Intel Corporation embodies achievement. The company is passionately dedicated to inventing and producing the fastest, cheapest, best product possible. Because of success at doing just that, at almost 41 years old, Intel still dominates the worldwide semiconductor market. There’s a 75 percent chance that your PC’s brain contains Intel chips.
On May 13th, the European Commission fined Intel a record $1.45 billion for—brace for the viciousness of the crime—reducing prices. Intel’s cost advantage had made it tough for rival AMD to gain market share, and being the good progressive body that it is, the EC embraced AMD’s whining and slammed Intel’s manufacturing superiority. The EC’s motivation seems to stem from a belief that first, companies mustn’t compete using competitive advantage; and second, that lower prices breed less competition.
Let that sink in.
A press release interprets the ruling: “By undermining its competitors’ ability to compete on the merits of their products, Intel’s actions undermined competition and innovation.” When inferior producers demonstrate “merit,” superior ones should hand the laggards some market share? Did Intel steal customers who preferred to pay more than what Intel charged? Indeed, to liberals, effort counts more than results. Presumably the EC can produce a list of companies that attracted customers through magnificent efforts that yielded mediocre results.
Any future enabled by the EC’s approach would call to mind FDR’s National Industrial Recovery Act (NIRA). To circulate more money and sustain higher wages, Roosevelt demanded higher prices. Can you say “stimulus?” How well did FDR’s plan work? Nine more years of depressing depression.
The EC will get exactly what Roosevelt perversely got: the imaginary good health of business to the real detriment of John and Jane Doe. In Europe, the “beneficiaries” will be Fritz and Françoise Shultz-LeBlanc. In the EC’s way of thinking, “fairness” to all companies demands holding prices artificially high. Government pixies sprinkle magic dust over the land so no company feels “less-than.” The customer loses.
And the Obama administration is watching.
A former antitrust official and current fellow at the leftwing Center for American Progress declares that the EC’s “relief …will provide an excellent guide to U.S. enforcers as they try to determine what to do about Intel’s exclusionary conduct.” The language alone disgusts freedom-loving individualists. Government must “relieve” the woes of companies who cannot compete? Intel’s just-retired Chairman Craig Barrett observes that “our Justice Department is preparing to march in lock-step behind Europe.”
Barrett is correct.
The President’s antitrust watchdog, Christine Varney, characterizes FDR’s 1937 antitrust actions as attempts to reestablish regulation that NIRA had lessened. Varney ignores the facts. NIRA required citizens to grin and bear higher prices for the good of all. Obama repeatedly pushes a similar theme of contrived altruism. At inauguration, he asked that we “sacrifice” for an America “bigger than the sum of our individual ambitions.” The “common good” at the expense of the individual.
Varney wants her Antitrust Division to support “development of competition policy more broadly.” Scary. The woman proclaims a focus on “the power of competition in the market to ensure the American consumer’s access to the best products at the lowest prices.” But with the contradictions in the Obama agenda, don’t count on competitively-driven prices. America will emulate Europe and Varney will abuse superior competitors like Intel even though her actions will impede her stated objectives. Between EC-style antitrust overregulation and Obama’s plan to penalize American companies operating overseas by closing tax “loopholes,” corporations are facing double jeopardy.
Varney espouses a renewed vigor to punish the winning ways of vibrant corporations like Intel. Speaking before the Center for American Progress, she announced what will amount to the stifling of competition by litigating companies that drop prices, under the guise that they are “predatory.” In a slip of honesty, she admitted “no adequate substitute for a competitive market,” but then reentered La-La Land by maintaining that it’s “clear” that “the country has been waiting for this ‘self-correction,’ spurred innovation, and enhanced consumer welfare.” Americans hoped to see a dose of economic calamity to improve their “welfare?” Yes, and tomorrow I shall wash my Trans Am by plunging it off the south rim of the Grand Canyon into the Colorado River. What’s “clear” is that Varney, like 99 percent of “progressive” fairness mongers, is ignorant of economic reality. In forcing equality, liberals corrupt the very concept of competition.
Some people have opined that Obama would commit political suicide by holding back innovative producers—the engines of free-market capitalism—during a major recession. The opinion betrays a flawed premise: that Obama’s current priority is reelection. Barack Obama is a sponge for all the adulation and prestige that he can soak up from like-thinkers and worshippers. If not stopped, before he politically guts himself Obama will effect “transformation” nearly irreversible even after Americans stare slack-jawed at his “changes.” FDR railed against “greedy” business and high achievers into his third term before the people regained consciousness. Where is our outrage? Will we demand that our saner representatives stop the President and the Democrat Congress from weakening America’s best and relegating us to the path of decrepit European socialist democracies?