Blame someone else: Joe Biden weaponizes the FTC

Joe Biden has made a mess of the economy, the voters know it, he knows the voters know it, and now he's desperately trying to find someone else to blame.

This would explain his new weaponization of the Federal Trade Commission against large retailers and wholesalers.  Seems they're the bad guys here with Biden's supply chain crisis.

According to Fox Business:

Nine major retailers, wholesalers and consumer good suppliers were ordered Monday to turn over detailed documents to the Federal Trade Commission (FTC) that may help identify what's driving global supply chain woes that are leaving stores with empty shelves and causing prices for goods to skyrocket. 

The FTC asked Walmart, Amazon, Kroger, C&S Wholesale Grocers, Associated Wholesale Grocers, McLane, Procter & Gamble, Tyson Foods and Kraft Heinz to turn over "detailed information" within the next 45 days to help the agency study the disruptions "causing serious and ongoing hardships for consumers and harming competition in the U.S. economy."   

It's weird stuff, given that the U.S. retail sector has a market size of $5.4 trillion, and those particular retailers and suppliers account for only about 40% of the sector, which includes automobiles, services, and other things that go well beyond what's in the local mall.  

Here's the market cap of the targeted companies:

Amazon: $1.78 trillion

Kroger: $30.88 billion

C&S Wholesale Grocers: Private company.  Revenue $25 billion, market cap estimated here somewhere between $1.26 billion of its rival and $10 billion per Forbes, which is probably high.  To be cautious, we will assign $10 billion.

Associated Wholesale Grocers: Private company.  Revenue $9 billion.  Compared exactly by margin to rival C&S, that's about 36% of the former's revenue, and assuming the same profit multiple, which again seems high, will cautiously and generously assign it $3.6 billion. 

McLane: Private company.  Revenue $50 billion, so let's give it $20 billion on the same formula.  It probably isn't that much, and could be a tenth of that based on this fellow's reading of it..

Procter & Gamble: $355 billion

Tyson Foods: $29 billion

Kraft Heinz: $41.5 billion

The grand total: $2.270 trillion, which is less than half of the $5.4-trillion U.S. retail market.  Take out Amazon, and the figure is about $490.1 billion, with the overly generous market-cap estimates of the three private wholesalers.  Funny how Democrat donor Target was not on that FTC target list, but the companies that were are all headquartered in red-state flyover states.

So now they're going on a fishing expedition, looking for evidence that these red-state companies are raising prices and keeping store shelves bare just for the heck of it, if not to make Joe Biden look bad or something, and the bottom line is that they're looking to pin something on these companies in order to blame them for the supply chain woes that are the Biden administration's as well as Democrat-run states' doing.

It's very much of a piece with the Biden administration's bid to blame Big Oil for higher energy prices, dispatching the FTC for that one, too — a real pattern of weaponization in that agency.  Instead of recognizing that oil prices are globally set based on market conditions emanating from government policies, he blames the oil companies themselves, cynically hoping the voters will believe that high prices are the result of Big Oil being mean to them.  This is one the Democrats have been investigating forever, imagining that any time oil prices go up, it must be executive A from oil company A calling up the local sheik in Saudi Arabia or executive B from oil company B and saying, "Hey, look, let's all work together to raise energy prices to profit big and make Joe Biden look bad."

It doesn't happen that way.

For a first-rate analysis on the absurdity of the whole idea, take a look at Richard Epstein's excellent debunking of the matter on the Hoover Institution's website:

President Biden has issued firm instructions to FTC Chair Lina Khan to investigate whether big oil should be held legally accountable for the recent runup in oil prices. The fact of some price increase seems beyond dispute. The average monthly Brent crude price dropped as low as $18.38 in April 2020, at the onset of the COVID crisis, but had risen to $83.54 in October 2020. But look just a little bit further and matters are not so simple, for by November 19, 2021, that price had dropped to $78.60. Indeed, this nineteen-month period witnessed wide fluctuations in price. Nonetheless, without referring to any price data, Biden broadly claimed that the "mounting evidence of anti-consumer behavior by oil and gas companies" should trigger an investigation into potential collusive behavior.

Given that "gasoline prices at the pump remain high, even though oil and gas companies' costs are declining," such alleged behavior, Biden assumes, has allowed big oil companies to double their profits since 2019, thereby allowing for stock buybacks and dividends in the coming year. "Hard-working Americans" — a tried and true appeal to populist instincts — should not be "paying more for gas because of anti-competitive or otherwise potentially illegal conduct," he said, which is why he has urged the FTC to bring "tools to bear" to ferret out and punish any possible wrongdoing.

It should be apparent that it does not take much in Biden's eyes to instigate a lengthy and hostile investigation. Rising profits are no antitrust violation when they generate dividends, many of which end up in the pension funds of those hard-working Americans. And buybacks and dividends free up capital for either consumption or further investment. Unfortunately, in Lina Khan's new age of antitrust enforcement, it appears unnecessary to allege anything that would make the price-fixing claim credible, for just how are the oil companies able to conspire to keep prices artificially high? OPEC finds that task difficult even with its formal agreements and enforcement powers. But the number of potential participants for any effective covert oil and gas price-fixing scheme must be few in order to deter individual companies from deviating from the cartel price by offering hidden concessions to its preferred customers.

The chart he links to is a doozy, making it clear that American oil companies are pipsqueaks compared to the big monster state oil companies who have far more control over entire markets.  See it here.

What we have here is taxpayer resources being squandered on phony investigations premised on the idea that voters should be blaming someone other than Joe for the inflation, supply chain issues, and economic problems they now experience.  All of those problems aren't the doing of any little guy, even a little guy as big as Amazon; they are brought on as a direct result of Joe Biden's huge federal overspending, which began with his COVID relief programs, kicked into high gear, and then got worse and worse as more monster spending plans went through.  All of that has forced the Fed into overdrive at the money-printing presses, and it doesn't help that Biden has just reappointed Jerome Powell to the Fed, who seems to think inflation is something less than a monetary problem, but keeps bringing up the supply chain as the root of the problem, as this tweet by Steve Hanke noted.

Biden's the only guy who's responsible for these serial economic fiascos being rained down upon the U.S. now.  His weaponization of the FTC is disingenuous and dishonest.  He should knock it off and face the reality of his own failed policies. 

UPDATE: Democrat donor Walmart was on the target list but Target itself, also a Democrat donor, was not.

Image: Pixabay, Pixabay License.

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