Latest / Stephanomics / Why Cutting Unemployment Aid Isn't Filling America's 9.2 Million Open Jobs

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Why Cutting Unemployment Aid Isn't Filling America's 9.2 Million Open Jobs · Stephanomics

• 0:06
  Speaker 1: Hello, and welcome to Stephanomics, the podcast that brings the
• 0:09
  Speaker 1: global economy to you. My name is Tom Orlick. I'm
• 0:13
  Speaker 1: the chief economist for Bloomberg. Now. With England entering a
• 0:17
  Speaker 1: period of national morning following our defeat in the European
• 0:21
  Speaker 1: Championship soccer final, your regular host Stephanie Flanders is taking
• 0:25
  Speaker 1: a break this week, So, like a young substitute stepping
• 0:29
  Speaker 1: nervously onto the pitch to take a crucial penalty, I'm
• 0:32
  Speaker 1: stepping in to host this week's discussion. Later in the podcast,
• 0:36
  Speaker 1: we'll go to Vietnam to hear about how factory workers
• 0:39
  Speaker 1: are sleeping on the factory floor to keep production humming
• 0:43
  Speaker 1: and the COVID outbreak under control. And here in the
• 0:46
  Speaker 1: US will dive into President Joe Biden's attempts to push
• 0:50
  Speaker 1: back against monopoly power. First, though, here in the US,
• 0:54
  Speaker 1: with concern from some parts of the political spectrum that
• 0:58
  Speaker 1: high unemployment benefits are eating a disincentive to work, Let's
• 1:02
  Speaker 1: go to Bloomberg's own Olivia Rockman for a report on
• 1:06
  Speaker 1: the real barriers that some women are facing when they
• 1:09
  Speaker 1: try to re enter the labor market and the human
• 1:11
  Speaker 1: cost when unemployment benefits are withdraw. America's economy is surging
• 1:23
  Speaker 1: coming out of the pandemic, and some politicians believe it
• 1:26
  Speaker 1: would be doing even better if not for generous unemployment
• 1:29
  Speaker 1: benefits put into place last March. They blame the US
• 1:33
  Speaker 1: government's extra three weekly payments to unemployed people for keeping
• 1:37
  Speaker 1: workers at home, and about half of US governors have
• 1:41
  Speaker 1: ended the federal benefits. Still, their efforts to lure workers
• 1:45
  Speaker 1: back into the office aren't working for a key demographic,
• 1:49
  Speaker 1: parents of young children, and especially mothers. They simply don't
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  Speaker 1: have childcare options and can't return to work regardless of
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  Speaker 1: unemployment checks. But there's and it's like I'll wake up
• 2:00
  Speaker 1: when my mom's getting undy for it, and I just
• 2:02
  Speaker 1: start crying because just I'm just at a loss anymore,
• 2:05
  Speaker 1: you know, if it wasn't for my mom, but now
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  Speaker 1: my mom has to struggle because of us. Calling Ker,
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  Speaker 1: a single mom in Cleveland, Ohio, whose expanded benefits were
• 2:14
  Speaker 1: cut off in late June, quit her job as a
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  Speaker 1: veterinary technician last year when her daughter's childcare center closed
• 2:21
  Speaker 1: shortly after the two of them got COVID, and her
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  Speaker 1: six year old has since been diagnosed with a medical
• 2:27
  Speaker 1: condition that weakens her immune system. Ker is desperate to
• 2:31
  Speaker 1: go back to work, but her young daughter hasn't been
• 2:33
  Speaker 1: cleared by her doctor to return to school just yet.
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  Speaker 1: So I was really counting on this. At least until September.
