Walking Through The Wreckage: Trump’s Structural Damage to the Executive Branch
Newsletter 69: De-Trumpification will necessitate both short term action and a long term reckoning with the nation’s shrinking civil service
In the opening days of Biden’s presidency, his executive orders and smattering of progressive appointments gives reason for optimism. Though Biden campaigned as a moderate, his cabinet is shaping up to be more progressive than Obama’s. Sustained pressure from grassroots movements and progressive organizations is making an impact and widening the fields of possibility for change.
Some decisions however, like the potential appointment of fintech revolver Michael Barr to the Office of the Comptroller of the Currency, as well as Biden’s silence on Trump’s US Attorneys, signal a potential return to a dangerous “normalcy”.
Any mirroring of Trump’s legacy, i.e the appointment of revolving door candidates, charged with regulating the very industries they work for, is not enough to meet a moment that demands structural change. Joe Biden should opt to leave a different legacy-- one that puts the nation on the path to recovery and not a relapse to a corporate captured government.
Transition
Big Tech -- a catch-all term that refers to a handful of companies that develop information technology products -- is poised to assert its influence in the Biden administration. The growing influence of Fintech (that is, finance technology) is particularly worrisome.
In an article for The Intercept, our Timi Iwaymei and Max Moran explore the insidiousness of fintech through Robinhood’s shutdown of trading of GameStop and other memed stocks. While fintech itself is not necessarily bad, the absence of regulation over this industry could be dangerous. Fintech firms tend to seek regulatory ambiguity that allows them to take advantage of superior access to highly paid attorneys to write contracts that impose risks on the unwilling. As the Robinhood scandal illustrates, without regulation fintech firms swindle average people through ill-advised day-trading or high-interest loans, usher new systemic risks into the financial system, and develop traceable, privately owned currencies with the potential to replace cash.
Far too many of Biden’s potential nominees to regulate the financial sector have fintech ties.
Governance
The success of the Biden Administration will also depend upon their reckoning with the catastrophe that was the Trump regime. Biden’s transition alone will not rectify the legacy of dysfunction that Trump and his cronies have left in their wake.
We face a combination of both structural damage (the loss of experienced civil servants and record voluntary departures) as well as lurking Trump loyalists, committed to carrying the outgoing president’s anti-democratic ideology.
As we’ve noted in previous newsletters, Trump’s holdovers still plague the government, like FBI director Chris Wray who failed to prevent an insurrection on the Capitol largely plotted in public online spaces. Trump’s US Attorneys who survived purges and loyalty tests still represent the Department of Justice throughout the country.
But firing Trump holdovers isn’t the only action needed to recover from the last four years. As our Eleanor Eagan writes in The American Prospect this week, meeting this moment will require a federal government that is much better staffed than it is now.
As the nation (barely) endured each passing year of Trump’s hyper-corrupt presidency, departments throughout the federal government continued losing mission driven civil servants. And at the same time, the Trump administration remained laser focused on shrinking the federal workforce. In public statements, Trump and his appointees repeatedly railed against government workers, referring to them as "deep state agents" or as part of a corrupt "swamp." Ironically, these insults were a far better reflection of the Trump administration's own goals.
The result of Trump’s war on the civil service has depleted the capacity of the federal government to function, with the Departments of Education, Labor, and State among the most affected. And the loss of workers of color of all genders and women has warped representation in the executive branch.
The call to revive the federal workforce is not about ideological posturing. It is about recognizing the severity of this moment and preventing human suffering. Any delay to addressing the intersecting issues we face today-- coronavirus, unemployment, the housing crisis and climate crisis -- will cause irreparable human harm.
For more on the need for surge hiring, please check out our press release, memo, and op-ed in the American Prospect.
Antitrust
As nominations to Biden’s administration continues, rumors surrounding who will helm the antitrust enforcement agencies have ramped up.
At the DOJ, the wind changed direction on Sullivan & Cromwell partner Renata Hesse, a former counsel for Amazon and Google who appears to have been knocked out of the running for Assistant Attorney General. Unfortunately, the replacement contender is Susan Davies, a Kirkland & Ellis Partner apparently pushed forward by Attorney General nominee Merrick Garland. Davies has her own share of conflicts of interest--she once represented Facebook in an antitrust suit brought by a rival advertiser. As David Dayen wrote, the FTC’s ongoing Facebook suit seeks to “break it into its component parts and ban it from the type of anti-competitive behavior Davies defended as their counsel.” Kirkland & Ellis has deep ties to the Republican Party and the Trump Administration, and as we argued last month, her willingness to serve as the firm’s resident Democrat helped Trump’s favorite law firm succeed.
David Dayen points to plaintiff lawyer Jonathan Kanter as a potential appointee who would bolster the anti-monopoly movement. But there remain plenty more corporate-tied antitrust lawyers vying for DOJ antitrust positions, including Crowell & Moring’s Juan Arteaga and Arnold & Porter’s Sonia Pfaffenroth. The Revolving Door Project published our research on these two figures and other concerning individuals who may be looking for antitrust appointments in Biden’s administration. Incoming antitrust officials will have the opportunity to capitalize on unprecedented public fervor to rein in the political and market power of Big Tech, and should be unhindered by ties to tech and other monopolists.
On the FTC front, excitement has been building around the possible nomination of “thorn in the side of Big Tech” Lina Khan to fill the commissioner seat to be vacated by CFPB director nominee Rohit Chopra. Khan is a Columbia Law School professor, former legal director for Open Markets Institute, and helped write the House Antitrust Subcommittee’s groundbreaking report on Google, Facebook, Amazon and Apple. Unsurprisingly, arguments to keep her out of an influential position have begun to pop up--Politico reported yesterday that Khan’s “2017 Yale Law Review article outlining potential antitrust violations by Amazon” may be grounds for recusal in a case against Amazon. As our Jeff Hauser tweeted, Khan’s antitrust scholarship in the public interest is in no way equal to helping a corporate client resist regulatory scrutiny. The purported equivalency is absurd, but indicates Big Tech’s unfolding, desperate attempt to block progressives from enacting anti-monopoly reforms at the FTC and DOJ.
While news that CEO Jeff Bezos is stepping down to chair the company’s board dominates headlines, the FTC announced the agency is sanctioning Amazon $61.7 million for stealing delivery driver tips. Commissioner Chopra stated he hopes the case ends the FTC’s inaction “when it comes to abuses in the gig economy and anticompetitive conduct targeting workers.” While Khan and others who are ready to take on monopoly power can fulfill that vision, Big Tech and its allies seem to be working to block anti-monopolist’s ascension to regulatory power altogether.
Want more? Check out some of the pieces that we have published or contributed research or thoughts to in the last week:
Robinhood Is A Perfect Example of Fintech’s Insidious Power
Why Recent American Governments Have Fumbled Crises
How Afraid Should Corporate America Be of Joe Biden?
Revolving Door Project: Biden Must Use Available Tools to Grow Civil Service Quickly
Progressives Vehemently Object To Cass Sunstein’s Plans To Return To Government
Congress Must Ask: Did Trump Politicize Our Civil Service?
How Biden could help narrow the racial wealth gap with just one appointment
Yellen Should Move Quickly To Appoint A Climate Leader In Treasury
New Dem-Majority Senate Must Assess Financial Reg Appointees Through Climate-Tinted Lens
How will the new Washington take on tech and civil rights?
Klobuchar Wants ‘Aggressive and Effective’ Antitrust Enforcers
Opinion: Joe Biden, liberal crusader?
"One more check is not enough": Progressives push Joe Biden to do more to help working families
Behind the Scenes: Personnel as Policy in the Biden Administration
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