Oliver Contreras/Sipa USA via AP Images
President Joe Biden listens as Rohit Chopra, director of the Consumer Financial Protection Bureau, speaks during a White House meeting of the Competition Council, February 1, 2023, in Washington.
Let me tell you about the McFlurry machines.
The ice cream makers at McDonald’s are so notoriously unreliable that a website called McBroken tracks which ones are functioning across the country. One company, Taylor Commercial Foodservice LLC, manufactures the machines, and they were effectively requiring all repairs on the equipment to go through them, by wiring them with software error codes that couldn’t be bypassed or even understood by franchisees. A company named Kytch created a work-around, translating the error codes into simple repair instructions. But Taylor and McDonald’s teamed up to crush that option.
Three years ago, in one of Lina Khan’s first acts as chair, the Federal Trade Commission initiated an investigation into the broken McFlurry machines. And two organizations, Public Knowledge and iFixit, petitioned for an exemption from the Digital Millennium Copyright Act, to allow franchisees to override the software error codes. (The organizations did this after cracking open a machine and finding simple parts inside that could be easily fixed by franchisees.)
I’m not going to say this is the most important thing the government has on its plate, or rather in its cone. It’s just one of life’s little inconveniences, something that ought to be figured out.
Three years later, the government did.
Late last month, the U.S. Copyright Office granted the exemption, allowing franchisees to repair their own McFlurry machines. The new rule went into effect last week. The FTC and the Justice Department had issued a joint comment supporting the exemption. It was a victory in the ongoing effort to allow a “right to repair” one’s own equipment, free of proprietary restrictions from dominant—and often incompetent—manufacturers.
So here you have three different federal government agencies making sure customers can get soft-serve ice cream when they want. It’s not exactly the vision laid out on the campaign trail. But it is indicative of something that has come together over the past four years, what I would call the kind of government America wants, regardless of your ideology. Whatever happens on Election Day, this trend is likely to change in either small or spectacular ways. So we should take a moment to explain why it matters.
When I speak with Biden administration officials, they use the phrase “whole-of-government approach” so frequently that they almost weary of it. It means coordinating the various silos among federal agencies to work on common problems, rather than seeing their jurisdictions as fortresses available to them alone. Sometimes this yields dividends as modest as, well, fixing the McFlurry machines at McDonald’s. Sometimes they’re much bigger. But the goal is to steer the ship of state in a common direction, a real problem in the executive branch.
In the Biden administration, one aspect of the whole-of-government approach has been to reassert public regulatory powers over the economy, reversing 40 years of corporate control. And you know it’s working because the titans of industry, who have felt the coziness of government capture for decade, are throwing a fit.
The faction within the government interested in doing their job well has made a significant impact at many levels.
Take Jamie Dimon, JPMorgan Chase’s CEO, who was so incensed at a recent banker conference that he thundered: “It’s time to fight back!” In particular, he was mad about the Consumer Financial Protection Bureau’s “open banking” rule, which will make it easier for account holders to move their money to their preferred bank, without the hassle associated with switching. This lock-in effect has effectuated a $1.1 trillion giveaway to big banks, which benefited from higher interest rates but never felt any competitive pressure to pass that on to depositors.
A lawsuit against the open-banking rule was immediately filed by the Bank Policy Institute trade group, using a front bank from Kentucky to get the case into a pro-business courtroom. The bankers literally want the court to declare that they are allowed to charge customers fees for the “privilege” of getting information about their account and moving their own money out of a bank.
CFPB director Rohit Chopra has frustrated big-bank CEOs by being the lone holdout on an interagency measure to increase capital requirements, so banks have to absorb their own losses rather than running to the government for a bailout. Chopra has also taken aim at what he has called the “asset manager oligopoly,” in advance of a rule from the Federal Deposit Insurance Corporation (which Chopra sits on) that would regulate asset manager investment in financial institutions.
Dimon and his fellow financiers want to keep their effortless trainloads of money flowing, and they dislike the whole-of-government approach to make finance safer and customers whole.
