On March 9 I interviewed Lina Khan — innovative antitrust thinker, former head of the Federal Trade Commission, and co-chair of the Mamdani transition in New York — at the CUNY Graduate Center. Transcript follows.
Transcript
Janet Gornick Good evening. I’m Janet Gornick, Professor of Political Science and Sociology and Director of the Stone Center on Socio-Economic Inequality here at the Graduate Center. Our center is the co-host of this evening’s event in partnership with our Office of Public Programs. It’s my great pleasure to welcome you here this evening. Welcome to the in-person audience here in Proshansky Auditorium, and welcome to the large virtual audience as well. This evening’s event is one of the many public lectures, panels, and conversations offered here at the Graduate Center at the City University of New York throughout the year. And at the Graduate Center, we’re proud of our history of applying research and scholarship to address societal challenges, and tonight’s conversation fits in with that tradition. This evening, we are extremely pleased to welcome Professor Lina Khan to the Graduate Center. Her first time on our stage here. She’s well known to us and to many of you for her foundational work on antitrust and competition law, and more recently for her crucial role as co-chair of Mayor Zohran Mamdani’s transition team.
Professor Khan in just a few minutes will be joined in conversation with Professor Paul Krugman.
So let me first tell you what to expect this evening. After my brief introduction, our two guests will hold a conversation led by Professor Krugman. And while they’re conversing, audience members will have an opportunity to write questions on index cards that you picked up on your way in. The public program staff will come down the aisles at about 7:10 to collect your index cards, and they’ll be sorted and handed to Professor Krugman. So let me make a quick plea to those of you who submit questions. Please make them relatively brief and print as clearly as possible, ideally in block print so that Professor Krugman can read what you’ve written. Yep, that’s necessary.
And then starting at 7:30, our guest will address your questions, and we’ll close at 7:45.
So let me tell you briefly about Professor Lina Khan. A graduate of Williams College and Yale Law School, she got her start in antitrust as a business reporter and researcher, examining consolidation across markets from airlines to chicken farming. In 2017, during her third year at Yale Law School, the “Yale Law Journal” published her article called “Amazon’s Antitrust Paradox”. The article had a huge impact in legal circles, legal and business circles in the United States. And the following year, “The New York Times” described it as reframing decades of monopoly law.
Professor Khan then went on to serve as chair of the Federal Trade Commission from June 2021 until January of 2025. And while at the FTC, she focused on exercising the full suite of the FTC’s statutory authorities, regularly engaging with public audiences and ensuring that the agency updated its tools to accommodate the reality of new markets. Her priority initiatives included reinvigorating antitrust and consumer protection enforcement, tackling non-compete clauses, taking on illegal contact, conduct, excuse me, that deprives Americans of access to affordable high quality healthcare, and protecting people’s sensitive data from surveillance. Her work did not go unnoticed. In 2023, Yahoo Finance dubbed her the most feared person in Silicon Valley.
And now in her post-FTC Life, she’s Associate Professor at Columbia Law, and she served as, as I noted, the co-chair of Zohran Mamdani’s mayoral transition team. So this evening, this evening, Professor Krugman will query her about multiple aspects of her career and her work, focusing especially on questions related to affordability, antitrust, and inequality.
And before I step off the stage, let me say a few words about Paul Krugman, who is well known to many of us here at the Graduate Center, and surely to many in the audience as well. Paul Krugman is a research professor in the Graduate Center’s PhD program in economics and a senior scholar in the Stone Center. Before joining the Graduate Center in 2014, he was Professor of Economics and International Affairs at Princeton. Professor Krugman’s scholarship has been honored countless times, including in 2008 when he received the Nobel Memorial Prize in Economic Sciences for his work on international trade theory.
He’s the author of more than 200 articles and many books, most recently “Arguing with Zombies, Economics, Politics, and the Fight for a Better Future”. In addition to working with us here at the Graduate Center, he co-authors textbooks on micro and macroeconomics with Robin Wells. And of course, many of you know him best for his 25 years writing op-ed columns for “The New York Times”. Last year, he transitioned away from “The Times”, but he surely has not left the world of public engagement. You can now find him on Substack, where every day he’s writing, interviewing diverse thinkers and frequently posting music aimed at raising his readers’ spirits. So welcome to our two guests. Paul, I turn the evening over to you.
Krugman Thanks Janet. Okay, so I should admit to everybody that I have a conflict of interest here, which is I think everybody here wants to hear about the Mamdani administration and what it can do. But I really wanna talk about theories of monopoly power, dynamic strategies and network externalities. And so we will get to stuff that actually matters later, or matters to people here. But I wanna talk, I wanna start with a little bit of sort of intellectual biography.
So tell me, I’ve tried to read some of it, but tell us about your start working on antitrust. ‘Cause you started very, very early on the issues. And then wanna talk about Amazon and all that.
