​Monopoly Round-Up: The Best and the Brightest Under Pressure

Today’s round-up has a lot of stuff. The war between Musk and Trump could lead to significant changes in personnel in the administration, the copyright office put out a potential fix for McDonald’s ice cream machines, and an appeals court refused to grant Apple’s emergency request to give it back its app store monopoly.

Before going to that, I’m going to focus on something personal, which is my role as an American elite, because it intersects with a political fight that’s going on right now. This weekend was my 25th reunion at Harvard. And Harvard is in an existential fight with the Trump administration. The White House is seeking to cut funding for scientists and researchers affiliated with Harvard, and to block the ability to host international students. This attack was a live topic of conversation among alumni. And it felt, well, weird.

One of my favorite movies as a kid was Glory, the story of the first all-black regiment to fight in the Civil War, the 54th Massachusetts Volunteer Infantry Regiment. The 54th had white officers, and its first commander was Harvard graduate Robert Gould Shaw, who was killed in battle along with a lot of his troops, many of whom were ex-slaves.

Shaw’s name is displayed prominently in an important building at Harvard, Memorial Hall, which houses both Annenberg, where freshmen eat meals, and Sanders Theater, a large lecture hall for beginning economics, the most popular class among undergraduates. I would sometimes just stare at the hallway where his name was listed, along with other Harvard alumni who died fighting for the Grand Army of the Republic, which sought to end slavery and preserve the union. This martial tradition at Harvard stretched back and forward hundreds of years; a third to a half of Harvard graduates in the 1640s went to England to fight for Oliver Cromwell in the English Civil War, and tens of thousands of Harvard graduates served in World War II.

But during the war in Vietnam, that tradition ended. I didn’t know people like Shaw. Serving your country, potentially sacrificing your life, that’s rare for Harvard graduates, except for unusually service-oriented types, or for those with political ambitions. I don’t want to be overly romantic about the past, but something is different today about Harvard. The last 25 years, since I graduated, are almost perfectly correlated with a period of disconnect between elites, and everyone else.

That’s not to say what the administration is doing is good. It’s not. But it is to say that there is a reason our institutions are under attack, and yet have limited popular legitimacy. Harvard is fighting back against Trump with litigation. There is a quiet pride among alumni now, a feeling that Harvard is going to be pretty badly wounded, but also, a sense that there’s some integrity there, somehow. And yet, while elites are waking up a bit, there is much further to go.

It’s not an inspiring moment. The university’s former President, Claudine Gay, a mediocrity, resigned last year over a fake scandal around anti-semitism and then allegations of plagiarism, and a milquetoast Jewish economist, Alan Garber, has taken over. In his speech to alumni, he talked about hearing from people unaffiliated with Harvard from all over the country, in all walks of life, from truck drivers to social workers. Someone like Garber spends most of his time dealing with annoying egomaniacs like Larry Summers, as well as billionaires. To hear from normal people, well, he seemed genuinely affected by that, and the fact that ordinary people care about the institution, and back him when the billionaires got scared. He also talked about the need for reform, recognizing that the anger at Harvard isn’t totally undeserved.

The practice of law, especially in areas like antitrust, lives at the intersection of elite practitioners representing the broad public. I am well-versed in why elites are distrusted, because I know where I went wrong. My failure was in 2002, when the debate over the war in Iraq was white hot. As a good Harvard graduate, I spent a lot of time reading and studying before forming an opinion. I went to panels with Iraqi dissidents, I read the Brookings Institute’s The Threatening Storm: The Case for War in Iraq – research assisted by a Harvard grad in my class. I paged through the New York Times and especially Tom Friedman’s columns, and I believed what good Democrats like John Kerry and Hillary Clinton told me. I went to protests and talked to anti-war protesters, and did my own surveys of their views. And I came away from it all feeling smug, that the war was a good idea, but more importantly, that the people who thought the war was foolish and immoral, well, they were unsophisticated.

