Brian Deese on Unleashing Competition (Podcast)

Episode Summary

Executive Summary: Barry Ritholtz interviews National Economic Council Director Brian Deese about President Biden’s competition executive order and the new interagency Council on Competitiveness. Deese argues that consolidation and barriers to entry have weakened competition, contributing to higher prices, lower wages, and less innovation. The order directs agencies to act across labor, health care, broadband, agriculture, technology, and other sectors, while some reforms may require Congress or independent agency action.

Main Topics: Competition policy and the executive order: Deese presents the order as a government-wide effort to promote competition for lower prices, higher wages, and more innovation. The 72-point initiative coordinates authorities across agencies rather than focusing only on traditional antitrust enforcement. Antitrust enforcement and market concentration: The interview links decades of narrower antitrust enforcement with increased consolidation, while noting that the expected benefits of consolidation—such as lower prices—have not materialized. Deese says the administration will prioritize vigorous enforcement and may support legislative changes. Worker mobility and employment restrictions: The order asks the FTC to examine non-compete clauses and addresses occupational licensing and employers’ sharing of wage data. Deese argues that these practices can limit workers’ ability to change jobs and weaken employers’ competition for talent. Consumer access, health care, and housing-related costs: Examples include allowing over-the-counter hearing-aid sales, scrutinizing real-estate commissions and exclusive broadband agreements in buildings, curbing pharmaceutical pay-for-delay arrangements, and enabling states to import prescription drugs from Canada subject to safety standards. Agriculture and right to repair: Deese describes concentrated markets for seeds and other agricultural inputs as limiting farmers’ choices and bargaining power. The order encourages the FTC to examine restrictions that prevent farmers from repairing their own equipment and other barriers that protect incumbents. Technology platforms, data, and net neutrality: The discussion covers scrutiny of tech mergers, platform operators’ use of data and competition against businesses on their own platforms, and the President’s support for restoring net neutrality rules. Deese also notes that Congress may need to provide additional authority.

Key Arguments: Deese argues that competition is a practical route to better household outcomes: lower prices, higher wages, more choice, and innovation—not an effort to be categorically pro- or anti-business. He says consolidation has increased across many industries without delivering the promised consumer benefits, and cites research estimating a substantial annual cost to a typical household. A government-wide council is needed because competition-related authority extends beyond the DOJ and FTC to agencies overseeing areas such as agriculture, transportation, health, and communications. Reducing non-competes, unnecessary licensing barriers, and employer-only wage-data sharing could improve labor-market mobility and make employers compete more effectively for workers. In markets including prescription drugs, broadband, agricultural inputs, and farm equipment, rules or concentrated ownership can restrict consumer and business choices; removing unjustified barriers may encourage new entrants. The executive branch can act through existing agency authorities, but independent enforcement decisions remain with agencies such as the DOJ and FTC, and some reforms may require legislation.

Data Points: Length of the competition executive order: About 7,000 words and 72 bullet-point actions - Ritholtz describes the order as a substantial policy initiative rather than a brief executive-order announcement. Estimated annual cost of consolidation to a typical household: About $5,000 - Deese cites estimates aggregating effects on prices, wages, and related costs. Decline in small-business formation: Almost 50% since the 1970s - Deese cites this as one indicator of reduced economic dynamism and barriers to new entrants. Increase in annual mergers: Five or six fold over the past couple of decades - Deese uses the increase to illustrate the scale of consolidation. Industries with significantly increased consolidation: 75% - Deese says this share of industries saw consolidation rise significantly over the prior 20 years. People with some form of hearing loss: Almost 50 million - The proposed over-the-counter hearing-aid rule is intended to reduce cost and access barriers for this population. Workers affected by non-compete requirements: About one in three employers; approximately 60 million people - Deese says non-competes extend beyond senior or technology jobs into sectors including hospitality, construction, and fast food. Jobs requiring an occupational license: About 30% today, compared with 5% in the 1950s - Deese argues that unnecessary licensing requirements can impede job mobility, including for people who move between states. Relative prescription-drug prices paid by U.S. consumers: About 2.5 times as much on average - Deese compares U.S. consumers with international counterparts, while noting that prices vary by country. Share of the world seed market controlled by four companies: Most of the market, to a first approximation - Deese cites this as an example of agricultural-input concentration that can limit farmers’ choices. Rural residents without access to high-speed internet: 30% live in a jurisdiction without access - Deese distinguishes the need to expand broadband infrastructure from the separate need for more competition where service exists.

Pivotal Quotes: "This is not about being sort of pro-business or anti-business, it's about being pro-competition." — Brian Deese: He summarizes the administration’s rationale for the competition executive order. "if your existing employer wants you to stay, they should compete for your talent." — Brian Deese: He explains the case for limiting non-compete agreements and improving worker mobility. "success will be because across the economy, lots of people have been able to improve their economic prospects in practical ways." — Brian Deese: He describes how the administration would judge the Council on Competitiveness’s success.

Implications: The initiative could reshape enforcement and regulation across many sectors, lowering barriers for consumers, workers, and new businesses. Its impact will depend on agency rulemaking, independent enforcement decisions, court outcomes, and whether Congress grants additional authority.