Phil Mattera

The FTC Bucks the MAGA Anti-Regulatory Crusade

The Consumer Financial Protection Bureau is in limbo. The Environmental Protection Agency has been turned into a fossil fuel cheerleader. The Securities and Exchange Commission has drastically scaled back its enforcement activity. The Federal Communications Commission is focused on using its powers to attack perceived enemies of the Trump Administration.

Across the federal bureaucracy, agencies seem to be reshaping themselves in accordance with Donald Trump’s belief that regulation of business is evil. And now with the shutdown, those agencies are barely operating at all.

Yet there is one agency that bucked the trend and continued its mission of exercising oversight of corporate behavior: the Federal Trade Commission. Until the shutdown caused it, too, to suspend operations, the FTC has been engaged in conventional and even aggressive enforcement activity.

Most notably, the FTC recently announced the resolution of a case against Amazon.com for using deceptive methods to enroll consumers in its Prime service and then making it difficult for them to unsubscribe. As part of the resolution, Amazon was required to pay a civil penalty of $1 billion and provide $1.5 billion in refunds while also changing its practices.

The only other Trump 2.0 penalty that comes close in size was the Federal Deposit Insurance Corporation’s settlement in April requiring Discover Bank (now owned by Capital One) to pay $1.2 billion in restitution and a $150 million civil penalty to resolve allegations its overcharged credit card fees. The FDIC has announced no significant penalties since then.

In the period since Trump took office, the FTC has announced more than a dozen other resolved enforcement actions. After the Amazon case, the largest was a $100 million judgment against a company called Assurance IQ for the deceptive marketing of substandard health insurance plans. Among the other companies that have paid penalties to the FTC this year are Walmart, Walt Disney, and Match.com.

Other significant cases are still under way. In September, the FTC sued Live Nation and Ticketmaster for engaging in improper arrangements with ticket brokers that ended up costing consumers billions of dollars in inflated prices. In April, the agency sued Uber for deceptive billing and cancellation practices.

Along with consumer protection action, the FTC has been pursuing its responsibilities as an antitrust regulator. The agency has continued to pursue a lawsuit, originally filed in 2020 in conjunction with state attorneys general, that accuses Meta Platforms of using anti-competitive mergers to gain monopoly power in certain segments of social media.

The FTC recently sued Zillow and Redfin for entering into an agreement the agency says improperly reduced competition in the market for rental housing online advertising.

There have also been some dubious actions on the part of the FTC, especially an investigation of the advocacy group Media Matters for supposedly engaging in an illegal boycott of X. In August a federal judge issued a preliminary injunction in favor of Media Matters, which argued that the case was politically motivated.

Also politically motivated was the Administration’s improper firing of the FTC’s Democratic commissioners.

On the whole, however, the FTC has not abandoned the aggressive enforcement posture it adopted during the Biden Administration under the leadership of chair Lina Khan. Hopefully, its approach will have some influence on those federal agencies carrying out MAGA-style anti-regulatory crusades.

Dr. Trump’s Dubious Medical Advice

Among the many unusual things Donald Trump has done in recent days is to make us feel some sympathy for a major drug company. Kenvue Inc., producer of Tylenol, had to stand by and watch as Trump used the bully pulpit of his office to issue what amounted to a condemnation of the widely used pain reliever.

Trump, who is not a doctor but likes to play one on television, made sweeping claims about links between Tylenol use during pregnancy and autism in children. In doing so, he went far beyond existing scientific research, which has not shown a conclusive connection between acetaminophen and neurological conditions.

This was not only bad news for Kenvue. Trump’s unsubstantiated statements angered many mothers of autistic children, who were made to feel guilty about their past use of Tylenol, as well currently pregnant women, who may now be reluctant to seek relief from pain and fever in the face of Trump’s admonition that they should “tough it out.”

There is one group that is pleased by Trump’s attack on Tylenol: plaintiffs’ lawyers. Even before Trump weighed in, there had been a widespread legal assault on acetaminophen. Starting about three years ago, numerous product liability lawsuits were filed against Johnson & Johnson, which produced Tylenol until spinning off its consumer businesses as Kenvue in 2023, as well as major retailers.