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  Speaker 1: I would have been financially okay, you know, I had
• 2:43
  Speaker 1: everything planned out, you know, with bills and everything. Now
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  Speaker 1: my mom she had to pick up. She's working like
• 2:48
  Speaker 1: eighteen hours a day, you know, to support cover me,
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  Speaker 1: the rent, you know, of her everything, and it's not
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  Speaker 1: fair to her. It's like it's so it's so hard,
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  Speaker 1: and you know, I want to go to work. I
• 3:00
  Speaker 1: don't want to sit at home. You know. That was
• 3:03
  Speaker 1: like my time away with my kid, making my money,
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  Speaker 1: you know, and three hundred a week is nothing compared
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  Speaker 1: to what I was making, you know, But at least
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  Speaker 1: my head was still above water bringing in that extra
• 3:14
  Speaker 1: three hundred a week and didn't have to really worry
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  Speaker 1: too much, you know. But now I don't know what
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  Speaker 1: I'm gonna do. I really don't. We ended up having
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  Speaker 1: to move back in with my mom. I can't afford
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  Speaker 1: to live out of my own supported kid. There was
• 3:27
  Speaker 1: just no way, you know, I mean, so it was
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  Speaker 1: like I was able to give my mom money to
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  Speaker 1: you know, towards out of the three hundred a week
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  Speaker 1: towards the rent, towards the bills. And now it's like
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  Speaker 1: that's why now this is being this money was taken away,
• 3:40
  Speaker 1: and she's she's working Monday through Saturday from three third. Well,
• 3:44
  Speaker 1: she leaves here at what's about two in the morning,
• 3:47
  Speaker 1: so she works from two thirty in the morning until
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  Speaker 1: three o'clock in the afternoon, and that's not fair to her.
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  Speaker 1: She's sixty six years old. Like many of the moms
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  Speaker 1: who have left the labor force to take care of
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  Speaker 1: their children during the pandemic, Ker will have to start
• 4:00
  Speaker 1: a fresh job search when she's ready to return to work.
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  Speaker 1: Labor force participation for American women between the ages of
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  Speaker 1: twenty and fifty four remains well below pre pandemic levels,
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  Speaker 1: and while some economists expected to recover when schools more
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  Speaker 1: fully reopened this September, it's unlikely to be a rapid
• 4:18
  Speaker 1: bounce back. Job openings are abundant in industries like restaurants
• 4:22
  Speaker 1: and hospitality, but finding something in a more specialized sector
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  Speaker 1: like veterinary medicine can take months, especially for candidates who
• 4:30
  Speaker 1: have gaps in their resumes. Yeah, I would have to
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  Speaker 1: start fresh. I would have to start all over. And
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  Speaker 1: our jobs in your industry said that, are they limited
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  Speaker 1: in your area? Like, would it be hard to find
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  Speaker 1: something immediately? It is hard, um, But hopefully for me
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  Speaker 1: it I have a lot of connections, so I'm hoping.
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  Speaker 1: But it's it's it's hard to go from one, you know,
• 4:52
  Speaker 1: jumping from one job to another. Um, because it gets
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  Speaker 1: around like all this person's you know, job happened. I mean,
• 4:58
  Speaker 1: they kind of know my situation right now. But what
• 5:00
  Speaker 1: I did do I, you know, because I'm about tech.
• 5:02
  Speaker 1: I was a non registered about tech. And what I
• 5:05
  Speaker 1: did was when all this started and she had to
• 5:08
  Speaker 1: be enrolled online, and I'm like, you know, since I'm
• 5:10
  Speaker 1: gonna have to sit home with her, I don't want
• 5:11
  Speaker 1: to just sit home. So I actually enrolled online to
• 5:13
  Speaker 1: school to get my license. I wasn't just gonna sit around.
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  Speaker 1: I need to make money when I when I go back,
• 5:19
  Speaker 1: you know, So hopefully through school I'll be able to
• 5:21
  Speaker 1: get a job. But nothing's guaranteed right now. You know,
• 5:24
  Speaker 1: a lot of places they're starting to close down because
• 5:26
  Speaker 1: they cannot get that help or people just still can't
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  Speaker 1: afford it because of this pandemic. A lot of people
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  Speaker 1: are hurting over here. It really sucks. Is that I
• 5:33
  Speaker 1: was just offered a job through our city and I
• 5:35
  Speaker 1: had to pass it up because of everything that's going on. Yep.
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  Speaker 1: And does it drive you crazy that like there's this
• 5:42
  Speaker 1: narrative that, oh, people are just collecting unemployment and not working,
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  Speaker 1: and here you are, like turning down a job exactly.
