Biden’s Moment to Show Who the Real Economic Populist Is

As Joe Biden prepares for Thursday’s televised debate with Donald Trump, it’s worth going back eight months to an event in the White House Rose Garden, when the President announced new rules designed to eliminate hidden “junk fees” imposed by banks, hotels, cable companies, and other businesses. “Folks are tired of being taken advantage of and being played for suckers,” Biden declared. He connected the new rules—which were introduced under the auspices of the Federal Trade Commission and which called on businesses to post all their fees up front—to other price-cutting measures that his Administration has adopted, including a provision in the Inflation Reduction Act of 2022 that capped the monthly cost of insulin for seniors on Medicare at thirty-five dollars. “For many years, Big Pharma blocked us. . . . They kept prescription-drug prices high and boosted their profits,” Biden said. “This time, we finally beat Big Pharma!”

The White House event was notable for a couple of reasons. It illuminated what Biden referred to as his broader vision of building an economy for the middle class rather than for special interests. It also typified the difficulties he has faced in getting this message across to the public. The Rose Garden event took place four days after the October 7th Hamas attack on southern Israel. Although it generated a fair amount of print coverage, broadcast and social media were almost entirely consumed by Israel and Gaza. It’s safe to assume that most voters never even heard about Biden’s new rules on junk fees.

This sort of thing has been a constant problem for White House officials. Practically every month of Biden’s Presidency, he has hailed the latest employment figures as evidence that the American economy has recovered more strongly from the pandemic than other major economies have. Last fall, along with Vice-President Kamala Harris and other senior Administration officials, he embarked, for a third time, on an “Investing in America Tour” to highlight new manufacturing initiatives that took advantage of financing provided in four major pieces of domestic legislation: the Bipartisan Infrastructure Law, the CHIPS and Science Act, the Inflation Reduction Act, and the American Rescue Plan.

So far, none of these efforts has had much impact on Biden’s lowly economic-approval ratings. The dramatic rise in prices during 2021 and 2022—which has resulted in an enduring sticker shock when the public buys food and other essential items—has undermined the popularity of elected leaders across the world, regardless of party affiliation. Biden is no exception. “It’s very hard to break through,” Bharat Ramamurti, who served as deputy director of the White House National Economic Council from 2021 to 2023, told me last week. “But a Presidential debate is a moment when it is guaranteed that people will be paying attention. It is an important opportunity for the President to refocus the debate.”

Part of Biden’s task will be to promote positive economic news while not appearing to downplay genuine concerns about inflation and the cost of living. Ramamurti, who worked for Senator Elizabeth Warren before joining the White House, cited various recent surveys and reports showing that there hasn’t been a moment in recent history when the typical American was wealthier, was more satisfied with his job, or had more opportunities to start a new business. Ramamurti also pointed to research by Arin Dube, an economist at UMass Amherst, which indicates that, despite the sharp rise in prices over the past few years, the inflation-adjusted wages of Americans in the middle of the wage distribution are now higher than they were in December, 2020, the month before Biden took office.

Of course, it’s tricky for a politician to persuade voters that things are better than they think they are. Even as many people tell pollsters that they are satisfied with their own economic circumstances, they also say that the economy as a whole is still in poor shape. But, if Biden would be wise to frame his comments carefully in this area, he shouldn’t hesitate to ballyhoo, once again, the steps his Administration has taken to address some of the exploitative and monopolistic practices that big corporations have long subjected ordinary American customers and workers to.

Many of these actions haven’t received the attention that they deserve, and they contrast sharply with the record, between 2017 and 2020, of Donald Trump, whose populist rhetoric from the campaign trail quickly yielded, once he was in office, to appointing former corporate lobbyists to regulatory agencies and showering corporations and the one per cent with huge tax cuts. Biden is promising to reverse those giveaways, and he has proposed new taxes on the very wealthy. Moreover, his Administration’s measures to eliminate hidden fees and reduce prescription-drug prices are part of a larger effort to boost competition and rein in corporate power, the likes of which arguably hasn’t been seen in the United States since the days of Teddy Roosevelt and Standard Oil.

