All right, good afternoon, and welcome back for our final segment of the George Mason Law Review 29th annual antitrust symposium. It's a delight to have all of you here. For those of you I've not yet met, my name is Donald Kochan. I'm the executive director of the Law and Economics Center and a professor here on the faculty at Scalia Law School. This is a wonderful event that celebrates the achievements of the students in bringing together their annual symposium, and it integrates key faculty members, including this year some of the principal organizers being Professor John Yun and Professor and Judge Douglas Ginsburg, who were instrumental in putting together the program for this event, and I thank them all for their contributions to it. I also would like to thank our sponsors, including the Antitrust Education Project, DCI, and FTI Consulting, for helping offset some of the resource commitments that were necessary for this program. As you may know, the Law and Economics Center is in its 50th anniversary. Well, we just passed our 50th anniversary. Started in 1974, we provide all of our programs as a public service. That includes programs that bring in about 650 federal judges every year on average to a variety of programs that we hold across the year. We have about 150 to 200 state AG attorneys that come through our programs every year, hundreds of academics, and then the entire public for programs and forums like this. So, we're delighted that all of you were able to join us in the mission of the Law and Economics Center to increase the understanding of economics and its application to law.
We're also delighted that you get to come and visit us here at Scalia Law School, which is a constantly vibrant and growing institution, and George Mason University being one that is growing and vibrant as well, including with this brand-new facility. This is one of the first programs we've been able to hold over here in Fuse, and we're delighted to showcase it to all of you. With that, we hope that you will continue to engage with the Law and Economics Center and with George Mason University's Antonin Scalia Law School and continue to support our students. Thank you for those who have been hiring them and thank you for those who will be hiring them as a result of meeting them today. And we hope that you will also be back next year for our program. But we're not done yet and we're excited to have our final fireside chat. And so for the final segment of the program, I'd like to introduce you to the incoming editor-in-chief of the George Mason Law Review. We congratulate him for taking on that post and we turn over the final introductions to Matt Thomas.
Good afternoon everyone. Thank you for being here. I would like to thank Garrett Gillespie, our symposium editor, one last time for helping put on this event. To introduce our final event, our fireside chat, between Chairman Andrew Ferguson and former Chairman Timothy Muris, who I've also had the pleasure of being his research assistant for the last 6 months. And so I've been looking forward to this for a long time. So please welcome them and I'll pass it over.
Well, thank you very much. Let me say a little bit about the chairman. And as you know, or maybe you don't, like Gaul, the federal government is divided into three parts. And that's what the Constitution says, and our guest today has participated and worked in all three. He was a clerk at the highest levels for Justice Thomas. He also clerked for Judge Henderson. He worked on the Hill in the Senate for the leader of the majority and also on the Senate Judiciary Committee. And of course he's now working in the executive branch, and again there are only three, as chairman of the Federal Trade Commission. He also worked in the states as Solicitor General.
Let me start with having had a lot of jobs at the Federal Trade Commission. I think of the place as having inside and outside activities. And again, you can think about them in threes. Inside, there's how one deals with the issues in terms of the substantive issues, the case agenda. There's also how one deals with the outsiders. And the outsiders are many. There's of course the administration, there's the press, there's the Hill, et cetera. And besides inside the Commission, that case agenda, there's also a research agenda. Now, personnel issues, so there's outside and inside. Personnel issues and budget issues permeate all of this. So let me start by asking the chairman what his inbox was like 13 months ago. He inherited a budget that was a bit of a mess with a lot of last-minute lawsuits also filed by the administration. He took over the reins at the very beginning. And so, what was in your inbox, Mr. Chairman?
Well, the most important thing, well, before I answer that, I'm really pleased to be here at Scalia Law School. I actually taught here for a couple semesters. I taught Fed Courts and Conflicts. And had just really outstanding students in my class, including at the time, you know, future Supreme Court law clerk. It was very obvious that she was going to be able to do that from her performance in the class. And, you know, because there was just a pitch to hire Mason students, I have hired Scalia students at very senior levels at the FTC. My principal competition advisor is an alumna of this school. And my head of the Bureau of Consumer Protection is an alumnus of this school. So, I agree it's a good idea to hire graduates of Scalia Law. So, the most important thing in my inbox was confirmation from the Executive Office of the President that the President had signed my appointment as chairman. There is a sort of brief period where the outgoing chairwoman who lingered in the commission for a little while after inauguration day was still in charge. I then, after having that confirmation, had to implement my succession plan. The outgoing chairwoman had her succession plan of people to be the acting folks in various offices, which was not consistent with the one that I then implemented almost immediately. And then, I'd been a minority commissioner for about 9 months before then. So, I had a sense of the budget crisis that I was inheriting. But not as good a sense as I got within the first like 72 hours.
