Rebecca Kelly Slaughter was reinstated as a commissioner of the Federal Trade Commission last week, after Judge Loren AliKhan ruled that the firing of her and a fellow Democrat was illegal under current statute. The other fired commissioner, Alvaro Bedoya, resigned during the legal fight to take another job, but under this ruling he would be entitled to back pay.
Slaughter returned to work last Friday, and her name has been restored to the roster of FTC commissioners. It is likely to be a short-lived reprieve. The Supreme Court has allowed firings of other Democrats on independent commissions to stand while legal cases play out, and by its next term, it will probably overturn the 1935 precedent of Humphrey’s Executor, which stated that presidents can only fire FTC commissioners for cause. Despite historical practice, there have been no nominations of minority-party members on any independent commissions in Trump’s second term, and as he gains the power to fire at will, I don’t expect any minority-party positions will be filled.
Some might ask if there’s a real loss there. Minority-party commissioners are just voices in the wilderness. They cannot stop a determined majority from working its will in rulemaking or enforcement, and Trump’s functionaries are definitely determined. But just by speaking up, minority commissioners serve a critical function as public watchdogs of those actions, and in setting another path for action in the future. In Trump’s first term, we saw the power of then-FTC Commissioner Rohit Chopra to even shape events and win key reforms from a minority-party seat.
Slaughter’s first order of business upon her return to the FTC was demanding a vote on the “click to cancel” rule, which a federal judge set aside earlier this month. The Republican majority may not leap at Slaughter’s suggestion, but it’s important for her to say from a position of authority that the FTC can respond to the ruling. It claimed that the Commission didn’t allow enough opportunity for opponents of the rule to make their case, to restart the process, do all the required analyses, and protect the public from subscription scams that enrich deceptive businesses, and every one of those arguments is bunk.
In the absence of any internal pressure, the FTC under chair Andrew Ferguson has lost the plot on its mission and purpose. The agenda of the past few months featured few actual advances on consumer protection, outside of ideological clickbait like a workshop on trade practices in the gender-affirming care industry. It’s catering to a hodgepodge of these MAGA agenda items along with big business’s wishes for special treatment.
Insight into who the FTC is working for can be seen in a pair of orders last week. On July 15, it denied a request from Scott Sheffield, former CEO of oil company Pioneer Natural Resources, to set aside an order in the merger of his company with ExxonMobil that barred him from joining the Exxon board over his alleged collusion with OPEC to keep oil prices high. Sheffield was not party to the complaint and therefore couldn’t file a request to throw out the merger conditions, the FTC said. However, the FTC was free to do so on its own, which it did two days later, claiming that the condition was improper and “would damage the FTC’s credibility and undermine its mission.” The FTC reversed a similar condition on a merger between Chevron and Hess for the same reason. (Amusingly, Sheffield doesn’t even want to be on Exxon’s board anymore.)
The Commission is taking requests from other CEOs to reverse the punishment of the Lina Khan era, including one from the head of a company that developed apps to spy on people without their knowledge. Meanwhile, the FTC has waved through several mergers, including Mars, Inc.’s purchase of Kellanova (the snack food brand that once was Kellogg), while dismissing lawsuits over illegal pricing and coordination, like in the Robinson-Patman Act case against Pepsi. To the extent that there has been new enforcement activity, it has been either relatively small in nature or left over from the Khan tenure. And separately, while the firing of Stephen Colbert represents innovation in weaponizing antitrust (Paramount needs federal approval for a merger with Skydance, and the Colbert sacking could have been one of the conditions), the FTC has already gone there by approving a large advertising firm merger on the condition that it would discourage boycotts sought by its clients.
In other words, the FTC has receded back into its comfortable position as an enabler to, rather than a challenger of, power. Companies, recognizing that they are back in business for consolidation, are starting to merge again, or engaging in novel practices to roll up industries. A huge potential railroad deal between Union Pacific and Norfolk Southern would be a capper for this merger wave. (In an ironic coincidence, other companies are realizing how unmanageable consolidation is, and are breaking themselves up, like in the case of Kraft Heinz.) There are still monopolization cases in progress against some of the biggest companies in the world, but the forward motion has stalled.
Much of this was expected; an administration led by Donald Trump was never going to be a bastion of consumer and worker protections. But there has been a shift, brilliantly explained by Matt Stoller in his newsletter Big. Trump, when proposing Liberation Day tariffs and other constraints on corporate profits, was flirting with a governing model that would damage stock prices (albeit in self-defeating ways). After seeing the damage, almost entirely through a stock market sell-off, he dutifully changed course in service to the lords of capital.
The precedent of this political era was maintained: Stock prices will not be harmed by any public policy, or as Stoller calls it, the “Number Go Up” rule. Whatever policies are deemed to be damaging to capital markets will be softened, whether through special exemptions or the free hand to consolidate, as the FTC has ensured. Trump, through finance-friendly surrogates like Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, has assured Wall Street that they’ll be taken care of. That’s why you’ve seen little stock degradation in the face of renewed tariff announcements. (I’m sure that part of this is Trump recognizing that he can only personally gain from the presidency in an economy with growing stock markets; that’s where the money funneled to him will come from.)
If incumbent businesses have demanded that the prime directive is for the number to go up, and if they have the power to sit on the hands of policymakers to effectuate that, a host of ways of structuring the economy take a secondary position. That includes rules on labor and work conditions, rules seeking to diffuse power in our economy, rules seeking to lower prices and eliminate the influence of middlemen, rules blocking outsourcing of jobs and manufacturing, rules on a more equitable tax system, rules for when and whom we bail out when crisis strikes, rules breaking up dangerous concentrations of power in other countries like China, even rules that have been hotly debated to make it easier to build clean energy and housing and infrastructure.
Stoller argues convincingly that the trillions of dollars held by baby boomers sets this Number Go Up directive in stone. Older voters with a stake in capital markets have clapped manacles on our public policy.
The problem, of course, with an attitude like this is that the same capitalists demanding that the number goes up will take on greater and greater risks to keep asset prices inflating, and that always ends in a crash, sooner or later. Financial regulation has been described to me several times as like a pendulum, with busts calibrated to how loose regulation is allowed to get during the boom times, followed by a swing back to tighter regulation amid the recovery.
The passage of the GENIUS Act last week, the crypto industry’s first return on its historic investment in Washington, sets the stage for what may become the most irrational financial mania in world history—and we know what comes next. And so does the end of antitrust enforcement and consumer protection at the FTC. That’s the irony of a public policy determined to protect asset values and growth: It requires allowing behaviors that will eventually destroy those assets and wash away that growth.
Busts tend to concentrate minds and return us to a better balance. We were on that path until Trump returned. The emergent impacts of the budget bill on health care represent one segment of the bust, but there will be others. The question will be whether we can use the aftermath to break the power financial capital holds over our government, and find a new consensus.