Khan Well, it’s so wonderful to be here, and a great honor to be in conversation with Professor Krugman. So I really got my start as a researcher and reporter. I, you know, graduated during the financial crisis and had originally wanted to be a business journalist. It was very difficult to find journalism jobs, and so I ended up landing at a think tank, where my job was really to do deep dives into various markets across the US economy, and in particular study how the structure of these markets had changed.
And so I would do, you know, spend months looking at the structure of, say, the book publishing industry or the chicken farming industry or the airline industry, and got a sense of how over decades we had gone from having,
in some cases, dozens of competitors to now increasingly, market after market just dominated by a very small number of companies. And my job was to document what the effects of that consolidation had been.
You know, sometimes the consolidation can actually be even more extreme than is visible to us. So if you go to the grocery store, you may see, you know, dozens of brands of laundry detergent or diapers or various kinds of snacks. But even there we see just a couple of companies control market after market, and so there’s actually an illusion of choice. And through doing this research, it was clear that oftentimes the purported benefits of consolidation had been overstated. And in fact, people were left much worse off, be it from the consumer perspective, where companies had started to use the lack of competition to jack up prices or deprive people of choices. But also for workers, for small businesses. I spent a lot of time studying agriculture markets in particular, where we’ve seen, you know, be it in chicken farming or meat processing or you know, beef, you have on the one hand, you know, tens of thousands of farmers, on the other hand, millions of consumers, but just four companies in market after market connecting them. And what that has meant practically is that consumers have been paying more for meat, even as farmers have been making less. And so there’s a clear economic impact.
But there was also just abuse of power that we were seeing, because oftentimes farmers’ entire livelihood could be dependent on just a single firm. And that firm would, you know, dictate terms, would engage in all sorts of abusive contractual practices. And so that got me interested in this body of law that we have in the United States, the antitrust and anti-monopoly laws that were designed precisely to prevent extreme concentrations of economic power. These laws go back to the Industrial Revolution where we had seen enormous technological progress, but similarly a lot of concentration of power.
And there was a concern among lawmakers that these new trusts and industrial titans were really abusing their power in ways that was leaving Americans worse off economically, but that it was also undermining core principles of freedom and liberty. And so that was really my entryway into this. And I just became fascinated by this question of how it was that we had so much consolidation in all these markets and extreme concentration of economic power, even as we had a set of laws on the books that were supposed to protect us from precisely that.
Krugman Okay, and I, yeah, I thought that was really revelatory that so many, you know, in economics textbooks, probably including mine, ours, we, you know, always present agriculture as the quintessential example of a highly competitive industry. But in practice it’s not. The farmers are competitive, the consumers are competitive, but the middlemen are the, okay. I kind of see how that led you to Amazon. So this is this, you know, standing in between. A lot of sellers, a lot of buyers, but someone, actually, that’s the original robber baron was the idea of the robber baron with this castle along the Rhine, extracting tolls from everybody who passes by. But tell me about the Amazon paper. Because I thought, you know, I read it, but I think people should know what it is you did, and I wanna follow up on that.
Khan You’re absolutely right that there are real parallels even among markets that can seem quite different, in that, you know, be it as a chicken farmer or as an author, if your livelihood is suddenly at the whims of a single gatekeeper or a dominant intermediary that is controlling access to markets, the type of abusive practices can actually start to look pretty similar, even in seemingly disparate markets.
So the Amazon paper similarly resulted from doing a lot of business and market research. I spent a lot of time talking to two sets of market participants. One was the set of businesses that were selling through Amazon, and the second was investors and financial analysts that were looking at Amazon more through a long-term financial prism. And this was around 2012, 2013. The kind of common policy wisdom in DC was that Amazon, along with these tech giants, you know, had revolutionized digital markets, that Amazon in particular was, you know, somewhat irrational. It kept losing money, it seemed to be, you know, relentlessly dedicated to making things cheap. And so the idea that Amazon could ever pose some kind of competition problem didn’t really compute for people, because we had come to interpret our antitrust laws primarily through the prism of what the effect on short-term prices would be. And so I ended up using a lot of that research to basically use Amazon to tell a broader story about how various changes in how we now do antitrust had created all sorts of blind spots.
You know, some of the core business practices that Amazon used to develop its network, to deepen its moat were business practices that in the ‘60s or ‘70s would’ve been viewed pretty skeptically by law enforcers. But because of this intellectual revolution that had been, you know, spurred by people like Robert Bork, by people kind of generally known as the Chicago School, that we were now oftentimes facilitating the very types of concentrations of power that these laws were supposed to be skeptical of. And so the article was about Amazon and about Amazon’s business practices, but it was really using the company to tell a deeper story about blind spots that I thought the current antitrust regime had.
Krugman And you got a tremendous amount of, both a lot of people paid attention, but also a lot of pushback, right? People were very upset. And it feels like it was a very long time ago, because in 2017, I guess when it was published, you know, how could you be critical of Amazon? And seems like it’s a very different world now.
