There is no harm in stating the obvious. Unless the naked emperor objects.
It's disappointing that lately, whenever Paul Krugman writes, the comments section turns into a long Bernie Sanders' promo. I get the feeling that many of these commenters have their essays composed ahead of time.
135
Thank you for this excellent column, Dr. Krugman. Perhaps you will now re-think your support of HIllary Clinton and go with the candidate who was on the picket lines with Verizon workers - Bernie Sanders. But before you decide, check out how much money Verizon executives have paid to listen to Mrs. Clinton's secret words.
49
Wait - monopolies are bad? Someone write that down...
30
But haven't yet reached the tipping point when workers begin push back against the damaging macroeconomic policies exposed in Prof. Krugman's article. What will it take to make the American people more aware of monopolization of American industry? What will it take to win against on the robber barons?
25
Mr. and Mrs. William Jefferson Clinton and their daughter Chelsea are proud royal card carrying members of the corrupt crony capitalist corporate plutocrat oligarch welfare American ruling caste. One robber baron and two robber baroness part of Scheme Clinton aka The Clinton Global Initiative. See "Listen, Liberal : Whatever Happened to the Party of the People" Thomas Frank
37
I like it when the professor stays on issues instead of defending Hillary . I would like to see Dr Krugman actually sit down with Bernie and try to work with him , regardless if Sander wins or loses , if Sanders wins the reason are obvious ,if Sander loses I still think it would be beneficial to us all . I think they proably have more in common then is aparent. I would also like to see Dr Krugman to try to work with Bernie on common ground to bring about change . They both have reached a lot of people So I hope others will encourage Dr Krugman to dialouge with Bernie
24
In his book Exit Voice and Loyalty (1970) Albert O. Hirschman pointed out that besides pricing power monopolies allowed their possessor to reduce the quality of their product. A number of years ago Wired Magazine argued that the breaking up of AT&T was crucial for the development of the internet in the United States. Their view was that if AT&T was still a monopoly they never would have had the incentive to wire the country for the internet.
33
This excellent piece should make people dwell on a couple of really important things:
1) Free Markets actually require regulation - without the rules being enforced you get monopolies rather than efficient competition driven exchanges of goods and services.
2) This isn't actually a gilded era - the Robber Baron metaphor is MUCH better. Occam's razor allows us to dispense with the Gilded era misnomer and focus on Robber Baron practices; they completely describe the problem.
1) Free Markets actually require regulation - without the rules being enforced you get monopolies rather than efficient competition driven exchanges of goods and services.
2) This isn't actually a gilded era - the Robber Baron metaphor is MUCH better. Occam's razor allows us to dispense with the Gilded era misnomer and focus on Robber Baron practices; they completely describe the problem.
40
Another important opinion piece. Paul could you write a rebuttal to Phil Gramm's Op ed in the wall street journal regarding the source of the last recession?
That would be helpful as i suspect a lot of misinformation....
That would be helpful as i suspect a lot of misinformation....
22
The fake concern of Liberals is no longer a trick that will fool the base of the Democratic Party.
Here is an article by Adolph Reed Jr., a Political Science professor at U. Penn. He has written for Harper's Magazine and been interviewed by Bill Moyers. And for all the white people who get excited about such things: he's black.
Written in 1996, about the fake "concern" of the Democratic Party:
http://www.commondreams.org/views/2009/12/09/liberals-i-do-despise
Here is an article by Adolph Reed Jr., a Political Science professor at U. Penn. He has written for Harper's Magazine and been interviewed by Bill Moyers. And for all the white people who get excited about such things: he's black.
Written in 1996, about the fake "concern" of the Democratic Party:
http://www.commondreams.org/views/2009/12/09/liberals-i-do-despise
5
PK is spot on about the harm to consumers from monopoly power. I got rid of Comcast cable and am awaiting delivery of a new SIM card so that I can use Ting on my phone. Overall reduction in monthly bills = $150. It can be done.
9
The scariest words in the English language: "Hello, I'm from a corporation, and I'm here to help you!" Believe me (sorry Donald), these ring truer than RR's glib rant.
35
Yes, Internet is essential to US competitiveness, yet its now a monopoly business. Pathetic speeds and service, at monopoly rents.
Mark
Mark
35
Why is someone who shills for the robber baron's minions lecturing us about robber barons? I'm sorry to say this but you have zero credibility. Running Sanders attack pieces on odd numbered days and these on even days is a bit bipolar.
Somebody should look at the water bill at the NYT, I suspect the columnists are taking more frequent and longer showers. Seemingly to no avail.
Somebody should look at the water bill at the NYT, I suspect the columnists are taking more frequent and longer showers. Seemingly to no avail.
20
Dr. Krugman, you don't seem to suggest anywhere in this essay the important role that recent acts of the federal government has played in granting monopolies. Have you considered the effect that Obamacare has had on the consolidation in the health insurance industry? Or, more directly, the effect on the airline industry of recent federally approved mergers, (Think American and US Air.)
Just seems odd and unnecessarily ideological to me that you make Ronald Reagan as the purported "villain" of your story when their is ample evidence at your feet of recent examples of how the Obama government has encouraged and enabled monopoly.
I happen to agree with the hypothesis of the essay, that monopoly leads to a varietal form of recession. I just believe that your argument would be stronger if it were posed with less ideology and more evidence.
Just seems odd and unnecessarily ideological to me that you make Ronald Reagan as the purported "villain" of your story when their is ample evidence at your feet of recent examples of how the Obama government has encouraged and enabled monopoly.
I happen to agree with the hypothesis of the essay, that monopoly leads to a varietal form of recession. I just believe that your argument would be stronger if it were posed with less ideology and more evidence.
14
Only Krugman could write such a column while blithely supporting the candidate who is beholden to the monied interests of corporate and banking lords. Look up irony as a literary technique Mr. Krugman... laughing so hard here, my sides hurt.
24
"True, there was a limited revival of anti-monopoly efforts during the Clinton years, but these went away again under George W. Bush."
Ah yes, the throw away line from Professor Krugman (the great), showing just how little Clinton (and his wife, he ever said "with me you get two for one") cared about reversing the terribly destructive trends of the Reagan years. He was too busy deregulating the financial industry and chasing skirts.
So your reason for pushing another Clinton presidency is...what exactly?
Ah yes, the throw away line from Professor Krugman (the great), showing just how little Clinton (and his wife, he ever said "with me you get two for one") cared about reversing the terribly destructive trends of the Reagan years. He was too busy deregulating the financial industry and chasing skirts.
So your reason for pushing another Clinton presidency is...what exactly?
21
Corporations are not only people, they are the worst kind of people: lazy and self-centered.
21
Return on capital may no longer be the critical goal of companies such as Verizon. POWER for the chief managers is the new goal and what capital is spent is spent to enhance this goal.
12
I am so gratified to read this column, Paul having returned to the solid ground of that subject he knows so well...economics. My once favorite iconoclast is once again masterfully smashing the "free market" shibboleths of our long Conservative Republican nightmare. That he illustrates his argument with the case of the Verizon strike is particularly gratifying. This column, coming just days after Bernie stood with Verizon workers in the cold, and was subsequently excoriated by yet another cartoonishly arrogant and mind-bogglingly overcompensated CEO, Verizon's Lowell C. McAdams, seems to be a signal, a tentative offer of an olive branch from Paul to his still loyal readers...such as myself...who have been so deeply disappointed by his increasingly unruly, spitefully sarcastic sniping at Simple Bernie and his uncritical, unthinking passion-inflamed "bots"...like myself. Are we to be friends, again, Paul? I've gotten over the shock your first temple-throbbing screed against Bernie caused me, and the resulting disillusion that deepened with every misleadingly titled column you twisted to obliguely and clumsily attack Bernie. I am really so eager to return to your fandom. Please, just drop the mean girl persona you've awkwardly adopted recently, and I will be back in your embrace in a heartbeat.
43
" … there was a limited revival of anti-monopoly efforts during the Clinton years … " And, knowing how you operate I suspect that in your mind the repeal of Glass-Steagall was an example of that.
6
Krugman's blind spot a/k/a/ Bernie, is either clear or baffling.
Usually, such behavior is the result of being bought off, and it seems likely that's the answer here. But its disappointing.
Usually, such behavior is the result of being bought off, and it seems likely that's the answer here. But its disappointing.
10
In the case of Verizon, personally I would say their speed, etc is about as good as my Internet in Colombia, where I spend several months a year. Colombian company vs. U.S. company and it's a tie with the developing world!!
A fix: require that Verizon, AT&T, etc. be required to carry - receive a reasonable fee - the signals of other companies over their lines. The Internet should be a regulated monopoly, 'cause that's what it is.
A fix: require that Verizon, AT&T, etc. be required to carry - receive a reasonable fee - the signals of other companies over their lines. The Internet should be a regulated monopoly, 'cause that's what it is.
17
Now you are talking like the Bernie Bro we knew
you were!
Break up the big phone companies!
you were!
Break up the big phone companies!
10
The scariest mergers will be in the area of agrichemical.
-Dow Chemical and Dupont - pesticides, fertilizer and othe rearth killing poisins
- Monsanto and Syngenta making GMOs they own to eventually own all growing things on earth..
-Dow Chemical and Dupont - pesticides, fertilizer and othe rearth killing poisins
- Monsanto and Syngenta making GMOs they own to eventually own all growing things on earth..
12
Your premise that "even in fields where 3 or 4 companies dominate, they still compete with each other." fails when 2 or three of those companies combine to lessen the competition. Paul's example of Cablevision versus Verizon poses not nearly the risk of Charter's pending buyout of TimeWarner/Brighthouse. Last year's proposed merger of TimeWarner and Comcast was aborted but it seems like that this purchase agreement will proceed, creating a $67 billion company.
By the way, Paul, can you provide us with any explanation for how a relatively small company like Charter will be able to pay $54 Billion dollars for what is currently the second-largest broadband company in the country? And is there even a snowball's chance that my monthly bill will go down to "economies of scale" which used to exist?
By the way, Paul, can you provide us with any explanation for how a relatively small company like Charter will be able to pay $54 Billion dollars for what is currently the second-largest broadband company in the country? And is there even a snowball's chance that my monthly bill will go down to "economies of scale" which used to exist?
5
This column reminds me that President Obama has just lent his support to a bill that would allow consumers to purchase set-top boxes from cable providers rather than paying monthly rental fees. Not only have those monthly rental fees allowed the cable providers to collect many times the worth of the boxes, but they have also allowed old technology to sit in place for years and years.
My cable company is is an absolute monopoly in my community. Why is it that I suspect that if I am allowed to stop paying that monthly fee for the set-top box, my monthly fee for "infrastrastructure improvements" will increase accordingly?
My cable company is is an absolute monopoly in my community. Why is it that I suspect that if I am allowed to stop paying that monthly fee for the set-top box, my monthly fee for "infrastrastructure improvements" will increase accordingly?
18
Krugman's graceful exposition of unrestrained greed and predation calls out for a more emotionally vivid representation of the reality that we each must face and which our Nation must face. We live in the thrall of predators, the WOLVES OF WALL STREET, who are not restrained by concern for the well being of our Nation nor the fate of the unfortunate 99%.
Bernie Sanders is a decent guy without the 'heft' to do as he promises without the overwhelming support from the voters who will elect every down ballot candidate who will support the revolution.
"Take America back" from the predator class. We need a Revolution at the ballot box for the fate of our families and friends and neighbors and our Nation beloved and created by our founders as a place of liberty and justice for all.
Instead, we have become a lawless jungle where the predators have found a way to steal our democracy.
VOTE or we and our children and the generations to follow will live under the tyranny of the entitled.
Krugman has offered us his dispassionate assessment. It is up to us to rise to the challenge.
Get involved. Get out the vote. Bring your passions and energies. VIVE LA REVOLUTION! VOTE!!!!!!
Bernie Sanders is a decent guy without the 'heft' to do as he promises without the overwhelming support from the voters who will elect every down ballot candidate who will support the revolution.
"Take America back" from the predator class. We need a Revolution at the ballot box for the fate of our families and friends and neighbors and our Nation beloved and created by our founders as a place of liberty and justice for all.
Instead, we have become a lawless jungle where the predators have found a way to steal our democracy.
VOTE or we and our children and the generations to follow will live under the tyranny of the entitled.
Krugman has offered us his dispassionate assessment. It is up to us to rise to the challenge.
Get involved. Get out the vote. Bring your passions and energies. VIVE LA REVOLUTION! VOTE!!!!!!
3
Air travel is another example. How is it possible that with rock-bottom fuel prices, airlines continue to gouge travelers? The original excuse for all the added surcharges - baggage charges, a price on sitting with your family, shrinking leg-room, lowering wages and benefits for airline staff and treating passengers like cattle - was high fuel costs. Now fuel is cheap , the only reason is lack of competition (and corporate greed). The Robber Barons are active on land air and sea. Time to break up the monopolies and the banks.
Feel the Bern.
Feel the Bern.
15
When Verizon owned the market in northern New England, including most of the lines in my state, a Verizon repairman showed me the 8-bit circuit card (circa 1980s) he had to replace to get my service back and said that the company refuses to invest in upgrading lines in our area.
When FairPoint bought the lines they looked on it as a business opportunity and have made the investment in fiber optics. As a result I now have DSL internet access from them at home and it is faster than my cable-based service at work.
Rather than making a false issue about wealth redistribution, those who are supporting the 1% should focus on the lack of investment in this country and how it is contributing to our decline as a nation. The true inequality is that the 1% don't think we are worth investing in anymore. Instead we are being liquidated.
When FairPoint bought the lines they looked on it as a business opportunity and have made the investment in fiber optics. As a result I now have DSL internet access from them at home and it is faster than my cable-based service at work.
Rather than making a false issue about wealth redistribution, those who are supporting the 1% should focus on the lack of investment in this country and how it is contributing to our decline as a nation. The true inequality is that the 1% don't think we are worth investing in anymore. Instead we are being liquidated.
27
The candidate you vociferously defend is willfully eating at the table, accepting campaign contributions — perhaps retainers? — from the oligarchs and herself enjoying the perks of living in a second robber baron era.
13
The issue you raise makes a lot of sense in terms of the concentration of power in a few firms, but it is not that easy. You decry the growth of big commercial banks, but when financing is done on a global scale the need for such size is clear. If we think we can change the world paradigm by limiting size and thus increasing competition locally, then we will simply have ceded our country's position to others ultimately hurting us.
Verizon is probably not the best case to argue lack of competition led to low wages and investment. It is a better example of the need to change our views on regulated industries. Acknowledge the utility-like character, but find ways to enhance competition. In this case, with competition from non-wire based providers, would it make sense for Verizon to invest in a long-term asset that might go away (like land lines) before they can get their money back?
