Everything you need to know about modern regulatory policy has been distilled into a single question recently asked by U.S. District Judge Emmett Sullivan. Sullivan is deciding whether to approve the Justice Department’s imposition of conditions on the recent SBC-AT&T and Verizon-MCI mergers. Normally, antitrust settlements are rubber stamped by the courts, but after two industry groups opposed to the mergers complained, Sullivan scheduled a hearing for this week to weigh his options. Last Friday, Sullivan gave the government, the companies, and the merger opponents a list of questions to address at Wednesday’s hearing. Question 8 is the most revealing:
Through the eyes of a layperson, the mergers, in and of themselves, appear to be against public interest given the apparent loss in competition. In layperson’s terms, why isn’t that the case?
I’m not sure who this hypothetical “layperson” is, but I suspect he’s someone who is totally ignorant of economics. He’s certainly ignorant about the industry he’s being asked to centrally plan (as are the prosecutors and even Judge Sullivan.) And if that’s the case, I don’t think he should be the standard used to decide a question involving basic property rights. Sadly, I suspect the “ignorant layperson standard” is what guides most regulatory (and general government) decision making.
Interestingly, Sullivan isn’t pinning all of his hopes on the ignorant layperson. His other questions ask to what extent the views of the FCC and New York Attorney General Eliot Spitzer should be taken into account. I don’t see how that helps.
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This is the best thing I have ever seen come out of the court system.
Of course it helps to ask what AG Eliot Spitzer, D-NY, thinks! Once his opinion is known, it is then always correct to do the exact opposite!!
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