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  Speaker 1: And that's what that I Oh, my gosh, I can't
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  Speaker 1: even use the words that I want to use. Yeah,
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  Speaker 1: I mean, because all these people are like, oh, now,
• 5:55
  Speaker 1: you guys can't sit around, you have to go get
• 5:57
  Speaker 1: a job. But it's like, you know what, there are
• 5:59
  Speaker 1: truly some people that cannot go back to work right now.
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  Speaker 1: By many measures, the U s economy has recovered from
• 6:06
  Speaker 1: the initial impact of the pandemic. Retail sales have surged
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  Speaker 1: above pre pandemic levels, most businesses are open at full capacity,
• 6:15
  Speaker 1: and demand for residential real estate is booming, But the
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  Speaker 1: labor market remains more than six million jobs short of
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  Speaker 1: where it was before COVID. A big question in the
• 6:23
  Speaker 1: coming months will be what the lingering effect of the
• 6:26
  Speaker 1: pandemic will be on workers and when or whether workforce
• 6:30
  Speaker 1: participation will return to where it was in early Kurse
• 6:34
  Speaker 1: says that while she understands the frustration of businesses having
• 6:37
  Speaker 1: trouble finding workers, there are circumstances that make returning to
• 6:40
  Speaker 1: work much more complicated than just submitting an application. I
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  Speaker 1: just wish more people would hear us out, I mean,
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  Speaker 1: and really see that some of us are struggling. We
• 6:50
  Speaker 1: don't have that luxury of going back to work. I mean,
• 6:53
  Speaker 1: some of us want to work. You know. I love
• 6:55
  Speaker 1: making my money. I mean more money going to work
• 6:57
  Speaker 1: than sitting home. Right, So I just, you know, I
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  Speaker 1: wish really somebody would take the time and listen and
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  Speaker 1: really see, you know, there's got to be something that
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  Speaker 1: can be done. I know that people are hiring and
• 7:09
  Speaker 1: they're they're you know, looking for workers, and I wish
• 7:14
  Speaker 1: I had an answer for that. I don't understand why
• 7:15
  Speaker 1: people won't call back for work, but I just I
• 7:19
  Speaker 1: just wish they'd figure something out, you know. I mean,
• 7:22
  Speaker 1: there's people that are really struggling and it and it
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  Speaker 1: it really sucks that they did this to us. It
• 7:27
  Speaker 1: really does. Thanks Olivia Rockman for that report and for
• 7:35
  Speaker 1: US Economy Watches It will be interesting to see what
• 7:39
  Speaker 1: happens in September when augmented unemployment benefits and nationwide and
• 7:44
  Speaker 1: the reopening of schools lifts some of the constraints on
• 7:47
  Speaker 1: childcare now as the global economy reopens, another driver of
• 7:52
  Speaker 1: distortions and a contributed to the uncomfortably high inflation we're
• 7:57
  Speaker 1: seeing in the US and elsewhere, is supply chains snarl ups.
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  Speaker 1: Shortages of semiconductors and other crucial components, is denting production
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  Speaker 1: of cars and other technology intensive products and sending prices
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  Speaker 1: sky high. Vietnam, with its low wages and strategic location
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  Speaker 1: in the East Asian electronic manufacturing hub, has been playing
• 8:21
  Speaker 1: an increasingly important part in global supply chains. Factories and
• 8:25
  Speaker 1: workers in Vietnam are taking some extraordinary steps to make
• 8:29
  Speaker 1: sure production keeps humming through the COVID crisis. For more
• 8:33
  Speaker 1: on that, we go to Bloomberg's Win Win in Ho
• 8:36
  Speaker 1: Chi Minh City. When you've been reporting a fascinating story
• 8:41
  Speaker 1: about workers attempting to keep production going and dodge COVID
• 8:44
  Speaker 1: infections by sleeping on the factory floor, tell us what's
• 8:48
  Speaker 1: going on. Yeah, Well, Vietnam is fighting against a resurgeon
• 8:53
  Speaker 1: of COVID nineteen. So the nation is trying to protect
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  Speaker 1: its reputation as an important part in the globoth text
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  Speaker 1: supply chain. So it has gotten innovation with like thousands
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  Speaker 1: of workers sleeping on factory floors to keep production lines running.
