The Biden ‘Strike Force’ Is Coming for You

After causing prices to rise, the White House blames business in an election year for “unfair and illegal prices.”

WSJ editorial. 

"The White House on Tuesday previewed what is sure to be a theme of President Biden’s State of the Union address on Thursday by announcing a new interagency task force to “crack down on unfair and illegal pricing.” How about rolling back burdensome government regulation that is raising prices?

The Administration’s new “strike force,” led by the Justice Department and Federal Trade Commission, will “stop illegal corporate behavior that hikes prices on American families through anti-competitive, unfair, deceptive, or fraudulent business practices,” a press release says. Mr. Biden went on a similar riff in last year’s State of the Union to target what he calls “junk fees.”

On cue, the White House Council of Economic Advisers (CEA) on Tuesday said the Administration’s actions are “already yielding billions of dollars in savings for Americans.” Most don’t see this when they pay their bills.

While inflation has moderated, prices for services and food in particular continue to rise faster than they did before President Biden entered office. Businesses are also increasingly tacking on charges, which the Administration doesn’t like, but most aren’t unfair or illegal.

Such fees have proliferated under Mr. Biden because business costs have increased. One way businesses pass on costs to consumers is charging more for differentiated products and services. As even the CEA acknowledges, in the “absence of these fees, businesses would likely raise their advertised prices to some degree.”

The real point of the President’s new price strike force isn’t to help consumers, but to blame business for the price increases. It’s political deflection. Hence, the FTC, Justice and Department of Health and Human Services on Tuesday launched a sweeping investigation into the “impact of corporate greed in health care” with a focus on private-equity firms. Ah, that old Democratic punching bag, “corporate greed.”

Private-equity firms have increasingly acquired physician practices, which provides a competitive counterweight to large hospitals and health insurers. While consolidation can raise healthcare prices, the culprit isn’t greed. It’s government regulation.

As we’ve written, ObamaCare’s medical loss ratio caps health-insurer profits. The regulation has spurred insurers to acquire pharmacy benefit managers and providers, which aren’t subject to government price and profit controls. To gain more leverage with big insurers, physician practices and other providers have bulked up with the help of private equity.

Independent physicians are also struggling financially because Medicaid and Medicare—which cover about 40% of the U.S. population—typically reimburse below their cost of care and don’t cover their overhead. This makes buyout offers by hospitals, insurers and private equity firms attractive.

Meantime, the Administration’s regulatory juggernaut is pushing up prices. Securities and Exchange Commission Chair Gary Gensler is targeting the zero-commission trading model. Consumer Financial Protection Bureau rules limiting bank overdraft and credit-card late fees will reduce the availability of free checking.

The Biden Presidency is becoming more expensive for Americans by the day."