Khan It was interesting. I mean, the piece came out in January or February of 2017, and then that summer, Amazon announced it was planning to buy Whole Foods. And I remember that was one of the first moments where the response to one of these big acquisitions seemed a little different, because it seemed to prompt this question for the public of, are there any limits, and what are those principles?
And so I remember that acquisition ended up spurring a lot of discussion in particular.
Krugman Yeah, I mean, what strikes me is that the idea that companies that have established these kind of network positions, these kind of centrality and everybody has to use them, that they would abuse that, seemed, you know, not many people were saying that 10 years ago. And nowadays it’s everywhere. It’s, I mean, the word of the year I guess like three years ago was Cory Doctorow’s enshittification, which was basically largely about Amazon and Facebook and all of these companies abusing their sort of central position in markets. And do you feel vindicated by all of that?
Khan You know, it’s good that there’s been collective learning about, you know, the challenges that these firms can pose, you know, resulting in major lawsuits being filed. You know, Google has now been found to be an illegal monopoly, you know, three times over in separate cases. The case against Amazon is still proceeding. So yeah, I mean, you know, I do think that there’s been a greater awareness of how these markets in particular can be prone to monopolization, right?
I think one of, the big shift was that in the early 2000s, there was a view that to set up one of these companies, all you need is, you know, a couple of high school dropouts in a garage with a good idea. And that the entry costs were very low, and that, if anything, the government should err on the side of inaction because these markets were so fast-moving, so dynamic that we didn’t want these, you know, arrogant government officials to start meddling. And so there was a, you know, almost a deliberate policy choice to err on the side of inaction from an antitrust and competition perspective. And I think, you know, fast forward even a decade from that time, there was a much greater recognition that actually there’s something about how these digital markets work, this concept of network effects, the ways that data advantages kind of reinforce themselves, that maybe these markets are even more prone to monopolization rather than less. And so maybe there should be more action and more scrutiny earlier. And so I think there was an inversion of some of those prior assumptions. –
Krugman Yeah, for people in the audience, network effects here really means that there’s a lot of these companies’ services that everybody uses, because everybody uses them, right? There’s a sort of circularity. I mean, you know, as many of us know, it’s really, really hard not to buy from Amazon now, and this is true of a lot of these companies. And you were talking about that quite early as a risk at a time when people were mostly praising it.
I’m gonna actually throw in a curveball though, which is not part of my plan here.
But one thing that, I don’t know if you’ve thought about this, but one thing that strikes me and that is really very different from the earlier antitrust debate was we would talk a lot about the power of, you know, General Motors, or the power of of corporations. But what’s interesting about this group is that these are not just corporations. They actually happen by and large to be sort of individual people, that Amazon is not just Amazon, but it’s Jeff Bezos. Facebook is not just Facebook, it’s Mark Zuckerberg. And this is, you know, this class of extraordinarily wealthy people, that’s something that’s kind of new, or it’s both new and old. It’s hearkening back to the 19th century. Have you thought about that at all?
Khan It’s a really interesting point. And it gets to the fact that, you know, there were massive intellectual and ideological changes in how we do antitrust. But that was just part and parcel of a broader set of changes that we’ve seen across laws. And that includes things like corporate governance. And so, you know, even if you look at how the boards are structured of a company like Facebook, there was much greater reliance on basically creating different segments of shares. And so basically creating kind of super-weighted shares and ownership for people like Mark Zuckerberg, so the types of corporate accountability that you might have had through a board previously really don’t exist for individuals like him. And so there’s been not only consolidation across markets, but consolidation of power within the firm and within the corporate structure, as you’re referencing,
Krugman Which means that we kind of get into the political arena as well, ‘cause that’s so important there. And I shouldn’t talk, but just plugging something that my former employer, “The Times” just had a report that said that in the 2024 campaign, 300 billionaires accounted for 19% of all political contributions in the United States, it’s really sort of 300 families, and a fair number of them are in fact these companies that you were writing about in 2017.
Okay, so you got into the political arena. You became a very young, very dynamic and very controversial chair of the FTC. So what was that like? Actually, how did that happen? How did you get, how did Joe Biden end up recruiting you?
Khan- I mean, you’ll have to ask him, you know, what that process was like for the White House. But for me, I had spent some time working as a staffer for a congressional committee. The judiciary committee has an antitrust subcommittee where we actually did a deep investigation into Facebook, Amazon, Apple, and Google and, you know, had been doing that work within government. When that wrapped up, I went back to academia and then, you know, the election happened and I got outreach to see if I’d be interested in serving at the Federal Trade Commission.
So it was a remarkable honor to get to take the helm there, especially during a time where it seemed there was a real appetite to rethink how we are using these laws, enforcing these laws. The Federal Trade Commission is an agency that was created back in 1914, has been given pretty significant powers by Congress, but for several decades, especially after the Reagan administration, had been kind of, you know, narrowing its ambition and really I think punching below its weight in some cases. And so it was an opportunity to come in and really reinvigorate the agency.
Krugman Okay, and so tell me about what you think were some of the notable targets, cases that you tried to go after, industries that you thought were interesting.