And what I'll talk about the budget crisis a little bit, but also the outgoing administration, there wasn't really a budgeting culture, which I'll talk about in a minute. But the budget crisis was pretty straightforward. First year of the Biden administration, Congress pretty substantially increased the FTC's annual appropriation. Second two years of the Biden administration, they brought it back to sort of historical levels, but that was a substantial decrease from the previous two years. During the first two years, my predecessor went on a hiring bonanza. A hiring bonanza that once accomplished could not have been sustained at the subsequent appropriation level. So when I was a minority commissioner, I would have meetings with the CFO, who was a phenomenal, long-time military guy before he became CFO, and just sort of the idealized version of the civil service was embodied in my former CFO. Just great American. He would hint when I was minority commissioner that if we don't get the payroll under control by 2026, there may have to be some furlough decisions. And then when I became chairman, he said very straightforwardly, if we don't get the payroll control basically in the next 9 months, we will have to start furloughing people. We cannot afford present employment levels.
And so the first thing I had to do was say I don't want to furlough a human being at the agency. That's terrible for the agency, it's bad for our cases, it's bad for being able to hire in the future. When I was a law student during the financial crisis, a very prominent national law firm basically laid off its entire first year class. Latham and Watkins, great law firm, but people my age had a term called Latham-ing. And for a long time, people were afraid of going to Latham because of what had happened to that infamous 1L class. And I was like, look, if the FTC gets a reputation for furloughing, when I am able to start hiring again, who would want to come here knowing that I may cancel your paycheck. And so I said we need to figure out ways to cut payroll in a way that doesn't involve furloughing people and get the rest of the expenses under control. And fortunately for my perspective, the administration undertook the delayed resignation program, which basically allowed me to put people on administrative leave for several months and then they could depart the agency, but they could continue to collect a paycheck. It was sort of like a departure incentive program. So, we offered that twice. We got permission from the government to offer early retirement, and we got the payroll to a level where we could continue our work and begin hiring at a sort of regulated, monitored clip no matter what Congress did with our budget. And what Congress ended up doing with my budget a couple weeks ago was slashing it by about 9%, which in the situation that I inherited, if that had happened, this would have been basically existential for the agency. But because of decisions we made early on to get the budget under control, we're ready to absorb it. We are hiring for I think something like almost a hundred positions. We've hired I think like 50 of those hundred, and we can continue that clip consistent with Congress's new appropriation because of the very tough decisions we made early on.
The other thing, which ended up being one of the hardest sort of non-substantive enforcement challenges at the beginning, was that our lease, the FTC has two buildings. We have our historic headquarters kind of right in the middle of the federal triangle, and then we have sort of rented office space across the mall in a commercial building. That lease had expired some time ago. I kept in my meetings as the minority commissioner, I kept being told by the career financial staff like we need to do something about this and it'll be expensive and we're not saving any money. Hopefully, we can sort of survive this. And a couple weeks into my time as chairman, we were told you're being evicted from the building and you need to do it in 100 days. I actually found out about this in a meeting where it was my first meeting that I called to decide what to do about this building. We just got like an email that was like you need to be out in 100 days. We maneuvered, worked with the admin, basically got that delayed, then began a pretty intense search across Washington to find a new space to move the people that were in the office space rather than our historic headquarters, which is about half of the DC-based agency. Found space, we're going to make it work. Honestly, thanks mostly to the incredible work of the career administrative staff who really just knuckled down and helped us do it.
I understood that these were issues that the leader of the agency has to deal with as a minority commissioner. I didn't really understand what that meant until the gavel switched hands and all of a sudden meetings that were basically like FYI about what's happening at the agency were FYI, here's what's happening at the agency and you need to do something about it like right now. And if it doesn't go well, it's going to be entirely on you. And so, first four months trying to get a grasp on that, make decisions with imperfect information while also assessing all of the things that I inherited from the previous administration, but particularly things that they had done since the morning after the election, was a lot of work in the first 6 months that I did not appreciate when I decided that I wanted to be chairman of the agency. Figured out pretty quickly, weathered the storm, got the agency through, and I'm very happy about the agency's trajectory now. But the first 6 months, I think the first 6 months of taking over any organization of any size are hard. I think all transitions of government are hard. I've never heard anyone that worked on a presidential transition or worked early on in an agency of government that did not describe it as difficult. But we were getting clear direction from elsewhere in the administration about the president's priorities and our job was to make sure that worked within the agency.
Thank you. Let me ask another general question, and you're one of the few people, I suppose Chair Khan could have answered this as well. She had a period where there were no Republican Commissioners. And then you and Melissa were there for a while. But now you serve without Democrats. What's the difference that you've seen, if any, between the time that the commission had multi-party and now?
