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Obama killing it on his way out - Executive Order on Corporate Competition (1 Viewer)

matuski

matuski

Footballguy
Obama to sign executive order to ignite corporate competition




“The idea is that whether we're talking about financial services, whether we're talking about products like the box on your cable TV — across the board if we have more players who can potentially participate, fewer barriers to entry, the rules aren't rigged, then you get more people trying to get your business and you get better products at cheaper prices,” he said.

The Council of Economic Advisors (CEA) released a report on Friday that documented evidence that competition has been reduced in the economy. The report pointed to a decades-long decline in new business formation and increases in industry-specific measures of concentration. The report pointed to efficiencies of scale, increases in merger and acquisition activity, firms’ crowding out potential competitors, and regulatory barriers to entry.
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Killing it. :thumbup:

 
The time to be "killing it" was 6 years ago.

“[Wages and incomes] haven't gone up as quickly as people had been accustomed to in previous generations,” he said. “But the fact of the matter is it is indisputable that the economy is much better now than it was when I came into office. We're continuing to make progress. And my hope is that during this debate we focus very practically on what are the additional steps we can take to make a difference.”
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The economy is improving...for things like set top boxes.

 
I've alwys felt that the proper role of government is the make the markets more efficient.  It looks like this order intends to do that.  It's up to the agencies to come up with the recommendations.  I hope that they are successful in increasing competition.

 
TobiasFunke said:
Shout out to Bernie as well for Obergefell v Hodges, the Warriors 73 win season, that new Star Wars flick, season 4 of the Americans, and all the other wonderful things his greatness has bestowed upon us.
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You left out the BK Angiest Whopper

Thanks Bernie

 
I guess I would like to see how various industries respond before I opine.  I do think that generally less regulatory impediment to entering an industry is a good thing.  (I say generally because there are some industries even I want subject to some regulation like nuclear power generation, mining, arms manufacture, etc.)

I do have my doubts that this will reach the regulatory agencies I would like to see reigned in.  I also tend to believe that there are economic laws in tension with each other.  yes, open competition can and does lower price and spur innovation, but success tends to breed market power and allow for efficiencies of scale.  I am not well versed enough to predict outcomes on something like this at such an early stage.  I do not know that anybody really could, but perhaps my not knowing that is based on my own lack of knowledge.  I will read others takes on this with some interest.  It might help if those takes included some background on the education, training, experience, and employment of those giving the takes.

Party on Garthmigos

 
As one of the first actions in this new, government-wide push, the Commerce Department is filing with the Federal Communications Commission (FCC) to call on it to increase competition in the set-top box market.

Cable and satellite TV boxes sit on televisions in hundreds of millions of American homes, showing up on every month’s bill as “converter rental.” According to analysis by the White House, the cost cable set-top boxes — on average $231 to rent per year — has risen 185% while the cost of computers, televisions and mobile phones has dropped by 90%.

“It's been tied to the provider, and you rent it and consumers spend billions of dollars on this every single year,”  Obama said. “There hasn't been much innovation”

====

regardless of the proposed solution,  this is a pretty good point

 
The executive order is just directing agencies to take a fresh look at ways in which they might exercise their regulatory power to remove barriers to competition.  It's an order to take a look at a particular issue and report back in 60 days. Really not that interesting.

As for what they might do, that depends on the industry and agency. This Yahoo article points out a couple measures fitting the description that are already underway: FAA and DOT pushing for greater runway access for more airlines and FCC doing something I don't understand at all related to its spectrum auctions. I assume you'd see stuff like that- FERC looking at ways to increase the ability of small generators to get their power to the grid, FDA looking at whether their regs present barriers to smaller companies getting approval that can be amended, etc.

Why didn't he do it earlier? I dunno. Why didn't George W Bush do it at all for 8 years?  Why didn't Bill Clinton?  Maybe he thought it was more important to focus on broad economic recovery during his first term rather than directing his and his agencies' focus to particular measures to increase competition. Maybe he read an article that made him think of it. Maybe he was worried about agency morale in light of GOP efforts to slash budgets and pay, shut down the government and rein in regulators. and didn't want to put too much on their plate. Maybe he wanted to do it all along but kept getting distracted by cool new stuff on Netflix. Who cares? It's not a specific measure that was absent before. It's just a mandate to agencies to check out a particular angle and report back.

 
bostonfred said:
As one of the first actions in this new, government-wide push, the Commerce Department is filing with the Federal Communications Commission (FCC) to call on it to increase competition in the set-top box market.

Cable and satellite TV boxes sit on televisions in hundreds of millions of American homes, showing up on every month’s bill as “converter rental.” According to analysis by the White House, the cost cable set-top boxes — on average $231 to rent per year — has risen 185% while the cost of computers, televisions and mobile phones has dropped by 90%.

“It's been tied to the provider, and you rent it and consumers spend billions of dollars on this every single year,”  Obama said. “There hasn't been much innovation”

====

regardless of the proposed solution,  this is a pretty good point
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I don't follow this stuff as closely as I might, but wasn't there a court ruling or agency ruling just a few months ago which allowed increased competition in that area particularly?  If so should that example, now addressed if indeed my memory is correct, be the poster child for something more sweeping? 