Perhaps we need to regulate the industry differently: provide transmission line owners with protection, but open up the use of the lines to others. In that case the most innovative provider would be the content winner, but Verizon would have its capital investment protected as a provider of the transmission lines (a utility function). Or maybe we should force the owners of the lines to become utilities and let everyone compete for content?
Broadband is really a local issue while the issue of monopolies or large size to compete in global industries is real and needs far more investigation.
Verizon is probably not the best case to argue lack of competition led to low wages and investment. It is a better example of the need to change our views on regulated industries. Acknowledge the utility-like character, but find ways to enhance competition. In this case, with competition from non-wire based providers, would it make sense for Verizon to invest in a long-term asset that might go away (like land lines) before they can get their money back?
Perhaps we need to regulate the industry differently: provide transmission line owners with protection, but open up the use of the lines to others. In that case the most innovative provider would be the content winner, but Verizon would have its capital investment protected as a provider of the transmission lines (a utility function). Or maybe we should force the owners of the lines to become utilities and let everyone compete for content?
Broadband is really a local issue while the issue of monopolies or large size to compete in global industries is real and needs far more investigation.
Real quick, can anybody tell me who deregulated Verizon's industry?
Oh, that's right- President Clinton.
Oh, that's right- President Clinton.
12
The doctor is right, only one party is interested in reining in the monopolies, but his BFF Hillary can't be counted as an interested party.
Get a clue, Hillary is no democrat.
Get a clue, Hillary is no democrat.
9
What Krugman is mysteriously leaving out is that mergers and consolidations ran rampant during the 90s under Clinton and his penchant for signing the Republican Congress's deregulation bills. During that time the banking industry, railroads, utilities, and telecommunications all saw major mergers taking place. After the Baby Bells were broken up in the 1980s, the Telecommunications Act of 1996 did away with the traditional restrictions between long distance and local phone companies, allowing long distance companies to buy up local phone companies and vise versa, not unlike the deregulating of the bank, doing away with restrictions between commercial investing and public banking. Bell could consolidate once again. All the Clinton Administration basically did was take a few mergers to court. A good thing, but grossly inefficient in light of the many deregulations he signed into law.
14
I am so gratified to read this column, Paul having returned to the solid ground of that subject he knows so well...economics. My once favorite iconoclast is once again masterfully smashing the "free market" shibboleths of our long Conservative Republican nightmare. That he illustrates his argument with the case of the Verizon strike is particularly gratifying. This column, coming just days after Bernie stood with Verizon workers in the cold, and was subsequently excoriated by yet another cartoonishly arrogant and mind-bogglingly overcompensated CEO, Verizon's Lowell C. McAdams, I am of a mind to consider this a covert olive branch extended by Paul to his still loyal readers...such as myself...who have been so deeply disappointed by his increasingly unrruly passive aggressive sniping at Simple Bernie and his uncritical, unthinking passion-inflamed "bots"...again, like myself. Are we to be friends, again, Paul?
48
So Paul, you mean Hillary Clinton doesn't have the solution for this? To read your columns these last few months, one would've gotten the impression that Hillary will save us from everything. No? Well it's refreshing then to see you stick to what you know: economics, as opposed to politics.
But if you did want to open your mind a bit, you would see that it's Bernie Sanders who has the right prescription for what you describe: break up the stranglehold that Wall St. and Corporate America have on us. Whereas your heroine, Hillary, would continue her cozy relationship with them and very little, if anything, would change. I know it takes a big man to admit he's wrong Paul, but if you want to gain back your credibility, I'm afraid you're going to have to eat some humble pie.
But if you did want to open your mind a bit, you would see that it's Bernie Sanders who has the right prescription for what you describe: break up the stranglehold that Wall St. and Corporate America have on us. Whereas your heroine, Hillary, would continue her cozy relationship with them and very little, if anything, would change. I know it takes a big man to admit he's wrong Paul, but if you want to gain back your credibility, I'm afraid you're going to have to eat some humble pie.
12
As a person who was born just after WWII for a long time I thought this country was moving forward, until that is Ronald Reagan became president. That charming man conned so many. What disturbs me is this country must keep going back and fighting anew conflicts I thought settled. I foolishly thought Robber Barons were a thing of the past and competition was what fueled economic policy. At least that was what the capitalists told us. Now all over again we must fight for a women's right to choice, we must fight against bad science and those who don't want evolution to be taught, we must fight for voting rights. I remember the 50's when science was all the rage, when creating infrastructure was all the rage. The workers pushed back against employers and formed unions earlier in the century. Unions have been destroyed. And on it goes. Go Verizon workers. Finally I wonder what party you meant in your last sentence. The Democrats maybe?
7
Companies are becoming more and more like NFL football team owners every day. Even the guys with the lousy teams get paid.
See my book called Cynicism - The New Rules of Economics for a free for a children's book version of the progression to today's situation. http://www.instantflipbook.com/flipbooks/2ee0b6b6ec/
See my book called Cynicism - The New Rules of Economics for a free for a children's book version of the progression to today's situation. http://www.instantflipbook.com/flipbooks/2ee0b6b6ec/
2
It really comes down to this: Do we want an economy that provides people decent jobs and lives or do we want the highest return on capital and damn the consequences? We have been led and brainwashed into the latter and this drives all domestic and foreign policy. The consequences are massive. People living in poverty, dead soldiers, unemployment, illegal workers, etc.
But our Constitution says "by the people and for the people" so the gulf between that document and our economic system indicates that we have been hoodwinked and we went to far in being slaves to capital. The choices in the current election are to continue to be hoodwinked or make changes.
We have all played our part in this mess when we choose to buy cheaper products, pay less taxes and want higher returns in our mutual funds.
It's time to make different choices and have different values if we want different results.
But our Constitution says "by the people and for the people" so the gulf between that document and our economic system indicates that we have been hoodwinked and we went to far in being slaves to capital. The choices in the current election are to continue to be hoodwinked or make changes.
We have all played our part in this mess when we choose to buy cheaper products, pay less taxes and want higher returns in our mutual funds.
It's time to make different choices and have different values if we want different results.
7
Occasionally Krugman almost starts to sound like an economist rather than a polemicist. This article had me listening until he blamed it all on Ronald Reagan, the Emmanuel Goldstein of the Democratic Party.
Politics aside, because both parties are to blame, I agree with Krugman about the problem he's talking about in this column.
Republicans often take the attitude that big business can do no wrong. Democrats almost always offer the response of tax increases and welfare programs as a Band-Aid for problems.
The real issue is how the economy itself is structured. And here Krugman raises a valid point. These huge companies are not responsive to consumers, and treat employees like disposable goods. They are increasingly immune to competition, and have only a handful of similarly huge competitors, if any at all. There are places, for example, where Verizon is the only option.
So the possibility of looking at monopoly power, or "bigness" in general, is absolutely valid. The worst examples are in technology. Apple, Google and Microsoft are basically it in their respective areas. And they are massive.
The other structural issues, which most deeply affect employees, are trade and immigration policy. Those policies, bought and paid for by big business, have one primary goal: the exploitation of cheap labor. Driving down wages.
Politics aside, because both parties are to blame, I agree with Krugman about the problem he's talking about in this column.
Republicans often take the attitude that big business can do no wrong. Democrats almost always offer the response of tax increases and welfare programs as a Band-Aid for problems.
The real issue is how the economy itself is structured. And here Krugman raises a valid point. These huge companies are not responsive to consumers, and treat employees like disposable goods. They are increasingly immune to competition, and have only a handful of similarly huge competitors, if any at all. There are places, for example, where Verizon is the only option.
So the possibility of looking at monopoly power, or "bigness" in general, is absolutely valid. The worst examples are in technology. Apple, Google and Microsoft are basically it in their respective areas. And they are massive.
The other structural issues, which most deeply affect employees, are trade and immigration policy. Those policies, bought and paid for by big business, have one primary goal: the exploitation of cheap labor. Driving down wages.
6
"And Verizon’s case isn’t unique. In recent years many economists, including people like Larry Summers and yours truly, have come to the conclusion that growing monopoly power is a big problem for the U.S. economy — and not just because it raises profits at the expense of wages. Verizon-type stories, in which lack of competition reduces the incentive to invest, may contribute to persistent economic weakness." Finally Krugman has had a "come to Jesus" moment. Now Professor Krugman tell HRC to release the TRANSCRIPTS.
7
But Paul, you endorse Hillary. This unequivocally means you support a moderate republican dressed up as a democrat, so your reference to "only one party" being concerned is nonsensical.
10
The thing is, Dr. Krugman, the government has ALLOWED Verizon to get away with not expanding its FIOS service and with not maintaining its existing service.
Here in NJ, rather than forcing Verizon to complete the work to install FIOS throughout the state -- as it committed to do when the plans were first approved -- the company's regulator (the Board of Public Utilities) has waived the requirement. It has allowed Verizon to stop servicing older phone wiring and replace it -- in "difficult to serve, low density" areas -- with what is essentially cell service that requires electricity to function, leaving residents with no communication during power outages.
The government has allowed this to happen. The government has allowed Verizon to return its profits to shareholders and overpaid executives, rather than forcing it to invest in its infrastructure. The cost of equipment repairs following storms in 2011 and 2012 were passed on to the public, even those failure to maintain that infrastructure contributed to the scope of the damage.
The government has already demonstrated that it will not force Verizon to meet its obligations to invest ... what would be different?
Here in NJ, rather than forcing Verizon to complete the work to install FIOS throughout the state -- as it committed to do when the plans were first approved -- the company's regulator (the Board of Public Utilities) has waived the requirement. It has allowed Verizon to stop servicing older phone wiring and replace it -- in "difficult to serve, low density" areas -- with what is essentially cell service that requires electricity to function, leaving residents with no communication during power outages.
The government has allowed this to happen. The government has allowed Verizon to return its profits to shareholders and overpaid executives, rather than forcing it to invest in its infrastructure. The cost of equipment repairs following storms in 2011 and 2012 were passed on to the public, even those failure to maintain that infrastructure contributed to the scope of the damage.
The government has already demonstrated that it will not force Verizon to meet its obligations to invest ... what would be different?
9
I would be a little less positive on Clinton. I remember the 90s and the run up to the dotcom bubble as a period of fast paced M&A. It was the period of new technology, paradigm shifts, new economy, old rules be damned, blah, blah, blah. So the field shrank under Clinton as well. It may have even sped up. And that is when Glass-Steagal was repealed.
5
Left out of the union's list of complaints
"Verizon has outsourced 5,000 jobs to workers in Mexico, the Philippines and the Dominican Republic" *
It might remind NY Times readers of NAFTA (Clinton) and PPT (Obama) and Sander's critical attitude towards global trade.
* http://money.cnn.com/2016/04/13/technology/verizon-strike/
"Verizon has outsourced 5,000 jobs to workers in Mexico, the Philippines and the Dominican Republic" *
It might remind NY Times readers of NAFTA (Clinton) and PPT (Obama) and Sander's critical attitude towards global trade.
* http://money.cnn.com/2016/04/13/technology/verizon-strike/
9
Krugman has conveniently forgotten that Reagan ended the monopoly of AT&T by ordering its break up into many individual telephone companies.
4
Capitalism - (Competition + Rules) = Feudalism
9
Thanks --Robber Baron Recessions (Krugman reason-lack of competition spirited by Ronald Reagan) NYT160418
In your heart of hearts, Mr. Krugman, do you honestly think Hillary Clinton is going to even speak against this growth in monopoly power, let alone do something about it?
114
Well, now that you know Krugman is very, very worried about corporate behavior, you can see why he would chose Clinton as his champion to tackle problems. After all, she told us that she told Wall Street that they needed to "Cut it out!" (If that doesn't make you laugh and bury your head in your palm, I don't know what will.) And according to a Goldman Sachs executive in attendance at one of her (private) speeches to GS she told her audience "We're all in this together. We've got to find our way out of it together." Team work! Big finance working side-by-side in earnest, good-faith effort with politicos to bring what is best for the world! *facepalm* About the only thing they're going to work together on is get the lobbyists diligently descending on legislators to write themselves a way out of even Dodd-Frank.
http://www.huffingtonpost.com/seth-abramson/release-of-clintons-wall-str...
The party of the Clintons worked diligently to make the Democratic party one that doesn't even pretend to mask it's matador defense to the outsized wishes of the corporate world. And Paul Krugman's neo-liberal economic family has done nothing but egg it on. Look around at what they have wrought. Like what you see? Sure, the GOP owns all the culpability, right?
http://www.huffingtonpost.com/seth-abramson/release-of-clintons-wall-str...
The party of the Clintons worked diligently to make the Democratic party one that doesn't even pretend to mask it's matador defense to the outsized wishes of the corporate world. And Paul Krugman's neo-liberal economic family has done nothing but egg it on. Look around at what they have wrought. Like what you see? Sure, the GOP owns all the culpability, right?
9
Not sure if 'one party' really cares about this issue, but I am sure that very few Americans seem to care. We do want 'low prices' and if we feel the largest corporations can give those to us, then that's where we'll shop. Poverty wages, sweatshops, environmental destruction are acceptable, as long as we feel our 'cost' is lowest. No real sense of economics at the personal level; and what our economic choices do to the society as a whole. We love sports, no economics.
4
The Republican establishment has elevated Reagan to sainthood by invoking his name at all times as if the Reagan Presidency as the golden age in American contemporary history. In fact, Reagan was responsible for the many policies, economic and social, that have divided and plagued the American society and for which Americans are living with the consequences.
6
When I began my post-military career in the 1970s, corporate culture was focused on being competitive. Income tax rates made making a quick killing through your compensation package relatively pointless and executives were intent on building a better product more cost-effectively. That all changed in the Reagan era. The Reagan tax cuts made a quick killing practical and the focus moved from long-term corporate growth to maximizing the current quarter. The self-serving CEO/executive culture ceased being about corporate growth, better products, and satisfied customers and shifted to me, me, me.
I'm naive enough to believe that we executives were not motivated by personal profit in the pre-Reagan era, but we lost much of the sense of responsibility and proportion afterwards the Reagan tax cuts tipped the balance.
I'm naive enough to believe that we executives were not motivated by personal profit in the pre-Reagan era, but we lost much of the sense of responsibility and proportion afterwards the Reagan tax cuts tipped the balance.
8
So why are you an ardent Hillary supporter? You are arguing against all that she stands for. I think you are confused.
6
Taking on big companies? Perhaps breaking them up?
You're beginning to sound like Bernie Sanders.
You're beginning to sound like Bernie Sanders.
8
Given Verizon’s current strategy, their name will be added to the list below:
1. IBM dominated mainframe computing and thought there was no future in desktop computing. Results: Apple.
2. When IBM woke up and got into desktop computing, it did not take ownership of the its computer’s operating system. IBM’s dominance in hardware was its strategy. Results: Microsoft.