Khan- Well, we were, you know, the FTC is by all accounts a pretty small agency. At its peak when I was there, it was around 1400 employees. And so we had to be extraordinarily focused on prioritization, and, you know, every investigation you’re doing is another investigation you’re not doing. So there were several factors that we looked at, one of which was just how significant is this industry for people’s day-to-day lives? And something that rose to the top of course was healthcare, where across different parts of the healthcare supply chain, we have similarly seen a lot of consolidation, be it among hospitals, be it among pharmacies, be it among these middlemen known as pharmacy benefit managers.
And in healthcare in particular, we’ve seen not only horizontal consolidation, but also vertical integration. So the same player that is the health insurer is also owning the pharmacy, is also owning the pharmacy benefit manager. We’d also seen trends such as private equity coming in and rolling up different physician practices and then jacking up prices. And, you know, week after week, month after month, we would hear from Americans about just how devastating this was for their day-to-day lives. I mean, we would routinely hear from people about how they were having to ration lifesaving medicines, skip doses of lifesaving medicines, people who had had family members pass away because they didn’t wanna, you know, use up all their insulin because it was so expensive. And so the kind of stakes here are literally life or death. And so we spent a lot of time focused on healthcare markets. That included things like whenever pharmaceutical companies were trying to merge or buy one another, we would be especially vigilant to make sure that these mergers were not gonna be used to snuff out new innovative drugs that actually would have brought down prices.
We also looked very closely at these middlemen, these pharmacy benefit managers, because we’d heard a lot about how their practices were both contributing to higher drug prices, but also squeezing out independent pharmacies and resulting in higher prices there. So I would say, you know, I think the tech work of the FTC gets a lot of attention, but I think, you know, healthcare was just as important an area of focus for us.
Krugman Okay. And yeah, there were some of those, there were some sort of scandalous acquisitions and then exploitations involving drugs. I’m trying to remember now. I’m sure you know better than me. But there were some really drastic cases that made headlines. And did you feel that you made headway on those?
Khan Yeah, I mean, you know, one of the most notorious was Martin Shkreli, AKA Pharma Bro, who, you know, bought up a drug and jacked up the price thousands of percent. And you know, that was a case that the FTC litigated, the FTC won, and then also secured a lifetime ban for Martin Shkreli, where he is not allowed to be in the pharma industry anymore. There’s some other cases that are still ongoing in healthcare, but we did successfully stop hospital mergers across the country. There’s a lot of evidence that when hospitals merge, prices and costs tend to go up and quality tends to go down. We’ve also seen the rise of healthcare deserts across the country, where, you know, people are gonna have to drive, you know, over 100 miles to get to the nearest hospital as opposed to 10 miles. And so, you know, there’s a lot more work to be done there, but there was some progress.
The other big area of focus for us was labor markets, where, you know, there was a lot of attention on how market power affected consumers, but over the last decade we’ve also seen more and more economic research showing that labor markets can actually be much less competitive than people had previously assumed. And that that also ends up being bad for workers in terms of resulting in lower wages, more stagnant wages. We were very focused both on how mergers were affecting workers, and so if a merger would be proposed, we would look not just at its potential impact on, say, patients, but also on, say, healthcare workers. And then we were very focused on this issue of non-competes, with this contractual provision that basically locks workers in place. –
Krugman Yeah, people don’t know, again, non-competes, maybe a fair number of people in this audience have actually encountered it, but yeah, you non-compete is basically saying, you know, if you leave, you cannot basically work for somebody who’s competing with us, can’t take a job, you can’t yourself compete with us. It’s a tremendous lock on the labor market. And did you make any progress? I’m unclear exactly how far we got on that.
Khan Yeah, so these are provisions that started off in the C-suite, but basically have proliferated. So now a conservative estimate is that one in five Americans has been governed by a non-compete, and that these are affecting, you know, security guards, janitors, fast food workers, people making, you know, close to minimum wage.
And that these have a real abusive effect. I mean, when we put out, so basically we both brought lawsuits against coercive non-competes that resulted in companies dropping them for thousands of workers. For example, we brought a case against the security guard company in Michigan that had been locking down, you know, again, minimum wage-making security guards, preventing them from taking jobs that were better fits. And this was resulting in people’s wages being depressed.
We also put out a proposed rule that would basically eliminate the vast majority of non-competes in this country.
And when we put that out, we got 26,000 comments from people across the country, from every state. We heard, for example, from a bartender in Florida who shared how she had been harassed at her job. It spurred her to go find another job. And when she, you know, basically made moves to go start working at a different restaurant, her original employer basically threatened her with a lawsuit for tens of thousands of dollars. And so she had to choose basically, you know, do I try to escape this horrible work situation where I’m getting harassed, or do I basically risk becoming bankrupt because of this lawsuit? And so, you know, there’s a financial impact here, but there’s also just a real coercive impact on people’s day-to-day lives. And it was just horrifying, candidly, to just see all the ways that employers have abused these contractual provisions.
