Reinvigorated antitrust activity under the Clinton administration has forged its share of odd alliances and divisions, with the latest example being the public debate yesterday between the nation's top trustbusters and
Federal Reserve chairman Alan Greenspan.
At a Senate Judiciary Committee hearing yesterday, Greenspan said antitrust officials should not interfere with monopolists that keep their prices low, adding that the government should exercise a "higher degree of humility" before taking action. (See related story)
While he did not specifically mention the Federal Trade Commission's antitrust action against Intel or the Justice Department's high-profile suit against Microsoft, his comments
rankled top officials of both agencies.
"I hope when [Greenspan] sets the discount rate he exercises a great deal of humility," U.S. assistant attorney general Joel Klein told Reuters.
Greenspan's comments are not likely to herald a shift in the Clinton administration's antitrust policy. Instead, they illustrate the tension that has accompanied anticompetition law since its origin in English common law in the 1600s.
"This is an area in which reasonable people can differ," said Robert Lande, a professor specializing in antitrust law at the University of Baltimore. "Unless a bunch of people meet in a proverbial smoke-filled room to agree on prices, there's probably going to be disagreement as to whether an action is pro-competitive or anticompetitive."
Disagreement has existed in every administration, said
William Baxter, the former head of the Justice Department's antitrust division and a professor at Stanford University. "Antitrust suits your own purposes because there's no political constituencies that have to be mollified," he added. Unlike issues such as abortion, governmental spending, and affirmative action, antitrust law does not tend to divide the populace into distinct groups.
Due to the political ambivalence in antitrust law--and the unique power Greenspan holds--his comments are not likely to have much consequence.
"Except for moral persuasion and the respect he generates, [Greenspan] is not in a position to affect administration policy," said Rick Rule, who headed the Justice Department's antitrust division during the laissez-faire Reagan administration and now consults for Microsoft. While the Reserve chairman is appointed by the president, he noted, the White House and the Federal Reserve are largely independent of one another.
Rule added that Greenspan's comments reflect "pretty much the predominant view of economists, lawyers, and, most importantly, the courts over the last 20 to 30 years. If [the comments are] controversial, it's only because there is an effort by the current administration to overturn those notions."
Under Clinton, antitrust enforcement has been more active than it has been in decades, experts agree. A recent wave of large mergers in the telecommunications, banking, and technology industries has combined with a more aggressive interpretation of the law.
But University of Baltimore's Lande disagreed with Rule that Greenspan's comments reflected the prevailing view of antitrust law. Greenspan "is an enormously respected person, but he's getting out of his area of expertise," said Lande. "You don't get immunization just because you're a big, successful company."
One way to account for the divide between Greenspan and Klein is by examining their particular approaches to economics. Greenspan is concerned with macroeconomics, which deals with things such as interest rates, unemployment, and inflation--things that affect the overall economy. Klein, on the other hand, tends to view the world through microeconomic glasses, focusing on individual consumers, businesses, and industries.
"Greenspan is a master of the macro, but [antitrust] is micro," Lande argued. "It's a totally different end of the economic spectrum."