3. Eastman Kodak thought their dominance of the film industry assured their continuing success. Results: digital photography.
4. AT&T thought their dominance of land line telephones assured their monopoly. Results: cell phones.
5. The railroad industry thought their dominance of cross country transportation and haulage assured their continuing status. Results: Interstate highway system changed everything.
1. IBM dominated mainframe computing and thought there was no future in desktop computing. Results: Apple.
2. When IBM woke up and got into desktop computing, it did not take ownership of the its computer’s operating system. IBM’s dominance in hardware was its strategy. Results: Microsoft.
3. Eastman Kodak thought their dominance of the film industry assured their continuing success. Results: digital photography.
4. AT&T thought their dominance of land line telephones assured their monopoly. Results: cell phones.
5. The railroad industry thought their dominance of cross country transportation and haulage assured their continuing status. Results: Interstate highway system changed everything.
5
In the first Gilded Age Andrew Carnegie and Henry Clay Frick would hire Pinkerton men to beat up and sometimes shoot their workers.
The Robber Barrons of this Gilded Age are kinder and gentler. They simply label a worker a "manager" and presto the 60 hour work week is back. The beauty of it is that not only do you not have to time and a half for overtime you don't even have to pay regular pay for the extra 20 hours. Another great tactic is the "independent contractor" scheme. Here no workers comp, health care, social security or medicare need be provided.
The more things change the more they remain the same.
The Robber Barrons of this Gilded Age are kinder and gentler. They simply label a worker a "manager" and presto the 60 hour work week is back. The beauty of it is that not only do you not have to time and a half for overtime you don't even have to pay regular pay for the extra 20 hours. Another great tactic is the "independent contractor" scheme. Here no workers comp, health care, social security or medicare need be provided.
The more things change the more they remain the same.
14
Thank you, thank you for returning to your area of competence. Now please follow up with discussion of how to fix the under-investment problem.
4
A couple of issues ago The Economist , a British magazine ran a couple of stories about this. In the US and only here US firms make much more money due to monopoly power. I guess what goes for free market in the GOP means the ability of the large fish to eat the small fish without any government interference and even help from the government.
6
internet/phone/tv monopoly is very real. Nobody wants/needs to do anything better for anyone. What are customers going to do? Cut the cord? You need that LAST cord to make everything else work.
1
"For we aren’t just living in a second Gilded Age, we’re also living in a second robber baron era. And only one party seems bothered by either of those observations."
Correction: Neither party's leadership seems bothered by those observations, and only one candidate actually proposes solutions to the problem. Hint: It is not the candidate Dr. Krugman and the Times editorial staff have endorsed.
Correction: Neither party's leadership seems bothered by those observations, and only one candidate actually proposes solutions to the problem. Hint: It is not the candidate Dr. Krugman and the Times editorial staff have endorsed.
8
Of course, Ronnie Reagan worked for the Rich, the Banks and the Corporations, he was a Republican. It was the Clintons and the Democratic Leadership Council that turned the Democratic Party over to the same people the Republicans work for and that's what gave the rich a monopoly on political power in this country.
Bill Clinton, G W Bush and Obama all worked for the 1% and gladly helped them consolidate their grip on political power.
Now we see Hillary, Warrior Queen of Wall Street, opposing a $15 minimum wage while she pocketed $150,000 for a one hour speech to the vampire zombies of Goldman Sachs.
Our never ending Iraq War is purely a War for oil, and the elite of both Parties share the delusion that if we help the Iraqi Government they will give their oil to the cartels that control western oil.
The really fatal monopoly is the one held by the rich over both Parties.
Bill Clinton, G W Bush and Obama all worked for the 1% and gladly helped them consolidate their grip on political power.
Now we see Hillary, Warrior Queen of Wall Street, opposing a $15 minimum wage while she pocketed $150,000 for a one hour speech to the vampire zombies of Goldman Sachs.
Our never ending Iraq War is purely a War for oil, and the elite of both Parties share the delusion that if we help the Iraqi Government they will give their oil to the cartels that control western oil.
The really fatal monopoly is the one held by the rich over both Parties.
8
I am totally convinced by Mr. Krugman's argument. What confuses me is how the author of this article choses to attack Bernie Sanders in every article he writes on the election. Mr. Sanders is the voice of this issue in American politics. Mr. Sanders is not without fault, yet his opponent, Secretary Clinton is part of the problem which Mr. Krugman describes.
87
Ironic, isn't it? Conservatives deceptively label public education a "government monopoly" and demand that it be broken up. Meanwhile, they zealously defend the prerogatives of the true monopolies and other private sector rent-seekers.
8
Conservative/Republican economic positions are inherently contradictory. First, they tell us competition is good. (Which this lefty believes and has observed and benefited from.) Then they tell us mergers are good for us because of vague, never specified increased efficiencies that will lower costs. Ha! All you have to do is look at my local airport fares, and their history as carriers have come and gone. There is no Southwest, and when Continental pulled out six years ago, fares went up on the other airlines immediately.
My religious body has very expensive FIOS for what really amounts to almost no use. I set out to switch to DSL and discovered that "It's not available in your area." Total hogwash, the real reason, I discovered, is that Verizon is trying to be rid of copper land line service. Repair calls are used as marketing efforts to get the customer to switch to FIOS and VoIP phone service on it. That's presuming FIOS is available at your home. It is not at mine, although it is a few blocks away.
This, despite the fact that buried utility wired service is virtually immune from hurricanes and similar misfortunes. I've had family members maintain contact through and after hurricanes Andrew (the Katrina of Florida) and Ike, in Houston. Unlike the short term battery backup in your home VoIP "modem," the phone company's central office uses natural gas powered generators to keep things working for days and weeks.
My religious body has very expensive FIOS for what really amounts to almost no use. I set out to switch to DSL and discovered that "It's not available in your area." Total hogwash, the real reason, I discovered, is that Verizon is trying to be rid of copper land line service. Repair calls are used as marketing efforts to get the customer to switch to FIOS and VoIP phone service on it. That's presuming FIOS is available at your home. It is not at mine, although it is a few blocks away.
This, despite the fact that buried utility wired service is virtually immune from hurricanes and similar misfortunes. I've had family members maintain contact through and after hurricanes Andrew (the Katrina of Florida) and Ike, in Houston. Unlike the short term battery backup in your home VoIP "modem," the phone company's central office uses natural gas powered generators to keep things working for days and weeks.
4
In facthe, buried service wires are not immune to natural disasters. The older copper plant both buried and above ground are susceptible to natural disasters almost equally. This is do in the ground to having old paper-clad style copper that can get faulty, especially during rain storms of any severity or even mild ones. Also, since most of the cross connect boxes are above ground, and at times mounted to poles, weather is definitely a service factor.
1
In some ways, it would hard for Bernie Sanders and Hillary Clinton to be more different.
Hillary Clinton, a Wall Street-backed multimillionaire, served for six years on the board of directors of Walmart, the world’s largest company based on sales. She remained silent at a time when the mega-corporation was viciously cracking down on workers’ attempts to unionize.
Bernie Sanders, on the other hand, has been unflinching in his support of the labor movement. Sanders has spoken passionately in support of striking Verizon workers on multiple occasions.
For a May 2013 speech, the Verizon paid Clinton a whopping $225,000 honorarium, according to her tax records.
Verizon has also given between $100,000 and $250,000 to the Clinton Foundation. Moreover, the Clinton Foundation has partnered directly with Verizon, which is notorious for its vehement opposition to unions. The corporation is a partner in the Clinton Health Matters Initiative, and said it is “proud to partner with the Clinton Foundation.”
No, money won't affect Hillary's "judgement" at all, Dr. Krugman...
Hillary Clinton, a Wall Street-backed multimillionaire, served for six years on the board of directors of Walmart, the world’s largest company based on sales. She remained silent at a time when the mega-corporation was viciously cracking down on workers’ attempts to unionize.
Bernie Sanders, on the other hand, has been unflinching in his support of the labor movement. Sanders has spoken passionately in support of striking Verizon workers on multiple occasions.
For a May 2013 speech, the Verizon paid Clinton a whopping $225,000 honorarium, according to her tax records.
Verizon has also given between $100,000 and $250,000 to the Clinton Foundation. Moreover, the Clinton Foundation has partnered directly with Verizon, which is notorious for its vehement opposition to unions. The corporation is a partner in the Clinton Health Matters Initiative, and said it is “proud to partner with the Clinton Foundation.”
No, money won't affect Hillary's "judgement" at all, Dr. Krugman...
11
Those who are advocating for Bernie have not learned the lessons of the Obama presidency: that it takes a Democratic Congress to implement change that benefits the 99%. While Bernie has garnered tremendous support for his populist prose, he has given zero indication that he will do anything to support the election of down-ballot Democrats, without which his words will bring no change. (And criticize her as they will, this past weekend she was raising money to support the election of a Democratic Congress...)
And if his promises don't bear fruit, we risk alienating a generation of supporters who - like Obama's - saw a candidate who could not achieve what they believed he could.
Bernie has a grand vision, but remember that a vision without a plan is simply a daydream.
And if his promises don't bear fruit, we risk alienating a generation of supporters who - like Obama's - saw a candidate who could not achieve what they believed he could.
Bernie has a grand vision, but remember that a vision without a plan is simply a daydream.
9
President Obama is not a fighter... From the beginning of his presidency, he refused to take the bully pulpit and appeal directly to the people to put pressure on a seditious Republican Congress who are fully paid for and owned by corporate interests...
And that is where he and Bernie will differ greatly... I believe both of them have their hearts in the right place... As for Hillary, it seems her heart lies somewhere buried in her personal bank account.
And that is where he and Bernie will differ greatly... I believe both of them have their hearts in the right place... As for Hillary, it seems her heart lies somewhere buried in her personal bank account.
2
The term "Robber Baron" implied, and should continue to imply, control over extraction industries, which need to be distinguished from manufacturing and service. Natural resources, including land, should be regarded as commons, and if not restricted from privatization, at least strictly regulated. Manufacturing, if not coupled to extraction, and service need a case-by-case treatment based on essentiality and impact on the commons, i.e. coal vs. health insurance vs. entertainment. In other words, please avoid the simplification trap.
2
I agree. You do not really think this is going to get much better with Hillary as President do you?
4
Mr Krugman, Nice to have you back talking about what your area of expertise is. Since your recent slanted personal opinion pieces I now read you with an eye to whether it is all true. This may actually be good as I shouldn't even take you as the voice of reason and honesty as I once did. But I do feel a bit sad also.
2
A good column, and evidence that Krugman has read, or should read to follow up further, a great book on this subject: Cornered: The New Monopoly Capitalism, by Barry Lynn of the New America Foundation. http://www.barryclynn.com/?page_id=25
1
I would actually say there is only one candidate of one party who is likely to take on the robber barons of today.
Hint - it isn't Mrs. Clinton.
Hint - it isn't Mrs. Clinton.
5
Wow, this is confusing when paired with your critique/take down of Sanders on his "break up the banks" theme. Isn't this exactly what you're saying now? Chase is on every corner, you're essentially forced to use them if you want a car loan. Yet Chase's fees shift and their customer service from China is useless and annoying..."how else can I help you today Mrs...." Chase never helped on the issue called on, and they want to work on another issue? So the Banks should be broken up, the lobbyists, the wall street boys who are waiting with bated breath for the GOP to privatize social security so they can get even more fees. And the airlines should be regulated...fees for every move the passenger makes, seats so narrow only runway models could get in them, and no reduction in any costs even though oil is cheap now. Robber barons love the fanatic religious right whooping up non-issues so the big companies, banks, etc. can do whatever they want to charge the consumer for any and all things. The bottom line is Wall Street ratings of companies and there is no investment in people and has not been in a long, long time. So you could have saved you breath on critiquing Bernie and focused on how real is Hillary's shift to his positions? She just playing to the people, or does she want a real democracy. You lost a lot of cred and if you gave a damn about democracy, you would write with urgency about the importance of voting democratic if you want democracy to survive.
5
Capitalism has competition as a driver for growth, the ONLY Invisible Hand Adam Smith discussed. Conservatives believe in something, but it is not Capitalism.
4
So very true! FIOS used to very hot stuff. Now it's middling grade, expensive, buggy, and drops several times a day for no reason whatsoever. It's also expensive as hell!
When will Americans learn? So much of what we take for granted as normal is not how it is in the rest of the developed world. Cell phones, TV, and Internet cost the average American *hundreds per month.* However, our services are slow, substandard, and pricey. Everytime an industry segment starts to lose true competition, the overall quality of services, functions, and features offered by that sector goes through the floor - while customer costs go through the roof.
Most recent case in point: DirecTV is a shadow of what it used to be in the Service area, ever since AT&T bought them. I have been a long time subscriber, and I soon will no longer be, due to the misersble service I received. The poor tech who provided the service was a long time tech for DirecTV. He was so embarrassed at what he was no longer allowed to do for me under his new working guidelines....
Tell me again, all you corporate apologists, exactly why we should give a darn about any large US company! Thieves, one and all! America is indeed "Exceptional" - in the level of fleecing we are all willing to accept.
When will Americans learn? So much of what we take for granted as normal is not how it is in the rest of the developed world. Cell phones, TV, and Internet cost the average American *hundreds per month.* However, our services are slow, substandard, and pricey. Everytime an industry segment starts to lose true competition, the overall quality of services, functions, and features offered by that sector goes through the floor - while customer costs go through the roof.
Most recent case in point: DirecTV is a shadow of what it used to be in the Service area, ever since AT&T bought them. I have been a long time subscriber, and I soon will no longer be, due to the misersble service I received. The poor tech who provided the service was a long time tech for DirecTV. He was so embarrassed at what he was no longer allowed to do for me under his new working guidelines....
Tell me again, all you corporate apologists, exactly why we should give a darn about any large US company! Thieves, one and all! America is indeed "Exceptional" - in the level of fleecing we are all willing to accept.
7
...and their "bought" legislators on the state and federal levels, whoring out their oaths of office to get election funding, are even more of a disgrace--especially when they use the window dressing of idiotic ideology ("conservative" which really means "right-wing authoritarian").
5
Germany has a lot of monopolies, but also rather strong unions, so the worst aspects are not present. So either more unions or--what is simpler--more federal crackdown on the communications firms.
3
What really gets me about Krugman is that he still fails to see what is staring him in the face. That is, that Bernie Sanders has been devoted to addressing these issues. I would love for him to explain how Clinton will make any changes when she is also feeding at the trough.
I think Krugmans problem is that he doesn't want to rock the boat of his elite world and he really has no clue how most of us live.
I think Krugmans problem is that he doesn't want to rock the boat of his elite world and he really has no clue how most of us live.