Krugman Okay, one more question about the past before we come up to New York City. Your time at the FTC coincided with the big inflation spike, which is like, roughly 2021 to 2023. And certainly up my alley, there was a lot of back and forth and quite angry debate about the role of monopoly power, about sellers’ inflation. How much of this is actually overheating of the economy or supply chain, and how much of this is just companies exploiting, you know, taking advantage, and who will notice if we raise prices now? And how much did you weigh in on that, and do you have views about it?
Khan- I mean, we certainly saw our job as making sure that no firm was, that Americans were not facing higher prices because of illegal business practices. And that took a couple of forms.
You know, when you have industries that are more concentrated, so if you have a smaller number of competitors, it can be easier for them effectively to collude. This is kind of, you know, anti-competition one-on-one, the idea that if you have three firms in a market, it’s gonna be much easier for them to basically fix pricesthan if you have 300 firms, where it’s just much more difficult to coordinate. And in as much as we had seen markets where you would now have had a smaller number of firms, and sometimes it seemed like they were using their earnings calls to even, you know, flag for one another that, “Hey, we think, you know, we’re gonna keep prices high,” and do some of that signaling. That was something that we monitored.
I think more generally though, there was this issue of how longstanding trends of consolidation had made markets more fragile, so that a single disaster in one place could drive up prices much more acutely. We saw this, for example, with infant formula, where back in 2022, there were major shortages in infant formula nationally. Infant formula is a market that has consolidated, there are four major manufacturers. And these shortages were a result of basically a contamination in one factory in America. And it was just an illustration of how concentrating production can also concentrate risk. And so that’s another way in which we saw a real relationship between diminishing competition and, you know, higher prices and more situations where you had greater vulnerability to abrupt spikes in prices.
Krugman Actually, that’s something I never thought of. Because I was aware very much during that period of how concentrated production was physically. It was always a kind of a shock to discover there was something that was used around the world, and a fire in one factory somewhere could disrupt. But I never really thought of that as being linked to, that the concentration was not just that the technology mandated it, but it was actually the market consolidation, was actually the monopolization. So you thought that that was a significant factor in all of that?
Khan- I mean, look, it’s, you know, you always want more empirical research figuring out what’s going on. And you wanna do, you know, market by market analysis. But certainly there were some markets where it did seem there was a relationship between increased physical concentration of production and, you know, greater susceptibility to these cascading risks.
Krugman Okay, well jump forward not that far in time, but move north a couple of hundred miles from DC. So how did you get, again, you may not know exactly, but how did you end up being associated with Mamdani? Was it during the campaign? Was it already before he won? And tell us about that.
Khan So yeah, when Assembly Member Mamdani was running for mayor last spring, he reached out and wanted to chat about, you know, different parts of his agenda and what he was thinking about, especially on this issue of affordability. He’s somebody that is extraordinarily curious, and he really wanted to understand and get to the bottom of what are the real drivers of increasing costs for people across the city, be it for them as consumers, be it for them as workers, be it for them as small businesses. And, you know, one of the first kind of videos that he did that really took off was one of him going to a halal cart driver, and saying, “Hey, I noticed that your chicken and rice used to cost $8 a couple years ago, and now it costs $10. Why is that, what happened?”
And so he was really oriented towards understanding substantively why is it that people are seeing higher prices? And so we, you know, met and spoke and chatted about, you know, what are some of the policy levers that New York City and a mayor in particular may have at his disposal? And so, you know, we stayed in touch. His team would kind of ask for feedback on some of their campaign proposals, on, you know, taking on corporate power. And so I was, you know, really thrilled to see him win, and then was honored to get to co-chair his transition.
Krugman Okay. And so you had, you were part of the transition, but not in the, or in addition to the usual sense. You had a team that was specifically working on these issues. You weren’t just sort of helping him pick the various offices?
Khan- So a main part of the job was helping assemble the team. I in particular was focused on the top economic and legal jobs. But alongside the appointments and personnel process, I was also helping on policy planning and wanting to make sure that, you know, coming in on day one as mayor, he had a robust set of options before him in terms of what he might be able to do to bring down costs. And so we had, you know, a little, a group of folks that were running those things down, be it in the context of small business or consumers or workers or energy. And so there was both a personnel and a policy component.
Krugman Okay, does that policy team still exist in some form? I mean, I know that you don’t formally have a role in this mayor’s administration, but do you still have a group of people that are working on this?
Khan So I mean, you know, now that he is mayor, he has a full team internally. We have kind of a loose coalition of folks outside that, you know, are still very eager to make sure that they are being provided, you know, policy options, and able to think expansively about what some of those tools and authorities may be.
So there is an ongoing policy process. I know there are a lot of organizations across the city that are kind of, you know, working on making sure that city hall is well-equipped when it comes with policy proposals.
Krugman Yeah, I have to say, it always shocks me when I think about how little I know about how anything is run in the city I live in. But anyway, it’s quite, it’s an enormous thing. How big is the city? There must, I have no idea how many employees the city even has, but it’s enormous.