I suppose the set top box thing could be used to sell the new initiative with a more cogent argument.  Something along the lines of the set top box issue focused our attention on a greater issue, of which the set top box issue was only a small part.  We do not intend to wait for piecemeal action to address an issue now highlighted when we can more efficiently do so by Executive Order.

Again, this is not an area in which I have any expertise.  I am an infant looking for footing so please feel free to offer me perspective. 

 
As usual the gov't is great at promoting dead/dying business models.

Set top boxes are toast. Most young people don't bother getting cable/satellite TV. My kids are in the 25-30 yr old range and have hi speed internet & no TV. Verizon has stopped expanding its Fios service & is focusing on wireless services. 

 
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TobiasFunke said:
directing agencies to take a fresh look at ways in which they might exercise their regulatory power to remove barriers to competition
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It sounds like he's deregulating because regulations can hurt business. :shrug:

TobiasFunke said:
Maybe he thought it was more important to focus on broad economic recovery during his first term
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This measure is supposed to help business, I would think a measure like this would have helped the recovery.

 
SaintsInDome2006 said:
It sounds like he's deregulating because regulations can hurt business. :shrug:

This measure is supposed to help business, I would think a measure like this would have helped the recovery.
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On the first comment, that's way too simplistic of an approach. In many industries regulation is necessary- I assume for example that you don't want to get rid of the FAA and just let people set up airports and fly planes wherever and whenever they want.  So the question becomes whether there's some steps you can take to increase competition in that field.

On the second comment- the measure is specific to a particular aspect of the private sector- increasing the number of players in a particular regulated industry. That's good and bad- good for consumers I would assume, but also maybe it increases the likelihood of failed businesses or faulty products or whatever. The airline industry is also a useful relatively simple example here because we can all understand it pretty easily. More airlines and routes is obviously good for ticket prices but might also cause more delays, increase risk of crashes, etc. I don't think the economy is a singular thing where you can say something is either good or bad. It's a question of what you want to prioritize.

 
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TobiasFunke said:
On the first comment, that's way too simplistic of an approach. In many industries regulation is necessary- I assume for example that you don't want to get rid of the FAA and just let people set up airports and fly planes wherever and whenever they want.  So the question becomes whether there's some steps you can take to increase competition in that field.

On the second comment- the measure is specific to a particular aspect of the private sector- increasing the number of players in a particular regulated industry. That's good and bad- good for consumers I would assume, but also maybe it increases the likelihood of failed businesses or faulty products or whatever. The airline industry is also a useful relatively simple example here because we can all understand it pretty easily. I don't think the economy is not a singular thing where you can say something is either good or bad. It's a question of what you want to prioritize
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On 1. yeah of course I agree.

On 2., ok so there are a lot of measures and some are more important than others, I'd agree on that. I think this sounds like a good idea, it just seems like it could have been done some time ago. I'd pretty much forgotten that Obama used to talk about helping competition back in 2008, I'm all for it, just seems like an 'on the way out the door' kind of thing, I wish it had been more of a feature.

btw - thanks for the explanation and discussion of the OP.

 
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reading the googles a bit and it seems TF is correct.  It's a formal "wagging of the finger".  No action (other than review/research) is required.  I guess this is better than doing nothing, but not sure it rises to the level of "killing it", but I understand that can be a sliding scale.

 
What regulator is going to admit whatever they've been doing to regulate/suppress business for the last 7 years is complete nonsense and was not only a waste of time but counterproductive and it took an executive order to get them to change their ways?  Wouldn't that put a regulators job in jeopardy?  If anything maybe a couple token ideas come out of it but putting a muzzle on regulatory attack dogs does not turn them into lap dogs.  

 
SaintsInDome2006 said:
On 1. yeah of course I agree.

On 2., ok so there are a lot of measures and some are more important than others, I'd agree on that. I think this sounds like a good idea, it just seems like it could have been done some time ago. I'd pretty much forgotten that Obama used to talk about helping competition back in 2008, I'm all for it, just seems like an 'on the way out the door' kind of thing, I wish it had been more of a feature.

btw - thanks for the explanation and discussion of the OP.
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From my limited perspective I have to agree.  isn't this the standard first move of most administrations.  You know, have the Vice President head a Task Force of Agency heads and Think Tankers find Agency inefficiencies and eliminate them.  From memory it seems we are usually treated to a press release during the first year about the number of pages that have been eliminated from the C.F. R. as proof the Administration is fulfilling campaign pledges.  The timing does seem wired to me.  That is not a criticism, but rather an observation.  Hell, for all I know Obama did this on entry into office as well and he is just bookending his administration.

 
TobiasFunke said:
The executive order is just directing agencies to take a fresh look at ways in which they might exercise their regulatory power to remove barriers to competition.  It's an order to take a look at a particular issue and report back in 60 days. Really not that interesting.

As for what they might do, that depends on the industry and agency. This Yahoo article points out a couple measures fitting the description that are already underway: FAA and DOT pushing for greater runway access for more airlines and FCC doing something I don't understand at all related to its spectrum auctions. I assume you'd see stuff like that- FERC looking at ways to increase the ability of small generators to get their power to the grid, FDA looking at whether their regs present barriers to smaller companies getting approval that can be amended, etc.

