The barbarian chief of the Federal Trade Commission (FTC), Lina “Genghis” Khan, has some of the most bewildering priorities I’ve ever seen.
The FTC is the federal government’s most prominent business regulator; yet she doesn’t seem the slightest bit concerned that US economic growth is coming to a screeching halt. Or that stagflation is once lurking. Or that the American manufacturing sector continues to be in a major recession.
She’s not even focused on trying to fix her own agency.
Remember, a recent Congressional investigation found the FTC to be a “toxic work environment” and “beset by dysfunction and chaos stemming from poor leadership and ideological bullying of its Chair [Khan]”. Sounds like a great place to work!
But Genghis Khan isn’t concerned about any of that.
Instead, she has fixed her warmongering gaze on… LUXURY HANDBAGS. And she is prepared to wield all the taxpayer resources at her disposal to ensure that no leather purse is left behind.
Squarely in Genghis Khan’s crosshairs are two American luxury goods producers– Coach and Michael Kors– who are currently attempting to merge; the deal was overwhelmingly approved by shareholders.
And obviously the merger makes sense to investors; giant legacy brands like Coach and Michael Kors suffer from an outdated business model that makes it increasingly difficult to compete with smaller, leaner businesses that sell almost exclusively online.
Coach and Michael Kohrs waste mountains of cash each year on expensive rents at shopping malls that simply no longer attract the foot traffic they once did.
These are massive costs for legacy brands that younger fashion startups don’t incur.
Similarly, because they are enormous companies, Coach and Michael Kors have to waste even more money on corporate administrative costs (like audit fees, company filings, huge bureaucracies, idiotic DEI initiatives) which, again, younger fashion startups don’t have.
At a certain point it makes sense for companies to merge, consolidate their assets, streamline their operations, and boost competitiveness. No wonder shareholders approved the deal.
But Genghis Khan cannot tolerate rational investors in a capitalist society making sensible financial decisions about what to do with their own privately owned shares.
So now she’s trying to block the deal, claiming that the merger will “eliminate fierce head-to-head competition.”
Come again? Has Genghis Khan serious never heard of Louis Vuitton, Gucci, Hermes, Chanel, Prada, Burberry, Valentino, Giorgio Armani, Dolce & Gabbana, Bulgari, Ferragamo, Tom Ford, Tory Burch, Oscar de la Renta, Diesel, etc.
There’s PLENTY of competition in the luxury handbag industry.
But let’s suspend all reality for a moment and pretend that we live in an alternate universe where Genghis Khan is actually correct… and that the Michael Kors / Coach merger would kill competition.
The obvious question, of course, is… who cares?!?! Does Genghis Khan also worry if there will be less competition among private jet manufacturers? Or luxury superyachts?
And that’s the point: this deal shouldn’t even be on the radar of America’s most prominent business regulator.
But wait! There’s more!
In addition to her war on luxury handbag producers, Genghis Khan also unveiled a gargantuan, 570-page regulation last week that, among other things, bans most noncompete agreements.
This is yet another core tenet of capitalism: two willing counterparties voluntarily entering into an agreement with one another.
Noncompete agreements are completely normal in business.
Companies often have to invest a great deal of time and money to train an employee, whether to operate heavy equipment, work on a complicated project, etc.
The company is willing to make the investment in the employee. They just want to ensure they’ll receive a return of that investment, and that the employee can’t just quit and sell those skills somewhere else.
It’s not unreasonable to want to protect your investment.
It’s also a completely voluntary arrangement. If the employee doesn’t want to sign, they don’t have to take the job. And with such a strong labor market, there are plenty of other jobs out there.
But Genghis Khan doesn’t think this voluntary arrangement is OK. Genghis Khan believes that all noncompetes are the result of evil capitalist exploitation.
Just imagine if the US military was subject to this same regulation.
Think about it: when people join the Navy to become a pilot, the military spends a ton of taxpayer money to train them how to land an $80 million fighter jet on a $13 billion aircraft carrier. In exchange, the new recruit agrees to spend the next 8 years flying for the Navy.
This is basically the military equivalent of a noncompete agreement. The taxpayers agree to pay for your training. The pilot agrees to serve for eight years. It’s a great deal for everyone.
But according to Genghis Khan’s logic, Navy pilots should be able to quit as soon as they graduate from flight school and go work for Delta Airlines.
Banning noncompetes is bad for capitalism and bad for the US economy. It means that businesses will be less likely to hire and invest in employee training. It means fewer jobs. It means lower productivity. It means being less competitive in the global economy.
Naturally Genghis Khan understands none of these consequences. And this is one of the key characteristics of Inspired Idiots: they think they’re doing amazing work, and they don’t realize they’re destroying the very economic system which made the United States the most prosperous nation in the history of the world.
They think they know better than everyone… and that they’re more capable of making decisions than you are.
She can’t allow company shareholders to make business decisions. She can’t allow workers to make voluntary employment decisions.
The rest of us are all apparently too stupid and feeble to make our own decisions. She and she alone must decide what’s right for everyone.
And that paternalistic, destructive, nanny state narcissism is perhaps the worst hallmark of Inspired Idiots.
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