Khan Yeah, I mean, it’s a huge bureaucracy. And it was really interesting just even having to learn kind of new agency acronyms and just like how the org chart works. And it’s phenomenal. I mean, it’s a enormous responsibility, and it spans everything from, you know, needing to make sure that when there’s a huge snowstorm, that, you know, snow’s plowed, that the streets are safe, to thinking more long term about things like housing, and how do we make sure that New York is a place where people can actually afford to live?
Krugman Yeah, we have a severe acronym shortage, by the way. I mean, I was having a whole conversation with somebody I know, who’s actually in the audience, about DOE. We were going back and forth, and it finally occurred to me that they were talking about the Department of Education. I was thinking of the Department of Energy in Washington. And so the conversation was total nonsense because we had two different DOEs.
Anyway. So let’s talk about affordability in New York. What are the areas where you, I mean, mayor has somewhat limited power, but maybe more than people think. What are some of the areas where you think that really things can be done? I wanna get into them a bit. And then well, if there may be some big ones that we need to talk about further.
But tell me, so I know that you’ve talked about, you’ve been, you know, the press reports have emphasized things like food delivery, real estate brokers’ fees. Can you tell us a little bit about each of those?
Khan So I think about it as different categories. You know, I think there’s one category that really is about taking on these extractive middlemen. And you know, you can call it market power, you can just call it corporate abuse. But I think we’ve seen across markets just this nickel and dimeing. You know, the proliferation of these junk fees, where a company will advertise one price, and by the time you go to check out it’s, you know, suddenly, you know, $20 more expensive because of these random service delivery fees, and you don’t really know who that’s going to or what it’s for.
We’ve seen things like the rise of subscription traps, where firms will make it very easy to sign up for a subscription, or you’ll be enrolled without even knowing, and then to cancel you have to jump through all of the hoops. And so, you know, there was a focus on some of these just bread and butter consumer protection issues. And so some of the first executive orders that the mayor signed were directing his administration across the board to be very focused on making sure that we had fair pricing, and that people were not being taken advantage of in this way, be it in the context of food delivery, be it in the context of housing.
The administration is doing these rental rip-off hearings to really hear from people about what are some of the worst abuses that they face from their landlords, be it in the context of these random fees or even in just, you know, basic conditions and habitability. So there is a corporate accountability plank to the affordability agenda that the mayor has been very open about wanting to double down on.
Then there’s a part of the affordability agenda that’s really about making sure that markets are fair and honest, and that in areas like housing, you know, that you can actually build. He’s also very focused on small business, and making sure that small businesses are not being squeezed, again, be it by arbitrary middlemen or by rules and regulations that are outdated or don’t make sense or were pushed at the behest of big firms, but don’t really make sense for small firms. And so those are just a couple of the kind of core pillars of how they’re thinking about affordability. –
Krugman So some of these things, I mean, food delivery, actually again, I didn’t really look into it until I started doing research for this talk, but food delivery is one of those, it’s a lot like, in some ways, like Amazon. The drivers are atomistic, a large group, and the customers are a large group, but then largely DoorDash and a couple of others just sort of stand in the middle. And it must be very similar issues to the kinds of things you were worried about.
Khan Yeah, there are a lot of analogies between how these dominant platforms operate and abuse their power, be it in the context of food delivery, be it in the context of ride sharing. And so there’s kind of a, you know, take on extractive middlemen, holds, you know, powerful corporations to account component. There is a component that’s about making sure that we don’t have, you know, regulations or red tape that are skewing the market away from allowing small businesses to compete. And then I would also say there’s a pillar that’s thinking about public options, and what are instances in which the state could actually be playing a more assertive role?
So this is, you know, gets to the fact that he talked about having public grocery stores, initially one in every borough, has rolled out plans for universal childcare. And so I would say, you know, there are different components of this, but it very much includes public options.
Krugman Okay, that’s really interesting. So that’s, by the way, that’s a really important point, that one way to deal with these things is to just have the public provide, not socialization, but the availability of a public version.
And so actually tell me what’s happening, I mean on... Sorry, two conflicting thoughts collided there and exploded. Anyway.
Actually tell me, talk about the grocery store thing, ‘cause that’s one of the things that people, you know, some people went wild negatively about. But it’s just a really interesting story about what you’re thinking there.
Khan Yeah, I mean, the mayor, during the campaign, talked about how there were parts of New York City where you have food deserts, and where you don’t really have access to affordable, healthy food. And, you know, one proposal that he put forward on the table was the idea that you could have public provisioning of groceries. And they’d do a pilot, there would be one in every borough. You know, some of the reaction to that was a little bit hysterical. But, you know, we have like, military bases across the countrywhere you have government-owned grocery stores. You know, it’s not as exotic as I think some of the critics assumed it was.
