Stigler Center In the News 2023

Corruption’s revolving door must be sealed shut before it is too late
December 17, 2023 | The Times
Matthew Syed quotes Luigi Zingales, who noted that “the best way to make lots of money is not to come up with brilliant ideas but to cultivate a government ally.”

Enforce the Robinson-Patman Act for a Fairer Economy
December 14, 2023 | The American Conservative
Erik Peinert and Katherine Van Dyck's ProMarket article on the Robinson-Patman Act (RPA) is cited to illustrate scant evidence that the RPA leads to higher consumer prices.

Google antitrust loss shows juries can be a path to victory for critics
December 13, 2023 | Washington Post
Samuel Weinstein’s ProMarket article on the jury trial aspect of the Google antitrust case was cited in an article by Cristiano Lima on the Epic v. Google case.

AI Is Testing the Limits of Corporate Governance
December 5, 2023 | Harvard Business Review
In an influential paper, economists Oliver Hart and Luigi Zingales argued that, in an unrestricted market for corporate control, a profit-driven buyer can easily hijack the social mission of a firm. They called this phenomenon “amoral drift.”

Why Americans should worry about Subway’s new ownership
December 4, 2023 | MSNBC
A ProMarket article on how hospital monopolies drive up prices was cited in an article on Sen. Warren’s efforts to prevent a sandwich monopoly.

Sam Bankman-Fried and Elizabeth Holmes may just be the tip of the corporate fraud iceberg that costs the economy $830 billion annually, study says
November 30, 2023 | FORTUNE
“It’s very difficult to know the pervasiveness of crime, because the only thing you observe is the crimes that are caught,” noted Luigi Zingales, a University of Chicago professor and coauthor of “How pervasive is corporate fraud?” published in the Review of Accounting Studies.

Should you put your faith in engagement or divestment?
November 27, 2023 | International Institute for Management Development
Why does divestment still attract support? There are at least four reasons. The first is that people do not want to be associated with an industry that is doing so much damage to the planet. “Not in our name,” they say. Luigi Zingales, a professor at the University of Chicago Booth School of Business, calls this the “deontological stand."

Antitrust Reform and Big Tech Firms
November 21, 2023 | Congressional Research Service
A report on antitrust reforms and big tech firms cites ProMarket articles by Herbert Hovenkamp, Randy Picker, Hal Singer, and Carl Shapiro.

Indispensable Treatment
November 20, 2023 | University of Chicago Professional Education
Former Stigler Center Research Professional Federico Marciano reflects on his time at the University of Chicago as a pre-doc and a GSAL student as the indispensable treatment that led to his broad acceptance to the best graduate programs in economics in the United States.

EPIC Comments to the NTIA on RFC Regarding Youth Mental Health, Safety & Privacy Online
November 16, 2023 | Electronic Privacy Information Center
Elettra Bietti’s article for ProMarket, “Data, Context, and Competition Policy,” is cited by EPIC in comments to the U.S. National Telecommunications and Information Administration
regarding youth mental health, safety & privacy online.

Rishi Sunak’s AI plan has no teeth – and once again, big tech is ready to exploit that
November 16, 2023 | The Guardian
“Given their central role in the AI ecosystem, the dominant corporations providing large-scale models must be given strict overarching responsibilities to behave fairly and in the public interest.” Georg Riekeles and Max von Thun cite Luigi Zingales’ work.

Pluralistic: The conservative movement is cracking up
November 14, 2023 | Pluralistic: Daily links from Cory Doctorow
Antitrust has been the centerpiece of the Biden Administration's most progressive political project. But elements of the right have also latched onto antitrust, for reasons of their own, writes author Cory Doctorow, citing an episode of Capitalisn’t.

America’s undeniable competition problem requires a regulatory fix
November 14, 2023 | The Hill
In an op-ed, Neale Mahoney and M Sinkinson cite our ProMarket interview with Thomas Phillippon, who calculates that consolidation is costing the typical household an extra $5,000 per year.

The FTC Lawsuit Against Amazon Is the Biggest Antitrust Fight of Our Time
November 10, 2023 | The Nation
At the moment, the [Amazon] lawsuit’s potential feels like the breakup of AT&T in the 1980s—a decision that unlocked fundamental changes to the way we work and communicate with each other, [as Monika Schnitzer and Martin Watzinger wrote in ProMarket].

