Freedom Line Blog

Hollywood drama typically remains centered in sunny California and in our homes and theaters.

This week, however, offers a convergence between the entertainment industry and an opportunity for the Congress to assist the Trump Administration’s success on accelerating the U.S. economy through its deregulatory agenda.

Specifically, the U.S. Senate Judiciary Committee is conducting a hearing on the proposed Netflix-Warner Brothers transaction, and the overarching theme should remain how allowing the free market, open competition and American innovation offer the best path to job creation and economic growth.

In other words:  The federal government should avoid needless interference in a mutually beneficial transaction between private parties.

Throughout the Biden Administration, we witnessed the economic harm caused by excess government interference into the U.S. economy, and since President Trump’s return to office we’ve witnessed an astonishing rebound about which we’ve frequently commented.  Growth is skyrocketing, and that reflects the benefit of a lower-tax, deregulatory agenda.

With that in mind, the U.S. Senate and Congress more generally must maintain the humility to realize that the parties involved are in the best position to weigh competing offers in this transaction, not federal bureaucrats.

Today’s video and streaming marketplace continues to demonstrate the constant innovation and growth that reflect America’s free market principles in an ideal world.  From services like YouTube to TikTok to Amazon Prime to HBO to traditional network television and every other streaming service, there has never been more competition for American viewing choices.  And new innovations, services, bundles and viewer models arrive almost daily.

Accordingly, there is simply no intelligent argument to be made that the video and streaming marketplace suffers from lack of competition or threat of market concentration.

We take no side in the particulars of the proposed Warner Brothers transaction, and it’s not our business what private parties determine to be in their shareholders’ and workers’ best interests.  That’s for the private and free market to determine, not big government.  If Warner Brothers determines that Netflix offers the best opportunity to continue its legacy and boost value, that’s not for bureaucrats to suffocate on technocratic whim.  For whatever it’s worth, Netflix has committed to preserving content spending, as well as continuing to license Warner Bros. programming to other services and even to maintain Warner’s theater release focus.   In contrast, wiser market observers note that the competing Paramount offer would more likely mean job losses due to the more overlapping production logistics of Paramount and Warner Bros.

Regardless, the important point is that this is a matter for the free market, not government dictate.

Whatever one’s personal preference in terms of programming, or idiosyncratic or ideological favoritism toward any of the private companies involved in this proposed transaction, the best way for the U.S. Senate and the federal government generally to ensure a thriving entertainment marketplace and promote jobs and innovation and economic growth is to follow the medical adage of “First, do no harm”

Congress must let the free market work.  That’s how we’re achieving remarkable economic growth at the moment, and that’s the best way for it to assist the Trump Administration’s proven deregulatory, pro-market agenda.

In a startling visual, our friends at Unleash Prosperity highlight something that has gone underreported to date:  The degree to which Americans’ average 401(k) plans have grown during both of President Trump’s terms, but fell by $25,000 under Joe Biden in inflation-adjusted terms.  Something to consider when Trump’s opponents attempt to claim that Americans suffer an “affordability” crisis under his leadership:

Your 401(k) Under Trump Versus Biden

From Unleash Prosperity, following our latest Liberty Update commentary referencing the issue, more picture-is-worth-a-thousand-words excellence, highlighting the Mount Everest of Joe Biden’s inflation record versus President Trump’s:

Inflation: Biden Versus Trump, Part II

In our latest Liberty Update, we highlight the welcome series of positive economic news since Donald Trump returned to the White House in January, including his superior record on inflation compared to his predecessor Joe Biden.  As is often the case, our friends at Unleash Prosperity have captured that inflation comparison in a helpful image, which is worth sharing and keeping in mind when the media continues to do its best to badmouth the Trump economy:

Trump Versus Biden On Inflation

Over at American Enterprise Institute (AEI), James Pethokoukis wrote a fascinating piece, “America’s Forgotten Prelude to Its Special Century,” in which he explains what led to the century during which America became the most prosperous, powerful and innovative nation in human history between 1870 and 1970.  “Yet America’s special century,” Pethokoukis notes, “did not emerge ex nihilo.  The pro-growth groundwork was laid in the less glamorous decades between 1790 and 1870.”

Critically, Pethokoukis notes the importance of intellectual property (IP), and patents in particular:

Equally important was an innovation culture, according to Rosenbloom.  Patents grew almost five times as fast as the population between the years 1790 and 1850.  Ordinary mechanics drove a culture of tinkering and incremental improvement (what economic historian Joel Mokyr has called the “Industrial Enlightenment.”).”

As we often highlight, strong patent and IP rights (including copyrights, trademarks and trade secrets) play just as important a role today in America’s innovation and economy on everything from lifesaving pharmaceuticals to technology to entertainment.