At least from my perspective of assessing the sort of before and after the multi-party membership as chairman, I don't see any difference really. I mean, you know, I have a vision for what I want the agency to be. I'm also, you know, I serve at the pleasure of the president and I'm a principal officer within the executive branch headed by the president. And so I have an agenda set by the elected head of the executive branch for the whole government, and then my job is to make sure the agency is implementing that consistent with the laws that we enforce. And that would be true no matter who was at the agency. So from my perspective, no real difference.
Look, I mean, Melissa, of whom I think the absolute world, and I worked with when she was SG of Utah, and she is going to be the most fearsome, I think the most fearsome US attorney in the federal government out in Utah. During our like nine months at the commission, we wrote hundreds and hundreds and hundreds of pages of dissents. In fact, I think at one point I calculated she wrote like 480 or something like that and I wrote like 370. But I mean it was an incredible clip for 9 months. A lot of that is the fact that they tried to launch like God knows how many cases in the final 2 months of the administration once the presidential election had been decided. But, you know, our output was voluminous. The former Democrat commissioners had been there for many years by the time that the president removed them, and a tiny fraction of them, including one of them in the minority, had written a tiny fraction of that. And so, my view is that my life has not meaningfully changed. Both while Melissa and Mark were there and now when Mark is there, the three of us have different views on the direction the agency should go, the types of cases we should bring, the types of things we should plead. Do we agree on more than we disagree? Yeah, absolutely. But we don't have perfect alignment and I can tell you from having been in close commission meetings with the two of them, that the debate we would have on whether to bring a case, how to contemplate potentially undertaking a rulemaking was very, very vigorous because the three of us don't see eye to eye on everything. And the testing by fire of having multiple points of view in my experience as chairman was extremely true when there were three of us even of the same party because the three of us have different views on priorities, different views on the meaning of very generally worded statutes. And when you are at a law enforcement agency, the debate over priorities is like half the battle, especially when you've got a $388 million a year budget like I presently have. The priorities debate is super, super important. And my views were constantly tested by discussing them with Commissioner Menter and with Commissioner Holyoke. And frankly, I think no differently or more intensely than they would have been with other commissioners there.
But before I turn to some questions about the case agenda, talking about you serving at the pleasure of the president and talking about the difference between the parties, you talk about the Trump Vance FTC and some people have found that odd. I find the criticism odd in the following sense. Your predecessor, one of the first things that she did was stand at the White House, stand by the president when he issued a competition executive order, which I think there's nothing wrong with, giving the FTC directives. And it was also something I did think there was something wrong with when he criticized the previous 40 years. When I was, the most visible thing that we did when we rolled out the national do not call registry, we rolled it out in the Rose Garden. Which is about as close to working with the administration as I think you can get. But so if you would comment on that criticism.
Yeah, so look, I was raised within the conservative legal movement. I was a law clerk to Justice Thomas. The talk of there being three branches and only three branches and every part of the government must fall within one of those three branches and that there isn't a quasi-legislative, quasi-executive, quasi-judicial fourth branch, I had imbibed and fully believed when I became a minority commissioner and when I was chairman. And so I wanted to make it clear internally and externally early on. There are no independent agencies. The Federal Trade Commission is part of the executive branch. We just had an election about who's going to be in charge of that executive branch. The people voted for one candidate over the other and we serve within that branch, period. We aren't independent. We don't get to make up our own minds all the time on everything. We do not answer only to ourselves. And I had written extensively about this as a minority commissioner. I wrote a dissent as a minority commissioner where I argued that two-layer protection for FTC ALJs was unconstitutional, a position that the administration now shares and has ordered agencies throughout the government not to defend two-layer removal protection for ALJs.
But this thing that I think for a lot of people was sort of theoretical, the idea that there are only three branches and that every part of the government must fit within one of those three branches was for me very, very, very real. And so when I took the helm of the Federal Trade Commission, I wanted to make it very clear we are part of the executive branch, period, full stop, end of discussion. And that I serve at the pleasure of the president and that our job is to execute the laws of the United States over which Congress has given us charge consistently with the agenda set by the man that tens and tens of millions of Americans just voted to become president of the United States. You know, this became very real for the whole country when the president began to remove commissioners and board members from commissions and boards that had claimed independence. I attended the arguments in Slaughter against Trump. I have learned both as a former Supreme Court practitioner and as a law clerk that it is very, very stupid to predict Supreme Court outcomes on the basis of the conduct of oral arguments, but suffice to say I feel extremely confident about the outcome of Slaughter against Trump. And particularly given the fact that even the respondents in Slaughter against Trump declined to defend Humphrey's Executor on its merits. There is universal recognition that the contents of Humphrey's Executor cannot be defended and that insofar as we're going to have independent agencies, we need a new rationale. And that what the court said in Slaughter just doesn't exist in the real world anymore. But I feel quite confident about the outcome of that case. And that is just consistent with my view that independence in government is just anti-democratic. The whole premise of our constitutional structure outlined by Madison in the first debates in the 1789 Congress is that there must be a chain of dependence running from the meanest officer of the government back to the people. And the only way that that runs is through the president. And pretensions to independence are just categorically anti-democratic. And that treating the FTC like it's part of the executive branch is restoring democracy to the executive branch.