The cases, which were consolidated, faced an uphill battle in trying to prove a link between Tylenol and both autism and ADHD. In December 2023, a federal judge in New York barred all five of the plaintiffs’ expert witnesses, finding that they were offering a flawed analysis that oversimplified the scientific evidence. The plaintiffs appealed, and oral arguments are scheduled for later this year.

It is unlikely that Trump’s comments by themselves will have much influence over the appeals court. More significant is the statement issued by Trump’s Food and Drug Administration announcing the initiation of the process for a label change “to reflect evidence suggesting that the use of acetaminophen by pregnant women may be associated with an increased risk of neurological conditions such as autism and ADHD in children.”

Unlike Trump, the FDA exhibited some caution, adding: “It is important to note that while an association between acetaminophen and neurological conditions has been described in many studies, a causal relationship has not been established and there are contrary studies in the scientific literature.” It remains to be seen whether this is more than window dressing.

Even if one thinks Kenvue is being treated badly by Trump, it is worth noting that the businesses it took over from Johnson & Johnson have a checkered history. In 2017, for example, J&J Consumer Inc. had to pay $33 million to resolve litigation brought by more than 40 states alleging its manufacturing facilities were substandard, leading to recalls.

In 2015, what was then the J&J subsidiary McNeil-PPC Inc. pleaded guilty to federal charges of selling adulterated infants’ and children’s over-the-counter liquid medicines. The company paid a criminal fine of $20 million and forfeited $5 million.

There may or may not be a significant link between acetaminophen and autism, but a legitimate answer to that question will come, not from Kenvue or the Trump Administration, but from rigorous scientific research free from business considerations or political grandstanding.

Another Anti-Woke Charade

For the vast majority of the U.S. population not involved in shareholder activism, Institutional Shareholder Services Inc. and Glass Lewis & Co. are far from household names. Yet these two firms dominate the business of providing advice to pension funds, asset managers, and other institutional investors on how to vote on issues that come up for a vote at corporate annual meetings.

These proxy advisors increasingly find themselves being targeted by those on the right who want to obliterate anything that they see as promoting progressivism. The latest attack comes from MAGA-loving Texas Attorney General Ken Paxton, who just announced his office has launched an investigation of the two firms for “potentially misleading institutional investors and public companies by issuing voting recommendations that advance radical political agendas rather than sound financial principles.”

Whatever restraint Paxton exhibited with the use of the term “potentially” in the first paragraph of his press release disappears by the third paragraph, which quotes the AG as saying: “My office has zero tolerance for these woke corporations smuggling radical, liberal ideology into the companies they advise and into the entirety of America’s financial system.”

Paxton’s witch hunt is just the latest phase of a long-running campaign against shareholder activism that has increasingly zeroed in on the proxy firms. In 2020, during Trump’s first term, the SEC moved to define proxy voting advice as solicitation and thereby impose onerous regulations on the activity.

That policy was rolled back during the Biden Administration, but business groups such as the National Association of Manufacturers sued to restore the restrictions. In July of this year, a federal appeals court ruled against the business groups, finding that the advisory firms are not engaged in solicitation.

Opponents of ISS and Glass Lewis have also tried to hamstring the firms through legislation. Earlier this year, the Texas legislature enacted SB 2337, a law that would have effectively required proxy advisors to tell investors that any voting recommendations based in whole or in part on environmental, social or governance (ESG) considerations were not in their financial interest. The firms sued, arguing that the law violated their First Amendment and due process rights. A federal judge in Texas recently issued a preliminary injunction blocking enforcement of the law while the matter proceeds to trial.

Paxton, who survived a 2023 impeachment trial and is now running for the U.S. Senate, has every reason to paint himself as a crusader against supposed DEI and woke ideology. In doing so, he is one of numerous Republican elected officials who are waging war against the free speech rights of anyone who does not toe the MAGA line.

Yet it is odd that figures such as Paxton seem to be obsessed with the proxy advisors, which do not seem to have much influence over corporate policies these days. Most large companies have retreated from DEI and ESG practices, many of which were not that meaningful in the first place. And it is worth noting that shareholder resolutions are in most cases not binding. If activists overcome the high hurdles in winning a vote, the company is free to ignore the result.

