Things got weird (ok, weirder) in Washington, D.C. last week. We found out that the Federal Trade Commission (FTC) is reportedly investigating the acquisition of Subway by Roark Capital, a private equity firm that already owns Jimmy John’s and Arby’s, among others. People familiar with the matter say that regulators fear the $10 billion merger will lead to consolidation within the fast-food industry. Sen. Elizabeth Warren (D-Mass.) — always quick to endorse poorly conceived government interventions — endorsed the investigation on X (Twitter), citing the merger’s potential to create “a sandwich shop monopoly.” When Lina Khan and Elizabeth Warren agree, you know you’re in for trouble. The FTC’s facially ridiculous hypothesis that this deal could create a sandwich shop monopoly not only ignores every principle of sound economics, but also calls the agency’s larger judgment into question. These questions are particularly important as the FTC’s current Democratic majority tries to convince courts and the American public to adopt novel, interventionist antitrust theories. In cases involving industries such as cutting-edge cancer screening and online marketplaces, the FTC has been able to hide its ideological agenda behind a smokescreen of pseudo-economics. This is impossible in the case of the Subway acquisition, which directly affects an industry that most Americans know from their own personal experience to be incredibly competitive. This is a wake-up call that none of the current FTC’s novel theories of competitive harms should be accepted without close scrutiny. Read our full statement here.
 
Profile in Courage: Javier Milei
 
For all of America’s fiscal fumbles, U.S. citizens can at least expect their government to (mostly) protect property rights and allow them a shot at the American dream. Not all countries can say the same. Argentina was once an economic dynamo, with living standards on par with the richest nations in North America and Europe. The good times did not last. Free markets gave way to big government populism, and an ever-growing government impoverished Argentina. Now, there’s hope that things will finally turn around. President-elect Javier Milei has dedicated his life to espousing the benefits of free markets and warning of the unintended consequences of a grande government. For leading the charge for a better future in a deeply troubled country, Javier Milei is a Profile in Courage.  Milei has been a colorful character. Few politicians in any country could say they sang in a Rolling Stones cover band and played as a goalkeeper in a football club (no, the other fútbol). His curious political ideology also turned heads and raised eyebrows. While attending the University of Belgrano, Milei developed a keen interest in economics and political philosophy. Milei delved into the works of classical liberal thinkers such as Friedrich Hayek, Ludwig von Mises, and Milton Friedman, who persuasively made the case that regulations and out-of-control spending and taxation were a recipe for ruin. These ideas had fallen on deaf ears in Argentina, where hyperinflation made (and continues to make) procuring basic necessities far too difficult. 
 
After earning his undergraduate degree and multiple master’s degrees, Milei made it his mission to bring free markets back to Argentina. His storied two-decade career as an economist included positions at HSBC Argentina, Máxima AFJP (a private pension company), and Estudio Broda (a financial consultancy). Milei didn’t set out to collect fancy titles; the ardent libertarian contributed to the field with more than fifty academic papers. One paper from 2017 perfectly describes Argentina’s calamitous situation: “the country’s economic growth has been falling sharply....there is no creation of steady jobs and trade levels are down 20 percent compared to historical highs....a study of national competitiveness prepared by the World Economic Forum shows our country in 140th place in a sample of 141 countries, where we have only failed to surpass the formidable achievements of the Venezuelan model, which with so much effort (economic and social) we try to copy every day.”  But, unlike the politically stagnant Venezuela, Argentina chose to try something different and gave Milei a shot. In what is being described as a “political earthquake,” Milei ran for president wielding a chainsaw and upset left-wing economic minister Sergio Massa in a runoff race. During the race and after his victory, Milei was unafraid to champion his unorthodox ideas. “The Madman” has proposed reducing bloated welfare payments and promises to shut ministries (agencies) such as culture, health, and education that he views as having failed their mandate. Milei has also vowed that, “[e]verything that can be [put] into the hands of the private sector, will be in the hands of the private sector” and is eager to privatize Argentina's state energy company YPF. But, Milei’s most controversial and talked-about idea is his dollarization scheme. The statesman has repeatedly bemoaned the “fraud of the peso,” in which politicians print local currency like there’s no mañana and create 140 percent inflation. Milei believes that putting Argentina on the dollar would end this sorry status-quo by tethering his country to a more stable currency printed at a far slower rate. While there would surely be transition woes, changing Argentina’s monetary system is preferable to the failed current system. 
 
