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FTC Nominee Shows His Anti-Consumer Outlook

Joshua Wright, nominee to the Federal Trade Commission faced tough grilling before the Senate Commerce Committee Tuesday and his answers did nothing to change my view that he is a bad choice for the Commission.

In in a written statement about the hearing Chairman Jay Rockefeller (D-WVA) voiced his concerns this way:

"Our final nominee is Josh Wright, who is a law professor at George Mason University.  He has been nominated to be a commissioner at the Federal Trade Commission (FTC), the federal government’s most important consumer protection agency.  Mr. Wright is a very accomplished young scholar.  He has written extensively on antitrust and other issues that would likely come before him as an FTC Commissioner. 

"In his academic writing – some of which has been funded by groups with a clear anti-regulatory agenda – Mr. Wright makes it very clear that he believes that market forces can solve almost any consumer protection problem.  While it is easy to espouse ideas like this from the academic ivory tower, serving as an FTC Commissioner is a very different job.  As a commissioner, his job will be to enforce the law as it is written, not as he theorizes it should be.  In the real world, some business practices hurt consumers and his job is to protect the consumers, not make excuses for the businesses."

Wright's answers to tough questions from Sen. Barbara Boxer (D-CA), Sen. Maria Cantwell (D-WA) and Sen. Fred Lautenberg (D-NJ) were largely platitudes and evasions.

The Senators were well armed with quotes from Wright's academic writings where he has argued that regulations hurt the market and ultimately hurt consumers.  Boxer said that she was concerned that he had written that the Consumer Financial Protect Board  was “aggressive and dangerous” and  “more likely to do harm than good for consumers."

Wright responded by claiming that in his academic writing he had written about the proposed Consumer Financial Protection Agency prior to the CFPB.  Boxer asked  if he stood by his article.

"No I don't stand by that.  It was never about the existing agency," he claimed.

"It's difficult to see how to protect consumers without rules," said Lautenberg.

"I do believe in rules and regulation," claimed Wright. "Markets are powerful that operate for consumers; regulation has the power to harness markets to work for consumers,  but also there is  the risk that regulations can work to the detriment of consumers."

Both Boxer and Cantwell raised concerns about Wright's financial ties to companies that may have issues before the commission.  Wright has written extensively opposing an antitrust suit against Google.  His white papers were funded by organizations that receive Google money.

Wright said he would recuse himself from any decisions involving the Internet giant for two years in keeping with President Obama's ethics pledge.  Cantwell noted what she called the "glacial pace" of the FTC and suggested that matters before the FTC now that he would recuse himself from might still be under consideration after two years. She asked him to spell out in writing where and when he would recuse himself.  Boxer made the same request earlier, saying, "Submit a list of where you would recuse – we don’t need a commissioner who can’t do the work."

Sen. Boxer also asked Wright about investigating the possibility that market manipulation caused California's spike in gasoline prices this fall.  She wanted to know if disgorgement of profits would be an appropriate remedy.  Without actually agreeing it would, he said,  "I would look at any and all appropriate remedies. I am happy to talk about it."

Basically Wright bobbed and weaved his way through the hearing, trying to disassociate himself from positions that are now inconvenient for a nominee to the FTC.  Despite his efforts, I was left believing he has anti-regulatory views that are fundamentally at odds with the agency’s consumer protection mission.

FTC Commissioners have brought a variety of philosophical approaches to the agency over the years, but generally have been able to operate within a broad consensus on key issues. Wright falls outside that mainstream and would be unable to make effective contributions to the agency.  He is likely to function mainly as an obstructionist.  His nomination should opposed.