Given this reality and the fact that ISS and Glass Lewis are a lot less radical that Paxton would have us believe, the battle over proxy advice seems to be little more than another MAGA anti-woke charade.

Tough Talk on Deceptive Drug Ads

With the announcement of a crackdown on deceptive advertising by pharmaceutical companies, RFK Jr. is once again showing that he may not be a complete crackpot. At his apparent direction, the Food and Drug Administration said it is sending about 100 cease-and-desist letters to drugmakers found to be making use of broadcast and digital ads that downplay the safety risks of their products.

The FDA’s move was reinforced by a presidential memorandum suggesting that the administration will move to change federal drug advertising policy, which since 1997 has allowed companies to limit the amount of information they have to include on harmful side effects. Today, the pharmaceutical industry spends billions of dollars a year on consumer advertising, a cost that helps drive up drug prices.

Marketing drugs to consumers has a long and contested history. It was the business model of the 19^th century patent medicine purveyors, who promoted their dubious products directly to users. To counteract the hucksters, entrepreneurs such as Eli Lilly began to create what became known as ethical drug operations to make safer remedies available to medical professionals. At the same time, there was a move by reformers such as Dr. Harvey Wiley to get the federal government to regulate the industry. The result was the 1906 Pure Food and Drugs Act, which among other things banned false and misleading claims. The 1938 Food, Drug and Cosmetic Act imposed further restrictions.

As a result, for decades, drugmakers focused on marketing to doctors through ads in medical journals and visits from sales representatives known as detail men. It turned out, however, that the ethical drugmakers could be as dishonest as the patent medicine purveyors. In the late 1950s Pfizer was embroiled in a controversy over deceptive ads in the journals.

It was not until the 1990s that the pharmaceutical industry began pushing for greater freedom to communicate directly with consumers. It succeeded in getting the FDA to issue new rules allowing broadcast ads that included only limited safety warnings.

Along with a flood of advertisements came a wave of scandals. In 2000, for example, the FDA warned Pfizer and Pharmacia, co-marketers of the arthritis drug Celebrex, that the consumer ads they were running for the medication were false and misleading. In 2003 Pfizer paid $6 million to settle with 19 states that had accused the company of using misleading ads to promote its Zithromax medication for children’s ear infections.

In 1999 a federal judge ordered Eli Lilly to stop promoting its osteoporosis drug Evista with what were said to be false claims that the medication reduced the risk of breast cancer. Lilly later pled guilty and paid $36 million in connection with the illegal promotion of Evista. In 2005 the FDA warned Lilly that its television advertisement for Strattera, a drug for attention deficit hyperactivity disorder, understated the risks associated with the medication.

In 2004 the FDA sent a warning letter to GlaxoSmithKline charging that a TV advertisement for the antidepressant Paxil was false and misleading.

In 2008 Merck agreed to pay $58 million to settle charges brought by more than two dozen states that the company’s advertisements for the arthritis medication Vioxx deceptively downplayed the health risks of the drug.

The list could go on. The upshot is that drugmakers frequently abused their new marketing freedom. The FDA and other regulators took some actions against the companies, but there is no evidence that their enforcement actions had much of a deterrent effect.

This brings us back to the present. It is good that the Trump and RFK Jr. are voicing concern about deceptive marketing, but they are not proposing any specific new initiatives. It is also unclear that they are serious about enforcing existing rules more vigorously. After all, this is an administration that has generally demonized regulation and has retreated from strong action against corporate miscreants.

Time will tell whether what they are doing amounts to anything substantial or is just another empty political gesture.

Serving One Special Interest

Presidential administrations usually lean in one of two directions: they tend to be more pro-business or more pro-labor. Some will emphasize deregulation, free trade, and corporate tax breaks. Others will focus on stronger enforcement of workplace safeguards, targeted tariffs, and a higher minimum wage.

The second Trump Administration does not fit neatly into either of these categories. It claims to be promoting the interests of both business and labor, but it is not clear that its policies fully benefit either one.