Just before the war started, I realized my error, but I still kept the attitude. Yes I was wrong, but for the right reasons. I listened to the appropriate people, used the right salad fork. But then something happened that didn’t make sense. There were no weapons of mass destruction. And yet the people at the New York Times who said there were – well they didn’t get reprimanded. Instead they got promoted, and opponents of the war, were purged. They got it wrong, and led me to get it wrong. But they got rewarded, and I felt like a fool.

Over the course of the next four years, I was shaken, many times, by a realization that most people already knew, and that David Halberstam wrote in The Best and the Brightest in 1971 on the war in Vietnam. And that realization is that the story that elites tell one another, and believe, well, it’s just not true. We don’t believe in merit. It’s easy enough to understand, but it’s very hard to really accept. If your identity is constructed around the idea that you are where you are because you deserve it, it’s rough to learn this truth.

I was ashamed. I had endorsed slaughter because I was fooled by certain ways of presenting information, and Harvard had in part helped instruct me in these methods. I don’t want to pin my choices on Harvard, many in that world did oppose the war, but the point is that elites like me, in general, were delusional and had done really serious levels of harm to people we would never know.

A few years ago, J.D. Vance made a powerful argument about the four recent great betrayals of the American working class – the war in Iraq, the offshoring to China/fentanyl epidemic, the financial/foreclosure crisis, and the post-Covid policies that split the country into “essential workers” and elites who baked bread. All four split the country by class. The Harvard class of 2000 was affected by these events, but largely as perpetrators who benefitted from enacting the policies that defined them. Certainly, my personal experience is living with the victors, not the victims.

I do not know if there is a broader realization of the harm that elites have done among my classmates. The 25th anniversary is a weird one. People are not old, but our bodies have started our inevitable decay, which we can feel; your mind doesn’t work as well as it once did, it’s slightly harder to remember things, parents are dying, kids are growing, aches and pains are common, but also embarrassing. There have been some deaths of classmates, not many, but a few. Cancer is not super common, but it’s not rare either, and the once radiant feeling of unlimited potential and raw ambition that rule-following Harvard attendees had is over, most of us now know that we are no different than anyone else, we want love, and meaning, and community, and not to rule the world.

I met old friends, and heard wonderful talks of people raising kids with severe autism, struggling with disease, death, or failure. I also met enormously impressive people who are doing science or law or art, leukemia research or public health or serving in office. It was genuinely lovely, to see classmates, with their families and bright children, many of whom are hoping to attend Harvard. Nearly everyone I met has matured into someone who is kinder than they were as a college student, willing to overlook flaws and acknowledge vulnerability. I was genuinely impressed, and felt a deep connection to my class.

But I also periodically asked, “do you know someone who died of fentanyl?” And the answer was always no, sometimes accompanied by surprise that most Americans do have personal experience with a family member or friend, or friend of a kid, who died.

Today, Trump’s attacks on Harvard are shaking the institution. Layoffs are starting. It feels a bit like a mill town where the mill has announced it is having financial troubles, and may move away. It’s not that different from D.C. under DOGE. This experience, of existential fear, that the community will be ripped apart, is not something Harvard is used to. And the parts of Harvard that are being wrecked do not deserve it; there won’t be layoffs in the economics or political science department, but among the people working on medical research or infant mortality

That said, there is still broad confusion about the moral implications of what’s happening. Do we realize that the cruelty visited on us is cruelty we visited on mill towns all over America, many times over? When Larry Summers, once President of Harvard, lied to open up American markets to China, or helped destroy Russia, well, that was in our name, hurting people we would never know, as I, in my own minor way, approved of killing working class Americans and Iraqis I would never know. Thousands of Harvard affiliated staffers and members in Congress and clerks and judges and general counsels crafted the world of elite lawlessness we are in today. Facebook, one of the most destructive companies in history, one that has fostered many teenage suicides, was born at Harvard in the early 2000s. That is not something I heard much about at the reunion.

