The Morning Dispatch: Biden and Tech
What the president's nominations suggest about his plans for Google, Amazon, and Facebook.
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Happy Thursday! One year ago today, the WHO declared COVID-19 a pandemic, President Trump announced a 30-day European travel ban, the NBA suspended its season, and Tom Hanks tested positive for the virus. Or was it one month ago? All feels like a blur.
Quick Hits: Today’s Top Stories
The House voted 220-211 on Wednesday to pass the $1.9 trillion American Rescue Plan, which will expand child tax credits, extend federal unemployment benefits, and send direct checks to millions of Americans, among other provisions. President Biden is expected to sign the bill into law on Friday.
The Senate voted on Wednesday to confirm Merrick Garland as Attorney General, Marcia Fudge as Secretary of Housing and Urban Development, and Michael Regan as administrator of the Environmental Protection Agency. All three were confirmed on a bipartisan basis.
President Biden directed the Department of Health and Human Services to purchase another 100 million doses of Johnson & Johnson’s COVID-19 vaccine, to be delivered later this year. Johnson & Johnson’s vaccine rollout has been slow out of the gate, with the White House telling governors Tuesday to expect less than 400,000 doses of the one-dose vaccine next week.
The Centers for Medicare & Medicaid Services and Centers for Disease Control issued updated guidance for nursing homes on Wednesday, recommending long-term care facilities—with a few exceptions—allow “responsible indoor visitation at all times and for all residents, regardless of vaccination status of the resident, or visitor.”
The Consumer Price Index rose 0.4 percent in February, and has risen 1.7 percent over the past year, according to the Bureau of Labor Statistics. Both figures were about what economists expected.
The United States confirmed 56,121 new cases of COVID-19 yesterday per the Johns Hopkins University COVID-19 Dashboard, with 2.6 percent of the 2,166,487 tests reported coming back positive. An additional 1,459 deaths were attributed to the virus on Wednesday, bringing the pandemic’s American death toll to 529,102. According to the Centers for Disease Control, 36,647 Americans are currently hospitalized with COVID-19. 2,028,692 COVID-19 vaccine doses were administered yesterday, bringing the nationwide total to 95,721,290.
Reading the Biden Tea Leaves on Big Tech
As we’ve written in recent months, Big Tech—the term of art for describing platforms such as Google, Facebook, Apple, Amazon, and Twitter—is increasingly under fire from both the right and the left, albeit for entirely different reasons. To simplify, Republican critiques of the platforms tend to focus on their content moderation efforts, while Democrats are more concerned about the sheer size and economic power the companies hold.
This was not always the case. Barack Obama’s Democratic Party was incredibly cozy with the tech industry: Pundits and reporters have long credited social media with playing a pivotal role in the success of his 2008 presidential campaign, and the White House provided members of the Obama administration a launching pad for future careers in Silicon Valley. Former press secretary Jay Carney now serves as a senior vice president at Amazon, onetime deputy chief of staff Kristie Canegallo is a vice president at Google, and erstwhile assistant attorney general Tony West is currently Uber’s chief legal officer. Heck, Obama himself has deals with Netflix and Spotify.
After spending four years as Donald Trump’s rhetorical punching bag, most in Silicon Valley welcomed the return of Obama’s vice president to the White House: 98 percent of campaign donations from tech company employees went to Democrats in 2020, according to an analysis by the Center for Responsive Politics.
But the Democratic Party has changed, and Joe Biden has changed with it. He never matched Sen. Elizabeth Warren’s level of hostility to the tech sector, but in a New York Times interview during the heat of the primary last year, Biden said he thinks Facebook CEO Mark Zuckerberg is “a real problem,” adding that “some of the things that are going on [in Silicon Valley] are simply wrong and require government regulation.” His campaign said that, as president, Biden would aggressively use “all the tools available—including utilizing antitrust measures” to ensure corporations act responsibly. Was this simply campaign rhetoric, or a legitimate promise?
Fifty days into his presidency, Biden has kept relatively mum about tech, instead focusing most of his time and energy on responding to the coronavirus. But a pair of recent personnel moves may indicate how his administration plans to approach the issue.
On Tuesday morning, Politico reported that Biden intends to nominate Lina Khan to the Federal Trade Commission, news that the New York Times confirmed yesterday. Khan rose to prominence in policy circles in 2017, when she published a lengthy piece in the Yale Law Journal arguing that existing antitrust law is “unequipped to capture the architecture of market power in the modern economy,” particularly tech companies. She claimed companies like Amazon can “escape antitrust scrutiny” by engaging in “predatory pricing” to pursue growth over profits. The paper became something of a holy text for the “hipster antitrust” movement that is attempting to shift antitrust law away from the consumer welfare standard.