Do Amazon and Google lock out competition?
October 19, 2023 | The Economist
The [antitrust] case against Amazon is stronger. Luigi Zingales of the University of Chicago thinks that if the alleged facts are found to hold, the FTC should win.

How Beyoncé and Taylor Swift Struck a New Kind of Movie Deal
October 7, 2023 | New York Times
Critics have argued [on forums such as ProMarket] a more effective alternative would have been enshrining the restrictions into updated regulations that applied widely to all industry players, including relatively new entrants like streaming services, instead of eliminating norms.

A Murder Story: Whatever Happened to Interoperability?
October 5, 2023 | The American Conservative
While it was Jimmy Carter who pulled the first tentative Jenga blocks out of the antitrust enforcement system, Reagan went at it with gusto, tearing them out by the fistful. The theories of Robert Bork and his Chicago colleagues gained currency, as Sandeep Vaheesan has argued in ProMarket.

Del capitalismo financiero al digital: del ‘homo economicus’ al ‘homo digitalis’
October 1, 2023 | The Conversation
In 2004, economists Raghuram Rajan and Luigi Zingales published Saving Capitalism from Capitalists, a book that was quite a premonition. In it, the authors pointed out the urgent need to rethink capitalism to save it from speculation and the power of the opulent capitalists of the financial world.

They Studied Dishonesty. Was Their Work a Lie?
September 30, 2023 | The New Yorker
“This is the stuff that C.E.O.s love, right?” Luigi Zingales, an economist at the University of Chicago, said. “It’s cutesy, it’s not really touching their power, and pretends to do the right thing.”

Donald Trump's business empire at risk following fraud ruling
September 29, 2023 | NPR
Donald Trump's business empire faces, quote, "great risk" after a judge's ruling. Luigi Zingales speaks to NPR's Brian Mann.

Google’s Fight Against Antitrust Hits a Roadblock
September 26, 2023 | The American Prospect
As Harvard Law professor Laurence Tribe explained [in ProMarket]: “The only substantial effect of Kanter’s recusal now would be to deny the DOJ access to his insights and years of expertise in prosecuting this case. It’s not hard to see why a company might want that.”

The FTC’s case against Amazon could set a dangerous precedent–and benefit other retailers
September 26, 2023 | Fortune
Chair Lina Khan’s negative views toward companies like Amazon were well-known even before she joined the FTC. In a 2019 article [in ProMarket], Khan asserted that when Amazon sells products in competition with other suppliers on the Amazon platform, the company gives itself an unfair advantage over those of other sellers.

Draft Merger Guidelines Weaken American Competitiveness
September 19, 2023 | TechFreedom
Bilal Sayyed's comments in ProMarket, The Draft Merger Guidelines Abandon the Persuasiveness of their Predecessors, cited in comments in response to the Federal Trade Commission (FTC) and Department of Justice’s (DOJ) request for comment on their proposed draft revised Merger Guidelines.

Searching for a Breakup
September 18, 2023 | Medium
The breakup of AT&T unlocked enormous value in the telecommunications industry, leading to more patents, more profits, and eventually the fertile ground needed for the internet market explosion in the 1990s, [Monika Schnitzer has argued in ProMarket].

The Justice Department Controversy You Might Have Missed
September 18, 2023 | POLITICO
The Merger Guidelines have been praised by progressive activists but faced significant blowback elsewhere. Antitrust scholars have been hotly debating the merits of the proposal in ProMarket.

Corporate consolidation is hurting Americans. Now is the time to rein it in.
September 16, 2023 | Pennsylvania Capital-Star
A 1978 Congressional report detailed the ways strong enforcement of the Clayton Act, coupled with the first-ever merger guidelines in 1968, “prevented merger-induced increases in market concentration.” This changed in 1982 when the Reagan Administration, without a single change to the law, radically changed the guidelines to focus on short-term consumer prices and economic efficiency [wrote Zephyr Teachout in ProMarket].