So the introspection seemed real, but limited. People talked about how they had to slow down their career as high-powered consultants because it was destroying their family, but without an acknowledgement that this job had likely destroyed the families of many others. The Silicon Valley engineer working on technology to make it easier to vote, while also building AI tools that destroy journalism, was baffled anyone might question the moral fiber of her company or of Mark Zuckerberg. It’s not that we are bad people. I did talk to a former Facebook insider trying to atone for his sins by building software for kids. We are just people.

Humans are social animals, and we follow our colleagues. Robert Gould Shaw, were he in my class, would likely be an ex-McKinsey guy working in media and tech in Chicago. Conversely, most of my classmates, had they gone to school in the 1850s, would have been in the Union Army. What has changed is the religious or spiritual dimension of how we think of our society, and that goes far beyond Harvard. The introspection we face as our bellies sag is about ‘our whole selves,’ therapeutic, New Age-y ways of seeing life. And that’s ultimately ripping us apart. What we need is a new metaphysical language, a way of saying we owe more to our society than ambition without wisdom. Every part of American society, from corporate leadership to black political leadership to scientific and financial and religious leadership, down to the insiders who run each particular industry, are beset by the same atomized and corrupted ideas. I saw it this weekend. We are the inheritors of a magnificent tradition, of a free society, and yet we do not see it as ours to protect, as ours for which to sacrifice. .

Harvard graduates are those who won the social lottery. For hundreds of years, we believed we had to act, or pretend to act, as stewards of a nation where all men are created equal. Shaw did. The class of 2000, and really classes going back to the 1960s, have not, or at least not so far. That is our legacy. That is elite failure. It is not inevitable, and it will change one day. Hopefully that day is sooner rather than later.

And now, the monopoly-related news of the week.

Good News

• The end of the Apple app store tax is in sight. The Ninth Circuit refused to stay the decision of a district judge allowing app developers to link out to their own websites and payment platforms from the app store. The actual order will be briefed before the appeals court in August. The Substack CEO says the changes have been “fantastic.”

• Votes on the Stablecoin bill amendments in the Senate are coming this week. They include an amendment imposing a 10% usury cap on credit cards, and a provision to cut swipe fees.

• I did a Breaking Points video on price discrimination, it’s titled “How a Bag of Doritos Explains the U.S. Economy.”

• “California’s AB 692, which would ban employer-driven debt agreements, de facto noncompetes, or Training Repayment Agreement Provisions (TRAPs), is out of the Assembly.” Good news from Lee Hepner.

• “The California Assembly just approved AB 325, an economy-wide ban on price fixing algorithms – a necessary bill to protect Californians from conduct that hikes prices, reduces supply, and deters new business formation.” That’s also from Lee Hepner.

• Arkansas Governor Sarah Sanders isn’t backing down on breaking up PBMs even after CVS has threatened to leave her state.

• Is a fix for McDonald’s ice cream machines on deck? The U.S. copyright office granted a request “to circumvent digital locks in order to repair commercial and industrial equipment. The Office did not grant the full scope of the requested exemption, but did grant an exemption specifically allowing for repair of retail-level food preparation equipment – including soft serve ice cream machines similar to those available at McDonald’s.”

• The most important news of the week is the conflict between Elon Musk and Donald Trump, which places significant tensions within the GOP coalition. Musk is not a good influence, having killed PBM reform in December and otherwise engaging in careless activities that undermine important areas of governance. He apparently also got into a physical fight with Scott Bessent, after Bessent accused him of fraud for not finding anywhere close to a trillion dollars in savings.

  There’s more. Buried in this story in the Washington Post is a man you may not have heard of – Sergio Gor, the director of presidential personnel. Gor is a libertarian knife fighter inside Trump-world, and has created a climate of fear across the administration. He also hates Elon Musk, and may pursue a vendetta against Musk’s appointees and DOGE.