In today’s hyper-competitive and ever-changing telecommunications sector, private enterprises must remain empowered to fluidly navigate and combine for greater market scale without gratuitous government regulatory interference.  How private companies choose to navigate today’s competitive environment isn’t particularly any of our business or concern, but the recent merger proposal between Charter Communications and Cox Communications does merit attention as it relates to something that the federal bureaucrats should not do:  intrusively overregulate.

It bears emphasis because for four years we at CFIF highlighted the egregious excess of the Biden Administration when it came to needlessly micromanaging private companies’ decisions on such matters.  The new Trump Administration has returned a more market-based economic approach that emphasizes lower taxes and less regulation, and the payoffs have already been obvious.

Let’s hope that current regulators – whether at the Federal Trade Commission (FTC), Department of Justice (DOJ) or Federal Communications Commission (FCC) – recognize the peril of the last administration’s discredited hyper-regulatory opposition to mergers of all sorts, and that they instead let the free market work itself out without needless bureaucratic interference.  As was the case in the first Trump Administration, the winners of that less-regulatory approach will be American consumers, our economy and private innovation.

Are you better off today than you were four years ago?

If you happen to be someone who ever purchases gasoline, the answer is no on that front, as our friends at the Unleash Prosperity Hotline highlight.  The Biden/Harris administration and its cheerleaders frequently trumpet that inflation and prices for items like gasoline are down significantly from their recent highs, what they rarely bother to tell you is that they’re still up significantly from when Biden and Harris took over:

The Biden/Harris Effect

In response to broad public discontent over economic conditions, the Biden/Harris administration habitually points to the nation’s unemployment rate.  What remains underreported is that the unemployment rate is actually on a disturbingly upward trend over the past year, from 3.4% in April 2023 to 4.1% now, just as voters consider whether to continue the economic policies of the past four years:

Unemployment Rate’s Disturbing Upward Rise

In their increasingly desperate effort to resuscitate Joe Biden’s sagging campaign, his defenders claim that stock markets vindicate “Bidenomics” (not that they call it that anymore, of course) vis-a-vis former President Donald Trump.  Well, our friends at the Committee to Unleash Prosperity show what happens when you adjust stock performance to account for out-of-control inflation under Biden:

“Biden Boom?” Not So Much.

In our latest Liberty Update, we highlight how Americans have soured on “Bidenomics” despite Biden supporters’ ongoing insistence that voters trust them rather than over three years of actual, real-life experience and hardship.  Well, our friends at the Committee to Unleash Prosperity have highlighted another point that merits emphasis as minorities turn against Biden in his reelection effort.  Namely, they prospered far more under President Trump than President Biden:

Minorities Prospered Far More Under Trump Than Biden

Joe Biden tells Americans that he’s helping them by building “from the bottom up and the middle out.”  But the numbers don’t lie, and the ugly reality is that he’s only dragging us all toward the bottom.  Throughout his presidency, wage gains (green) have been consistently exceeded by inflation (blue), meaning loss in real earnings (red):

Bidenomics Means Lost Earnings

Consumer spending accounts for approximately two-thirds of the U.S. economy, so Joe Biden’s crushing impact on consumer confidence helps resolve his apologists’ confusion over Biden’s economic disapproval.  After inheriting an economy rebounding from the Covid shock, Biden’s policies quickly drove consumer confidence back downward, where it continues to stagnate.  No wonder he finds himself in such electoral hot water.

Bidenomics Crushes Consumer Confidence

As Joe Biden attempts to paint a rosy picture despite Americans’ real-world experiences, the truth is that wages still haven’t caught up to inflation during his presidency:

Inflation Outpaces Wages Under Biden

The Biden Administration and its advocates insist that the economy is flourishing, often citing the job market.  According to the federal government’s own numbers, however, job gains have slowed since Biden entered the White House:

Job Gains Have Slowed Under Biden

In our latest Liberty Update we highlight how replacing Joe Biden atop the Democrats’ 2024 ticket wouldn’t substantively change the left’s “Bidenomics” economic agenda that is the main voter concern driving his unpopularity.  In noting Biden’s strange and stubborn habit of whispering into the microphone that “It’s working” when promoting that failing agenda, we noted that poverty just surged at a record rate last year, according to the federal government itself.  From our friend Stephen Moore, here’s a helpful visual placing it in stark relief:

Bidenomics Is “Working?”

“The record of price controls goes as far back as human history.  They were imposed by the Pharaohs of ancient Egypt.  They were decreed by Hammurabi, king of Babylon, in the eighteenth century B.C.  They were tried in ancient Athens.” -Henry Hazlitt

Today marks the one-year anniversary of Joe Biden’s misnamed “Inflation Reduction Act” (IRA), which even he now admits shouldn’t have carried that title.