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  Speaker 1: Um Earlier in the northern provinces of Bunding and Bankzang,
• 9:15
  Speaker 1: two key manufacturing hub that home to Samson and FoST
• 9:21
  Speaker 1: Gone luck Share those leading suppliers of apple authorities. There's
• 9:26
  Speaker 1: have asked about. You know, one hundred fifty thousand workers
• 9:30
  Speaker 1: are living in industrial parks to reduce the risk of infection,
• 9:35
  Speaker 1: and recently in the commercial Huntum city about two hundred
• 9:39
  Speaker 1: companies have also set up or we'll set up soon
• 9:43
  Speaker 1: sit over sites for thousands of workers to be able
• 9:46
  Speaker 1: to remain operations. So they are sleeping on either metal
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  Speaker 1: burned bats with bamboo mats in uh you know, do
• 9:58
  Speaker 1: mysteries U as well as intense in camp camping penn
• 10:02
  Speaker 1: species on cement flaws inside the factories and they're also
• 10:08
  Speaker 1: quarantined until they tested negative after returning from home. When
• 10:14
  Speaker 1: have you spoken to some of the workers, what's the
• 10:16
  Speaker 1: mood like? Well, I talked to the amount of the
• 10:19
  Speaker 1: phone because it's quite difficult to get to those factories
• 10:22
  Speaker 1: these days. So um, when I talked to them, most
• 10:26
  Speaker 1: of them uh quite um happy that they can still
• 10:30
  Speaker 1: go back to work because last month their factories got
• 10:34
  Speaker 1: shut down and they have to stay home with almost
• 10:38
  Speaker 1: no salaries. So although sleeping on the floor, uh kind
• 10:44
  Speaker 1: of you know, some told some told me that it
• 10:46
  Speaker 1: is a bit difficult to sleep at first, but then
• 10:48
  Speaker 1: they get used to it gradually. And the funny thing
• 10:52
  Speaker 1: is that they have accordition in thirty four hours, so
• 10:56
  Speaker 1: it's also better than living outside at they don't have
• 11:01
  Speaker 1: that kind of accordion ng. And in the factories they
• 11:05
  Speaker 1: share rooms and share bathrooms, but they feel quite safe
• 11:10
  Speaker 1: inside though. So is the strategy working containing the virus
• 11:15
  Speaker 1: while allowing production to continue or are we already seeing
• 11:18
  Speaker 1: more outbreaks? Well, that strategy seems really helpful with you know,
• 11:26
  Speaker 1: at LISTA to another prophecies of baton zion bounding in
• 11:30
  Speaker 1: uh near Hannoi had them to contain the virus spread
• 11:35
  Speaker 1: and the number of new COVID cases falling down where
• 11:38
  Speaker 1: every day and more areas in the two promises that
• 11:42
  Speaker 1: are now got removed lockdown or social distancing restrictions and
• 11:47
  Speaker 1: most of the companies, most of the factories, they're now
• 11:50
  Speaker 1: able to reopen. Yeah, it looks like it's it works
• 11:55
  Speaker 1: when through this forward for us. How long do you
• 11:58
  Speaker 1: think these extraordinary measures will have to stay in place?