• Department of Justice Antitrust Division lawyer Hetal Doshi announced her campaign for Colorado Attorney General. Doshi is one of several antitrust vets running for office.

• The D.C. Attorney General got a $1 million settlement against a corporate landlord for alleged rent-fixing through algorithms.

• A good article on how the Cleveland Clinic benefits from a weird pharmaceutical discount program meant for the poor called 340B.

• Google was caught again hiding evidence.

• A fascinating piece by economist and BIG reader Michael Barnes showing that a lot of what we think we know about cities and housing isn’t actually accurate.

• A good line from Rep. Marie Gluesenkamp Perez at WelcomeFest, on the intra-party fights among Democrats: [The] “plurality of actual Americas in the sense of our demand for economic agency, the nuts and bolts of antitrust — can I fix my own shit and can I sell my chickens to who I want to…”

• A price fixing suit hit Cabela and Bass Pro.

• Don’t mourn regulatory independence.

• There’s a new antitrust lawsuit against David Protein Bars for buying Epogee, the producer of a fat replacement chemical that is now allegedly being withheld from the market.

Bad News

• The Antitrust Division settled a merger challenge, allowing internet and network testing and design firms Keysight Technologies to buy Spirent Communications, as long as Spirent divests certain lines of business to Viavi. This deal follows on the FTC’s settlement last week between Synopsys, Inc. and Ansys, which make chip design tools. Ironically, that settlement had Synposys sell its Optical Solutions Group to Keysight.

  The reason this settlement is bad is the same reason the FTC deal was bad. Wall Street now knows they can get otherwise illegal deals through, if they work with the antitrust enforcers and let them engage in weird forms of industry central planning.

• A judge set the timeline for the Amazon antitrust trial, which starts on February 9, 2027. The case was filed in September of 2023, so it’s three and a half years until trial. That’s insane.

• For the third time, Trump is refusing to obey the law to ban TikTok.

• Apple acquires its first video game studio.

• Massive liquor distributor Southern Glazier’s increased price increases dramatically in Louisville this week, costing bars and restaurants badly.

• Idaho wants to turn over Medicaid to UnitedHealth Group.

• Trump wants to cut the FTC’s budget.

• China’s refusal to export rare earth magnets to the U.S. meant that auto firms considered moving engine production to China. After a discussion between Jinping and Trump, those exports seem set to resume.

• The Fed lifted Wells Fargo’s asset cap.

• Music gear marketplace Revere got acquired.

• 79% of countries of the world have a more positive view of China than the U.S.

• Seems like someone wants to seriously limit the Defense Production Act. China expert Rush Doshi testified against doing so.

• The Bureau of Labor Statistics is cutting data gathering due to budget cuts. It’s nice to know less about the economy.

• The Boston Consulting Group quit its role in Gaza. It has to be really bad for BCG to give up on a client.

• There’s a new think tank being launched for Democrats, with the goal of moving the party towards more corporate-friendly policies. It was previewed at the Wildflower retreat, where a cabin costs $2400 a night.

• “Google has hired Donald Verrilli Jr, the U.S. solicitor general under Obama, to appeal a judge’s ruling that the tech titan has an unlawful monopoly in online search.” Obama alums are so lame.

• A very bad idea, so-called ‘ghost trains.’ From the American Prospect: “Rail industry lobbyists and their allies are pushing to reduce the already threadbare crews with remotely operated or entirely autonomous trains, despite the need for split-second decisions to adapt to changing circumstances. Ultimately, the desire is to take human beings out of the process entirely and rely on ghost trains, despite the potential risks to the countryside and nearby residents.”

• Chart Industries and Flowserve merged in a $19 billion deal. “Chart specialises in handling gas and liquids at extremely low temperatures largely aimed at industrial clients, while Flowserve caters to water and chemicals companies, offering pumps, valves, seals and flow control products and services.”