With Christine Wilson’s departure, the Federal Trade Commission (FTC) has lost a champion for high-quality work and open debate. Many will miss her, but the staff and consumers will suffer the most.
What’s even sadder is that it seems that losing her as a commissioner was necessary to lay bare the FTC’s rapid decay. The current agency leadership is reportedly mistreating the staff, going light on consumer protection, and undoing years of rigorous and intellectually sound work that made the U.S. a global leader in effective antitrust — at least until two years ago.
Robert Bork Jr., has called for a congressional investigation into the shenanigans at the FTC. We’ll see whether that goes anywhere. At a minimum, President Biden and future presidents should take note and exercise greater care in choosing commissioners, because the qualities of the persons sitting in those seats greatly impact people’s lives.
In her resignation letter and earlier announcement, Wilson details the agency’s leadership problems. Others have also described the problems, so I won’t repeat those here. Instead, I want to explain why they have occurred and how they can be avoided.
I’ve spent the past 25 years teaching regulators from across the globe how to build world-class agencies. One important lesson that appears to be a significant failing at the FTC is that commissioners need to leave their ideologies, personal ambitions and past loyalties at the proverbial door when they accept their new jobs.
The FTC has several features that are intended to make this happen. The staggering of commissioner terms, the limit of no more than three of the five commissioners being of the same political party, the appointment process, and the limits on a president’s authority to remove a commissioner help put distance between commissioners and any political alliances. Requirements for transparency and following rule of law, due process and precedence should dampen the effects of ideology, loyalties and past alliances, and favoritism.
But it takes more than laws and formalities to make a commissioner effective: He or she needs to embrace the spirit of independence, collegiality and humility. A widely admired regulator in the Caribbean protected his agency from political interference by sharing information equally with every political party. Another regulatory leader in the region often reminded his peers that citizens elect lawmakers, not regulators, to make law.
A former American regulator built integrity into his work by realigning his loyalties away from long-held beliefs and associations, and toward his new colleagues and the laws they were to implement. He is now a sought-after speaker on effective regulation. Another put her career at risk by standing up to her governor and voting according to the evidence. The governor took revenge, but the agency became stronger for having weathered the storm. Yet another regulator emphasized humility by recognizing limits to regulators’ knowledge.
Partnering with colleagues, building continuity, and creating an environment that encourages passionate, substantive debate are critical soft skills for a regulatory agency because they make the agency predictably principled over many years. Predictable regulation is essential for economic progress, as many studies have shown. Businesses invest more and citizens receive higher incomes in countries where businesses trust that regulators will follow laws and sound reasoning, rather than fickle politics and ideologies.
A source of today’s challenges at the FTC appear to reflect Chairperson Lina Khan’s loyalties to her fellow neo-Brandeisians and their shared vision of a government-shaped economy, a view she helped formulate and championed during her years in academia and with congressional staff. But the ideology runs counter to decades of economic research and of established, well-considered FTC precedents. As Wilson explains:
“In November 2022, the commission issued an antitrust enforcement policy statement asserting that the FTC could ignore decades of court rulings and condemn essentially any business conduct [that] can be labeled with a nefarious adjective — ‘coercive,’ ‘exploitative,’ ‘abusive,’ ‘restrictive.’”
The FTC refused to define the terms, making this an “I know it when I see it” policy, as Wilson points out. Such vagueness violates due process and rule of law, and it enables political opportunism, creating excessive legal costs and depressed business investment.
President Biden and future presidents should endeavor to appoint commissioners who will be loyal to the work, respect laws and precedence, humbly recognize their personal limits and the value of others’ opinions, and seek to strengthen their institutions’ abilities to support a vibrant economy.
Mark Jamison is a nonresident senior fellow at the American Enterprise Institute, where he works on how technology affects the economy and on telecommunications and Federal Communications Commission issues.