• 12:02
  Speaker 1: The government is trying to accelerate its fascination program. Right now,
• 12:09
  Speaker 1: is has fascinated about four percent of its population of
• 12:13
  Speaker 1: UH ninety eight million, and it's trying to reach about
• 12:18
  Speaker 1: seventy percent of its population by early next year. One
• 12:22
  Speaker 1: queue next year. Until then there may be more factories
• 12:26
  Speaker 1: will have to do the same arranging for the effect
• 12:30
  Speaker 1: of their workers to sleep in the factories to keep
• 12:34
  Speaker 1: the production life running. Like earlier this week, authorities in
• 12:38
  Speaker 1: Orgimen City just all the companies in a high tech
• 12:42
  Speaker 1: park where Sam Suman Intel has factories to set up
• 12:45
  Speaker 1: to arrange and set up on side sleeping accommodation for
• 12:48
  Speaker 1: the workers. I think that they are going to get
• 12:52
  Speaker 1: out of this, but it would take them time to
• 12:54
  Speaker 1: get back to where it was before. Thanks very much
• 12:58
  Speaker 1: to Bloomberg's Win Win for years that story well, remarkable
• 13:09
  Speaker 1: efforts there by workers in Vietnam sleeping in their factories
• 13:13
  Speaker 1: to keep production going. Think about that the next time
• 13:16
  Speaker 1: you pick up your smartphone. Now, let's return to the US,
• 13:19
  Speaker 1: where a growing area of concern for progressive economists and
• 13:23
  Speaker 1: lawmakers is the lack of competition in the economy. The
• 13:27
  Speaker 1: growing concentration in market power with a shrinking number of
• 13:31
  Speaker 1: firms grabbing a growing share of profits is bad for workers,
• 13:36
  Speaker 1: bad for customers, bad for startups, and in the end,
• 13:40
  Speaker 1: bad for the dynamism of the economy as a whole.
• 13:43
  Speaker 1: It's a tough problem to deal with, but the Biden
• 13:46
  Speaker 1: administration has made a down payment on a solution, with
• 13:49
  Speaker 1: an executive order aimed at boosting competition. In a moment,
• 13:54
  Speaker 1: we'll hear from Professor Maurice Stuckey, an expert in competition law.
• 13:58
  Speaker 1: But before we do that, let's speak to Bloomberg Zone
• 14:01
  Speaker 1: and an edgeton. Anna covers the technology being here in
• 14:05
  Speaker 1: d C. And of course it's the giant tech companies Amazon, Facebook,
• 14:09
  Speaker 1: Google and Apple that are in the sites of the
• 14:12
  Speaker 1: antitrust regulators. Anna, thanks for joining us my pleasure. First
• 14:16
  Speaker 1: of all, tell us what's in this executive order. This
• 14:19
  Speaker 1: is a pretty broad executive order that looks at not
• 14:22
  Speaker 1: just technology but industries across the economy. And how federal
• 14:27
  Speaker 1: agencies can use their power to write rules and regulations
• 14:31
  Speaker 1: that would encourage competition. Now we're talking about things like transportation, healthcare, agriculture, airlines.
• 14:38
  Speaker 1: There are a lot of industries that could be affected
• 14:40
  Speaker 1: by this order, so pretty sweeping and was the motivation
• 14:44
  Speaker 1: for the Biden administration. Well, this is another indication about,
• 14:49
  Speaker 1: you know, kind of the antitrust movement in Washington. We
• 14:51
  Speaker 1: see a lot of energy on Capitol Hill trying to
• 14:55
  Speaker 1: strengthen antitrust laws. We also see Lena Khan uh note
• 15:00
  Speaker 1: doable antitrust expert appointed to head the FTC. And this
• 15:03
  Speaker 1: is kind of the Biden administration part of that note
• 15:06
  Speaker 1: to show an all of Washington approach to encouraging competition
• 15:10
  Speaker 1: across the economy. What's interesting about the Biden and executive
• 15:13
  Speaker 1: order is this is something that Biden can do unilaterally.
• 15:16
  Speaker 1: You know, he doesn't have to uh negotiate a bill
• 15:19
  Speaker 1: getting through Congress in order for this to take effect.
• 15:21
  Speaker 1: That limits how effective it could be and that it
• 15:24
  Speaker 1: could be undone by a future president. Becoming this early
• 15:27
  Speaker 1: in the Biden administration, it should give his federal agencies
• 15:30
  Speaker 1: plenty of time to implement these rules. To make potentially
• 15:34
  Speaker 1: significant changes in the economy. An executive order limited in impact,
• 15:39
  Speaker 1: potentially reversible by a future administration, but still a dying
• 15:43
  Speaker 1: payment on addressing this serious concern. Could you give us
• 15:47
  Speaker 1: an example of something that will change as a result
• 15:50
  Speaker 1: of this executive order. Yeah, there's an interesting movement for
• 15:54
  Speaker 1: the right to repair. I thought this was one of
• 15:55
  Speaker 1: the really interesting parts of the executive Order, and this
• 15:59
  Speaker 1: is this element would require manufacturers of farming equipment, for example,
• 16:03
  Speaker 1: to allow farmers to repair their own tractors and uh,
• 16:08
  Speaker 1: you know, high tech equipment. It would also have implications
• 16:11
  Speaker 1: for consumer electronics, you know, especially users of Apple products.