Chopra is overshadowed by FTC chair Lina Khan, the avatar for every billionaire’s anger. But they’re actually pissed that the FTC has led the way for other agencies, like the U.S. Copyright Office in the McFlurry example. An absurd report from the House Oversight Committee, making all sorts of nefarious claims to FTC actions, boils down to committee Republicans being irritated on behalf of their corporate paymasters that Khan knows how to work the levers of power and get things done.
For example, she took on Big Tech’s history of inventing a concept called “digital trade,” and worming their way into the U.S. trade representative’s office to embed it into trade deals, subverting national regulatory authority around the world. A template digital trade chapter was thrown out of a proposed USTR deal with the Indo-Pacific, and House Oversight Republicans are mad that Khan helped make that outcome happen. At the Department of Transportation, where Khan’s former deputy Jen Howard runs competition policy, new rules forcing automatic refunds for canceled or severely delayed flights won Khan’s praise.
Jakub Porzycki/NurPhoto via AP
Sometimes the “whole-of-government approach” yields dividends as modest as fixing the McFlurry machines at McDonald’s.
There are of course the FTC’s own initiatives. Just in the past few weeks, we have the “click to cancel” rule to make it as easy to end a subscription as it is to start one (which immediately drew a corporate lawsuit), or the successful merger challenge to an attempt to corner the market on affordable handbags, one of 14 victories in merger cases that are conveniently missing in the House Oversight report.
But beyond the usual suspects—FTC, CFPB, the Antitrust Division of the Justice Department, the National Labor Relations Board, the Securities and Exchange Commission, and more—the tiniest corners of the government have taken up this approach. Like when the U.S. Forest Service broke a monopoly in aerial firefighting retardant, or when the Department of Transportation standardized electric-vehicle charger interoperability as a prerequisite for receiving public funding, or when the Department of Health and Human Services implemented a rule for over-the-counter hearing aids that has led to innovation and competition, or … when the Copyright Office made it so that McDonald’s customers seeking dessert don’t have to constantly deal with broken McFlurry machines.
Whole-of-government approaches are not just focused on competition policy. At the Phoenix plant of TSMC, the world’s leading semiconductor manufacturer, chip production yields are coming in higher than at comparable plants in Taiwan. That’s despite a lot of nonsense that Americans can’t make semiconductors, or that the Biden administration was foolish in trying to deliver too many wins at once on reindustrialization, good jobs, and other goals. The approach to industrial policy has been comprehensive, and it’s worked.
The government is a big entity, and the whole-of-government approach is admittedly not whole. The Biden administration didn’t solve every problem under the sun, or even try to. But the faction within the government interested in doing their job well has made a significant impact at many levels. And those pinched by that approach—primarily corporate beneficiaries of a broken government—are predictably apoplectic. On the Trump-friendly oligarch side, Elon Musk, the head of the tantrum brigade, proudly announced that Lina Khan “will be fired soon”; billionaires favorable to Harris have expressed the same wish.
That’s definitely about Khan, but it’s more about this diligent tendency in governing, the whole-of-government approach. It was a quiet revolution, but compared to the past few decades, it was definitely revolutionary. The previous self-appointed owners of this country don’t like it, and don’t want to see government even thinking about things like competency and problem-solving. As Matt Stoller quoted last week, G.K. Chesterton once said, “The poor have sometimes objected to being governed badly. The rich have always objected to being governed at all.”
If Trump wins the election, the whole-of-government approach will be weaponized on behalf of the rich and powerful, aimed at the vulnerable, the poor, migrants, and other objects of scapegoating. If Harris wins, there will clearly be pressure to dismantle the approach, to position it as too radical, too unwieldy, too unwelcoming of business, too damaging to global competitiveness or whatever other buzzword billionaires want to use.
But we could maybe see the last four years as a moment, where government learned about the failures of the past, while charting a different future. On the precipice of a possible turning away from this moment, the public could revive a slogan used by Kamala Harris over the past 100 days: We’re not going back.
