Ben & Intel Investors - A Common Sense Letter from Senator Gorton concerning Microsoft, Intel and the Peoples's Republic of the FTC & DOJ.
A good letter - should be read by all!
Paul
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Statement of Senator Gorton
PR Newswire - June 19, 1998 16:34
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Alan Greenspan and Antitrust June 19, 1998
WASHINGTON, June 19 /PRNewswire/ -- Senator Gorton issued the following statement
today:
Mr. President, the Senate Judiciary Committee heard testimony on Tuesday from Federal Reserve Chairman Alan Greenspan and Assistant Attorney General for Antitrust, Joel Klein. The hearing was called to discuss the economic impacts of the recent wave of mergers and
acquisitions and the role of federal antitrust enforcers in today's economy.
While the subject matter was narrow, nothing less than the future of the American economy is at stake in the debate between those in this nation who believe in the power and efficiency of the free market and those who advocate government control of the market.
Both sides in the debate, and both witnesses at the hearing claim to be working toward the same goals: consumer protection, competition, and economic expansion. But the contrast in the means each side advocates to achieve those ends is astonishing.
Alan Greenspan, arguably one of the most powerful men in the world, urged "humility" on the part of government antitrust enforcers. While Joel Klein pushed for more government intervention and more taxpayer money for his division at the Department of Justice.
Once again Mr. President, I find the attitude of the Clinton/Gore Administration's Justice Department disturbing. It is quite apparent to this Senator that Joel Klein and his staff are anti-business, anti-success, and anti-economic growth.
Mr. Klein pled for more, not less, government control of the economy. In fact, in his testimony Mr. Klein said, "We reject categorically the notion that markets will self-correct and we should sit back and watch." Instead, Mr. Klein believes the government should control every move of America's most successful and innovative companies in the name of competition and consumer protection. His statement strikes me as an endorsement of the very kind of socialist-style command and control economics embraced by the Soviet Union that led to its
collapse, not the free market principles on which the United States economy is based.
Mr. Greenspan, a long-time champion of the free market, made the case that the Justice Department and the Federal Trade Commission have been overstepping their bounds recently in predicting how mergers will affect the economy of the future, and in prohibiting mergers on the basis of predictions about the economic future of industries. He said, "I would like to see far more firm roots to our judgments as to whether particular market positions do, in fact, undercut competition or are only presumed on the basis of some generalized judgment
of how economic forces are going to evolve." Greenspan went on to point out that, "history is strewn with people making projections which have turned out to be grossly inaccurate."
The Chairman of the Federal Reserve Board, despite his power to do otherwise, represents and advocates the same common sense approach to competition and consumer welfare as that advocated by our founding fathers. His vision is one in which the government rarely
intervenes in the free market that, left alone, can provide more benefits and broader economic wealth for consumers than the smartest government planners and politicians. His vision is one in which American entrepreneurs invent amazing new products and compete openly with one another in a free, but relentless marketplace, to meet the constantly changing demands of consumers.
It is Mr. Greenspan's vision that has contributed to the greatest economic growth in this nation's history; that of the Justice Department would undermine it.
In contrast to Mr. Greenspan's, Mr. Klein's comments reveal an elitist, government-knows-best approach to economics. Under the guise of consumer protection, Klein advocates government control of the marketplace in order to prop up businesses that cannot compete
successfully on their own.
I for one, Mr. President, believe Mr. Greenspan's approach to be correct and to be the one that has and will serve the American consumers and the American economy best.
As Greenspan so eloquently put it, "Through skill, perseverance, luck, or political connections, competitors have always pressed for market dominance. It is free, open markets that act to thwart achievement of such dominance, and in the process direct the competitive drive, which
seeks economic survival, towards the improvement of products, greater productivity, and the amassing and distribution of wealth. Adam Smith's invisible hand does apparently work."
Let us look, for example, at the Justice Department's case against Microsoft -- the most successful and innovative company in the U.S. software industry. In this case, the Justice Department argues that Microsoft does not allow computer manufacturers to customize the
desktop. Mr. Klein's solution to this problem is for the government to force Microsoft to allow competing desktops to be displayed on Microsoft's own operating system software.
But only a few weeks after Mr. Klein filed suit against Microsoft on this front, the free market has produced its own solution. A small, start-up software company in Seattle called Pixel has begun marketing a product that makes use of the sliver of black screen space surrounding Microsoft's Windows display on the desktop. Using this empty space, Pixel's software will allow computer manufacturers to display their own control bar. The control bar gives users
direct access to Web sites chosen by the computer manufacturers.
In the next few weeks, Packard Bell and NEC will start shipping computers with Pixel's new control bar on the opening screen.
Compaq Computer has come up with its own alternative. The company announced last week that it will provide a special keyboard with a new range of personal computers that incorporate function keys for instant access to e-mail, news, weather, shopping and other features.
Like the Pixel software, this new keyboard enables Compaq to partner directly with Internet publishers and access providers, effectively bypassing Windows.
These innovations make it clear that the free market works much faster and much more effectively than government intervention. It is a lesson that the Administration and Assistant Attorney General Klein should take to heart.
Mr. Klein's counterpart at the Federal Trade Commission, Robert Pitofsky, recently filed a similar case against Intel, another highly successful high tech company that has come under fire for its very success.
The FTC has charged that Intel, in attempting to protect its own intellectual property, is engaging in anti-competitive business practices. This suit comes at the very time that Intel is
facing the toughest competition in the microprocessor market that it has faced in its history as a company. The FTC is as perverse as is the Department of Justice.
Mr. Greenspan's testimony is a breath of fresh air in an increasingly stifling era of big government intervention in the free market. I urge my colleagues in the United States Senate to heed Mr. Greenspan's words and to join me in my efforts to bring reason back into the
debate over antitrust policy.
SOURCE Office of Senator Gorton
/CONTACT: Office of Senator Gorton, 202-224-3441/
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