• 16:16
  Speaker 1: When your iPhone breaks and you want to take it
• 16:19
  Speaker 1: to a local repair shop, a lot of times that's
• 16:22
  Speaker 1: not possible with this really complicated technology. So one thing
• 16:25
  Speaker 1: this executive Order would do is to require manufacturers to
• 16:29
  Speaker 1: allow independent repair people to repair their products. And that
• 16:33
  Speaker 1: gives consumers a lot more choice in how they use
• 16:37
  Speaker 1: and kind of prolong the life of their of the
• 16:40
  Speaker 1: things that they own. But it's something that manufacturers have
• 16:42
  Speaker 1: pushed back on. That's so interesting. I have a drawer
• 16:45
  Speaker 1: at home which is entirely full of redundant electronic equipment,
• 16:49
  Speaker 1: and I've always suspected that the manufacturers deliberately building in
• 16:54
  Speaker 1: obsolescence after a couple of years to force me back
• 16:57
  Speaker 1: to the shops to buy the latest addition. I'm glad
• 17:00
  Speaker 1: to see that my intuition was close to the truth. So, Um,
• 17:05
  Speaker 1: the executive order has to be followed by legislation for
• 17:09
  Speaker 1: this sort of broad strategy to work. Um, what should
• 17:13
  Speaker 1: we expect? There? Is there a bill passing into Is
• 17:16
  Speaker 1: there a bill in the works in Congress? Yeah, there's
• 17:18
  Speaker 1: a few interesting fronts on the antitrust battle in Congress.
• 17:22
  Speaker 1: In the Senate Antitrust Subcommittee, Chairman Amy Klobchar has introduced
• 17:27
  Speaker 1: her own proposal, as has her ranking member Mike Lee,
• 17:30
  Speaker 1: the ranking Republican in the Senate committee. And in the House,
• 17:33
  Speaker 1: we see um tech focused legislation from Representative Cicillini, Democrat
• 17:39
  Speaker 1: from Rhode Island, and Representative kin Buck, a Republican from Colorado.
• 17:43
  Speaker 1: They would really take aim at for technology companies as
• 17:47
  Speaker 1: as Apple, Amazon, Facebook, and Google. And these bills are
• 17:51
  Speaker 1: bipartisan and would limit the way that these companies can
• 17:55
  Speaker 1: present their own products, you know, in some cases, would
• 17:58
  Speaker 1: prohibit them from having those products in the first place,
• 18:00
  Speaker 1: that they compete with third party companies that depend on
• 18:03
  Speaker 1: their platforms. There's kind of different levels of seriousness of
• 18:07
  Speaker 1: this legislation and kind of a different chance that it
• 18:10
  Speaker 1: has of actually becoming law right now is it's written.
• 18:13
  Speaker 1: It doesn't look like these bills have a very good
• 18:15
  Speaker 1: chance of becoming law in this Congress. But the fact
• 18:18
  Speaker 1: that we're getting bipartisan support for these measures shows that
• 18:21
  Speaker 1: there is a lot of anger on both parties at
• 18:25
  Speaker 1: just how concentrated the economy has become and how hard
• 18:27
  Speaker 1: it is for small businesses and um different companies to
• 18:31
  Speaker 1: compete in in industries that have become very consolidated. Anna,
• 18:35
  Speaker 1: thanks so much for your insights. Thanks so much. Well.
• 18:42
  Speaker 1: Anna gave us the what's happened and some of the
• 18:45
  Speaker 1: what's next. For a little bit of the why it
• 18:47
  Speaker 1: happened and is it enough, let's go to Maurice Stuckey,
• 18:51
  Speaker 1: a professor at the University of Tennessee, former prosecutor at
• 18:55
  Speaker 1: the U S Department of Justice, and co author of
• 18:57
  Speaker 1: the recent book Competition Overdo. Professor Stucky, thanks for joining us.