7
So how about we use a slogan of Reagan's but with a slight modification: "Corporations are the Problem".
4
It's not just the banks and phone companies. My cable bill is the largest bill that I pay on a monthly basis. There's very little competition in any given market, if any, so they can charge these extraordinarily high prices for their service. And greedily suck in profits while they offshore many jobs. How often do we get someone in India or a similar third-world country when we call in for a issue with their service?
7
Well, it is nice to have some one notice the growth of monopolies in the United States. Seems to happen, to coincide with, the growth of oligarchies. And the money of the oligarchs in control of politics, of the media, of corporations, of a society. Was it Marx who warned about the danger of capitalism to move toward monopoly?
6
Correction: And only one CANDIDATE seems bothered by either of those observations.
6
Verizon did not expand its FIOS service to Paterson until very, very late in the game. Considering the fact that our population is "minority" majority, this was not only economic racism, but also stupid, because our African-American population here are some of our most savvy consumers.
2
Right on professor.
A couple of years ago, sales agents from AT&T called its subscribers here and told us that they were bringing in fiber optics which would vastly improve our service and urged us to sign up. Most of us did.
The new service was called Uverse I believe.
I know that you like all of us will not be too surprised to know that no fiber optics ever arrived but we were rewarded with increased monthly fees and much worse connectivity.
Not a day goes by now without service interruptions galore. AT&T has sent the servicemen out so often that many of them feel like family members. Last week, the second serviceman told us that he slowed down the megabombs or some such thingies coming into our lines and service should improve. AT&T then emailed saying that our increased speed was now going to cost us about 50% more per month.
While calling AT&T to inform them that our service had in fact been slowed not speeded up, we warned them that our conversation would doubtlessly be interrupted and to please call us back when this occurred as we still lost connectivity regularly.
I asked a friend across town if he had similar problems. When he quit giggling, he told me he and his wife were sprucing up the spare bedroom so the serviceman could just move in.
You're the economist professor. Tell me, does AT&T make much profit? Do they invest much in R & D? Or is their strategy for growth just to purchase their competitors and buy back their own stock?
A couple of years ago, sales agents from AT&T called its subscribers here and told us that they were bringing in fiber optics which would vastly improve our service and urged us to sign up. Most of us did.
The new service was called Uverse I believe.
I know that you like all of us will not be too surprised to know that no fiber optics ever arrived but we were rewarded with increased monthly fees and much worse connectivity.
Not a day goes by now without service interruptions galore. AT&T has sent the servicemen out so often that many of them feel like family members. Last week, the second serviceman told us that he slowed down the megabombs or some such thingies coming into our lines and service should improve. AT&T then emailed saying that our increased speed was now going to cost us about 50% more per month.
While calling AT&T to inform them that our service had in fact been slowed not speeded up, we warned them that our conversation would doubtlessly be interrupted and to please call us back when this occurred as we still lost connectivity regularly.
I asked a friend across town if he had similar problems. When he quit giggling, he told me he and his wife were sprucing up the spare bedroom so the serviceman could just move in.
You're the economist professor. Tell me, does AT&T make much profit? Do they invest much in R & D? Or is their strategy for growth just to purchase their competitors and buy back their own stock?
5
Dems have been in the White House for 15 of the 35 years since Reagan's innauguration. They held majorities in Congress for most of that time. Could it be that Bernie is right, and corporations have effective power over both parties?
7
Corporate Socialism is the name of the game. The internet providers, the pharmaceutical Companies, the utilities, the banks, the defense contractors, need I go on.
7
It is important to report accurately on why Verizon workers went on strike:
"The union's list of complaints is a long one: Verizon has outsourced 5,000 jobs to workers in Mexico, the Philippines and the Dominican Republic. Verizon is hiring more low-wage, non-union contractors, the union says.
"The main thing is that's it's taking good-paying jobs and taking them away from the American public," said Ken Beckett, a technical telecommunications associate for Verizon and union board member with 1101 CWA, as he picketed with colleagues outside a Verizon office in Manhattan."
Left out in the column's report of grievance is outsourcing to low wage foreign countries.
This is likely no accident, as Dr. Krugman has long argued for the benefits of outsourcing (it increases salaries in low wage countries) is beneficial on the global scale even when hurtful to American workers.
"The union's list of complaints is a long one: Verizon has outsourced 5,000 jobs to workers in Mexico, the Philippines and the Dominican Republic. Verizon is hiring more low-wage, non-union contractors, the union says.
"The main thing is that's it's taking good-paying jobs and taking them away from the American public," said Ken Beckett, a technical telecommunications associate for Verizon and union board member with 1101 CWA, as he picketed with colleagues outside a Verizon office in Manhattan."
Left out in the column's report of grievance is outsourcing to low wage foreign countries.
This is likely no accident, as Dr. Krugman has long argued for the benefits of outsourcing (it increases salaries in low wage countries) is beneficial on the global scale even when hurtful to American workers.
3
I, for one, am glad to see Prof K return to the economics of issues that affect our lives and leave the political polemics out of it, so I can go back to admiring his insights.
3
Since Prof. Krugman, in calling out the greed and me-first insularity of the 0.01%, so clearly agrees with the themes of Sen. Sanders' campaign, why is he so opposed to Sanders and so supportive of Wall Street's favorite Democrat?
7
Because I agree with Dr. Krugman on this issue, I am all the more convinced that Secretary Clinton should release the transcripts of her speeches to Wall Street. If she were seeking a professorship, or a judicial appointment, would not all her writings be subject to scrutiny? Given her close association with big business -as well as such associations of the Clinton Foundations - there is ample cause for the public to be concerned about how she will deal with monopolistic corporations. Knowing what she said during paid speeches to corporate America would provide important insight - like Romney's comments about the 47 percent.
81
"But why doesn’t Verizon want to invest? Probably because it doesn’t have to: many customers have no place else to go, so the company can treat its broadband business as a cash cow..."
That sounds strangely familiar, like some major political party...can't think which...
That sounds strangely familiar, like some major political party...can't think which...
4
Maybe it's time to restate the obvious: Verizon isn't in business to provide broadband service, Ford isn't in business to make automobiles, Pfizer isn't in business to make pharmaceuticals. These are corporations. They are all in business to make money, or in the current formulation, to "maximize shareholder value". They do all the other tedious things they do in service of that single overriding purpose.
Nor are all "shareholders" are created equal. Since executive compensation is largely based on "increases in shareholder value", executives get a double helping, once in executive compensation and again as increases in value of shares they own.
"Free markets" are kryptonite to corporations. A free market drives prices down toward the marginal cost of production, destroying corporate profits, "shareholder value" and executive compensation in the process. When corporate chieftains whine about free markets, they mean 'free from government interference', not freedom to compete in the Adam Smith way of thinking.
Monopoly and financial engineering are natural corporate behaviors. Only unnatural government interference with those behaviors will change them.
Nor are all "shareholders" are created equal. Since executive compensation is largely based on "increases in shareholder value", executives get a double helping, once in executive compensation and again as increases in value of shares they own.
"Free markets" are kryptonite to corporations. A free market drives prices down toward the marginal cost of production, destroying corporate profits, "shareholder value" and executive compensation in the process. When corporate chieftains whine about free markets, they mean 'free from government interference', not freedom to compete in the Adam Smith way of thinking.
Monopoly and financial engineering are natural corporate behaviors. Only unnatural government interference with those behaviors will change them.
13
The role of Anti-trust in modern globalized economy is not clear to us. If we break the American company in the name of anti-trust and China did not do that what will be the consequence of American competitiveness in the global trade? Are you talking about the monopoly trend in the traditional regulated business, like communication, finance, healthcare, transportation,.... and. allow the monopoly for global competition on consumer goods, capital goods, ....? It seems, the theory of globalization was not properly researched before it was accepted. We became guinepigs to our highly trained economists and lobyists.
1
Hospital consolidations are contributing to high costs and poor service in many communities. .
8
This article mainly ignores the concept of cross elasticity. FIOS is, perhaps, a superior technology, but there are other alternative technologies, such as, cable, wireless, and possibly other emerging technologies that easily fill the need.
If Verizon has a dominant market position, we already have laws that can deal with that, and they should be enforced. If Verizon is not subject to those laws because it is not abusing a dominant market position, than it will cease to be a problem over time as others fill the void Verizon is leaving by not moving aggressively enough into new technologies.
In a free society, the freedom of choice allows for the making of bad choices. If Verizon is making bad choices in how it runs its business, then Verizon will pay a price as companies that make better choices surpass Verizon in the marketplace, the stock markets, etc.
If Verizon has a dominant market position, we already have laws that can deal with that, and they should be enforced. If Verizon is not subject to those laws because it is not abusing a dominant market position, than it will cease to be a problem over time as others fill the void Verizon is leaving by not moving aggressively enough into new technologies.
In a free society, the freedom of choice allows for the making of bad choices. If Verizon is making bad choices in how it runs its business, then Verizon will pay a price as companies that make better choices surpass Verizon in the marketplace, the stock markets, etc.
One example of the new Robber Baron Age is the infrequency of news media criticism in recent years of intermittent RIchest Man in the World, Mexican telecom monopolist Carlos Slim. If Prof. Krugman is serious, I would invite him to use his platform in The Times to criticize the Times' largest individual shareholder.
4
I agree with the over thesis of the opinion piece, but I disagree on some of the Verizon examples. Regarding FiOS expansion there are a few different points to consider. In the existing Verizon wireline markets there is viable broadband competition from the Cable companies, and in some cases "independents" like Google Fiber. Verizon has also carefully picked markets that have the demographics and the Average Revenue Per User (ARPU) necessary to support the cost of pulling a fiber based service. That is why they sold markets like New England that don't meet those metrics. Thirdly, on the topic of competition, many younger consumers are cord cutting and using a 4G LTE based service. Another point to consider is that from a retail perspective, Verizon is primarily a wireless company. Verizon has around 5.5M FiOS users, they have close to 110 million Verizon Wireless users. Verizon has limited investment resources, and has to balance investment between different infrastructure and services. It is worth noting that since the introduction of the iPhone, the demand for wireless services has increased over 10,000%, yet my wireless bill has not increased 10,000% to pay for that grown. So while I agree with the overall thesis on growing monopoly power that often raises profits at the expense of wages, while outsourcing good wage job, I think the specific Verizon examples used do not support the thesis and do not show a nuanced understanding on the service provider industry.
Are We All Rent-Seeking Investors?
"If companies operating in the marketplace can influence prices and regulation, the theorem of profit maximization as a path to welfare maximizations falls flat. If companies can raise prices by monopolizing markets or colluding with other players, and increase revenues by political connections, they are not really engaged in creating value but in transferring value from taxpayers and consumers to their coffers"
"The growing concentration of many industries in the United States raises many questions regarding US antitrust policy and the growing role of money in politics. Grullon, Larkin, and Michaely trace the growing concentration to lax antitrust policy."
https://promarket.org/are-we-all-rent-seeking-investors/
"If companies operating in the marketplace can influence prices and regulation, the theorem of profit maximization as a path to welfare maximizations falls flat. If companies can raise prices by monopolizing markets or colluding with other players, and increase revenues by political connections, they are not really engaged in creating value but in transferring value from taxpayers and consumers to their coffers"
"The growing concentration of many industries in the United States raises many questions regarding US antitrust policy and the growing role of money in politics. Grullon, Larkin, and Michaely trace the growing concentration to lax antitrust policy."
https://promarket.org/are-we-all-rent-seeking-investors/
3
Paul Krugman is a pretender. He likes to talk, but just like the establishment democrats, he doesn't like the walk.
Another article trying to appeal to ordinary Americans so that he can act as if he cares, so that the establishment democrats (such as his boss Hillary Clinton) can act as if they care ... all with the aim of getting their vote. It is very clear that neither he nor the establishment democrats have any intention of seeing actual meaningful change that can benefit ordinary Americans.
Paul Krugman, you have lost a lot of credibility because of your support for Clinton. Time for you to go! Let's try with Joe Stiglitz ...
But then again, this is NY Times ... pretenders as well ...
Another article trying to appeal to ordinary Americans so that he can act as if he cares, so that the establishment democrats (such as his boss Hillary Clinton) can act as if they care ... all with the aim of getting their vote. It is very clear that neither he nor the establishment democrats have any intention of seeing actual meaningful change that can benefit ordinary Americans.
Paul Krugman, you have lost a lot of credibility because of your support for Clinton. Time for you to go! Let's try with Joe Stiglitz ...
But then again, this is NY Times ... pretenders as well ...
10
We should have known "Trickle down" was a fraud. Generally speaking, a "Trickle " is not a lot of anything, it's merely a trickle. The trickle, however small or large, went directly to the big corporations and banks and it stopped there.
Perhaps some of the trickle went into the pockets of Congressmen and women.
But while companies are reining in record profits, the working men and women
haven't had pay raises that balance the profit percentages. Is it any wonder that the disparity in income issue and the minimum wage issue is so energizing the Bernie Sanders campaign?
The young voters can see what's going on and George Clooney is right on in his assessment of "obscene" amounts of money in politics.
Perhaps some of the trickle went into the pockets of Congressmen and women.
But while companies are reining in record profits, the working men and women
haven't had pay raises that balance the profit percentages. Is it any wonder that the disparity in income issue and the minimum wage issue is so energizing the Bernie Sanders campaign?
The young voters can see what's going on and George Clooney is right on in his assessment of "obscene" amounts of money in politics.
9
In my old classroom market models the only way to curb monopoly rents was price control. Are we willing to reintroduce them? I know I am overpaying for my TV-internet services. If I switch between Comcast and Verizon every two years my monthly bill would be half of what it is and the reinstallation cost would be equivalen to one extra month. I have not done it lately because Comcast is now providing better quality than Verizon. Please let me know what should we do to reintroduce monopoly price control!
2
I agree that mergers have been used to make things more anti competitive. Laying this at Reagan's feet is a bit of a stretch. He has not been POTUS since the late eighties. In case I missed something, there have been many presidents since then. The Obama presidency has not focused on this, Clinton and the Bushes did not, but it is the fault of someone from thirty years ago. Seems like a pretty narrow view of things.
3
The "strong demand" for Fios is driven by general dislike for Comcast, and the same demand is equally for any alternative including Google Fiber or ATT GigaFiber. Fios is too small and late to the party to really challenge either of these three. And given the relative lower profitability it's pretty natural for investment to go towards wireless.
1
Something Dr. Krugman didn't mention is how competing companies offer more opportunity for employment. If you don't like the way Verizon treats you, you have few options for other employment. If we had a trust buster in office there would be dozens of opportunities for employees. In fact there would be more jobs. And the company who most successfully managed those options would be the leader. Instead we have a de facto company just because no one else is big enough to get into the game. And they are free to treat employees poorly and customers worse.