Ninth Circuit Should Affirm Denial of FTC Preliminary Injunction Request in Microsoft/Activision
September 15, 2023 | TechFreedom
Bilal Sayyed's comments in ProMarket, The Draft Merger Guidelines Abandon the Persuasiveness of their Predecessors, cited in an amicus brief urging the U.S. Court of Appeals for the Ninth Circuit to reject the FTC’s narrow view of the proper scope of issues for consideration in a preliminary injunction hearing, and to affirm a district court’s denial of the FTC’s request for a preliminary injunction in the case FTC v. Microsoft Corp. and Activision Blizzard, Inc.

To Antitrust Enforcers, Consumers Are Irrelevant
September 14, 2023 | Hoover Institution
Carl Shapiro, an economics professor at the University of California, Berkeley, and deputy assistant attorney general in the Department of Justice’s Antitrust Division during the first Obama presidential term, wrote an extensive article [in ProMarket] that is quite critical of the rules.

50 years since Pinochet's coup
September 11, 2023 | TRT World
Luigi Zingales joins the program to discuss the ongoing impact of General Pinochet's rule, which continues to divide Chile.

Comments for the Record: Draft Merger Guidelines
September 11, 2023 | American Action Forum
Evidence from a September 2023 piece in ProMarket written by Carl Shapiro, former DOJ Deputy Assistant Attorney General for Economics Antitrust Division, supports the assertion that the draft Merger Guidelines do not reflect current agency practice.

DealBook: Merger guideline guidance
September 6, 2023 | The New York Times
Alongside a raft of essays from antitrust experts in ProMarket, about 1,200 public comments on the proposal have already been submitted

Wrestling With Inequality, Some Conservatives Redraw Economic Blueprint
September 5, 2023 | The New York Times
Scholar Matthew Desmond, on the Capitalisn't podcast, has vehemently disagreed with Phil Gramm's analysis.

Antitrust at the Agencies: Back to the Past Edition
September 1, 2023 | Truth on the Market
Carl Shapiro–another distinguished academic, chief economist at the Antitrust Division during the Obama administration and, during that same administration, a member of the President’s Council of Economic Advisors–is also critical, arguing “Why Dropping Market Power from the Merger Guidelines Matters” in a contribution to a ProMarket symposium on the draft guidelines. Dennis Carlton of the University of Chicago–yet another former Antitrust Division chief economist–is even more critical in asking (and answering), “Have the Draft Guidelines Abandoned Economics?”

El podcast de Luigi Zingales y Sebastián Edwards sobre los Chicago Boys: “El historial económico (en dictadura) fue realmente pobre”
August 31, 2023 | La Tercera PULSE
Former Stigler Center Journalist in Residence Rodrigo Cardenas summarizes our Capitalisn't episode, "Key Lessons from the "Chicago Boys" Chile Experiment."

Editorial: The feds are about to take on Google’s alleged anticompetitive behavior. The history involves the ‘Chicago School.’
August 31, 2023 | Chicago Tribune
"In a paper, three academics attribute the influence of the Chicago School to moneyed interests that benefited from big businesses getting bigger," writes the Chicago Tribune Editorial Board, alluding to work by Luigi Zingales, Filippo Lancieri, and Eric Posner.

Antitrust: The Draft Merger Guidelines & Non-US Regulators
August 25, 2023 | DEAL Lawyers
European economist Cristina Caffarra writes in ProMarket on what signal other antitrust enforcement agencies might take from the U.S. Merger Guidelines.

US DOJ tests new approaches to boost cartel enforcement revival efforts
August 25, 2023 | Global Competition Review
Guy Rolnik, Asher Schechter and Brooke Fox, ‘DOJ Antitrust Head Jonathan Kanter: “We Are Making It Very Clear: We’re Going to Hold Individuals Accountable”’, ProMarket (28 April 2022)

Luigi Zingales y sus advertencias sobre las AFP y los conglomerados
August 23, 2023 | Centro Competencia
El viernes 11 de agosto, el economista Luigi Zingales (PhD en economía del MIT y profesor en la Universidad de Chicago) dictó en la Facultad de Economía y Negocios de la Universidad de Chile (FEN) una Conferencia Internacional por la celebración de los 50 años de la revista “Estudios de Economía” de la FEN.