It remains to be seen whether Javier Milei can bring to bear the changes he so desperately seeks. Even a handful of his proposals could turbocharge Argentina and give her citizenry a chance at prosperity. And, for giving his people hope for the future, “El León” is truly a Profile in Courage. 
 
 
The Government’s Grocery Games
 
It is no secret the federal government has very little love in its heart for big American businesses, or the workers receiving paychecks. In the last handful of months alone, antitrust enforcers at both the Department of Justice (DOJ) and the Federal Trade Commission (FTC) have gone after Apple, Google, Meta, and Microsoft. Add to the top of that list the FTC’s recently unsealed suit against Amazon. That means the federal government is now actively going after five of the top six most valuable American companies in terms of market capitalization. The FTC now has grocery chains locked in on its sights. All of this is funded by taxpayers as agencies continue their antitrust march. This antitrust wave is spearheaded by FTC Chair Lina Khan and the head of the DOJ’s Antitrust Division, Jonathan Kanter. However, with Khan laying the groundwork for another suit against the proposed merger of supermarket chains Albertson’s and Kroger, it is clear that this movement is driven less by ideology and more by knee-jerk reactionism that casts any growth in the size of a business to be harmful to the broader economy. Kroger and Albertson’s currently occupy 10% and 6% of the U.S. grocery market share respectively. The combined entity would still be well behind Walmart, the national leader with a 29% market share. Another threat to supermarkets such as Kroger and Albertson’s is the rise of national discount grocery chains. Such chains now occupy 63% of the overall market, compared to just 37% for traditional supermarkets like Kroger and Albertson’s. Among the rising competitors are chains such as Aldi and Trader Joe’s – which have a complicated merger history themselves. However, the fastest rising star is Amazon. With a number of Amazon Fresh grocery stores (and their acquisition of Whole Foods) Amazon has vaulted into the top five of U.S. grocers. It was not even in the top 15 just 20 years ago. It owns 5% of the nationwide grocery market share, just $5 billion away from overtaking Albertson’s.
 
Traditional supermarket chains are now left with a choice amidst a flurry of dynamic, agile companies eating up their market share. They can either adapt or go bankrupt by sticking to their old ways. Kroger and Albertson’s chose the former, deciding to combine their resources to be able to scale and change their business models to be able to better compete with the Walmarts and Amazons of the world. Oddly enough, Khan began her rise in the antitrust world authoring a paper for the Yale Law Journal titled “Amazon’s Antitrust Paradox.” Publicly, Khan and Kanter seek to combat the supposed harms to competition caused by dominant firms like Amazon. The paper even goes on to note how Amazon’s low pricing allows it to eat up market share, even while profits do not soar. This is much the same way they are pricing out supermarkets like Kroger and Albertson’s. Of course, this is all fair play in the free market. Consumers stand to benefit as companies fall over themselves to deliver better prices and better services. They fail to do so at their own peril. Kroger and Albertson’s are in the midst of attempting to do just that. They are doing so in order to compete with a company that both Khan and Kanter would describe as a dangerous monopolistic power in the United States.
 
Antitrust enforcers like Khan and Kanter posit themselves as the head of a new ideological movement. As Kanter puts it, “We’re seeing a similar kind of energy just coming from a different ideological point of view — one focused on faithfully enforcing the law.” For her part, Khan said in a speech to a group of law students in Washington, “This is just the very, very, very, very beginning of this work, and we need all of you to be in this movement, to be coming into government.” However, the Kroger-Albertson’s merger gave them an opportunity to test that theory. The market delivered, responding to the threat to their market from Amazon. Instead of championing the move as the market working to sustain competition and prevent monopolization, the FTC is openly suggesting a suit to prevent it. Alas, no, the antitrust movement happening at the FTC and DOJ is neither new nor ideological. It is a re-packaging of the “anti-monopolist” ideas of the early 20th century Supreme Court Justice Louis Brandeis. It is also a reactionary movement that neither desires market competition nor consumer welfare. Instead, it mindlessly opposes any move that makes a reasonably large company any larger – even if it means it can compete with a company many times its size.
 