Trump has presented himself as a fierce opponent of business regulation. Since January his administration has crippled agencies long targeted by corporate interests, especially the Environmental Protection Agency and the Consumer Financial Protection Bureau. At the same time, other agencies such as the Federal Trade Commission and the Federal Communications Commission have taken aggressive stances against particular companies for what often appear to be ideological reasons.

As for trade policy, Trump’s extravagant use of tariffs has pleased a few industries beset by foreign competition, but it has also created a burden for domestic producers which rely on components from abroad. After long pretending that tariffs are paid by foreign suppliers, Trump is now pressuring U.S. retailers to absorb those costs, at the expense of their profit margins. Meanwhile, many small businesses in sectors such as construction and hospitality are struggling to deal with labor shortages caused by immigration raids.

The corporate sector is now facing another challenge that is unprecedented: demands from Trump that companies such as AMD and Nvidia hand over to the federal government a portion of their revenue from chip sales to China, while Intel was pressed to convert billions in grants it was to receive under the Biden-era CHIPS and Science Act into a 10 percent equity stake to be held by the feds.

These moves have free marketeers up in arms, warning that the U.S. is moving toward a system of state-run capitalism like that of modern China. Traditional Republicans knew they were taking a risk supporting a tariff-loving Trump, but this new focus on direct government involvement in major corporations has taken everyone by surprise.

There is also confusion in Trump’s posture toward labor. His administration likes to depict itself as pro-worker. It is true that Trump got tips and overtime pay exempted from federal income tax, yet those perks will benefit a small portion of the workforce. There is no indication that Trump’s tariffs are boosting wages or are bringing back a substantial number of offshored jobs anytime soon. Nor will Trump’s corporate interventions do anything to help the employees of the affected companies.

At the same time, Trump’s wholesale attack on the collective bargaining rights of one million federal workers has gotten him dubbed the biggest union buster in American history. Private sector workers will suffer from the firing of top officials at the National Labor Relations Board, which is currently unable to rule on worker complaints.

Budget cuts and staff reductions at agencies such as the Wage and Hour Division and the Occupational Safety and Health Administration are leaving workers more vulnerable to wage theft and to injury on the job. The dismantling of the Office of Federal Contract Compliance Programs is making it harder for workers experiencing pay discrimination at firms receiving government funds to get redress.

In short, many of Trump’s policies are working to the detriment of both business and labor. Yet there is one group thriving under this administration: Trump himself and his family interests.

Trump is able to indulge his seeming obsession with controlling everyone and everything while blowing past all the previous norms about not using the presidency for personal enrichment. His sons are traveling the world, trading on the Trump name to make business deals of many kinds.

Most brazen has been the foray into cryptocurrency that works hand in glove with the administration’s moves to deregulate that business. The Trump family is estimated to have gained some $5 billion in paper wealth just the other day when trading began in a digital token issued by World Liberty Financial, a firm controlled by the Trumps. Given everything else going on with the administration, this enrichment has generated relatively little controversy.

While the current administration is not consistently pro-business or pro-labor, it unwaveringly promotes one special interest: all things Trump.

What’s Behind Rising Beef Prices?

Those who enjoy a breakfast of steak and eggs are feeling better about half of their plate. Egg prices have come down sharply in the past year. But now beef prices are the problem, soaring well beyond the level of other foods.

Most analyses of the situation point to two primary culprits. The first is drought, which parched grazing land and caused hay prices to spike. When these conditions emerged a few years ago, ranchers responded by slaughtering cattle sooner. Initially, this increased supply and pushed prices down. But now the herds are smaller and output is down, putting upward pressure on prices.

The other culprit are tariffs, especially those Trump capriciously imposed on Brazil, a major source of U.S. red meat imports, to punish the country for prosecuting former president Jair Bolsonaro in connection with a January 6-type attempted coup.

A federal court in Minnesota is focusing on another cause: collusion among the major beef producers to keep prop up prices. Starting in 2020, groups of beef buyers filed several lawsuits that came to be consolidated in a multidistrict action against the giants of the industry.