What Does “Stakeholder Capitalism” Mean to You?
August 15, 2023 | Harvard Business Review
The economists Roy Shapira and Luigi Zingales have shown, for example, that polluting the environment, even when it is against the law and harmful to public health, can sometimes maximize long-term value for shareholders.

Opinion: Lina Khan’s FTC wants to transform antitrust. Is there a better way?
August 14, 2023 | Washington Post
Herbert Hovenkamp's article as part of ProMarket's online symposium on the Merger Guidelines is cited by the Washington Post Editorial Board. "But to the skeptic, parts of the guidelines read as a denunciation of growth."

If Big Tech Is a Problem, What’s the Solution?
August 7, 2023 | Chicago Booth Review
“Antitrust in the 1960s and early ’70s was a mess,” says Chicago Booth’s Luigi Zingales. It was unclear, he says, exactly what it was trying to accomplish. “One of the reasons the Chicago push succeeded is because it was logical and simple in a world in which there was a lot of contradiction and tension.”

Luigi Zingales: “Chile debería pensar más seriamente en tener un impuesto al patrimonio”
August 6, 2023 | La Tercera
Este jueves y viernes estará en Santiago el destacado economista italiano Luigi Zingales, autor de los famosos libros “Salvando al capitalismo de los capitalistas” (junto a Raghuram Rajan) y “Capitalismo para la gente”.

How to save markets to become free again
July 12, 2023 | The New Times
Professor Luigi Zingales whose “Crony Capitalism” course has become so popular over the years – which myself I had fun attending during this last Spring quarter – has been a strong advocate of how to fix markets and break monopolies.

Should investors stay and fight for green change — or divest?
July 5, 2023 | Financial Times
Socially conscious investors are increasingly pushing funds to divest certain shareholdings. But in most cases, they would do better to retain their stakes and engage with management to bring about reform, Booth’s Luigi Zingales explains in a recent op-ed.

ESG funds: Greenwashing Wall Street
June 30, 2023 | Quartz
“These findings cast doubt on the hope that self-regulation would suffice to undertake a green transition. Firms seem very responsive to the public mood in words and programs. Better outcomes? Not yet!” —Luigi Zingales, finance professor at the University of Chicago Booth School of Business, writing in a shareholder value study

ESG: Are Investors Willing to Pay for Social Responsibility?
June 30, 2023 | CCR Corp
Here’s an excerpt from a ProMarket blog by one of the study’s authors: "Our empirical analysis provides the following main results. First, we find that when making investment decisions, individuals are indeed willing to forgo some returns in order to promote social interests: The average willingness to pay in our experiment varies..."

Bank failures now happen at warp speed. The Fed needs to do more to stop them.
June 28, 2023 | MSN
My colleagues Tano Santos, Naz Koont, and Luigi Zingales find that digital banking undermines financial stability. When interest rates rise and keeping money in a low-interest account becomes costly, clients of traditional banks stick with their deposits.

Why Joe Biden’s trustbusters have fallen short of their ambitions
June 21, 2023 | The Economist
How successful have they been? They have certainly reframed public thinking about trustbusting. “Six years ago, if you didn’t buy into the consumer-welfare standard, you weren’t a serious person. Now that’s completely gone,” says Luigi Zingales, a finance professor at the University of Chicago Booth School of Business.

What I Learned About ‘Woke’ Capital and Milton Friedman at the University of Chicago
June 9, 2023 | Wall Street Journal
As Luigi Zingales, a Chicago finance professor, puts it, we now have the politicization of the corporate world because we have corporatization of the political world. Corporate money and influence have invaded politics since the 1970s and even Friedman, a big supporter of liberty, might not like it.

Was Bailing out the Silicon Valley Bank Depositors the Right Decision?
June 6, 2023 | Conversable Economist
Was that decision appropriate? Raghuram Rajan and Luigi Zingales make the case against in “Riskless Capitalism” (Finance & Development, June 2023).

Just how safe are credit unions?
June 2, 2023 | Marketplace
Banks are trying to maximize their return on equity, and that can lead them to take bigger chances with their lending or investments, said Luigi Zingales, a finance professor at the University of Chicago Booth School of Business.