Let me turn to what I call the enforcement agenda. There's a lot of discussion today about the economy. And a lot of it goes under the heading affordability. The FTC has always talked about what we now talk about affordability. And they might have called it pocketbook issues. Let's start with consumer protection. Your distinguished alum, as you mentioned, is with you today who's the head of that bureau. What about what you're doing there implicates affordability?
So, I agree with you. Chris Wilson Farge is one of the finest lawyers that I've ever worked with and runs our Bureau of Consumer Protection. So, you know, I've always described the two roles of the agency as, you know, our economic system depends on vigorous competition. On a sort of low-grade war among market participants to compete for consumers, compete for dollars, compete for feet to come into the store, etc. And that our consumer protection rules are like the Marquess of Queensberry rules for boxing. We want you guys to fight, but we are going to impose limits on what you can do to compete. And what those limits include, you can't lie to people. You can't mislead them by omission or commission, and then the slightly more complicated part of our laws, you can't treat them unfairly. And on the consumer protection side, sort of enforcing those rules about how competition is supposed to proceed, I've seen it as my role to try to restore people who have money wrongfully taken from out of their pockets back to where they were. And that the goal here is not press releases about corporate wrongdoing. It's finding people who are hurt, going after the people who hurt them, and taking the money that was put into their pockets wrongfully and putting it back into people's pockets, and sending a signal to the marketplace that if you do this type of thing, you're going to hear from us. And if you broke the law, I'm going to come get you.
And so our rate of case development has been just spectacular. I mean, I will put the intensity of my enforcement agenda up against anyone of either party from the last 50 years. I think the difference between me and my predecessor is I am not trying to pursue grandiose market remaking theories of consumer protection. And that the goal is find people who were hurt and deliver to them, and find the biggest groups that you can and deliver to them the results as quickly as we can. But only bring the cases that you think you can win. I mean, one of the things I told staff very early on was I've noticed a difference between cases that you think you're going to litigate and cases you think you're going to settle. And when you bring me cases that are settling, and I sort of poke and prod at the evidence, sometimes it's a bit lacking. And if it's cases that you know you're going to have to litigate, you build them up a little more. I'm not going to settle cases I don't think that I have a chance at winning at the stage that we would bring it just because we're going to settle. In other words, I don't want to do this extortionate thing where you hit someone with a CID and they say how much they have to pay you to go away. I want to go after people who have actually wronged people. I want to go after people who sort of leak money out of consumers in ways that they don't necessarily notice at the time and restore those consumers to their rightful place and to restore trust in the marketplace. I mean, I think we do have, pardon my language, but there is this phenomenon that appears sometimes in newspapers, sometimes in magazines, and a lot online...
called enshittification, where people sort of feel like all the time things don't work in the economy like they used to. I have to pay all sorts of drib and drab fees here and there for all sorts of stuff I didn't used to. Things don't go as well as they used to and it's very frustrating. And I see it as one of my most important jobs is to get people confident in participating in the market by making them believe that when they participate in transactions, they know what they're getting into, nothing's going to be taken from them unfairly or unwittingly. And that sort of confidence makes people more willing to participate in markets and keeps economic activity going. And so we've brought a lot of ROSCA cases, big ROSCA cases involving online commerce. The rate of frustration that I hear from consumers about, you know, fees tacked on at the end of transactions, misunderstanding about what they were signing up for when they were signing up for it. I mean, there's a reason Congress passed this law, but given how much commerce takes place online every day, we've really focused on bringing strong ROSCA cases to try to promote some confidence in the marketplace. And as we've announced, we are exploring a click-to-cancel and negative option rule, a lawful one this time, but again, as part of our goal to try to make people confident in the markets in which they're going to participate, encourage them to engage in economic activity to keep the economy going.
You mentioned money and you have been getting a significant amount of money back despite the AMG case, of course. Which said that the commission's use of 13b, especially the way they tried to expand it starting in the Obama years, was not justified by the FTC Act. But given AMG, what are the obstacles and how have you overcome them?