Why didn't he do it earlier? I dunno. Why didn't George W Bush do it at all for 8 years?  Why didn't Bill Clinton?  Maybe he thought it was more important to focus on broad economic recovery during his first term rather than directing his and his agencies' focus to particular measures to increase competition. Maybe he read an article that made him think of it. Maybe he was worried about agency morale in light of GOP efforts to slash budgets and pay, shut down the government and rein in regulators. and didn't want to put too much on their plate. Maybe he wanted to do it all along but kept getting distracted by cool new stuff on Netflix. Who cares? It's not a specific measure that was absent before. It's just a mandate to agencies to check out a particular angle and report back.
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Think this pretty much covers it. Well said.

 
The timing of this is a response to a report from the Council of Economic Advisors that just came out and showed that the top companies across a broad range of industries increased their market share, squeezing out smaller and newer companies.

The Council of Economic Advisors (CEA) released a report on Friday that documented evidence that competition has been reduced in the economy. The report pointed to a decades-long decline in new business formation and increases in industry-specific measures of concentration. The report pointed to efficiencies of scale, increases in merger and acquisition activity, firms’ crowding out potential competitors, and regulatory barriers to entry.
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Rove! said:
competition has been reduced in the economy. The report pointed to a decades-long decline in new business formation and increases in industry-specific measures of concentration
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Seems to me the government has been allowing way too many mega-mergers and market consolidation for some time now. I haven't seen much if any difference between Bush and Obama on this.

 
Not a big fan of big corporate mergers, but not really seeing that as a problem in the data. The level of "firm exits" has not changed all that much over the past 40 years. The problem seems to stem more from a steep decline in "firm entries" (new business formation). 

I think it would be great for all levels of government to seriously think through (and solve) how they may be contributing to or even causing the lack of new competitors. For example, do we really need Certificate-of-Need laws that restrict the building of new health care facilities? What about the increasing regulatory cost to hire/have American workers?  What about the burdensome licensing rules in many states, for things as simple as braiding hair?

You might consider your own industry segment, and think about how the various regulations hinder new competitors? Broadly speaking, the layers of regulation make it very difficult to navigate a start-up, or gain a foothold as a small competitor. In my industry (property & casualty insurance), every new regulation requires resources (legal, IT, etc) that larger companies are better able to provide, but smaller companies can get left behind. 

It's not just (or even mostly) a federal issue. Cities/counties/states have increasingly burdensome zoning/construction/what-not laws, micro-managing many aspects of a business. 

 
besides regulation, i think there's a more "organic" cause of a decline in competitive metrics. that is the ability for a market leader to gain huge economies of scale due to modern technology and globalization. Markets are much less likely to be geographically fractured now, driven by the internet and relatively cheap "transportation" costs.

 
The corporate tax code punishes smaller corporations and needs to be completely redone.  No band-aid can cover up such a massive wound.  Hopefully the next president can pick it up. 

 
What is the classic saying...if it moves tax it, if it still moves regulate it, when it stops moving subsidize it.

 
Before getting into the details, a little historical context (and more on a specific action we’re taking today).

Millenials are often defined as the generation born after 1980. But they could also be described as the generation that doesn’t remember what it’s like to be forced to rent a big, overpriced, basic phone from the phone company.

Until the early 1980s, the phone company had a monopoly—not just on the wire to your house but, in many cases, on the phone you plugged into that wire.

And the result wasn’t pretty.

Phones had little variety, evoking the famous Henry Ford quote — "You can have any color, so long as it’s black” — and only the most basic functionality. Worse yet, households had to pay a fee each month to rent these phones that added up over time to many multiples of what they would have paid to purchase a similar (or fancier) phone themselves.

Then, all that changed when the Federal Communications Commission (FCC) and others took action to open up phones to competition. This competition and the technological progress it helped drive, led to a proliferation of digital dialing, built-in answering machines, a panoply of styles, cordless phones, and other innovations.

A similar dynamic has taken hold elsewhere in American homes today: According to a recent study, 99 percent of all cable subscribers lease a set-top box to get their cable and satellite programming.

It sits in the middle of our living rooms, and most of us don’t think twice about it. But that same study found that the average household pays $231 per year to rent these often clunky boxes. And, while the cost of making these boxes is going down, their price to consumers has been rising.

Like the telephones in 1980s, that’s a symptom of a market that is cordoned off from competition. And that’s got to change.
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https://www.whitehouse.gov/blog/2016/04/15/ending-rotary-rental-phones-thinking-outside-cable-box

- Not sure I understand why he is addressing set top cables boxes?

As for Ma Bell being broken up right now, ATT does all of these things:

  • Cable
  • Internet
  • Data/Broadband lines
  • Wifi
  • Land Phone
  • Long Distance
  • Phone Store
  • Cell Phone
  • Text
  • Cell Phone service.
  • Home security.
  • They can put all this on one bill.
What happened here and is AT&T going to be broken up again? No?

 
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