Posts Tagged ‘Anti-Trust Laws’

Monopoly power and what to do about it

July 2, 2016

The trouble with the U.S. economy is monopoly power.

Concentrated business power means less consumer choice, less opportunity for entrepreneurs and greater concentration of wealth.

Senator Elizabeth Warren

Senator Elizabeth Warren

Senator Elizabeth Warren described the problem very well in a speech on Wednesday.  If you care about this issue, I strongly recommend that you click on the first link below.

She noted that five banks have been designated as “too big to fail” by the Federal Reserve Board and the Federal Deposit Insurance Corp.

But that situation is not limited to the banking industry.  Four airlines (down from nine in the past 10 years) control 80 percent of all airline seats.  If American, Delta, United or Southwest were to be in danger of ceasing operations, could there be any doubt that the government would want to keep them flying at all costs?

There’s another problem with concentration in the transportation industry, and that is the incentive to abandon small and remote communities and concentrate services in a few hubs.   The second article linked below describes how concentration in the airline, railroad and trucking industries has harmed small cities in the Heartland.  “Flyover country” wasn’t always flyover country.

Concentration means less consumer choice.  Warren pointed out that more than half of Americans who with Internet or cable television service use Comcast.  Yet, she said, a third of U.S. citizens who theoretically have access to high-speed Internet service can’t afford it.   Americans pay more than Europeans for Internet service and get worse service.

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The things that President Obama could do

August 18, 2014

butwewon'tThe excuse given by supporters of President Obama is that he is stymied by the Republican control of the House of Representatives and by Republican obstructionism in the Senate.   It is true that the congressional Republicans are determined to block the President’s programs by any legal means necessary.

But as Thomas Frank pointed out in his latest Salon article, there are many things the President could do on his own authority that would be both popular and beneficial to the nation.  They are:

Frank noted that Obama also could tell the Federal Communications Commission that Net Neutrality is the policy of his administrationHe could reclassify marijuana so that it is no longer a Class I narcoticHe could reform the federal contracting system so as to discourage outsourcing and promote good labor practicesHe could encourage whistle-blowers instead of punishing them.

So why doesn’t the President do any of these things?  It can’t be because he is worried about corporate donations for his next campaign.  He is not eligible to run again, so that is not a factor.

I see three possible explanations.  The most likely is that he genuinely believes in what he is doing.  My guess is that he thinks that the status quo, with some minor modifications to file off sharp edges, is the best that is possible in today’s world.

Another possibility is that he doesn’t want to do anything to jeopardize the kind of lucrative post-Presidential career that Bill Clinton enjoys.  And the third, which I think highly improbable, is that he is afraid, that the powers-that-be know some guilty secret or have some sort of leverage on him.