Ronald Reagan did a lot of horrible things but allowing the fox to watch the chicken coop has been a disaster for everyone but the 1%
Ronald Reagan did a lot of horrible things but allowing the fox to watch the chicken coop has been a disaster for everyone but the 1%
4
Dear Mr. Krugman,
A swindler I once knew explained "capitalism" to me as "simply selling stuff at a lose so, ultimately, you drive out the competition and have a monopoly on what you sell and can charge whatever you feel".
Simple but ringing of truth; when the railroads needed a boost in the 1800's they were given every kind of concession to ensure their "profitability" all the while telling everyone who'd listen "this is GOOD for the country".
Enter "oil" and motor transport and the railroads were, suddenly, abandoned with the emphasis on "good roads across the country" with, again, the "good of the country" always promoted.
Yet we find both the railroads and the highways falling apart as those "capitalists" have made off with their bundles of cash and couldn't care less about "infrastructure".
What you describe in your column is nothing more than how the United States "economy" works; benefit the few at the expense of everyone else, "bailouts' and "banks too big to fail" now being the norm.
If one expects help from our legislators, guess again; 1/2 of them are millionaires and they do not make laws that disturb their own pocketbooks.
The collapse of the Soviet Union should stand as a warning that no country is "Too Big To Fail" including our own, hypocritical little island that just may "Ponzi" itself out of existence.
A swindler I once knew explained "capitalism" to me as "simply selling stuff at a lose so, ultimately, you drive out the competition and have a monopoly on what you sell and can charge whatever you feel".
Simple but ringing of truth; when the railroads needed a boost in the 1800's they were given every kind of concession to ensure their "profitability" all the while telling everyone who'd listen "this is GOOD for the country".
Enter "oil" and motor transport and the railroads were, suddenly, abandoned with the emphasis on "good roads across the country" with, again, the "good of the country" always promoted.
Yet we find both the railroads and the highways falling apart as those "capitalists" have made off with their bundles of cash and couldn't care less about "infrastructure".
What you describe in your column is nothing more than how the United States "economy" works; benefit the few at the expense of everyone else, "bailouts' and "banks too big to fail" now being the norm.
If one expects help from our legislators, guess again; 1/2 of them are millionaires and they do not make laws that disturb their own pocketbooks.
The collapse of the Soviet Union should stand as a warning that no country is "Too Big To Fail" including our own, hypocritical little island that just may "Ponzi" itself out of existence.
4
For all of you making the connection between Sanders 'breaking up the big banks' and Krugman's excellent analysis, I'd remind you only one person has been talking about really going after the problem in the financial sphere. That's Clinton who is talking about AIG, Lehman and Countrywide as well as the other players.
For anyone who does their own investing, the rise in profits clearly comes from reduction of investment including R&D and squeezing labor costs as well as new products, etc. Investors have to understand the long-range risk. Keep beating this drum, Paul. No one else is making this case.
For anyone who does their own investing, the rise in profits clearly comes from reduction of investment including R&D and squeezing labor costs as well as new products, etc. Investors have to understand the long-range risk. Keep beating this drum, Paul. No one else is making this case.
6
Finally an article that is not stumping for Clinton and an issue article. Then you put Larry Summers and yourself in the same sentence. Maybe I should of not blamed Larry Summers for many of Bill Clinton's poor decision.
These robber barons also are not contributing to the revenues (paying taxes) that keeps this country running efficiently (or not) and making investments in the future of the nation.
Also, it leaves it up to the smaller corporations who actually do pay the 35% tax rate (possibly) and find it harder to compete in this rigged system.
When will the robber barons being prosecute for theft from this great nation of ours.
These robber barons also are not contributing to the revenues (paying taxes) that keeps this country running efficiently (or not) and making investments in the future of the nation.
Also, it leaves it up to the smaller corporations who actually do pay the 35% tax rate (possibly) and find it harder to compete in this rigged system.
When will the robber barons being prosecute for theft from this great nation of ours.
3
Dear Dr. Krugman:
It has come to my attention that the vast majority of readers of the NYT are so radically liberal they are defacto Communists, and view themselves as a neo-Proletariate, led by Bernie Sanders, bent on revolution against the neo-Bourgeois capitalists including the 1%, the .01% and today, the Robber Barons. Nothing short of coup-de-tat, revolution and the expungement of anything other than what suits their notion of "fairness", is the answer. Magically, the structure of our government will be eliminated, checks and balances forgone, and government by Socialist Fiat will be the norm.
Sounds reasonable doesn't it?
For this, however, you will be forever pen-lashed for writing columns that do not conform to their notion of rationality. A pity. I thought you deserved praise for today's insights.
It has come to my attention that the vast majority of readers of the NYT are so radically liberal they are defacto Communists, and view themselves as a neo-Proletariate, led by Bernie Sanders, bent on revolution against the neo-Bourgeois capitalists including the 1%, the .01% and today, the Robber Barons. Nothing short of coup-de-tat, revolution and the expungement of anything other than what suits their notion of "fairness", is the answer. Magically, the structure of our government will be eliminated, checks and balances forgone, and government by Socialist Fiat will be the norm.
Sounds reasonable doesn't it?
For this, however, you will be forever pen-lashed for writing columns that do not conform to their notion of rationality. A pity. I thought you deserved praise for today's insights.
1
Here is a story about how bizarre Verizon is. Here in the Village of Croton, we are lucky enough to have both cable and Fios on our streets. Yes, actual competition, sorta.
The Fios service does NOT bring us television. You get broadband and phone, but not TV. The Village Government has asked repeatedly for Verizon to turn on TV-there isn't any dispute here. There is no technical reason why this can't be done, and folks who live on the border of the Village, but on the other side, do have TV.
The place is wired. The Boxes are installed. Given topography and distance there are a lot of folks who'd rather use fios than cable. Yet, someone at Verizon won't hit the few keystrokes needed to activate TV on Fios in Croton on Hudson. It defies logic, that they would spend the money to wire the Village, yet deny TV, and send all those folks over to Cable, Satellite or OTA if they can get a signal.
Something is seriously wrong at Verizon Management.
The Fios service does NOT bring us television. You get broadband and phone, but not TV. The Village Government has asked repeatedly for Verizon to turn on TV-there isn't any dispute here. There is no technical reason why this can't be done, and folks who live on the border of the Village, but on the other side, do have TV.
The place is wired. The Boxes are installed. Given topography and distance there are a lot of folks who'd rather use fios than cable. Yet, someone at Verizon won't hit the few keystrokes needed to activate TV on Fios in Croton on Hudson. It defies logic, that they would spend the money to wire the Village, yet deny TV, and send all those folks over to Cable, Satellite or OTA if they can get a signal.
Something is seriously wrong at Verizon Management.
5
So Paul in now feeling Weakened at Bernie's. I guess it's only "realistic" when it's in his own mouth...
1
Could have sworn krugman has written that breaking up the monopolistic big banks would not make a difference. The same as Hillary's position. But other monopolies are bad? First he biased and rigged his political analysis in favor of Clinton. Now he's going as far as misrepresenting his economic analysis!
2
The problem is well defined but poorly diagnosed. Monopoly power can only exist because of "entry barriers" (most of them regulatory). Most monopolies are protected by governments - banks, utilities, airports.... Ronald Reagan believed in competition and so did Milton Friedman. To argue otherwise would be dishonest.
Five Canadian banks control 90% of Canada's market. They make huge profits, and some Canadians benefit from this because they are shareholders either directly or through their pension funds. I know I benefit as a shareholder. Canadian banks did very well in 2008 (if you are interested, here is an interesting report comparing US vs Canadian banks http://thegisi.com/data-report/investing-into-banks-u-s-vs-canada/ ).
Canadian banks doing well and being regulated, however, has a huge invisible cost. Every time I withdraw money from another Canadian bank, the ATM charges me C$ 4 to C$ 5 per transaction, so if I withdraw C$ 50, I pay a 10% fee! Canadian banks have never innovated/invented anything, because they don't have to - they are an oligopoly. Do they invest a lot? I don't know, if they do, I don't see any creative products getting launched. Are Canadian bankers overpaid? Well, many of them are paid more than C$ 1.0 mln per year, I'd consider that as overpaid.
I am a big fan of Paul Krugman, I've read most of his books, I admire his intellects and speed of thought, but I could never understand the blind trust he places in government bureaucrats.
Five Canadian banks control 90% of Canada's market. They make huge profits, and some Canadians benefit from this because they are shareholders either directly or through their pension funds. I know I benefit as a shareholder. Canadian banks did very well in 2008 (if you are interested, here is an interesting report comparing US vs Canadian banks http://thegisi.com/data-report/investing-into-banks-u-s-vs-canada/ ).
Canadian banks doing well and being regulated, however, has a huge invisible cost. Every time I withdraw money from another Canadian bank, the ATM charges me C$ 4 to C$ 5 per transaction, so if I withdraw C$ 50, I pay a 10% fee! Canadian banks have never innovated/invented anything, because they don't have to - they are an oligopoly. Do they invest a lot? I don't know, if they do, I don't see any creative products getting launched. Are Canadian bankers overpaid? Well, many of them are paid more than C$ 1.0 mln per year, I'd consider that as overpaid.
I am a big fan of Paul Krugman, I've read most of his books, I admire his intellects and speed of thought, but I could never understand the blind trust he places in government bureaucrats.
Your argument doesn't make sense. It reminds me of all those global trading pitches by economists to voters telling them you may lose your job but you can buy cheaper stuff at Walmarts.
1
Careful!
People might think you're schilling for Bernie after all.
People might think you're schilling for Bernie after all.
1
Monopoly power is part of a broader set of protections that business lobbyists pursue relentlessly. Other government-supplied advantages derive from copyright, patent, tax, regulatory, and trade laws/treaties.
The term *rentier* describes the elites who thrive on exploiting and expanding these government-supplied advantages.
To say that the Democratic party as a whole is "bothered" by this crippling corporate welfare syndrome is highly dubious. If it exists at all, their botheration is ineffectual.
The two-year election carnival is a wonderful distraction that allows rentiers to ply their trade under the radar.
This is what Bernie Sanders' magnificent campaign has been all about. Win or lose, he has fingered the culprits who are robbing us all.
The term *rentier* describes the elites who thrive on exploiting and expanding these government-supplied advantages.
To say that the Democratic party as a whole is "bothered" by this crippling corporate welfare syndrome is highly dubious. If it exists at all, their botheration is ineffectual.
The two-year election carnival is a wonderful distraction that allows rentiers to ply their trade under the radar.
This is what Bernie Sanders' magnificent campaign has been all about. Win or lose, he has fingered the culprits who are robbing us all.
4
The growth of new media calls for the immediate break up of Facebook, which has been allowed to restrict trade and monopolize at the expense of expanding the internet where it matters most.
Service infrastructure providers like Verizon have neglected low income areas and now neglect their own prime user consumers like Mr. Krugman by profit triage.
The cure in Verizon's case is to force FIOS sharing by smaller companies that provide an alternative cost and better service. That was the whole idea behind anti-trust.
Creation of jobs that protect the consumer and the environment are an enemy to profits from poisoning and killing consumers. So testing and inspection mandates have been under decades old attacks by big business. World trade is great. But, getting poisoned from food laced with heavy metals shipped from outside the U.S. and sold as 'organic' outside a state like California which pays to test - that's another matter. There are 1,000 Flint, Michigans and more waiting to happen or already in place in the U.S. that haven't been diagnosed and therefor aren't even on the table for fixing.
We have lost sight of what makes society function properly, but, it isn't ''Revolution'' which actually just provides a confrontation and replaces money with who you know politics. It calls for a more complex and sophisticated society with more competition and companies not less. It requires an active and intelligent government and a Hillary Clinton type of leader.
Service infrastructure providers like Verizon have neglected low income areas and now neglect their own prime user consumers like Mr. Krugman by profit triage.
The cure in Verizon's case is to force FIOS sharing by smaller companies that provide an alternative cost and better service. That was the whole idea behind anti-trust.
Creation of jobs that protect the consumer and the environment are an enemy to profits from poisoning and killing consumers. So testing and inspection mandates have been under decades old attacks by big business. World trade is great. But, getting poisoned from food laced with heavy metals shipped from outside the U.S. and sold as 'organic' outside a state like California which pays to test - that's another matter. There are 1,000 Flint, Michigans and more waiting to happen or already in place in the U.S. that haven't been diagnosed and therefor aren't even on the table for fixing.
We have lost sight of what makes society function properly, but, it isn't ''Revolution'' which actually just provides a confrontation and replaces money with who you know politics. It calls for a more complex and sophisticated society with more competition and companies not less. It requires an active and intelligent government and a Hillary Clinton type of leader.
80
It's not like Dems have been shut out of power since 1981. They had the White House for 15 out of 35 years during that period, and Congressional majorities most of that time. Could it be that Bernie is right and that corporations have co-opted them as well?
4
Monopoly and consumer welfare are economic issues. They are not political issues. Using government power to break up monopolies and encourage competition in the market place is consistent with idea of promoting "free market", a doctrine that conservatives should worship as well.
And let's not make everything about Bernie Sanders, shall we?
And let's not make everything about Bernie Sanders, shall we?
5
If only Mr. Krugman was as committed to competition within the banking industry as he seems to be within the telecommunications industry. Then, he might admit that Dodd-Frank has been a disaster for the nation, cementing “too big to fail” big banks, an oligarchy working toward a monopoly, as the federal government’s preference. Meanwhile, it killed literally thousands of small and regional banks — the competition — that had nothing to do with sparking the Great Recession.
35
Paul, you've taken the position that it's Hillary who lives in the real world of getting things done. I'm aboard to some degree, but can you picture Hillary breaking up the concentrated power of the very big banks? Of that I'm not very confident. And couldn't we fairly term Goldman-Sachs a robber baron?
87
Capitalism leads to a concentration of capital and when holders of that capital are allowed the "free speech" of funding political campaigns and lobbying of those already in office we see increased concentration of capital.
The system can work, and did work for a while, but that will take limiting the scope of some of the powerhouses of industry. Limiting the number of media outlets must be strictly followed. Ownership of businesses other than media must be ended as that makes for twisting of the media to support the other business in its portrayals.
Back in the day the Social Security number could not be used as an identifier and banks were restricted to single state operations the financial industry was full of fat cats and not predatory panthers.
The masses are beginning to catch on and either another revolution leading to peasants charging the manor house, or a civil war between workers wanting their bosses free to succeed in any way possible versus workers demanding respect and care and shared rewards to come with shared responsibility.
The system can work, and did work for a while, but that will take limiting the scope of some of the powerhouses of industry. Limiting the number of media outlets must be strictly followed. Ownership of businesses other than media must be ended as that makes for twisting of the media to support the other business in its portrayals.