• 19:02
  Speaker 1: Thank you now. In your book, you make the argument
• 19:06
  Speaker 1: that competition in and of itself isn't a good thing.
• 19:10
  Speaker 1: What's needed is more positive some competition, you call it
• 19:13
  Speaker 1: noble competition, which expands the size of the economic pie,
• 19:18
  Speaker 1: and less toxic competition which drives a race to the
• 19:21
  Speaker 1: bottom in standards and risks, gauging workers and consumers in
• 19:25
  Speaker 1: the process. Is the biden executive order going to the
• 19:29
  Speaker 1: move the US closer to having the right kind of competition?
• 19:33
  Speaker 1: It is, so you have two problems right now. The healthy,
• 19:38
  Speaker 1: noble type of competition is being squeezed out, and so
• 19:41
  Speaker 1: you have unhealthy competition, toxic competition, on one hand, and
• 19:47
  Speaker 1: then two little of the good types of competition on
• 19:49
  Speaker 1: the other. So what this proposal seeks to do is
• 19:53
  Speaker 1: two things. First, bring more of the healthy competition, and
• 19:57
  Speaker 1: then second, go after some of the exploitative competition. Where
• 20:03
  Speaker 1: we talk in our book about trip pricing. So here,
• 20:06
  Speaker 1: for example, the airlines, they can't dangle a low price
• 20:10
  Speaker 1: in front of you and then have all of these
• 20:14
  Speaker 1: add on fees as you go through the process of
• 20:16
  Speaker 1: booking of flight, which I think in the UK and
• 20:19
  Speaker 1: many other jurisdictions is prohibited, but not in the United States.
• 20:24
  Speaker 1: So my reading of the literature, Professor is that one
• 20:27
  Speaker 1: of the reasons why antitrust regulation has become weaker over
• 20:34
  Speaker 1: the last decades is because of a shift in the
• 20:38
  Speaker 1: sort of the legal philosophy. Back in the days of
• 20:42
  Speaker 1: Louis Brandeis and the trust busters of the early twentieth century,
• 20:47
  Speaker 1: there was a focus on market structure and how excessive
• 20:51
  Speaker 1: concentration of market power could be bad for consumers. But
• 20:56
  Speaker 1: from the nineties seventies, with the rise of the Chicago School,
• 21:00
  Speaker 1: there was a shift in view um and the new
• 21:03
  Speaker 1: kind of antitrust philosophy takes a much narrower conception of
• 21:08
  Speaker 1: what's bad for consumers, and in fact holds that as
• 21:12
  Speaker 1: long as prices are coming down, there can't be any
• 21:15
  Speaker 1: problem with competition. Could you give us a very brief
• 21:19
  Speaker 1: review of that transition from market structure to prices as
• 21:25
  Speaker 1: the lens through which the courts interpret competition policy and
• 21:29
  Speaker 1: talk about some of the effects that that's had. Sure. So,
• 21:34
  Speaker 1: the problem is that without any legislative change, the Supreme
• 21:40
  Speaker 1: Court incorporated the work of Work and other the Chicago
• 21:45
  Speaker 1: School of Theorists and looked at and I trust through
• 21:48
  Speaker 1: this consumer welfare lens, and the promise was that it
• 21:51
  Speaker 1: would make markets more competitive and would bring greater certainty
• 21:55
  Speaker 1: to an I trust law. And it's failed on both measures.
