Montana State University

MSU economist says he'll bring "war stories" back from DC for students

December 13, 2007 -- By Carol Flaherty

Andy Hanssen in Washington D.C. Nov. 29, 2007.   High-Res Available

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Every couple of years, the U.S. Department of Justice's Antitrust Division brings in an economist from academia to help review mergers or business practices that come under its scrutiny. In the past, the position has been filed by well-known economists, included presidential candidate Barack Obama's economic advisor, Austin Goolsbee, a University of Chicago professor. This year, that economist is Andy Hanssen from Montana State University.

Hanssen, who has been at MSU since 1995, is on leave from the Department of Agricultural Economics and Economics to take the DOJ post.

"It should be interesting for students to hear actual 'war stories' when I get back," Hanssen said.

Every time there is a merger or a question about a business practice that influences competition in the market place, it's referred to either the U.S. Department of Justice or the Federal Trade Commission. While Hanssen is not at liberty to discuss cases he is working on, they can involve subjects that affect people from many walks of life, from those who have to pay interstate transportation fees to those who buy a certain product manufactured by a company seeking to merge with its competitor.

"You never know what firms or people will be affected," he said. The issues may be important to ranchers dealing with cattle buyers, farmers seeking better seed sources, or the owner of a small business that purchases a specialty component built by only a few manufacturers.

Hanssen says he is very aware of added responsibilities in the DOJ job.

"Our decisions and recommendations may affect the incentives companies have to innovate," he said. "It's a delicate balance. On the one hand, you get innovation from market activities, and you don't want to stifle that. But on the other hand, you have to look at whether a proposed merger or business practice is anticompetitive."

Over time, he adds, DOJ watchers see the department "tacking back and forth" trying to maintain that balance. Hanssen enjoyed studying the process before his DOJ appointment, and now is enjoying his insider's view of it.

"It's very exciting to work on cases," he said. "Every time a merger is announced, if it is above a certain size, the firms have to file papers on it. After a preliminary review, we can issue a second request if we need more information. Officers in the company can be required to testify, but at the end of the day, it can still be difficult to get clear information. Nevertheless, ultimately you have to decide whether to allow the merger or forbid it."

Hanssen's tour of duty started in September and continues until May 2008. He began work just after Attorney General Alberto Gonzales resigned Aug. 27. President Bush announced the nomination of Michael B. Mukasey Sept. 17 and Mukasey was sworn in Nov. 9.

"One of the interesting things was to see how little effect it had on the work," Hanssen said. "For the most part, people do their work and the administration's impact is not as large as you would think.

Hanssen is living in a studio apartment about a mile from his office. He walks to the office every day, and frequently gets out for a run along a route that takes him along the Mall, past the Washington Monument, Lincoln Memorial, through George Washington University's campus and into DuPont Circle.

The security inside the buildings is almost as interesting as the outside is historic. For the main DOJ building, access is allowed only after presenting identification three times to armed guards and passing through a sealed, single-person, capsule.

Even with friends nearby from undergraduate days at Johns Hopkins University, Hanssen says that the most difficult adjustment to Washington D.C. hasn't been the urban location, but missing his family, who stayed behind: wife Karen and daughters Maggie, 7, and Lily, a kindergartener.

Still, he sees this temporary job as a fascinating opportunity.

"It is quite something to realize that I'm part of a process that is going to affect a lot of people. It may not always involve companies that readers have heard of, but, still, they make and sell a real-world product. As a professor, you stand up and talk. You hope that what you say influences the way students understand the world, but here, your opinion matters in a very direct way. At the end of the day, decisions here have implications for prices we pay and influence the way markets are structured. You hope to get the decision right."

Contact: Andy Hanssen