Beyond Biden’s own regrets, however, Americans deserve to understand its destructive impact on our healthcare system and world-leading pharmaceutical innovation sector.

Namely, our traditional market-based approach has resulted in an unrivaled legacy of pharmaceutical innovation and abundance relative to the rest of the industrialized world.

For example, the United States accounts for approximately two of every three new lifesaving drugs introduced worldwide, meaning that we alone create twice as many new drugs as the entire world combined.  As another illustration, American consumers enjoy a substantially higher availability of critical drugs compared to people in other advanced economies.  Of 270 new medicines introduced domestically since 2011, only 52% of them were available to our neighbors just across our northern border in Canada, 41% in Australia, 48 % in Japan, 53% in France, 64% in Britain and 67% in Germany.

Destructive drug price controls, however, maintained an illogical appeal for the Biden Administration and the political left.

They can’t say that they couldn’t have foreseen the downsides of the IRA.  Amid debate over broad drug price controls back in 2021, a University of Chicago study warned of their potential negative impact on future drug innovation and availability:

The United States has far fewer restrictions on price than other countries, but the Biden Administration has announced their goal to lower drug prices through greater price regulation. …  [N]ew drug approvals will fall by 32 to 65 approvals from 2021 to 2029 and 135 to 277 approvals from 2030 to 2039.  These significant drops in new drug approvals will lead to delays in needed drug therapies, resulting in worse health outcomes for patients.  

Several years earlier, even the United Nations World Health Organization (WHO) similarly warned about the consequences of government price controls and intellectual property violations:

[P]rice controls, combined with the threat of market lockout or intellectual property infringement, prevent drug companies from charging market rates for their products, while delaying the availability of new cures to patients living in countries implementing those policies.  

Disregarding those warnings and textbook economic logic, the Biden Administration and Pelosi-Schumer Congress plowed ahead with the IRA, whose drug price control provisions President Biden bizarrely trumpets as a 2024 reelection theme.  From branded drugs to off-patent older generics, the Biden Administration accelerated government efforts to artificially target drug prices, oblivious to the foreseeable consequences.

We’re now suffering the consequences of that agenda.

Drug shortages have already reached record highs, increasing by 30% between 2021 and 2022 alone, according to a report earlier this summer from the Senate Committee on Homeland Security and Governmental Affairs:

Shortages of critical medications continue to rise – including drugs used in hospital emergency rooms and to treat cancer, prescription medications, and even common over-the-counter treatments like children’s cold and flu medicine.  The number of active drug shortages in the U.S. reached a peak of 295 at the end of 2022. …  Between 2021 and 2022, new drug shortages increased by nearly 30 percent.  At the end of 2022, drug shortages experienced a record five-year high of 295 active drug shortages.  

Separately, a new report from the American Cancer Society warns of emerging drug shortages, caused in part by drug pricing policies:

Chemotherapy drugs used to treat cancer are increasingly in short supply and have returned to the list of top-five drug classes affected by shortage.  Expanded demand, supply shortages, limited manufacturing capacity, and low profit margins for generic therapies are among the factors resulting in the current nationwide shortage.  …  A number of the drugs included in the shortage don’t have an effective alternative.  As first-time treatments for a number of cancers, including triple-negative breast cancer, ovarian cancer and leukemia often experienced by pediatric cancer patients, the shortage could lead to delays in treatment that could result in worse outcomes.  

Accordingly, drug shortages have reached record levels under the looming threat of drug price controls, weaker intellectual property protections and regulatory browbeating.

Instead of perpetuating the IRA’s spiral of price control insanity, elected leaders should return to the more market-oriented approach that brought unrivaled innovation before more Americans pay the needless cost.

Make of this what you will, as Joe Biden pitches “Bidenomics” in his reelection effort and maligns the alleged “trickle down” economic record of his predecessor:

Bidenomics

Posted without additional commentary, per the latest Labor Department data, here’s an illustration from economist Steve Moore of the immediate and ongoing pay cut that Americans have experienced since Joe Biden became president:

The Biden Pay Cut

We recently referenced how Joe Biden seeks a 2024 job extension from American voters even while he has presided over a record 24 consecutive months of earnings declines (wages minus inflation), and our friend Stephen Moore offers an instructive illustration of the point:

Record Biden Earnings Bust

While Joe Biden simply repeats his claims to be building an economy “from the bottom up and the middle out,” and strangely brags about slight reductions in the rate of inflation that shot upward under him, our friend Stephen Moore provides yet another handy visual on how inflation has outpaced wage gains since Biden entered the White House:

Joe Biden the Wage Slayer