The litigation alleged that from at least 2015 Cargill, JBS, Tyson Foods, and National Beef Packing Company agreed among themselves to reduce live cattle purchasing and slaughter volumes for the purpose and effect of increasing their margins. The plaintiffs alleged that the companies accomplished and perpetuated this agreement through collusion at trade association conferences and industry events between executives and key employees, and through ensuing collusive relationships. This anti-competitive activity, the plaintiffs argued, caused them to pay artificially and illegally inflated prices for boxed beef, which in turn elevated prices for consumers.

Plaintiffs have achieved a series of substantial settlements. In 2022 JBS agreed to pay $52.5 million to direct purchaser plaintiffs. Earlier this year, JBS said it would pay $83.5 million to settle allegations it had conspired with other processors to suppress the prices paid to ranchers. Earlier this month, Cargill and consumer indirect purchaser plaintiffs announced that they had reached a settlement, but details have not yet been announced.

Along with conspiring to keep prices high, the big beef producers have been accused of colluding to depress wages of their employees. A 2022 lawsuit filed in Colorado has resulted in another series of multi-million-dollar settlements, including a $72 million payout by Tyson Foods and $55 million by JBS. Cargill and National Beef Packing coughed up another $43 million.

JBS, Tyson Foods, and Cargill have also been connected to illegal child labor via the hiring of underaged workers by Packers Sanitation Services to do dangerous cleaning work at their plants.

Despite their lawsuit payouts, it is likely that the beef giants have not completely mended their ways and are still finding ways to push up prices and push down wages. Drought and Trump’s tariffs are not the whole story behind rising beef prices. Plain-old corporate greed is also playing a role.

Private Litigation to the Rescue

It used to be the case that federal prosecutors and regulators were the first to bring action against a corporate abuse, and plaintiff’s lawyers followed that with a class action lawsuit designed to obtain additional relief for harmed parties.

In the new Trump era, the federal government is increasingly abdicating that role. As Public Citizen points out, the Justice Department and other agencies have dropped scores of investigations of corporate lawbreaking.

Or else the DOJ is employing leniency practices that let companies off easy. For example, federal prosecutors just notified Liberty Mutual that the company will not be charged under the Foreign Corrupt Practices Act despite evidence that its subsidiary in India paid bribes to officials at six government-owned banks. Under the declination deal, no charges will be filed if Liberty Mutual disgorges $4.7 million in profits.

Future enforcement actions against companies are growing less and less likely as a result of deep staffing cuts at many regulatory agencies and because some of those agencies are now led by Trump allies pursuing a MAGA agenda.

The courts, especially at the appellate level, are doing little to impede this retreat from enforcement. The U.S. Supreme Court is, in effect, cheering it on.

Yet there is also good news from the courts: those plaintiff’s lawyers are not backing down. Here are some examples of their efforts:

A federal judge in New York just gave final approval to a settlement in which Mastercard agreed to pay $26 million to resolve allegations of racial and gender discrimination in its hiring practices.

A federal judge in Illinois gave final approval to a deal in which Cargill is paying $32 million to settle litigation in which it was accused of improperly sharing internal information with other turkey processors to limit price competition. In another case in the same court, a group of poultry processors agreed to pay $41 million for their anti-competitive practices.

Last month, a state jury in California awarded $314 million in damages to Android mobile device users who sued Google for transferring data from their devices without their consent for information harvesting and surveillance purposes.

DuPont became the latest chemical company to settle litigation relating to PFAS contamination when it agreed to pay $27 million to upstate New York residents whose drinking water was tainted.

General Motors agreed to pay $150 million to end a case involving the sale of vehicles with hidden engine defects that caused excessive oil consumption.

Capital One paid $425 million in a lawsuit alleging it deceptively advertised its 360 Savings accounts as high-interest products.

Phillips 66 is paying $12.5 million to resolve a lawsuit in which workers at its refineries in California claimed they were not given proper meal and rest breaks and were not compensated for time spent donning and doffing personal protective equipment.

These are but a small sample of the steady stream of class actions brought in federal and state courts on behalf of consumers, workers, and communities. Corporations and their allies have long disparaged such cases as frivolous lawsuits and have sought to limit them through so-called tort reform.