Khan has since worked in the office of FTC Commissioner Rohit Chopra, served as counsel on the House Judiciary Antitrust Subcommittee’s lengthy investigation into leading tech companies, and is now an associate professor at Columbia Law School. At just 32 years old, she would be the youngest FTC commissioner in history if confirmed by the Senate.
The Khan news made the biggest waves, but it came just days after fellow Columbia Law School professor Tim Wu announced he was joining Biden’s National Economic Council to work on technology and competition policy. The title of his most recent book—The Curse of Bigness: Antitrust in the New Gilded Age—may provide some insight into how he’ll be approaching these issues.
GOP Sen. Mike Lee, ranking member of the Senate Antitrust Subcommittee, expressed concern on Tuesday over Khan’s lack of experience and her approach to competition policy. “Ms. Khan no doubt has a promising career ahead of her, but being less than four years out of law school, she lacks the experience necessary for such an important role as FTC Commissioner,” he said. “Her views on antitrust enforcement are also wildly out of step with a prudent approach to the law.”
But tech is an issue that splits Republicans between their free market instincts and populist rhetoric. A spokesperson for Sen. Ted Cruz—one of Big Tech’s harshest critics—told The Dispatch the senator “looks forward to meeting with Ms. Kahn and will assess her nomination on the merits.”
Progressives, meanwhile, are ecstatic with Biden’s actions. “We applaud President Biden for recognizing that Lina Khan is a once-in-a-generation legal mind,” said Sarah Miller of the anti-monopoly American Economic Liberties Project. Rep. David Cicilline—chair of the House Antitrust Subcommittee—praised Khan for doing an “incredible job” while working for him, claiming her nomination to the FTC would be a “major victory for locally-owned businesses, workers, and everyone who has been negatively affected by the dominance of Big Tech.”
The appointments certainly represent a major shift for Democrats’ relationship with Silicon Valley, but on their own, they likely won’t change much in terms of actual enforcement action. “I think by elevating these two figures, the Biden administration is trying to appease the Left in a way, and show they’re taking antitrust seriously,” said Alec Stapp, director of technology policy at the Progressive Policy Institute. The most important positions for competition policy—assistant attorney general for antitrust and FTC chair—have yet to be filled.
The FTC—responsible for enforcing antitrust laws—is led by five commissioners, no more than three of whom are allowed to hail from the same political party. It’s currently knotted up at two apiece, but one Democrat—Rohit Chopra—is leaving to head up the Consumer Financial Protection Bureau. Who Biden nominates as the third Democrat—and who he elevates to chair—will say a lot about where his priorities lie.
“It’s not like [Khan] is going to be unilaterally making any kind of enforcement decisions,” said Geoffrey Manne, president and founder of the International Center for Law and Economics, in an interview with The Dispatch. “Anyone who was appointed into that position was going to vote the same way at the end of the day.”
He echoed Stapp’s theory that Biden may have chosen Khan and Wu for more political reasons. Their selection could “imply that the administration is serious about antitrust enforcement, serious about being aggressive against big tech companies,” he said. “But it could also just mean that the administration recognizes that there are a diversity of viewpoints in the party, and it’s important to keep everyone kind of happy, and you put people like Lina and Tim in positions that maybe aren’t decisive [to] make your constituency happy. And maybe you end up with a pretty moderate overall position.”
Regardless of which position the Biden administration takes, the FTC is already building an antitrust case against Facebook, and the Department of Justice is doing the same with Google. Antitrust cases are “almost always multi-year” endeavors, Stapp said. “This will be a very long process, and we’re in the early innings.” Back in December, a judge overseeing the Google case set the trial’s tentative start date as September 12—of 2023.
In the meantime, Stapp thinks Biden and Senate Democrats will likely come together through budget reconciliation to increase funding for the FTC to hire more staffers. “Big antitrust cases like the case the FTC is bringing against Facebook are very resource intensive. And I think no reasonable person would want the FTC or the DOJ to decline to bring a case that they thought they could win with the proper resources, but they only declined to bring it because they’re underfunded,” he said. “If we were to adequately fund our enforcement agencies, they would likely be able to bring more cases, maybe win more cases. And then people would be a little more satisfied and maybe not necessarily want to make as radical of changes to the antitrust laws.”