Back in the day the Social Security number could not be used as an identifier and banks were restricted to single state operations the financial industry was full of fat cats and not predatory panthers.
The masses are beginning to catch on and either another revolution leading to peasants charging the manor house, or a civil war between workers wanting their bosses free to succeed in any way possible versus workers demanding respect and care and shared rewards to come with shared responsibility.
2
Verizon pays no taxes. Don't you think it's time that these corporations - which the supreme court has deigned "people" with free speech and religion - contribute to our infrastructure they so abundantly profit from ?
http://www.huffingtonpost.com/2014/02/25/corporation-tax-rate_n_4855763....
http://www.huffingtonpost.com/2014/02/25/corporation-tax-rate_n_4855763....
2
That "many customers have no place else to go" applies to Comcast as well suggests that the industry is filled with mini-monopolies that should be illegal, or prosecuted as such. When the airwaves and 'utility' lines were respectively regulated and constructed by public entities it allowed for competition to use those media. This is a prime example of why a competitive economy needs to not only be managed for public interest but also by public selected bodies.
3
The wireless business is is not so much a monopoly as an oligopoly. There is more to the story that involves the industry's trade groups lobbying Washington with warnings about internet capacity Armageddon that will come unless the carriers like AT&T and Verizon receive little-to-no regulation, no net neutrality laws, no price controls, huge subsidies and tax credits. Of course, this all results in less consumer protection. Government could side with consumer but as usual they accede to the wishes of the rich and powerful.
If the wireless carriers are bad then the cable companies (internet and t.v.) are downright criminal. Within their franchise territory, in most places in the U.S., the cable companies have no competition and are apparently free to raise rates any amount at any time. At least the utilities have to go through the public utilities commission.
Consumers have lost many protections largely because of Republicans anti-government and pro-big-business agenda that they vigorously and continuously pursue. Unfortunately, like so many things, the Democrats are far less vigorous fighting the Republicans. They just wag their finger at the Republicans while the country shifts incrementally further and further to the right.
If the wireless carriers are bad then the cable companies (internet and t.v.) are downright criminal. Within their franchise territory, in most places in the U.S., the cable companies have no competition and are apparently free to raise rates any amount at any time. At least the utilities have to go through the public utilities commission.
Consumers have lost many protections largely because of Republicans anti-government and pro-big-business agenda that they vigorously and continuously pursue. Unfortunately, like so many things, the Democrats are far less vigorous fighting the Republicans. They just wag their finger at the Republicans while the country shifts incrementally further and further to the right.
2
HRC took a $225,00 speaking fee from Verizon on May 21, 2013.. See 2013-2015 Speaking Fees for HRC
http://citizenuprising.com/hillary-clintons-speaking-fees-2013-2015/
And yet after writing all this you fervently support the Democrat corporate America will take if it cannot get a Republican, Hillary Clinton. Why didn't you mention that? Being frightened of a Trump victory is no excuse for supporting one of the most corrupt candidates running for office, ever.
http://citizenuprising.com/hillary-clintons-speaking-fees-2013-2015/
And yet after writing all this you fervently support the Democrat corporate America will take if it cannot get a Republican, Hillary Clinton. Why didn't you mention that? Being frightened of a Trump victory is no excuse for supporting one of the most corrupt candidates running for office, ever.
2
Your claim of corruption is without merit. When asked at the last debate for evidence of a quid pro quo, Bernie could produce none.
Better to consider which candidate has solid policy proposals to address the barriers to progress than to support Bernie's flailing about the process. The issue of money in politics is real, but it will take a Democratic President AND a Democratic Congress to change the system.
Hillary has been subject to right-wing attacks for a quarter century. Each time, they have been found untrue. Those who have carefully examined her record - as was discussed in the Times a week ago - have found her to be honest.
If you have disagreements on policy, state them clearly. But please avoid the false statements about her character in an attempt to avoid discussion of policy. It is beneath what I expected of Bernie when he began what he said would be a "positive" campaign.
Better to consider which candidate has solid policy proposals to address the barriers to progress than to support Bernie's flailing about the process. The issue of money in politics is real, but it will take a Democratic President AND a Democratic Congress to change the system.
Hillary has been subject to right-wing attacks for a quarter century. Each time, they have been found untrue. Those who have carefully examined her record - as was discussed in the Times a week ago - have found her to be honest.
If you have disagreements on policy, state them clearly. But please avoid the false statements about her character in an attempt to avoid discussion of policy. It is beneath what I expected of Bernie when he began what he said would be a "positive" campaign.
2
We are, indeed, living in a "second Gilded Age" where income inequality now means that the 85 richest people in the world have the same share of wealth as the bottom 1/2 of the entire population.
Consolidation of power, in service, manufacturing, and financial industries and union busting, voter suppression, and anti-immigrant furor contributes to this new second "robber baron era."
And "they" tell us we should be excited about this new "sharing economy."
Consolidation of power, in service, manufacturing, and financial industries and union busting, voter suppression, and anti-immigrant furor contributes to this new second "robber baron era."
And "they" tell us we should be excited about this new "sharing economy."
82
This commentary makes it hard to understand PK's support for Hillary Clinton. HC instinctively will ignore, if not continue, policies that favor economic consultation. It would be important for PK to resolve
3
Cue all the Bernie fans asking why PK doesn't love Bernie now and hate Hillary because something something Hillary is bought by something something and Bernie is pure.
53
One of the two candidates stood with striking Verizon workers on the picket lines. The other's campaign profits from Verizon's political largesse. That isn't a comparison of "purity" vs. "impurity", just a statement of fact.
5
Corporations are not investing in their businesses because they see no market growth. No competent business person will expend resources in a market where existing facilities are not stretched. Job creators only create jobs in an expanding economy. ECO 101
Monopolistic markets may pay a part, but many people believe that wages are declining because workers have lost bargaining power. Union membership have declined precipitously. The loss of wages for the majority of the population has translated to a weak economy. The US economy depends on consumer spending and if most consumers lack funds, it makes sense that the overall economy will be affected. What has happened is that corporations have become so successful in lowering labor costs that they have destroyed their customer base.
More vigorous anti-trust enforcement may lower prices and corporate profits but only wide spread wage growth will expand the economy.
Monopolistic markets may pay a part, but many people believe that wages are declining because workers have lost bargaining power. Union membership have declined precipitously. The loss of wages for the majority of the population has translated to a weak economy. The US economy depends on consumer spending and if most consumers lack funds, it makes sense that the overall economy will be affected. What has happened is that corporations have become so successful in lowering labor costs that they have destroyed their customer base.
More vigorous anti-trust enforcement may lower prices and corporate profits but only wide spread wage growth will expand the economy.
2
Strange, but the scenario that Dr. Krugman illustrates concerning monopolies is also what is destroying America from the inside out. Our government refuses to invest in our infrastructure under the pretense of maintaining lower taxes and balanced budgets (which, truly, it does neither) and so we watch our roads, bridges, tunnels, social services, schools - everything - decline and decline. It is our government's "unwillingness to invest in its own business". And why doesn't the government want to invest? Because it doesn't have to - it's customers have nowhere else to go.
But wait... they do. They could actually vote in ways that gets rid of the status quo and brings in new leadership with new vision.
But wait... they do. They could actually vote in ways that gets rid of the status quo and brings in new leadership with new vision.
2
Spot on. And it is not just manufacturers - remember there used to be the "Big 8" accounting firms, now there are 4. Saint Reagan should be called out for the damage he did to our country. He set in motion the whole mess where the captains of industry colluded with Wall St. to get the financing to consolidate each and every industry to provide the heft they needed to withstand closing factories here to set up in cheaper markets, and buy bureaucrats to approve it.
Reagan may not have been our worst president but he certainly did the most lasting damage with his sunny, anti-government, tax, regulation, and labor blatherings. The conservatives picked the perfect poster boy.
Reagan may not have been our worst president but he certainly did the most lasting damage with his sunny, anti-government, tax, regulation, and labor blatherings. The conservatives picked the perfect poster boy.
3
This whole premise of monopolies and lack of competition can be applied to many industries and ends up screwing consumers in the pocketbook. When there's only 1 airline to choose from, they can raise their fares and limit choices consumers have. Since I live in Atlanta, I can only fly Delta and end up paying higher fares for the privilege for the most part. I subscribe to AT&T UVerse but every time I called them about an issue, they seemed more concerned with up-selling me to a more expensive package rather than solving my problem or fixing my service. Competition is good for the economy because it keeps companies honest and forces them to compete for customer loyalty. When they don't have to worry about that anymore, they just worry about profits and fattening the CEO's salary at the expense of everything else.
Record profits? CNBC says we are in the midst of a profits recession. And this is reflected in the S&P 500 being virtually flat for the past 12-18 months.
This is reminiscent of the US auto industry. For decades they relied on faithful customers to keep purchasing crappy US cars and did not bother to keep up with the Japanese autos until it was too late. But the US auto worker could rely on the union to keep their wages up.
But unfortunately, it was those same high US auto-union wages, compared with much lower Japanese wages at the time (the 70's and 80's), that prevented US car manufacturers from being able to compete in making compact cars and resulted in their not "keeping up." With that opening, the Japanese manufacturers eventually broadened their lines to include a wider range of cars, and of course also opened US auto plants in non-union areas, where they continued to have a wage cost advantage over the Big Three.
I'd go beyond asserting that only one party seems bothered by the monopolization of key industries. I'd say only one candidate in that party is truly concerned. It's the candidate Krugman isn't supporting.
Bernie Sanders for president.
Bernie Sanders for president.
3
"And only one party seems bothered by either of those observations." Actually,only one wing of one party seems bothered.
1
Aftermath of the S&L Crisis, <1000 DoJ felony convictions (1989-1995).
Aftermath of the Financial Crisis, 0 DoJ convictions (2008-present).
Abusive, corporate behaviour is not the problem; neither is shadow banking; nor irresponsible borrowers. Weak, spineless government administration is the problem.
Aftermath of the Financial Crisis, 0 DoJ convictions (2008-present).
Abusive, corporate behaviour is not the problem; neither is shadow banking; nor irresponsible borrowers. Weak, spineless government administration is the problem.
4
What Prof. Krugman misses is that the largest boom in mergers took place during the Clinton years (http://www.investopedia.com/articles/investing/102314/biggest-mergers-ac... followed by a smaller one during the younger Bush administration.
3
Dr. K was talking about laying the foundation during the Reagan years by deregulating and detaxing the upper class and corporations.
1
Are we really a free market economy? Capitalism unchained?
Consider these..................
The phone companies cooperate with the government providing the metadata the NSA absorbs and the police use.
The big banks are intimately connected to the government and all manner of law enforcement serving authorities over the interests of their customers.
The Pharmaceutical industry is protected from foreign competition imports and enriched with the recent adoption of Medicare drug insurance following which the prices have skyrocketed.
The health insurance industry is now connected to the federal and states governments and enriched through mandatory insurance.
The automobile insurance industry is assured profits through mandatory car insurance in all fifty states.
The armaments industry is assured of a major chunk of the federal budget every fiscal year irregardless of a state of war or peace.
Doesn't this remind of of government control of the economy such as in Communism?
Entire industries are De facto monopolies protected by governments.
Consider these..................
The phone companies cooperate with the government providing the metadata the NSA absorbs and the police use.
The big banks are intimately connected to the government and all manner of law enforcement serving authorities over the interests of their customers.
The Pharmaceutical industry is protected from foreign competition imports and enriched with the recent adoption of Medicare drug insurance following which the prices have skyrocketed.
The health insurance industry is now connected to the federal and states governments and enriched through mandatory insurance.
The automobile insurance industry is assured profits through mandatory car insurance in all fifty states.
The armaments industry is assured of a major chunk of the federal budget every fiscal year irregardless of a state of war or peace.
Doesn't this remind of of government control of the economy such as in Communism?
Entire industries are De facto monopolies protected by governments.
64
Look at the economy as a system. Just like individual cells in an organism, each person's separate functioning contributes to the collective system. But just like some collection of cells increase their energy intake and grow out of proportion to their place in the system, corporations (which are only specialized collections of us cells) are absorbing disproportionate amounts of the output from each of us and have become cancerous. Parts of our economy have developed autonomous behavior independent of the outcome to the component parts, and independent of the outcome to the system itself.
These cancerous corporations have what appear to be rigid cell walls that permit only energy intake. But these walls are self-serving rules and laws which are entirely man-made, and can be man-unmade. It is up to the larger system to excise the cancer, or allow it to grow at the expense of its ultimate viability. Unlike actual cells, we humans have the capacity to correct for errors and control what societies we evolve for ourselves.
These cancerous corporations have what appear to be rigid cell walls that permit only energy intake. But these walls are self-serving rules and laws which are entirely man-made, and can be man-unmade. It is up to the larger system to excise the cancer, or allow it to grow at the expense of its ultimate viability. Unlike actual cells, we humans have the capacity to correct for errors and control what societies we evolve for ourselves.
7
America has been fighting a class war for the past 60 years, but only one side is aware of it. That is the plutocrat Republican side.
Their propaganda says that there is no class war, and the 99% accepted this claim until recently. Now substantial parts of the electorate are seeing things differently. The first evidence was Obama's victory, which he mis-interpreted as a victory for the status quo. Obama has disappointed most progressives.
Both the Trump supporters and the Bernie supporters are primarily motivated by a perception that the plutocracy is ripping them off and pushing them down. They are right, and together they are almost half the electorate. Their prescriptions are opposites, and they are not yet coalesced into the powerful voting bloc that they could be, but their visceral view of the problem is the same.
What to do? One step is propaganda. Here is an example. Most Americans think that wealthy people earned their money. Yet six of the wealthiest ten Americans inherited over $100 billion each. We need to limit inheritance, as Thomas Jefferson did. But people need to understand the issue and know the facts. Krugman does help.
Bernie is right, we need a revolution. The conservative plutocrats have made one. It is time we progressives reverse their gains.
Go to YouTube and watch Comedy Party Platform (2 min 9 sec). Send a buck to Bernie, invite me to speak. Thanks. [email protected]
Their propaganda says that there is no class war, and the 99% accepted this claim until recently. Now substantial parts of the electorate are seeing things differently. The first evidence was Obama's victory, which he mis-interpreted as a victory for the status quo. Obama has disappointed most progressives.
Both the Trump supporters and the Bernie supporters are primarily motivated by a perception that the plutocracy is ripping them off and pushing them down. They are right, and together they are almost half the electorate. Their prescriptions are opposites, and they are not yet coalesced into the powerful voting bloc that they could be, but their visceral view of the problem is the same.
What to do? One step is propaganda. Here is an example. Most Americans think that wealthy people earned their money. Yet six of the wealthiest ten Americans inherited over $100 billion each. We need to limit inheritance, as Thomas Jefferson did. But people need to understand the issue and know the facts. Krugman does help.