And it really gets to this point of, you know, you wanna make sure that the market is working honestly and fairly
Staff- Sorry to interrupt. Your microphone isn’t working very well. –
Khan Thank you. - Can I get this? - Yeah. You wanna make sure that the market is able to work fairly and honestly and competitively, but in some instances you’re gonna want to have the government also play a role, and basically, you know, provide additional competition. Again, not to own the entire market, but to provide an option and a competitive force in ways that could have a salutary effect too.
Krugman Okay, just another diversion here. But kind of along those lines, one of the things that, you were talking a lot about healthcare in your time at the FTC, and consolidation. And healthcare is an area where New York City actually has a lot of public, there are a lot of public options. I was actually kinda shocked, one of my students when I was teaching my class here did a paper on just how much of the New York City health system is in fact publicly-owned. Have you looked into that? I’m sure you must have.
Khan Yeah, it’s certainly something that is top of mind, as the mayor and his administration think about, you know, how do we make sure that the biggest, you know, pain points for people in terms of their monthly bills are being taken care of. Healthcare of course is a major one. And especially given what’s happening in DC resulting in, you know, skyrocketing premiums,
I think there’s a special obligation to make sure that cities and governments are using the full might of their leverage and authority to bring down prices. You know, you’ve seen even places like California announce things like public provisioning of insulin. During the recent governor’s race, you had now Governor Spanberger in Virginia talk about wanting to create a publicly-owned pharmacy benefit manager. So there certainly are a lot of proposals on the table that would have the city or the state play a much more muscular role in the direct public provisioning. I think there’s also a question of, once you have that government role, you know, how are you using that leverage?
One thing that the mayor also talked about during the campaign was, you know, wanting to look at things like the nonprofit status of hospitals, and whether that’s something that still fully makes sense, or wanting to make sure that the kind of, you know, hospitals are upholding their end of the bargain in terms of what they’re supposed to follow through on if they’re actually able to organize as nonprofits. So, you know, there’s a lot on the table there too.
Krugman The mayor has actually basically at least gotten, in principle has gotten the pre-K, the free pre-K. But the two big ones that are still very much up in the air, as far as I know. What do I know? I don’t, you know, I just live here. But the two that sort of are in really have gotten people sort of both cheering and wrapped up are the, first of all, the rent stabilization. Let’s talk about that first for a second. How involved have you been in that, and what do you think is happening?
Khan So that’s something that is basically decided by this Rent Guidelines Board. It’s, you know, a board where the mayor gets to appoint certain individuals. He’s announced who he wants to appoint. And so that’s a process that’s gonna play out in terms of them making, you know, independent determinations about what to do. And so that’s still in process.
Krugman Okay, and free buses. That’s the one that, you know, again, people go wild, and it’s really, it’s an interesting discussion. Do you wanna, do you have anything to say about that? Probably not. Well, tell me where you are on that. I don’t mean not to wanna talk about it, but I’m not sure if that’s, how much that’s in your wheelhouse, but.
Khan Yeah, I mean, you know, I think he has made the case for it very effectively in terms of just the enormous externalities in terms of the huge benefits that arise from having buses that are fast and free, and just why that’s so important for kind of, you know, making the city a better place to live. That is something that is kind of wrapped up in these broader budgetary discussions involving Albany. And so, you know, something that I’ll say, just stepping back, as you look across these different policy levers and authorities, there are some that are more unilaterally within the mayor’s control, or at least where control resides at the city level, so all you need is kind of city council plus the mayor. And then there are ones that really require the buy-in and agreement of Albany, be it the governor, be it the state assembly. And so it’s kind of a tapestry of what things can he do unilaterally versus kind of has to work very closely with other actors. –
Krugman Well, that kind of brings me to where I was planning to go anyway, which is the, you know, obviously you’re quite a heck of an economist, when that arises. But your background is law. And one of the things at least press reports suggest that you’ve really been doing is looking for, basically exploring what are the mayor’s powers? Anything you wanna talk about? ‘Cause that’s a really interesting, you know, kind of thing, that takes a lot of expertise that many of us don’t have. But how has that search gone? –
Khan Yeah, I mean, it’s really a project that is informed by my experience at the federal level, where I was pretty stunned to come into federal government and see all sorts of federal authorities, so laws that Congress had passed instructing federal agencies to enforce certain laws that had just been forgotten about. And you know, the laws existed on the books, but were not actively being enforced by agencies, sometimes because there was a sense that, oh, this has kind of fallen out of fashion, sometimes it just never was really prioritized by political leadership. And so, you know, oftentimes, especially in places like DC there’s a huge amount of conversation and discussion about new laws, and the need for new legislation, and we need, you know, Congress to do this and that. And I think that can sometimes detract from a real focus on what laws already exist, what tools already exist, what authorities already exist?
And so, you know, at the FTC, for example, we were very focused even on things like making sure companies are not lying about whether their products are made in America. This is something that Congress back in 1994 had instructed the FTC to start enforcing against, basically, you know, if a business is saying its products are made in America, but they’re actually made in China, you know, that’s illegal and they should be penalized. And there are certain consumer protection elements of that, but it’s also about creating a fair marketplace so that businesses that are honest are not losing out to firms that are being dishonest.