Today, nonetheless, they are increasingly the primary way in which corporate misconduct is being addressed.

Note: Violation Tracker documents more than 5,000 class action lawsuits in a dozen categories.

Debunking Debanking

There are plenty of reasons to be critical of the big banks. They hit customers with illegitimate fees. They misuse personal information. They pay meager interest on savings accounts. They do too little to help struggling mortgage holders. Some such as Wells Fargo have a history of creating bogus accounts to generate revenue. Many have been accused of manipulating foreign exchange markets, enabling tax evasion by the wealthy, and helping bring the U.S. economy to the brink of collapse in the late 2000s.

In Violation Tracker, Bank of America has by far the largest cumulative penalty total: $87 billion. JPMorgan Chase is second with $40 billion; Wells Fargo and Citigroup are also among the ten most penalized corporations.

Apparently oblivious to all this, Donald Trump recently launched a tirade against the banks that focused on a bizarre accusation: that they refuse to do business with people with right-wing political views, especially Trump himself.

In an interview with CNBC, Trump claimed that JPMorgan Chase and Bank of America had refused to accept deposits from his company after his first term as president. “The Banks discriminated against me very badly,” he moaned.

Trump’s account may very well have been fictional. If not, it conveniently ignores the idea that the banks may have shunned him because he was a bad credit risk, and for a period of time after January 6 there was a chance he would end up in prison.

Aside from his personal grievances, Trump’s comments appear to be connected to a move by his administration to address what right-wingers claim is a practice of “debanking” – denying banking services to people based on their political views. There is, of course, no evidence that banks apply an ideological litmus test to potential customers.

Instead, the debanking assault seems to be an effort to undermine rules governing transactions with individuals who might be connected to illegal activities such as money laundering and the financing of terrorist activities. As part of their due diligence, banks are supposed to consult lists of people who may be tied to such activities.

During the Obama and Biden Administrations there were also efforts to discourage banks from doing business with crooked operators in areas such as payday lending and cryptocurrencies. These efforts, known as Operation Choke Point, have come under frequent criticism from MAGA world.

The banks themselves would like to weaken their due diligence obligations. That probably explains why they chose not to scoff at Trump’s criticism. A JPMorgan spokesperson said: “We agree with President Trump that regulatory change is desperately needed.”

If anything, the regulations governing bank practices need to be more stringent. All too often, financial institutions are found to be deficient in their anti-money-laundering efforts. U.S. and foreign banks have paid out billions of dollars in fines and settlements to resolve cases brought by federal and state regulators.

Big banks have also been accused of doing business with disreputable individuals such as one very much in the news these days: the late Jeffrey Epstein. In 2023 JPMorgan Chase paid $290 million to settle a lawsuit brought by victims of Epstein who alleged that the bank turned a blind eye to indications of his sex trafficking because he was such a lucrative client.

If debanking means that financial services are denied to the likes of Jeffrey Epstein, I’m all for it.

21st Century Robber Barons

It’s a case of life imitating art imitating life. The announcement that Union Pacific is seeking to acquire Norfolk Southern to create the first coast-to-coast rail network sounds very much like the deal that the character George Russell is depicted as seeking to accomplish in the HBO television series The Gilded Age. Russell is said to be based on the real-life 19^th Century robber baron Jay Gould, who controlled UP in the 1880s before moving on to manipulate numerous other rail lines.

The $71 billion deal being pursued by UP is a throwback to the bad old days of unrestrained corporate concentration. It would reduce the number of Class 1 carriers from six to five and give a single operator control of some 50,000 miles of track across 43 states. It will certainly create upward pressure on freight prices.

It would also bring together two companies with checkered records. Norfolk Southern is notorious for the 2023 derailment in Ohio that spilled a large quantity of toxic chemicals in the town of East Palestine. Many of the 150 railcars—which included tankers filled with hazardous materials such as vinyl chloride—caught fire and were allowed to burn for days.

Jennifer Homendy, chair of the National Transportation Safety Board, would later allege that NS “delayed or failed to provide critical investigative information to our team,” forcing her to have to threaten to issue subpoenas to compel disclosure. She described the company’s actions as “unconscionable” and “reprehensible.”

