Joel Klein Cashes In
William L. Anderson
In an earlier article in the FreeMarket, I questioned whether or not Joel Klein, who headed the US Justice Department's Antitrust Division during the Clinton administration's jihad against Microsoft, was doing so as a "public servant," or might there be a more personal agenda. We now have our answer: Klein was going for the big bucks.
According to the February 1 Wall Street Journal (page B1), Klein has been hired to a top post at the conglomerate Berlesmann AG, ostensibly to shore up the firm's chances of successfully completing its proposed mega-mergers. This, of course, is the same Joel Klein who was always "nervous" about the effect such mergers that he will now promote would have upon consumers.
I have no intention of attacking someone just because he has been hired to a job that pays millions of dollars a year. No doubt, his services will be worth whatever BAG pays him. However, I highlight this recent news story to point out that things are not always as they seem in Washington, DC.
During the litigation against Microsoft, many politicians of both parties along with a worshipful news media were portraying Klein and his colleagues at the DOJ as unselfish public servants interested only in promoting what they perceived to be the "public interest." That any of them could actually profit by such activity was off the radar screen.
In November, I wrote: "Klein insists that he is only looking out for US consumers. What he does not say is that he is actually looking out for himself." I further predicted that "Klein and his friends have set themselves up to become extremely wealthy people for the rest of their lives. . . . Economists have known that dirty little secret for years. The fact that numerous economists have become millionaires by testifying in antitrust cases plays no small role in the fact that antitrust laws are still on the books."
Klein, who was known as a "trust buster" during his unfortunate reign in the DOJ, will now try to convince regulators that "trusts" are a good thing, and that whatever he said while in Washington doesn't apply to his present client.
Ironically, by helping companies merge and engage in other activities that he most likely would have opposed while in Washington, Klein is actually doing more for the economy than he ever did as a "trust buster." The problem is not what he will do, but rather, what he did to achieve his present status.
For all of the propaganda we read regarding the "need" for antitrust legislation and enforcement, antitrust is mainly a racket involving government employees, attorneys, politicians, and economists. Government employees like Klein use their positions to spruce up their resumes in order to land better jobs in the private sector; attorneys are paid fat fees for making appeals to regulators, politicians, and the news media; politicians crow about how they are "protecting the public" all the while collecting campaign contributions from attorneys and regulated firms.
Economists are the last but also necessary link in this unholy chain. It is the economics profession, after all, that gives the intellectual blessing to bogus "theories of antitrust." Of course, there is also a payoff to economists, as pointed out earlier, since many of them earn six-figure fees as "expert witnesses" in antitrust cases.
As Dominick Armentano has so eloquently written in his classic, Antitrust: The Case for Repeal, the real issue is not how to "reform" antitrust laws to make them more "fair." No, the only option that will actually stop this revolving door to looting productive people is for antitrust laws to be stricken from the books forever. The case of Joel Klein reminds us why this path is more urgent than ever.
_______________________William L. Anderson teaches economics at North Greenville College and is an adjunct scholar of the Mises Institute (firstname.lastname@example.org).