In the past three and a half years, Biden appointees at the Federal Trade Commission, the Justice Department, and the Consumer Financial Protection Bureau have unveiled a long list of pro-competition rules, enforcement actions, and lawsuits. Just last month, the antitrust division of the Justice Department joined with thirty states to demand the breakup of Live Nation Entertainment, the owner of Ticketmaster. In a sweeping lawsuit, the department accused the company of illegally monopolizing the market for concert-ticket sales, eliminating competitors, hurting artists, and forcing concertgoers to pay artificially high prices that often include a host of additional fees. “FUCKING FINALLY. The evil empire of Live Nation (aka Ticketmaster) is getting sued,” one poster wrote on Reddit. “The fees. The price gouging. All of it making it more and more unaffordable to see the music and artists we love for so many years.”

Earlier this year, the Justice Department accused Apple of using anti-competitive tactics to maintain a smartphone monopoly. Other high-profile actions by the Administration, some of which I wrote about last week, have included the F.T.C. suing Amazon for allegedly squeezing its online sellers with high fees and effectively preventing them from offering lower prices, and the Justice Department suing to block a merger between JetBlue and Spirit, which it said would lead to higher airfares and fewer choices for travellers. Ticketmaster, Apple, and Amazon have all denied the charges against them, but these interventions were taken from the antitrust playbook, which involves trying to prevent large companies from extending and exploiting their market power.

The Biden competition agencies also have taken more novel steps to address somewhat less visible corporate abuses. Earlier this year, the F.T.C., which is led by Lina Khan, promulgated a new rule banning noncompete agreements, which prevent workers from moving to rival firms for higher wages or better working conditions. These restrictive contract terms, which were once largely confined to senior executives, had been applied to roughly thirty million Americans doing ordinary jobs in industries ranging from finance to fast food and construction. Under the new rule, it is illegal to impose noncompete clauses on most workers who earn less than a hundred and fifty thousand dollars a year.

In another potentially path-breaking development, the F.T.C. and the Justice Department last month launched a public inquiry into the phenomena of businesses backed by private-equity firms buying up rivals to dominate specific markets, a strategy known as a “rollup.” In recent years, this practice has reduced competition in many parts of the economy, including nursing homes, mobile-home parks, veterinary clinics, and residential rental properties. Last September, the F.T.C. sued U.S. Anesthesia Partners, a Texas health-care provider, and Welsh, Carson, Anderson & Stowe, a New York-based private-equity firm that helped to create the business and invested in it, alleging that they “executed a multi-year anticompetitive scheme to consolidate anesthesiology practices in Texas, drive up the price of anesthesia services provided to Texas patients, and boost their own profits.” (Welsh Carson and U.S. Anesthesia Partners have denied the allegations.)

To be sure, Biden’s competition agencies have encountered legal setbacks, including federal judges overturning their efforts to block some major mergers, including one between Microsoft and the gaming company Activision. Last month, a federal court in Texas dismissed Welsh Carson from the anesthesiology case on the grounds that it is now a “minority, non-controlling investor” in U.S. Anesthesia Partners. Lawyers described the ruling as a significant victory for the private-equity industry, but the broader investigation of rollups is continuing. As with the original trustbusters during the Gilded Age, Biden’s watchdogs see their role as being to check monopolization and the concentration of economic power wherever it arises.

In many ways, Biden is an unlikely scourge of the C-suite class. A longtime moderate Democrat, he has repeatedly referred to himself as a capitalist, and since he became President there have been times when he could have been tougher on major corporations. During the pandemic, for example, some major governments, including a center-right one in Britain, imposed a windfall tax on energy companies that were making out like bandits after a global surge in oil prices. Biden restricted himself to moral suasion. Taken as a whole, however, his Administration’s record belies the trope, common on the left and the right, that both major parties are in the pockets of big business, and it doesn’t matter who wins elections. If that were the case, why would there be so much pushback against Biden’s competition policies? Right now, lawyers for Big Pharma are suing to block the new prescription-drug rules. Big banks are suing to overturn an edict from the C.F.P.B. that capped credit-card late fees at eight dollars. And a number of plaintiffs, including the Chamber of Commerce, the Business Roundtable, and individual firms, are suing to block the F.T.C.’s ban on noncompete agreements.

One of these plaintiffs, Ryan, a global tax-services firm, is being represented by Eugene Scalia, the eldest son of the late Justice Antonin Scalia who served as Labor Secretary under Donald Trump, a position in which he reversed a series of pro-labor regulations from the Obama era. Ramamurti, the former White House official, told me, “That says it all.” In factual terms, maybe. But, as a matter of politics, it’s up to Biden to make the contrast visible, and to point out that he, rather than the bluster merchant standing across from him, is the real economic populist. The record is clear: Biden will never get a better chance to explain it to voters. ♦

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