OP-ED
Lina Khan’s Demolition Derby at the FTC
Washington D.C. Business Daily | by Robert H. Bork, Jr. | published July 6, 2022
Federal Trade Commission Chair Lina Khan was asked in a recent interview about low morale in her agency. Chair Khan told The New York Times she takes this allegation “incredibly seriously,” adding “this is a moment of incredible change at the agency, and we know that moments of change can be difficult.”
Difficult indeed. In a recent Office of Personnel Management survey, FTC employees gave Chair Khan and her team low marks for lacking “high standards of honesty and integrity,” plunging the rating of the organization from first place to last among agencies. FTC employees also dropped their agency from first to last when asked if they have a “high level of respect” for senior leaders.
Khan lives up to Lincoln’s dictum that the best way to test a person’s character is to give her power. Once touted as a wunderkind for rising from Yale Law to FTC Chair in just four years, Khan has proven to be a ham-handed manager. “Under Chair Khan, morale has plummeted, and we have seen an exodus of experienced lawyers and economists,” wrote Christine Wilson, one of the agency’s two Republican commissioners. “The FTC may take a generation to recover from this loss of institutional knowledge and expertise.”
This is a sea change for an agency that prided itself on collegiality among ideologically diverse experts. For decades, FTC made process paramount to ensure that expert opinions and voices from consumers, industry, economics, labor, and the law could be heard before any significant rule change would be considered. The commission majority always took pains to solicit the minority’s views to find common ground wherever possible.
The FTC’s intellectual ferment was enriched by an exchange of ideas at conferences, where agency experts provided transparency into agency thinking while picking up ground truth from consumer groups and industry alike. Only one week into Khan’s tenure, her abrasive chief of staff Jen Howard (who sports a silver necklace at work with the f-word in cursive lettering) issued an email prohibiting staff from attending conferences.
FTC’s internal culture of debate that once sharpened its actions has now been fully replaced with unilateral control by the Office of the Chair. Khan need not solicit even commission votes to compel the staff to follow her dictated process in all investigations. Policies long subject to notice and comment are being altered or rescinded without internal or external input.
Morale at FTC is worsened by FTC leaders, like former Commissioner Rohit Chopra, who called the agency “a backwater” and “failed agency” for its quaint dedication to process and inquiry. The disparagement of the agency by its leadership may turn out to be a self-fulfilling prophecy. The abrupt resignation of FTC’s chief economist, Marta Wosinska, in February is just one of the most notable casualties in FTC’s brain-trust exodus.
Under its prior cautious, democratic process, FTC had hardly been lax. In 2017, when the agency had only two members – one Republican and one Democratic – it brought twice as many merger challenges as Chair Khan’s FTC. In 2020, under a Republican president, antitrust enforcement hit its highest number in decades. FTC’s actions rested on the conviction that with vetted policies, it could embrace neutral principles to be a strong referee of the market.
What changed? Commissioner Wilson argues that Lina Khan and her fellow progressive antitrusters buy into Marx’s teaching that law is a tool of capitalist oppression. Self-styling themselves as Neo-Brandeisians, after Justice Louis Brandeis, Khan and her team publicly reject that antitrust law can ever be above politics. The FTC today is the ripening of toxic fruit planted in the nation’s progressive law schools – not just Marxism, but its intellectual offspring, Critical Legal Studies.
Acting more like commissar than a commissioner, Khan jettisoned the consumer welfare standard that has guided bipartisan antitrust enforcement for almost 45 years. Khan is replacing it with inchoate policies that somehow pledge to protect workers, unions, and less efficient competitors – vague standards that downplay consumer benefits like low prices and high quality, deny the markets predictability, and keep executives in the thrall of progressive Washington. She is trying to change the law unilaterally by replacing well-established merger review guidelines and planning to undertake vast new rulemakings to sidestep case law unfavorable to her views.
While acting hyper-aggressively at the level of policy, Khan’s FTC has often failed to challenge mergers within statutory deadlines, opting instead to send threatening letters to companies at the expiration of waiting periods.
A maladroit manager, equal parts callow and callous, Khan is more than a detriment to her agency. The chaos, uncertainty, and vengeful regulation she brings to the FTC is the last thing this economy needs with high inflation, perched at the precipice of a recession. Expect Khan to emerge as a menace to American jobs, consumers and, yes, workers.
Robert H. Bork, Jr., is the president of the Antitrust Education Project