It is time American consumers see this for what it is. Government bureaucrats like Khan and Kanter are not looking out for their best interests. In fact, both have eschewed the notion of antitrust based around “consumer welfare.” Neither are they servicing a coherent ideological agenda. They are flailing to tear down whatever they’re able to economically. The sooner Americans in and out of government realize this, the better for taxpayers and consumers.

Blogs:
 

Monday:  TPA Slams FTC’s Foolish Investigation of Subway Deal, Progressive Attacks on So-Called ‘Sandwich Shop Monopoly’

Tuesday: TPA Supports House Passage of H.R. 4666 and H.R. 4667

Wednesday: The Market Is Putting an End to the ESG Craze

Thursday: State Bill of the Month – November 2023 and Bill of the Month: Defense Spending Oversight Act

Friday: Profile in Courage: Javier Milei 

 
Media:
 
November 15, 2023: The Blaze ran TPA’s op-ed, “Foolish subsidies won’t make Democrats’ EV dreams come true
 
November 18, 2023:  WBFF Fox45 (Baltimore, Md.) interviewed me about the cost of building bike lanes in Baltimore, Md.
 
November 18, 2023:  WBFF Fox45 (Baltimore, Md.) quoted TPA in their story about the cost of building bike lanes in Baltimore, Md.
 
November 20, 2023:  National Review ran TPA’s op-ed, “American Compass Points the Wrong Way on Online Regulation.”
 
November 20, 2023:  WBFF Fox45 (Baltimore, Md.) quoted TPA in their story about travel expenses paid for by the Maryland teachers union.
 
November 20, 2023:  WBFF Fox45 (Baltimore, Md.) interviewed me about a potential structural deficit for next year.
 
November 21, 2023:  WBFF Fox45 (Baltimore, Md.) quoted TPA in their story about travel expenses paid for by the Maryland teachers union.
 
November 27, 2023:  WBFF Fox45 (Baltimore, Md.) interviewed me about a potential increase in the minimum wage for tipped workers.
 
November 27, 2023: Issues & Insights ran TPA’s op-ed, “Looming Kroger-Albertson’s Challenge Exposes Antitrust Hypocrisy.”

November 28, 2023:  Patrick Hedger appeared on KNRS Radio 105.9 FM (Salt Lake City, Utah) to talk about the FTC’s battle against Subway sandwiches.
 
November 28, 2023: Inside Sources ran TPA’s op-ed, “Postal Service Must Steer Clear of Electric Trucks.”
 
November 28, 2023: Reason ran TPA’s op-ed, “Do You Still Have the Right to a Jury Trial?”
 
November 29, 2023:  Patrick Hedger appeared on NewsTalk STL 101.9 FM (St. Louis, Mo.) to talk about the FTC’s battle against Subway sandwiches.
 
November 29, 2023:  WBFF Fox45 (Baltimore, Md.) quoted TPA in their story “Baltimore county to vote on making Inspector General position permanent: A mission to eliminate fraud and waste.”
 
November 29, 2023: The Boston Herald (Boston, Mass.) ran TPA’s op-ed, “Postal Service should steer clear of electric trucks.”

November 29, 2023:  Patrick Hedger appeared on WBZ News Radio1030 (Boston, Mass.) to talk about the FTC’s battle against Subway sandwiches.
 
November 30, 2023:   I appeared on WBOB 600 AM (Jacksonville, Fla.) to talk about education spending and the economy.
 
November 30, 2023:  WBFF Fox45 (Baltimore, Md.) interviewed me about the Baltimore County Inspector General.

Have a great weekend!



Best,
David Williams
President
Taxpayers Protection Alliance
1101 14th Street, NW
Suite 1120
Washington, D.C. xxxxxx
www.protectingtaxpayers.org