And so that was, you know, one thing that just the agency had not prioritized even enforcing that, you know, during my tenure we took more seriously. There were all sorts of other examples of, you know, laws that Congress had passed, you know, instructions they had given the FTC in terms of what to enforce. There’s this law that goes back to the Great Depression, the Robinson-Patman Act, that’s really about making sure we don’t have illegal forms of price discrimination, and that small businesses are having the same opportunities as large businesses in terms of the deals that are being offered. That’s something that the government stopped enforcing basically in the late 1990s. And we would actually have general counsels admit to us that they didn’t even advise their firms to abide by this law because there was just so much non-enforcement. And they were basically like, until and unless you guys start enforcing it, we’re not even gonna tell our executives that they have to follow this law.
So, you know, there was just a real sense of wanting to make sure we were using all of our tools, being faithful to the laws that Congress had passed, that kind of informed my desire to make sure that this mayoral administration was similarly gonna be kind of faithful, you know, executors of the laws that already exist. As well as wanting to make sure that, you know, given his focus on affordability, on wanting to make sure that, you know, working class New Yorkers can live here comfortably and with dignity, that he knew all of the tools and authorities that he has at his disposal to do that.
Krugman And are there any good examples comparable to sort of Robinson-Patman Act that are mayoral prerogatives that have not been exercised?
Khan Well interestingly, there are some city council efforts right now to think about whether there should be a New York City level of Robinson-Patman. So, you know, there are some discussions about that. You know, there’s a law that bans unconscionable practices in New York City that goes back to the 1970s that basically can presumably be activated to take on forms of unfair or, you know, unconscionable pricing, especially in context where people might be captive consumers. And so imagine a situation in which, you know, you’re a patient at a hospital, the hospital gives you, you know, some kind of Tylenol, but they end up billing like $60 for even though it costs, you know, $6 at the pharmacy down the street. You know, is that an unconscionable practice because you are basically a captive customer? Or similarly if you’re, you know, at a stadium or a concert venue, when you just have much fewer options, are there certain rules that firms should really be following in terms of how they do pricing? So that’s just kind of one bucket of, you know, of potential tools that may exist.
Krugman I’m sure that other people have suggested this, but there a little bit of an analogy, which you might not like, to Robert Moses, who was famously, you know, was expert at reading the fine print in legislation and finding things he could do. And there’s a little, I mean, hopefully with better intentions. But do you ever think of yourself as being sort of the good version of Robert Moses?
Khan I mean, I think, you know, any lawyer will think their job is to read the fine print very closely. And you know, I think when you’re coming into these types of jobs, there’s such an enormous responsibility, and oftentimes not a lot of time, right? You don’t know how much time you’re gonna have. And I think, you know, when you are elected with as strong a mandate as Mayor Mamdani has, I think you really have a huge obligation to make sure that you really are mining every single tool and authority that may exist to make life better for people. And that’s something he’s very committed to.
Krugman So the whole, I assume you must be thinking about this, but the whole concern, particularly, you know, if you read Murdoch publications and so on, is that all of this attempt to serve affordability, to help the working class, is gonna lead the businesses and the wealthy to flee the city. How are you feeling about all of that? Any comments on that?
Khan I mean, it’s interesting. I think we’ve heard a lot of speculation about that. I mean, the business press that I’ve read has suggested that actually we see kind of major, you know, Fortune 100 companies actually re-upping their leases and expanding their physical footprint in New York City rather than fleeing. The mayor’s point has also been that we’re already seeing an exodus in New York City, and that’s an exodus of working class people. And shouldn’t we be worried about working class people having to flee too? I think-- (audience applauding) You know, he’s also shared that in conversations with some of these same CEOs, they’ve recognized that policies that make New York City more affordable ultimately are gonna be good for their business oftentimes too, in as much as it allows more of their employees to actually live here and really expands the talent pool. So, you know, I think you’re always gonna hear some of that grumbling, and sometimes even hysteria. And of course, you wanna look closely at the research and, you know, at the empirics of what might actually happen. But I think, you know, there is a lot of evidence suggesting that some of these policies are gonna have just much greater impact than harm.
Krugman Okay, I can’t resist. One of my favorite lines in all this was, you know, some businesses actually have moved to Florida, but there was some Wall Street type who tried it and said, “The problem with moving to Florida is that you have to live in Florida.” So anyway. Okay, so you’re fairly optimistic that enough businesses and wealthy people see the benefits of a better New York for the people of New York will outweigh whatever taxes they might have to pay or regulations they might face.
Khan I mean, I think there are a whole bunch of data points that point in that direction, yes.
Krugman Thank you so much! It’s been great.
Khan Thank you.
Market Design
Left: Tom McCall Waterfront Park, 2026. – Right: Same Place, 1950: Harbor Drive Freeway