"Riskless Capitalism", by Raghuram Rajan and Luigi Zingales
June 1, 2023 | IMF Finance & Development Magazine
Did uninsured depositors in the failed Silicon Valley Bank (SVB) need to be saved? The argument is that even though everyone knew that deposits over $250,000 were uninsured, if uninsured depositors had not been made whole, panic would have coursed through the banking system.

What ESG goals actually change at companies that set them
May 30, 2023 | Quartz
“I had been interested in the topic of the objective of the firm for a long time,” says Luigi Zingales, one of the study’s co-authors. He’d also seen sentiment fluctuate on the subject of what companies thought they were for.

Regional bank crisis may be far from over, experts warn
May 27, 2023 | Marketwatch
Researchers led by economist Luigi Zingales of the University of Chicago published an analysis in April that showed that banks with well-functioning mobile applications experienced greater deposit flight when the Federal Reserve began raising interest rates than those without those digital tools.

(Dis)Belief in Banking
May 25, 2023 | Chartered Banker
Professor Luigi Zingales, University of Chicago Booth School of Business and co-host of the podcast Capitalisn’t, believes that trust is a complex matter. “When you think about trust, there is a country or institutional average that is very much related to the way people see society as a whole. People are much more trusting in Sweden than they are, for example, in Brazil. If you ask a Brazilian how much he trusts individuals, he’ll say not very much, and when asked how much he trusts banks, he’ll say the same. And in Sweden it’s high for both.

There are risks but also big potential benefits from digital payments
May 15, 2023 | The Economist
A more novel risk from digital finance may be financial instability. A recent paper by Luigi Zingales of the University of Chicago and co-authors finds that deposit outflows from digital banks were greater than those from traditional banks in the second quarter of 2022.

How Elon Musk upended Twitter and his own reputation in 6 months as CEO
April 27, 2023 | CNN
“I give him some credit for trying a different business model,” indicates Luigi Zingales of Chicago Booth. “I think the business model based on user data is quite abusive.”

Interview with Luigi Zingales: Saving capitalism from itself—and for the people
April 17, 2023 | Federal Reserve Bank of Minneapolis
By his own admission, Luigi Zingales might not be a conventional pick for the Institute Advisory Board. He holds a chair in entrepreneurship and corporate finance at the University of Chicago Booth School of Business, preparing MBAs destined for the “1 percent” on the home turf of Milton Friedman. Through popular books, op-eds, the publication ProMarket, and the podcast Capitalisn’t, the genial economist has built a reputation as a happy warrior for capitalism and free enterprise.

Is Economics Self-Correcting?
April 7, 2023 | The American Prospect
Then I got in touch with Luigi Zingales.Zingales heads the Stigler Center at the University of Chicago, and criticized the old orthodoxy in two important books, A Capitalism for the People (2012) and Saving Capitalism From the Capitalists (with Raghuram Rajan, 2003) and in his ongoing work at his center, which includes regular media convenings to expose journalists who cover economics to a broader brand of scholarly economic inquiry.

Surveillance: Banks In 4% Rate World
April 6, 2023 | Bloomberg
Luigi Zingales, University of Chicago Booth School of Business Professor of Finance says the banking system can't operate with interest rates at 4%. Thierry Wizman, Macquarie Global Interest Rates and Currencies Strategist says it's the "speedy, aggressive and abrupt increase" to 4% rates that is the problem

Forbes Money JP Morgan’s Jamie Dimon: Banking Crisis Not Over. He’s Right
April 5, 2023 | Forbes
Researchers Naz Koont (Columbia), Tano Santos, and Luigi Zingales (both University of Chicago as well as NBER) found digital deposits flightier, per the red line in the graph (that Luigi was kind enough to let me use) below.

Luigi Zingales: SVB reveals regulatory failings in the age of social media bank runs
March 21, 2023 | Luohan Academy
In a recent episode of Capitalisn’t following the collapse of Silicon Valley Bank (SVB), Luigi Zingales interviewed 2022 Nobel laureate and University of Chicago colleague Douglas Diamond. The Diamond-Dybvig model is a key conceptual framework for understanding bank runs, particularly how sound banks can fail due to a self-fulfilling prophecy.

