The Evil and Economically-Ignorant Federal Trade Commission (FTC)
Would it make sense for a corporation to spend hundreds of millions of dollars on a new business with a business plan of competing with Wal-Mart by charging higher prices than Wal-Mart does? Of course not; the biggest idiot in the entire business world would never contemplate such a stupid idea, yet that is the cornerstone of the Federal Trade Commission’s argument for holding up a proposed merger between Dollar General and Family Dollar. The FTC is demanding that Dollar General sell 4,000 of its existing stores as a condition of the merger. If not, say the bureaucratic ignoramuses there, the merger will create “monopoly power.” In the language of the FTC, “monopoly power” means the power to raise prices. This of course would allow Wal-Mart (among other corporations) to wipe out the newly-merged corporation.
Obviously, the intent of the merger is to achieve synergies that will allow the new company to CUT prices and become more competitive with Wal-Mart — exactly the opposite of the FTC “analysis.” This doesn’t mean that the new company would necessarily succeed, but that is certainly the intent. That is why the Web site, TheStreet.com, published a headline about the proposed merger declaring that it would mean “BIG Trouble for Wal-Mart.” Big trouble for Wal-Mart would in turn mean great news for consumers. The FTC is doing everything it can to see to it that that never happens. So-called antitrust regulation has for 125 years been a tool of the crony capitalists. Its effect has always been to protect (politically-connected) competitors from competition, all in the name of “the public interest”!