• 21:59
  Speaker 1: So what you see is that courts can say, well,
• 22:02
  Speaker 1: competition can be reduced so long as it doesn't harm
• 22:06
  Speaker 1: consumer welfare, and the only way to measure that is
• 22:09
  Speaker 1: through pricing, and that's really not applicable in the digital
• 22:12
  Speaker 1: platform economy. The other problem with the consumer welfare lens
• 22:18
  Speaker 1: is that it misses over half the picture. You don't
• 22:21
  Speaker 1: really see the impact that mergers can have on workers
• 22:26
  Speaker 1: and their wages. You don't see the impact that these
• 22:29
  Speaker 1: mergers can have on farmers um and you see this
• 22:33
  Speaker 1: in the Biden Order. Is that a lot of the
• 22:36
  Speaker 1: harm has also happened upstream, where consumers are being squeezed
• 22:42
  Speaker 1: in their wages or the prices that they may pay
• 22:45
  Speaker 1: because farmers are also being squeezed as a result. So
• 22:49
  Speaker 1: does the Executive order Now, I mean that the Federal
• 22:52
  Speaker 1: Trade Commission and other agencies have the space they need
• 22:55
  Speaker 1: to rewrite the rules, an engineering more of the right
• 22:58
  Speaker 1: type of competition pull in the face of skeptical courts.
• 23:02
  Speaker 1: Do we fundamentally need new legislation? Right? We really need both.
• 23:08
  Speaker 1: One thing is both the Republicans and the Democrats in
• 23:13
  Speaker 1: their separate reports and Congress on the Digital platform economy
• 23:17
  Speaker 1: have voice concerned that the courts have gone too far
• 23:21
  Speaker 1: and clamping down on anti trust. So now the agencies
• 23:26
  Speaker 1: as well and the are are raising that same concern.
• 23:31
  Speaker 1: And the courts have to listen because they're there to
• 23:34
  Speaker 1: interpret the law and not their gloss that they added
• 23:39
  Speaker 1: to the law, including this consumer welfare standard. And in
• 23:43
  Speaker 1: particular it's a Supreme Court that is the primary culprit
• 23:46
  Speaker 1: here because it infrequently visits anti trust, but when it
• 23:50
  Speaker 1: does it really makes a muck of things. So one
• 23:54
  Speaker 1: thing is that the courts should listen and have a
• 23:56
  Speaker 1: little bit more ubrous. But the other thing in which
• 23:59
  Speaker 1: you see is going on in Europe um, particularly with
• 24:03
  Speaker 1: the Digital Markets Act to Digital Services Act and Germany
• 24:07
  Speaker 1: in upgrading its competition law and the UK likely doing
• 24:12
  Speaker 1: the same, is that we need new tools to tackle
• 24:16
  Speaker 1: some of the problems in the digital platform economy and
• 24:20
  Speaker 1: and I trust is often too slow, takes way too
• 24:24
  Speaker 1: much time, and the outcomes are too unpredictable, so we
• 24:28
  Speaker 1: need greater certainty. Market participants should be able to know
• 24:33
  Speaker 1: what is expected of them and when there is a violation,
• 24:38
  Speaker 1: it can be quickly redressed, and for that we need
• 24:41
  Speaker 1: statutory reform. So it sounds like the Biden executive orders
• 24:45
  Speaker 1: an important first step, but we also need to change
• 24:49
  Speaker 1: your heart by the courts, action by regulatory agencies, and
• 24:53
  Speaker 1: ultimately legislation to move the US economy more towards that
• 24:59
  Speaker 1: new ball competition, which Professor Stucky writes about in his
• 25:03
  Speaker 1: book Competition Overdose. Professor Stucky, thank you so much for
• 25:07
  Speaker 1: your time, Thank you for having well. The Stephonomics team
• 25:16
  Speaker 1: have given all they can, but in the battle to
• 25:18
  Speaker 1: answer all the economics questions, the best result we can
• 25:22
  Speaker 1: hope for is a draw. So as extra time on
• 25:24
  Speaker 1: the podcast draws to a close, it only remains for
• 25:27
  Speaker 1: me to thrack the ball of economic analysis into the
• 25:31
  Speaker 1: wooden upright of incomprehension and then head in hands. Thank
• 25:35
  Speaker 1: our contributors Olivia Rockman, Win Win Anna Edgertant and Professor
• 25:40
  Speaker 1: Morris Stuckey, Producer Mike Sasso, and sound engineer Magnus Henrickson.
• 25:46
  Speaker 1: Please join us next week when you're regular host, The
• 25:49
  Speaker 1: eponymous Stephanie Flanders will be back and normal standards of
• 25:53
  Speaker 1: economic insight and humor will be restored