How A New Executive Order Aims To Shift Power From Companies To Consumers
ARI SHAPIRO, HOST:
Here are just a handful of things that could come out of a sweeping executive order that President Biden signed today - refunds for certain airline fees, increased availability of generic prescription drugs, hearing aids sold over the counter, making it easier to compare internet service. There were 72 executive actions in total, and at the White House this afternoon, Biden said they will benefit workers, consumers and small businesses.
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PRESIDENT JOE BIDEN: I know America can't succeed unless American business succeeds. But let me be very clear. Capitalism without competition isn't capitalism. It's exploitation.
SHAPIRO: This is a massive grab bag of measures, and so to better understand how they all fit together, we are joined by Bharat Ramamurti. He is deputy director of the National Economic Council. Thanks for being here.
BHARAT RAMAMURTI: Thank you.
SHAPIRO: So let's start with these 72 actions involving more than a dozen federal agencies. What is the uniting framework here? How do they all fit together?
RAMAMURTI: Each of these actions is about promoting competition in our economy. And competition leads to three things - lower prices for consumers, higher wages for workers, and more innovation in our economy. And so the uniting thing between all the things that you just mentioned - hearing aids and prescription drugs - so driving prices down for consumers. So just to give you an example on hearing aids, right now it costs about $5,000 to get a pair of hearing aids, and you have to go to a doctor or specialist to get them. Under the rules that'll come out of this executive order, you'll be able to go buy hearing aids over the counter at your local drugstore, and it will cost you hundreds of dollars instead of thousands of dollars. So that's just one of the very many concrete ways that the executive order is going to end up benefiting American consumers.
SHAPIRO: The White House has been comparing this to earlier efforts to break up big monopolies by Teddy Roosevelt and FDR. But the president is not breaking up Amazon or Facebook with these moves. What would you say to critics who argue that these measures don't go far enough to curb the power of America's biggest companies?
RAMAMURTI: Well, look; antitrust throughout history, including under President Teddy Roosevelt and President Franklin Roosevelt, has always been in part about enforcement of antitrust laws - enforcement done by the Federal Trade Commission, the Department of Justice. You can't do that by executive order. What you can do, and which is what the president did today, is to urge those agencies to robustly enforce antitrust laws, to view mergers with some level of skepticism given the body of evidence about price increases following mergers, job losses following mergers. And it's to essentially set the tone for enforcement for the administration. That's what the previous President Roosevelts did, and that's similar to what President Biden did today.
SHAPIRO: Even a former Obama administration economist, Jason Furman, who generally is in favor of these moves, said it's not going to miraculously transform inequality in this country. Is the White House open to taking more ambitious steps than this package we've seen today?
RAMAMURTI: Well, I think the president has made clear that this executive order exists alongside the other actions that he has taken. It exists alongside the American Rescue Plan, and it sits alongside his current effort to invest in infrastructure in this country, to set the stage for long-term productivity growth, long-term economic growth. And making sure that every American can benefit from that is by making sure that competition is prevalent throughout the economy.
Just to give you an example there, a lot of workers - up to 60 million according to one estimate - are subject to non-compete agreements. So if you work at one hotel chain, you can't go work at another hotel chain. If you work at one retailer, you can't go work at another retailer. The president wants workers at a retail location, a construction worker to be able to go take a job that's a better fit for him or her. And as a result, what he wants to do today through his executive order is ban or limit those non-compete agreements so more workers can take advantage of the hot economy that we have.
SHAPIRO: You're saying this is designed to promote competition and support workers. The pushback from Republicans has been that it will harm business and therefore the economy. They describe this as regulation, red tape. What do you say to that criticism?
RAMAMURTI: Well, I would say two things. No. 1, fair and open competition has always been at the heart of American capitalism. And what we are doing today by promoting more competition is going to help the vast majority of businesses in this country. It's going to help small businesses compete on a level playing field. It'll make sure that the big businesses can't shoulder them out or prevent them from competing in the first place.
Now, look; there's a growing body of academic evidence, of academic literature showing that the trends towards consolidation have not only hurt consumers in the form of higher prices, have not only hurt workers in the form of lower wages, but have hurt small businesses. The rate of small business formation today is half of what it was in the 1970s before we saw this growing trend towards consolidation. So I would argue that this is a very pro-business move by the president. And as he said, without fair and open competition, you don't have real capitalism.
SHAPIRO: Many of these measures were first enacted during the Obama administration - net neutrality, luggage fee refunds, hearing aids, country of origin, meat labeling laws. The Trump administration rolled back or abandoned them. So how can you ensure that these actions will have staying power and not just evaporate when an administration of a different party takes power?
RAMAMURTI: Well, in many cases, these were measures that were passed into law during the Obama administration, or in some cases, including with the hearing aids, during the Trump administration. But they required agencies to complete rules in order to get them done. What the president has done today is say, prioritize completing these rules, and do it fast. You know, in the case of hearing aids, do it within 120 days. Get these rules out the door so that by next year, Americans will be able to go into their local drugstore and pick up hearing aids just like they pick up a thermometer. It's about prioritizing action. And look; we believe that these are popular actions that going to put money back into the pockets of American families, and it's going to be very hard to reverse them later.
SHAPIRO: Your previous boss was Elizabeth Warren, and she has spent her career working on issues related to the power of big corporations. And it seems that President Biden is stocking his administration with other consumer advocates. Does today's order signal that the Biden White House is embracing some of the economic ideas that Senator Warren was known for promoting?
RAMAMURTI: You know, the president has been talking about getting rid of non-compete agreements for years and years. And he's talked about fair and open competition for a long time. He's talked about the power of big tech for a long time. And so look; I think what unites President Biden and Senator Warren and I think every Democrat is an idea that the economy should work for the middle class. And the actions that are being taken today are about concrete steps to put money back into the pockets of middle-class families and making sure that small businesses have a fair shot. I think that that is an economic philosophy shared across the entire spectrum of the Democratic Party.
SHAPIRO: That's Bharat Ramamurti, deputy director of the National Economic Council. Thank you for speaking with us today.
RAMAMURTI: Thank you.
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