Bernie is right, we need a revolution. The conservative plutocrats have made one. It is time we progressives reverse their gains.
Go to YouTube and watch Comedy Party Platform (2 min 9 sec). Send a buck to Bernie, invite me to speak. Thanks. [email protected]
5
This is the corporate voting season and every stock holder gets to vote for the corporate board. Sometimes there are socially responsible things to vote for. There are fewer printed annual reports this year because they are PDF reports. Corporate voting is a way the public exercise power over what it owns. However, there are no speeches and only party.
1
Top 5% has something like 65% of stocks, so who's voting? Not regular joes and josies, that's for sure.
1
I am tired of hearing how big business and wall street are destroying America. Over the last ten years or so Verizon has installed a outstanding fiber optic network here and brought their FIOS business online. I expect this was very expensive. They are in heated competition with Time Warner. A article in the NYT about their workers who are on strike said their pay now was 130K including benefits. Nice pay for swapping out routers and running cable, it's hard to feel sorry for them. In today's world anyone with a pension, 401K, 329 account has an investment in stocks and bonds one way or the other. If big business was not making a big profit and their stock prices went down people that lost their nest egg would not be happy. If I ran a large corporation the last thing I would do is invest big money in the US. Look at how unstable our political system is. One guy running for President wants to create a socialist state and destroy wall street and big business, another wants to carpet bomb the middle east till the sand glows, the third wants to deport the low paid work force while giving nukes to many countries as we pull back. All this while many states are passing discrimination laws.
33
Reagan puts the antitrust enforcers into deep hibernation. The right cheers. Obama refocuses immigration enforcement on undocumented workers committing serious crimes. The right explodes in anger and lawfare.
Is the right's flip-flopping moral relativism anything less than blindingly obvious?
If the right wins in the Supreme Court fighting Obama's deportation policy, would it provide a means of forcing future conservative Administrations to enforce antitrust laws?
Is the right's flip-flopping moral relativism anything less than blindingly obvious?
If the right wins in the Supreme Court fighting Obama's deportation policy, would it provide a means of forcing future conservative Administrations to enforce antitrust laws?
2
Some simple (i.e. easy to do) suggestions here: When dealing with commodities (cereal, soft drinks, cable, phone service, internet retail sales, defense contractors, etc) no 6 companies should control more than 50% of the market. If so, break up or downsizing must take place. Exceptions would be where there is huge capital investment required to enter the market, such as commercial airplanes or oil refineries. With banks, stipulate that they can only do business in states contiguous with their home office. (This was suggested in the 1980s. A lot of MBA stuff is about how to defeat/rig the "free market", i.e. handcuff the "invisible hand".)
2
It's refreshing to see Professor Krugman return to more fact-based political/economic analysis than his recent, on-going shilling for Hillary. If he were completely honest in that respect, he'd acknowledge how the Sanders campaign represents the movement to being undoing the work of the Reagan/Clinton corporatism, dismantling of regulation that led to the 2008 financial collapse and the situation he describes in this column. I suspect that much honest historical context, however, doesn't fit with his promoting Hillary who'll at best tinker around the edges of ending plutocratic rule, but not fundamentally disturb the rigged system in place.
3
Every time we learn of a new merger or acquisition we hear a lot of bla, bla, bla of how the average consumer will benefit from this and learn how much 'cost savings' the acquiring company will have.
OK, why not make them guarantee said consumer savings? At a minimum require the new company to return 1/2 of any savings to their customers. If they will not, or cannot, impose a special tax on the company equal to 400% of their executive bonuses. Require this for 20 years, or more.
OK, why not make them guarantee said consumer savings? At a minimum require the new company to return 1/2 of any savings to their customers. If they will not, or cannot, impose a special tax on the company equal to 400% of their executive bonuses. Require this for 20 years, or more.
4
But the GOP tells us that capitalism is good for us! That the rich are the elect of God and the poor are just lazy welfare queens! Surely the Ted Cruz's and Paul Ryans of the world cannot be wrong - after all they embody pure American values; Ryan trusts in the economics of world-wide acknowledged experts like Ayn Rand! Heck, Ted Cruz has a direct phone line to God- what more can we ask?
180
"For we aren’t just living in a second Gilded Age, we’re also living in a second robber baron era. And only one party seems bothered by either of those observations."
And only one candidate of that party. Feel the Bern!
And only one candidate of that party. Feel the Bern!
5
Placing the blame entirely on Republicans is not correct, nor is assuming a Clinton presidency would eliminate practices that have created a corporate welfare economy in the US. This economy has been created partly through rules enacted by both Republican and Democratic elected and appointed officials at federal and state levels that have "rigged" the competitive game, in the process benefitting a small percentage of Americans quite handsomely. The new rules have created many forms of redistribution, tax reduction possibilities, public contracts awarded without any competitive bidding process, and bailing out reckless firms that suffer substantial losses - nearly all of which have benefited a small percentage of wealthy Americans.
Only one presidential candidate (as well as Elizabeth Warren) has been outspoken about the new rigged economy, and it is not Hillary Clinton.
Only one presidential candidate (as well as Elizabeth Warren) has been outspoken about the new rigged economy, and it is not Hillary Clinton.
3
If you don't want an economy dominated by robber barons, vote for Bernie Sanders, and no matter who wins the election, join the peaceful revolution to create true democracy.
All of the other candidates, including Clinton, are their friends. Clinton was the "senator from Wall Street," when the last financial crisis was bubbling over. The only action action she took was to tell them to "cut it out."
Hillary Clinton is friends with Henry Kissinger. He is one of the architects of the new world order put in place since the 1970s and accelerated by the Reagan Thatcher revolution. She thinks that the guy that encouraged right wing death squads to kill union activists around the world and encouraged militaries to overthrow democratically elected leaders because they were more interested in taking care of people than global corporations was a good secretary of state. This global corporate revolution has sucked (as Ross Perot warned when running against Clinton and Bush 20 years warned) tens of millions of high paying jobs out of this country. Hillary helped Bill get NAFTA through congress, and if she wasn't in a race against Sanders right now, she wouldn't be pretending she is against the TPP.
The robber Barons giver her millions because she delivers for them, like she delivered a vote for the Iraq war which has delivered Iraq's oil to a bunch of oil corporations, including some Chinese ones.
Clinton basks in the status quo. Only sanders would put people above corporations.
All of the other candidates, including Clinton, are their friends. Clinton was the "senator from Wall Street," when the last financial crisis was bubbling over. The only action action she took was to tell them to "cut it out."
Hillary Clinton is friends with Henry Kissinger. He is one of the architects of the new world order put in place since the 1970s and accelerated by the Reagan Thatcher revolution. She thinks that the guy that encouraged right wing death squads to kill union activists around the world and encouraged militaries to overthrow democratically elected leaders because they were more interested in taking care of people than global corporations was a good secretary of state. This global corporate revolution has sucked (as Ross Perot warned when running against Clinton and Bush 20 years warned) tens of millions of high paying jobs out of this country. Hillary helped Bill get NAFTA through congress, and if she wasn't in a race against Sanders right now, she wouldn't be pretending she is against the TPP.
The robber Barons giver her millions because she delivers for them, like she delivered a vote for the Iraq war which has delivered Iraq's oil to a bunch of oil corporations, including some Chinese ones.
Clinton basks in the status quo. Only sanders would put people above corporations.
7
I would think that Dr. Krugman's concern over the expansion of monopolies would lead him to rethink his support for Secretary Clinton over Senator Sanders.
And an executive order made in the last eight months of a presidency doesn't sound like a "turning point" to me. It sounds like scraps falling to the floor after the meal is done.
And an executive order made in the last eight months of a presidency doesn't sound like a "turning point" to me. It sounds like scraps falling to the floor after the meal is done.
4
I'm not sure broadband shouldn't be regarded as a utility. And I am not crazy about what 'competition' among multiple private providers has produced in other essential services. 'Competition' always translates as, 'Let's make everything as complicated as possible for the consumer!
I don't have a cell phone in part because the multiplicity of complicated plans makes my eyes cross.
Alternatives to PSE&G contact me constantly (circumventing the worthless do-not-call list) urging me to change my energy provider. Are they Enron? How do you know till the bill goes up or the lights go out?
I could take the discount 3-in-1 phone/cable/Internet package, then switch providers when the cost ratchets up. Yeah, I really want technicians drilling new holes in my walls and changing all the equipment once a year.
TV: subscribe separately to a dozen different services - Netflix, Hulu, etc - each of which carries exactly one program I might like to watch.
'Health insurance' ... let's not go there.
Thank God for our sewer system - no 'competition' there.
There are things I don't want to waste time and brain cells on. I just want them to be there. I'm willing to pay a little more, and settle for 'good enough', for the luxury of not having to think about them. Negotiating all this damn 'competition' feels like spending all my time picking up pennies in the gutter when I could be working, reading or writing poetry, planting the garden, playing with my cat doing anything more rewarding.
I don't have a cell phone in part because the multiplicity of complicated plans makes my eyes cross.
Alternatives to PSE&G contact me constantly (circumventing the worthless do-not-call list) urging me to change my energy provider. Are they Enron? How do you know till the bill goes up or the lights go out?
I could take the discount 3-in-1 phone/cable/Internet package, then switch providers when the cost ratchets up. Yeah, I really want technicians drilling new holes in my walls and changing all the equipment once a year.
TV: subscribe separately to a dozen different services - Netflix, Hulu, etc - each of which carries exactly one program I might like to watch.
'Health insurance' ... let's not go there.
Thank God for our sewer system - no 'competition' there.
There are things I don't want to waste time and brain cells on. I just want them to be there. I'm willing to pay a little more, and settle for 'good enough', for the luxury of not having to think about them. Negotiating all this damn 'competition' feels like spending all my time picking up pennies in the gutter when I could be working, reading or writing poetry, planting the garden, playing with my cat doing anything more rewarding.
84
Wait, the most powerful corporations in the market become monopolies? And monopolies no longer need to compete for customers? And this is bad for consumers? The next thing you'll tell me is that monopolies fix prices! Geez!!
108
Why has enforcement against Monopolies declined? Because cooperation between Government and business has gone up. Consider the dragnet of information by the N.S.A. and the phone company data, or the Big banks being aligned with law enforcement.
The government has actually been protecting Monopolies through deregulation and outright cooperation. The companies have the information the government wants.
The government has actually been protecting Monopolies through deregulation and outright cooperation. The companies have the information the government wants.
2
I agree - but it's more insidious. Government and corporations are morphing into one. Watch the inflows and outflows you see with every presidential administration change - same people keep turning up like bad pennies.
The only upside I see to the Trump movement is that it may finally unshackle the economic elite that have benefited from the post-Reagan economic climate from the white working class that has repeatedly voted against its own economic interests. Given how destructive the polices have been on the middle class, the rupture was almost certainly inevitable, although flag burning, gay marriage, and all the other hot button social issues were certainly used in a masterful way to delay the day of reckoning.
4
Some interesting observations in this column, although I don't necessarily understand the Verizon example, as it seems there are many cell phone companies to choose from, and I think Goigle actually just began experimenting with free phones.
I think by far the most troubling phenomena and trend is illustrated, however, in the first sentence.
I think by far the most troubling phenomena and trend is illustrated, however, in the first sentence.
1
Reply to Rima Regas,
"...take back our country." Sounds like Trump.
In reality, their is little difference between Sanders and Trump. They both pander to disenfranchised whites. Both employ a scapegoat to channel their followers' anger, and to draw attention away from the hollowness of their promises. For BS, the scapegoat is "big banks;" for DT, it is immigrants.
Incidentally, as The Times reported this week, the big banks are effectively breaking themselves up, under pressure from regulators acting under Dodd-Frank. http://tinyurl.com/znuzqcu
Hillary is correct in her analysis of this issue. Sanders is merely offering his followers the enemy they need.
"...take back our country." Sounds like Trump.
In reality, their is little difference between Sanders and Trump. They both pander to disenfranchised whites. Both employ a scapegoat to channel their followers' anger, and to draw attention away from the hollowness of their promises. For BS, the scapegoat is "big banks;" for DT, it is immigrants.
Incidentally, as The Times reported this week, the big banks are effectively breaking themselves up, under pressure from regulators acting under Dodd-Frank. http://tinyurl.com/znuzqcu
Hillary is correct in her analysis of this issue. Sanders is merely offering his followers the enemy they need.
5
If Professor Krugman actually believes what he is writing here, then why is he is unrelentingly critical of the one candidate who actually articulates these views on a regular basis, Bernie Sanders? Either Krugman does not actually believe any of this, or he has some kind of personal grudge against Sanders. In any case, it is impossible to take Krugman seriously, given this glaring contradiction.
3
Perhaps Paul K, like me, is tired of the ranting about problems with no stated strategies for ameliorating them. Bernie can whip up a crowd with cries of injustice, but don't see him or his "administration" being able to do much about these issues if he were to gain the White House.
While the economic logic may worthy even though no data is presented even though he does stoop to anecdote, the proposed etiology, as always, succumbs to the professor's ideologically black-and white-view of the world. Problem? Hmmm, what could be the cause? Why of course, it must be Ronald Reagan! Any democrat president since then could never be responsible because each one is always overwhelmed fighting off the pandora's box of evil furies unleashed by the former Republican president. Come on Professor, we deserve better.
1
Krugman shows fake concern. His real message is to brand the Republicans as the bad guys and make the Democrats seem like the only good choice. The role of the Republicans at this point is to "sheepdog" voters into the arms of the Democrats. Krugman is not showing real concern for monopoly power or the Verizon workers. He's being a soldier for the Democratic Party. Shame on us readers who fall for this.
Robert Reich has been touring Red states discussing his most recent book. He wanted to stop preaching to the choir and see what conservatives and Tea Partyers think:
http://robertreich.org/post/132819483625
He found friends! The majority of Red state people want much of the same things that we Blue staters want. There is so much productive common ground.
The problem with seeking common ground is that the brand identity of the 2 parties disappears when we come together. This is what both parties fear.
The problem is with both political parties, not the people. If krugman cared about monopolies he would be very worried about HRC's closeness to Wall Street. He isn't. How simple can it get?
Robert Reich has been touring Red states discussing his most recent book. He wanted to stop preaching to the choir and see what conservatives and Tea Partyers think:
http://robertreich.org/post/132819483625
He found friends! The majority of Red state people want much of the same things that we Blue staters want. There is so much productive common ground.
The problem with seeking common ground is that the brand identity of the 2 parties disappears when we come together. This is what both parties fear.
The problem is with both political parties, not the people. If krugman cared about monopolies he would be very worried about HRC's closeness to Wall Street. He isn't. How simple can it get?
