[Congressional Record Volume 144, Number 81 (Friday, June 19, 1998)]
[Senate]
[Pages S6693-S6694]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      ALAN GREENSPAN AND ANTITRUST

  Mr. GORTON. Mr. President, the Senate Judiciary Committee heard 
testimony on Tuesday from Federal Reserve Board Chairman Alan Greenspan 
and the 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, on the other hand, 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 that economic future. 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.'' Chairman 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 those of Mr. Greenspan's, Mr. Klein's comments reveal 
an elitist, government-knows-best approach to economics. Under the 
guise of consumer protection, Mr. 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.

[[Page S6694]]

  As Mr. 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 manufacturer.
  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.

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