NS ended up paying $310 million to resolve a case brought against it by the U.S. Justice Department and the Environmental Protection Agency, while also settling a class action lawsuit brought by community residents for $600 million.

Over the years, the company has also paid millions of dollars in fines to the Federal Railroad Administration (FRA) for safety violations and $2.5 million to the Equal Employment Opportunity Commission to settle allegations it engaged in systemic disability discrimination. In 2020 NS was ordered to pay $85,000 and reinstate an employee who was fired for reporting an on-the-job injury.

UP has also paid out millions for safety infractions and has been fined five times for retaliating against whistleblowers. Its environmental record includes a $31 million penalty imposed by the EPA for water pollution and a $2.3 million settlement with four California counties concerning the mishandling of hazardous wastes.

There is no reason to believe that the company emerging out of this merger would be any more compliant with workplace, environmental, and other types of regulations. On the contrary, its size would enable it exercise even greater sway over an agency such as the FRA.

Regulatory weakness is also likely to be exhibited by the Surface Transportation Board, the federal agency with oversight over the proposed merger. It is being run by Patrick Fuchs, a former Senate staffer who worked for Republican Senator John Thune. Fuchs is reported to be open to further consolidation of the industry. We are thus likely to see a repeat of 2023, when the Board green-lighted Canadian Pacific’s purchase of Kansas City Southern.

This could pave the way for the other rail behemoth, Warren Buffett’s BNSF, to make a move on CSX. Soon, nearly all of U.S. freight traffic could be under the control of two or three mega-carriers. Jay Gould would be impressed.

The Attack on Independent Business Regulation

Donald Trump has a great fondness for the policies of the late 19^th Century, praising that period’s focus on tariffs and its lack of a federal income tax. Yet there is another practice from that time that Trump abhors: independent regulatory agencies.

In 1887 Congress created the Interstate Commerce Commission to oversee the railroad industry, which then played a commanding role in the economy and was not known for having high ethical standards. The ICC was not completely autonomous—the president appointed its members—and it had some significant flaws, but the agency was the beginning of a system in which federal oversight of business would take place outside the direct control of the White House.

Part of the Trump Administration’s campaign to remake the federal government is the elimination of independent regulation. In February, Trump signed an executive order taking a significant step in that direction by giving the Office of Management and Budget extensive powers to oversee the agencies. He has gone on to fire their Democratic commissioners, brazenly violating the legal requirement of bipartisanship in the running of those entities and a 90-year-old Supreme Court ruling that presidents cannot fire board members without just cause.

Unfortunately, the current Supreme Court has shown no inclination to block Trump’s power grab. It has just allowed him to proceed with the dismissal of three commissioners at the Consumer Product Safety Commission. This ruling, issued as part of the Court’s ever-expanding shadow docket, followed a similar decision allowing Trump to remove a Democrat from the National Labor Relations Board. Trump has also fired commissioners at agencies such as the Federal Trade Commission and the Nuclear Regulatory Commission. And, of course, he is openly weighing whether to illegally fire Federal Reserve chair Jerome Powell; the Fed is a banking regulator as well as being in charge of monetary policy.

Aside from the general issue of undue consolidation of presidential power, Trump’s moves at the independent agencies are likely to be detrimental to the oversight process itself.

It is true that the agencies have a mixed record when it comes to enforcement. Entities such as the Nuclear Regulatory Commission have traditionally been too close to the industries they were supposed to oversee. On the other hand, independent agencies have brought major actions against major companies for various kinds of violations. The FTC, for example, has imposed multi-billion-dollar penalties on Meta Platforms and Volkswagen.

Trump, of course, is exerting more power over the agencies not to make them more aggressive but rather to weaken their oversight, especially when it comes to companies favored by the Administration. Or else he is seeking to turn the agencies into weapons against those he disfavors. This is seen most clearly at the FCC, whose Trump-appointed head Brendan Carr, is an eager MAGA partisan.

Overall, Trump’s campaign against independent regulation is an enormous gift to Big Business and a serious setback for consumers, workers, and communities depending on those agencies for some measure of protection against corporate misconduct.