Worth Your Time
In his new self-published book, The Secret Apartment: Vet Stadium, a surreal memoir, Vietnam veteran Tom Garvey (no relation) chronicles his experience living in a concessions stand inside Philadelphia’s Veterans Stadium from 1979 to 1981. In a piece for the Philadelphia Inquirer, reporter Stephanie Farr chronicled Garvey’s bizarre story. “He arranged the space so that if someone opened the door, all they would see was a wall of cardboard boxes,” she writes, “but hidden at one end of the boxes was a corridor which opened up into the secret apartment.”
COVID-19 has, in more ways than one, robbed us of our sense of familiarity with the outside world. In a piece for The Atlantic, Emma Cushing talks to neuroscientists about how the pandemic has messed with our brain chemistry to the point where we’re beginning to forget how to be normal. “I feel like I have spent the past year being pushed through a pasta extruder,” she writes. “I wake up groggy and spend every day moving from the couch to the dining-room table to the bed and back. At some point night falls, and at some point after that I close work-related browser windows and open leisure-related ones.”
If you’re a history buff and/or enjoyed Declan’s piece about the Whig Party last month, check out history professor Jelani Cobb’s latest piece in The New Yorker on a similar theme. “America’s political parties and the party system are, in fact, accidents of history,” he writes. “The Founders were suspicious of ‘factions,’ as parties were then called, fearing that powerful blocs would put their own regional or commercial interests above the common good, and endanger the fragile union of the new nation. But, as Richard Hofstadter wrote, in his 1969 book, ‘The Idea of a Party System,’ the Founders’ ‘primary paradox’ was that they ‘did not believe in parties as such, scorned those that they were conscious of as historical models, had a keen terror of party spirit and its evil consequences, and yet, almost as soon as their national government was in operation, found it necessary to establish parties.’”
Presented Without Comment: You’ve Got About Two Weeks Edition
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Toeing the Company Line
On the site today, Rachael looks at several school districts that have opened up during the pandemic and how they have navigated mitigation measures. Beyond implementing masking, some have changed their class schedules to reduce classroom sizes and others have moved lunch to a larger location like the school’s gymnasium. “The truth is, while the school year has not gone perfectly for anyone, the districts that are open have been showing how it can be done,” she writes.
In his Wednesday G-File (🔒), Jonah breaks down the inevitability of elites as a sociological and historical phenomenon to help us better understand Meghan Markle and Prince Harry’s controversial interview with Oprah Winfrey this week. For Jonah, the couple and the royal family are classic representations of warring elitist factions: “The old aristocracy of inherited titles and noble bloodlines versus the new aristocracy of celebrity.”
In his latest French Press (🔒), David focuses on Biden’s decision to undo “one of the Trump administration’s best policies” by issuing an executive order “directing the secretary of education to ‘consider suspending, revising, or rescinding’ Trump administration regulations that guaranteed basic due process protections for accused students in campus sexual misconduct adjudications.” Read the whole thing to learn more about how this Obama-era guidance “created a due process nightmare on American campuses.”
Congressional Democrats’ omnibus voting rights, campaign finance, and ethics bill, H.R. 1—also known as the “For the People Act”—passed in the House last week, and the gang broke it all down on this week’s Dispatch Podcast. They also discussed GOP retirements in the Senate, whether arguments about cancel culture are trumping more substantive public policy debates, and a surprise tabloid-y topic you won’t want to miss!
“An increasingly common tactic on the populist right is to label skeptics of new government programs (protectionism, subsidies, etc.) ‘free market fundamentalists’ who dogmatically oppose any and all government regulation and believe in the perfection of free markets,” Scott Lincicome writes in his Capitolism newsletter (🔒) this week. “The same folks brushing aside us ‘market fundamentalists’ are quick to add that they, of course, still support free markets generally but are compelled to make an exception in the case of whatever policy they may be advocating at the moment.”
Let Us Know
Thinking back to this time last year, what memories stand out to you as pandemic life began in earnest? What was your last “normal” activity? When did you realize this was serious?
Reporting by Declan Garvey (@declanpgarvey), Andrew Egger (@EggerDC), Haley Byrd Wilt (@byrdinator), Audrey Fahlberg (@FahlOutBerg), Charlotte Lawson (@charlotteUVA), Ryan Brown (@RyanP_Brown), and Steve Hayes (@stephenfhayes).