Who Can't Capture Markets Captures Regulators

Wednesday, December 20, 2017

George Will writes of regulatory capture by Whirlpool, which is run by pragmatists whose "stand" on the issue of competition is best described as "whatever will sway bureaucrats to act in ways that enhance our short-term profits":

We shouldn't have to worry about whether Donald Trump or any other government official approves of the brand. (Image via Wikipedia)
In 2006, when Whirlpool was paying $1.7 billion to buy its largest competitor, Maytag, federal regulators fretted that this would give the company too much market power. Whirlpool said: Fear not, competition from foreign manufacturers such as South Korea's Samsung and LG will keep us sharp and benefit American consumers. Now, however, Whirlpool, which is weary of competition, has persuaded the U.S. International Trade Commission to rule that Samsung and LG should be reproached for what, eleven years ago, Whirlpool said it welcomed: competition.
Will notes of the tariffs sought by Whilrpool's cronies:
The tariff/tax, which is designed to limit the choices of, and increase the prices paid by, American consumers would be 50 percent on all imported machines, after the first 1.2 million. U.S. customers caused the importation of about 3 million Samsung and LG washers in 2016.
On average, if a new machine costs, say, $500, the above figures would increase the price to $650. (And note that other regulations already have increased the original price over what it ought to have been.) It is more wrong than Will indicates for the government to have this kind of power in the first place. We should not have to wonder what decision will spew forth from the muddled mind of someone who simultaneously favors regulation of trade and holds himself out as an opponent of the regulatory state. The government has no business restricting trade with peaceful nations or telling businesses how to price their goods, even if they ask it to.

-- CAV

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