When most people think about the economy in America, their minds turn to organizations like the Fed. It is important to note, though, that other organizations play an important role in the economy of the United States as well.
Take the Federal Trade Commission, for example. This organization has been in existence since 1913 with the primary goal of protecting consumers. Many of the policies it puts into place, however, are responsible for some of the most monumental changes in the United States economy.
Before you can understand how the FTC can affect the economy of the United States, it is first necessary to take a closer look at the FTC.
There are three organizations, or bureaus, that make up the heart of the FTC. The Bureau of Consumer Protection helps to ensure consumers don’t get caught in fraudulent deals. The Bureau of Competition is responsible for the enforcement of antitrust laws in the United States and The Bureau of Economics is responsible for letting the FTC know how it is changing the American economic landscape.
The FTC is essentially an investigative service. It looks into reports of problems by consumers, questions from either congressional body, or media reports of problems. The FTC can look into entire industries if it has valid concerns. Should the FTC find any serious problems, it can start the process of litigation to ensure that consumers are protected from industrial wrongs. Also, in order to prevent problems within industries, the FTC can make rules that businesses must follow. Therein lays the real power of the FTC to change the American economy.
Many FTC rulings have changed the economy. For example, in 1984, the FTC ruled that funeral homes had to provide customers with a general price list to ensure they weren’t being charged unduly. Until that point, the funeral industry was wholly unregulated on a financial basis, thereby changing the way they do business and the economics of that industry.
Antitrust rulings in the petroleum industry in the 1980s have not significantly changed the industry, despite the concerns expressed by many consumers. But, the FTC completes an annual report on the industry to ensure its policies haven’t caused price jumps or declines in the United States.
Recently, the FTC introduced federal do not call legislation, allowing consumers to opt-out of telemarketer phone calls. Because the telemarketing industry employed millions and reported an overall profit of more than six hundred billion dollars in a given year, the no-call legislation and the rules associated with it have truly changed the way reputable companies can do business. As a result, profits from the telemarketing industry have gone down, and there are job losses that might not have occurred without the rulings. Many companies have filed complaints against the FTC rulings in an attempt to change the way they are regulated.
The FTC can change the economy of an industry for better or for worse, and understanding the power of the organization is a step in the right direction to gaining a deeper knowledge of the United States economy.