Watchdog in the marketplace
The temporary closedown of the Federal Trade Commission for lack of funding reminds us of how much the American people would lose if the FTC were closed down completely -- or even sliced into virtual powerlessness as some members of Congress have been trying to do.
Consider those Levis you're wearing, those blue jeans made by the Levi-Strauss company. Under an FTC consent order, the firm agreed not to fix the resale prices of its products. Savings to buyers? An estimated $50 million.
We will probably never know how much the publi has been saved by such other consent agreements as the one with the giant Federated Department Stores Inc., under which it agreed not to pursue shopping center practices such as dictating prices charged by other stores and prohibiting price advertising by them. Or how much the public has gained through protection from false advertising -- and through the encouragement to competitive pricing by such an action as overriding state laws against the advertising of eyeglasses.
A strong FTC is an essential bastion for the interests of the buying public in the midst of all sorts of advantages for business and industry. Yet legislators have been trying tko cut it back. In the sense that the regulatory process could be improved add made more efficient, there is very reason for Congress to make itself felt. But the House wanted to takethe extraordinary step of making FTC trade rulings subject to veto by either the House or the Senate. And it wanted to hobble the FTC's efforts to control advertising, particularly TV commercials aimed at children.
The good news is that a House-Senate conference committee has come up with a version of the bill that is not as bad as it might have been. A veto now would require action by both houses. Certain efforts to improve standard-setting for products are restricted but not stopped as once proposed. Rulemaking on children's advertising would at least not be prohibited. However, it too would be restricted -- to the point, some say, that the FTC is unlikely to take any action soon.
Apparently the administration can live with the results. The FTC head reportedly says the "most serious threats" to the commission's ability to protect Americans in the marketplace have not materialized.
But the moon of chipping away at the FTC remains evident. What is needed, on the contrary, is a strong vote of confidence in an agency willing and able to be a watchdog for all of us without the resources to know when an ad is false, a price wrong, a deal unfair.