Investigate the Bank Failures
March 20, 2023 | City Journal
In a speech last week, President Biden reassured the public that those responsible for the failure of Silicon Valley Bank (SVB) and Signature Bank will be held accountable. In the 2008–09 Financial Crisis, this did not happen. For Biden’s promise to be more than rhetoric, his administration must take a proactive role. As the last crisis showed, the normal mechanisms of accountability are broken. Banks paid billions of dollars in fees, but no CEO, board member, auditor, or regulator went to jail. Aside from a few CEOs, nobody even paid a fine out of his own pocket.

Two out of three corporate frauds go undetected, research finds
February 17, 2023 | University of Toronto News
The researchers, which included Adair Morse of the University of California, Berkeley and Luigi Zingales of the University of Chicago, used the findings to infer that the real number of companies involved in fraud is at least 10 per cent – about three times greater than their previous estimates. That squares with previous research that has pegged the true incidence of corporate fraud between 10 and 18 per cent.

6 VCs share advice for laid-off tech workers planning to launch startups
February 14, 2023 | TechCrunch
Many tech workers have never experienced a job market like this one. Last year, 1,044 tech companies let go of 159,786 employees, according to Layoffs.fyi. As of this writing, 103,767 workers have been laid off from 345 startups so far in 2023. Many, many more are coming, obviously. Losing a job unexpectedly is more than a financial shock. Many of us invest much of our identity in what we do for a living, which means layoffs can transform social and emotional lives overnight.

Top Int'l Economists to Netanyahu: ‘Undermining Judiciary Detrimental to Prosperity and Growth’
February 8, 2023 | Haaretz
Fifty-six world-renowned economists, including 11 Nobel laureates, have signed an open letter protesting the Benjamin Netanyahu-led government’s plan to weaken Israel’s democracy and damage judicial independence. Among the known and respected economists are Peter Diamond and Daron Acemoglu of MIT; Luigi Zingales and Marianne Bertrand of the University of Chicago; Eric Maskin, Lucian Bebchuk and Oliver Hart of Harvard; Paul Milgrom of Stanford; and Daniel Kahneman of Princeton.

The Great Fraud Reckoning
January 31, 2023 | Business Insider
"What's cool about Arthur Andersen's bankruptcy is that there was a panic among its clients," one of the study's authors, the University of Chicago professor Luigi Zingales, told me. "They needed to do all sorts of cleanup."

With the Adani Crisis, Is Narendra Modi's House of Cards at Risk?
January 30, 2023 | The Wire
The question of India’s new political economy was first posed in 2012 when analyst Ashish Gupta raised the alarm about bad debts at state banks. The issue was taken up by US-based economist Raghuram Rajan when he was appointed to the Reserve Bank of India in 2014. Rajan and his colleague at Chicago-Booth Luigi Zingales cast India’s problem as one of crony capitalism. Rajan as Reserve Bank Governor only until 2016.

The Justice Department accuses Google of an advertising monopoly
January 26, 2023 | NPR
NPR's Steve Inskeep speaks with University of Chicago professor Luigi Zingales about the federal antitrust case targeting Google's digital advertising business.

Just How Common Is Corporate Fraud?
January 14, 2023 | New York Times
On a recent visit to Salt Lake City, Alexander Dyck ordered Chinese takeout and received a branded fortune cookie wishing him wealth and promoting FTX, presumably packaged before the crypto empire’s epic collapse. “I should have saved it,” he said regretfully.Mr. Dyck is a professor of finance at the University of Toronto, who just published a provocative new study on the pervasiveness of corporate fraud. The study has been passed around in the world of academia in recent weeks, and has become a fascination among general counsels, corporate leaders and investors.

Complexifying Antitrust
January 4, 2023 | BBN Times
Current discussions of US antitrust policy often refer to a “before” and an “after.” A common fable goes that in the “before” from the 1930s up through the early 1970s or so, zealous antitrust regulators protected the public interest. But then, a group of recalcitrant free-market academics led a movement to toss out the wisdom of the past, and instead allowed big business to flourish unfettered and unafraid. Now, a brave but embattled group of reformers is struggling to reestablish the old wisdom of protecting consumers from big firms.