3
Monopolies powers have indeed augmented under Obama. Facebook, Google, Apple, Cisco, etc. are all de facto monopolies. A new phenomenon has also appeared: companies so powerful, they do not need to pay tax, and they flaunt it: the Apple CEO admitted in front of the Senate that Apple did pay tax on most of its profits. With impunity.
The largest 21 banks, and others, overseas, can commit crimes, and are just slapped with fines, not admitting guilt. Such crimes would send commoners to jail. This is what monopoly powers give: impunity, the ability to be above the law, and manipulate political servants accordingly.
Obama's presidency also diverted vast public funds in the service of various companies, including in aerospace. To argue that the situation justified these exceptional measures seems farfetched.
The largest 21 banks, and others, overseas, can commit crimes, and are just slapped with fines, not admitting guilt. Such crimes would send commoners to jail. This is what monopoly powers give: impunity, the ability to be above the law, and manipulate political servants accordingly.
Obama's presidency also diverted vast public funds in the service of various companies, including in aerospace. To argue that the situation justified these exceptional measures seems farfetched.
2
Consolidation and eliminating competition also affect labor. No point in striking or quitting if there's only one or two companies where you might find a job -- at the same or lower wage.
1
And given my finding that power concentrated in a small number of large corporations has reached toxic levels, not just for workers, but for the entire U.S. economy, I endorse, as our Democratic candidate for president ... Hillary Clinton!!
1
Verizon is far from the only company that refuses to pay its people decent wages or to do preventive maintenance on its network. Optimum, in the NY area, won't do any preventive maintenance either. They claim that it's not worth it. We are told that America is the most advanced nation in the world but the evidence in front of us says otherwise. We have a lousy technological infrastructure, unreliable cell phone networks (that cost far more than they are worth), an alleged healthcare system that functions well as long as you are not a patient, an education system that is not producing graduates who are ready to work after high school, a transportation system that is in horrible condition, and too many people who cannot even hope for decent jobs that pay decent wages.
The only ones in America who are able to take full advantage of how "advanced" America is are the very rich or the corporations. They have the resources because, in the case of big business, they have the money. Somewhere along the line, perhaps because of Ronald Reagan, Americans became convinced that any sort of income redistribution to help out the less than rich, was robbing the rich. Bill Gates is rich because of us. Steve Jobs and Apple made money because of us. They didn't make it on their own. Obama is right: no one gets rich solo. Therefore, since we all use the roads, the internet, etc., all of us, businesses and the very rich included, should give back. Taxes are how it's done.
The only ones in America who are able to take full advantage of how "advanced" America is are the very rich or the corporations. They have the resources because, in the case of big business, they have the money. Somewhere along the line, perhaps because of Ronald Reagan, Americans became convinced that any sort of income redistribution to help out the less than rich, was robbing the rich. Bill Gates is rich because of us. Steve Jobs and Apple made money because of us. They didn't make it on their own. Obama is right: no one gets rich solo. Therefore, since we all use the roads, the internet, etc., all of us, businesses and the very rich included, should give back. Taxes are how it's done.
2
This column also ignores our perverse market incentives for stock buy backs instead of capital investment.
1
Contrary to most commenters of this column, I am not an economist, professional or amateur, and consider myself inadequately knowledgeable on the issue of what causes a stagnant economy. But the little engineer brain I do possess tells me that inadequate investing by businesses must also be correlated to inadequate demand by consumers. And logic also tells me that if consumers had more disposable income, they would buy more, demand would increase accordingly, and in turn businesses would invest in creating more supply. So, maybe, businesses could consider the revolutionary idea of using some of their profits to pay their workers a little more. Who knows? They might even benefit by having a larger pool of customers. But I know it's unworthy of consideration, and probably a heretic thought to suggest that they pay their employees and, God forbid, have to reduce the multi-million pay packages of their executives. I must be a communist, and so must be all these Verizon employees!.
2
I look out my window to watch the birds at the feeders while others wait their turns perched on a big cord of fiber optic that runs down my street. In our town Verizon runs FIOS™ to a few select buildings but does not allow the houses along the run to connect. Whenever I see the Verizon truck outside the house, I run out like Little Ralphie in a " Christmas story " and ask "Are we getting Fios ?" Usually the repairman collapses in laughter and explains again that the realm is carved up into fiefdoms and I am owned by Verizon. Our lord's margins are simply higher with wireless. So like a good peasant I huddle by the fire and read the 1993 agreements that provided the funds ( $4B ?) for the spread of high speed internet across the kingdoms. I guess they were locked in the same box with the Sherman and Clayton Acts and buried in the graveyard. As Miracle Max said, " Have fun storming the castle !"
3
This is what PK won't ever admit, the monetary policy solution almost always results in lower wages for the masses
Apr 5, 2016 - We do not think it represents a real improvement in the wage growth though. ... Wages in Japan has been steadily falling in Japan since 1998. http://www.japanmacroadvisors.com/page/category/economic-indicators/labo... His program in Japan was resulted in drastically lowered wages for the majority, the stock market took of making the rich richer, and they can't add the vat tax because everyone is so poor it kills demand again. Why he's been urging the same program here for years Stiglitz:
"people who depend on .... income, hurt further, cut their consumption more deeply than those who benefit – rich owners of equity – increase theirs, undermining aggregate demand today." https://www.project-syndicate.org/commentary/negative-rates-flawed-econo...
Poor people can't buy more Paul, bad models used for years have made people worse off, they have no savings. they need to borrow for emergencies. When are you going to decide to realize this simple fact. You never will, because it conflicts with you bad economic theories. You don't get blood from a stone.
Apr 5, 2016 - We do not think it represents a real improvement in the wage growth though. ... Wages in Japan has been steadily falling in Japan since 1998. http://www.japanmacroadvisors.com/page/category/economic-indicators/labo... His program in Japan was resulted in drastically lowered wages for the majority, the stock market took of making the rich richer, and they can't add the vat tax because everyone is so poor it kills demand again. Why he's been urging the same program here for years Stiglitz:
"people who depend on .... income, hurt further, cut their consumption more deeply than those who benefit – rich owners of equity – increase theirs, undermining aggregate demand today." https://www.project-syndicate.org/commentary/negative-rates-flawed-econo...
Poor people can't buy more Paul, bad models used for years have made people worse off, they have no savings. they need to borrow for emergencies. When are you going to decide to realize this simple fact. You never will, because it conflicts with you bad economic theories. You don't get blood from a stone.
1
We have a demand problem in our economy that is greater than the supply problem. that is the crux of my argument here. It's good to go after oligopoly power, but it will not solve the demand issue, bad monetary policy that helps the richest members of society contributes to that, as does free trade instead of fair trade. The TPP won't help either
Finally, a column that describes the problem exactly. Concentration of power creates conditions that lead to abuses described here by Krugman. And, I agree it started in earnest with King Ronnie. His war on unions was part of his legacy and deregulation another.
Much of my career was spent in the telecom industry. Now we see four major players, AT&T, VZ, Century Link, and Level 3. Consolidation has pretty much ruined competition in many industries, including the media. The mindset of a monopolist is one of arrogance, Robber Baron indeed. And, a continuation of a Republican congress will sustain this trend as both the Senate and House are pretty much controlled by the Barons.
I have thought of a way to mitigate the worst effects of this drift to monopoly in the telecom industry and I believe conditions are ripe for such a move. My experience goes back to the late 80's through to 2013. So, I have seen the breakup of AT&T where competition was mandated, and now the re-emergence of monopoly.
I do not believe Sanders has the ability to understand or combat the mess we find ourselves in today. He is heavy on the slogans and criticism of Hillary but light on any substance. "Breaking up the banks" is hardly a solution by itself, just a dream. Sanders fans extend their legitimate dreams into a futile, albeit convincing hope, that he is the answer.
Much of my career was spent in the telecom industry. Now we see four major players, AT&T, VZ, Century Link, and Level 3. Consolidation has pretty much ruined competition in many industries, including the media. The mindset of a monopolist is one of arrogance, Robber Baron indeed. And, a continuation of a Republican congress will sustain this trend as both the Senate and House are pretty much controlled by the Barons.
I have thought of a way to mitigate the worst effects of this drift to monopoly in the telecom industry and I believe conditions are ripe for such a move. My experience goes back to the late 80's through to 2013. So, I have seen the breakup of AT&T where competition was mandated, and now the re-emergence of monopoly.
I do not believe Sanders has the ability to understand or combat the mess we find ourselves in today. He is heavy on the slogans and criticism of Hillary but light on any substance. "Breaking up the banks" is hardly a solution by itself, just a dream. Sanders fans extend their legitimate dreams into a futile, albeit convincing hope, that he is the answer.
138
Clearly, both Hillary and Bernie are flawed. They are not up to the task of an ethical revolution that would make primary the well being of ALL Americans not the privileged few who can game the system. As you likely know, THE WOLF OF WALL STREET unveils the moral indifference/depravity/turpitude of its central characters. Although extreme, that moral indifference appears to be characteristic of the ruling .01%ers and thus beyond remediation. We need a system rooted in the law that would hold accountable those who behave so egregiously and governance that is both competent and motivated to hold accountable all those who endanger the well being of our fellow citizens.
1
What do you mean, Verizon customers have nowhere else to go? I left Verizon for T-Mobile over four years ago and have been very happy with the switch. I have a great smartphone (I paid cash for it, although I could have financed it if I'd wanted to) and excellent, competitively priced service. Their online and phone customer support are terrific. Until competition in this space increases, which would be wonderful, I'll at least take comfort in the fact that this ex-Verizon customer DID have someplace else to go.
1
See also "Captive Audience" about the phone and cable industry by Susan Crawford. One more issue is that guys like Verizon compete with Comcast. The former is under regulation as a common carrier the latter is not. Because of this, Comcast has less overhead and can be more profitable in core business which forces Verizon to play catchup. This is all common behavior at the end of a paradigm when the markets step in with a new paradigm that forces everybody to compete again but by different rules. Remember that the Robber Baron era was followed by Teddy Roosevelt, Trust Buster.
I don't see Ivy League schools expanding their capacity to accommodate the many eminently qualified students who seek to attend them every year, coincidence?
Larry Summers has been in every White House administration since Teddy Roosevelt and now he has an opinion?
Larry Summers has been in every White House administration since Teddy Roosevelt and now he has an opinion?
3
In 2008 I was a precinct captain at an elementary school in Iowa. I met a rather elegantly dressed woman who was for Hillary Clinton. Turns out in a big way. She was a personal friend, come out to observe the "process." Not only a friend but one of the three FCC commissioners who spent her time sabotaging the Telecom Act of 1996. In part thanks to her, cable companies called a truce to competition and carved up the customer landscape in peace. The bill promised a savings of $76 billion for cable. Ha!
Ari Emmanuel, the Super Agent, is on the board of Live Nation. Under President Obama the FTC signed off on the Live Nation Ticket Master merger into Live Nation Entertainment. They now control ticket sales and venue mangagement for every nearly concert in the United States. Rahm Emmanuel did not stay quiet on this merger. And Live Nation Entertainment now has the excellent summer concert venue of Northerly Island in Chicago all to itself for only a $70k campaign contribution.
Can't get Hamilton Tickets? Blame the folks who will destroy the artists who speak out against the service fee and empower the brokers.
Obama "wakes up" to the monopoly problem in April 2016? C'mon. That nice lady from Iowa who personally voted to raise your cable bill. She can't wait for the next inauguration.
Ari Emmanuel, the Super Agent, is on the board of Live Nation. Under President Obama the FTC signed off on the Live Nation Ticket Master merger into Live Nation Entertainment. They now control ticket sales and venue mangagement for every nearly concert in the United States. Rahm Emmanuel did not stay quiet on this merger. And Live Nation Entertainment now has the excellent summer concert venue of Northerly Island in Chicago all to itself for only a $70k campaign contribution.
Can't get Hamilton Tickets? Blame the folks who will destroy the artists who speak out against the service fee and empower the brokers.
Obama "wakes up" to the monopoly problem in April 2016? C'mon. That nice lady from Iowa who personally voted to raise your cable bill. She can't wait for the next inauguration.
2
So, basically is "All for one" and the Republicans stop there.
1
Two other areas where monopolist practice s have gravely harmed the public is in consolidation of our media and the ongoing problem of lack of real competition in health care, both with insurance and drugs. It would be easy to remedy the health care problem simply by having a public option and having government bidding on drugs instead of the current price fixing. The news industry consolidation however is a thornier problem but should also be addressed.
3
"Robber barons"? Really? Name one other group besides the economically successful that you can reference with a slanderous moniker and get away with it.
And then there's Apple, that destroyed the music business, and turned traditional cell phones into buggy whips.
For every Verizon, there's an Apple. Don't be silly Professor.
An Executive order to promote competition? What is that. Perhaps some of these companies are over-regulated, and that decides investment.
We now know Todd-Frank backfired. All the small independent banks went away, they couldn't handle the paperwork.
The answer is not more government, it is less.
For every Verizon, there's an Apple. Don't be silly Professor.
An Executive order to promote competition? What is that. Perhaps some of these companies are over-regulated, and that decides investment.
We now know Todd-Frank backfired. All the small independent banks went away, they couldn't handle the paperwork.
The answer is not more government, it is less.
1
When it comes to both internet and cable TV options in the US, PK is spot-on. We desperately need more competition. Where I live (Seattle) there are 2 options...neither great. We vacillate in our thinking of which company represents the "bad guys". But neither option provides much choice, so more competition can help enormously.
I concur Verizon wouldn't bring Fios to our building despite being right next door. So we are left with Time Warner another almost monopoly with a truly horrendous service record. I teach online with students around the world but have to warn them that while I live in downtown Manhattan in a tech corridor, my online service is 3rd world and may go down while I teach...
I was nodding in agreement with Krugman's premise until he got to the big reveal of the cause being Ronald Reagan.
Reagan? Really? He's been out of office for thirty years!
Since Reagan left office there has been a complete transformation of our economy. Entire industries, such as manufacturing, are gone from America. New industries, such as internet and data based sectors, have burgeoned.
Sorry Prof, you could have put a little more effort in to analyzing a topic that deserves more attention.
Reagan? Really? He's been out of office for thirty years!
Since Reagan left office there has been a complete transformation of our economy. Entire industries, such as manufacturing, are gone from America. New industries, such as internet and data based sectors, have burgeoned.
Sorry Prof, you could have put a little more effort in to analyzing a topic that deserves more attention.
1
Reagan is the appropriate citation.
Every President from FDR to Carter was committed to breaking up too-big corporations, to foster competition, including Republicans.
From Reagan onwards, the only President who has made any effort on the subject was Bill Clinton. And every Republican beginning with Reagan has vehemently opposed ANY efforts to promote competition! His administration was the singular change to decades of successful policy.
Every President from FDR to Carter was committed to breaking up too-big corporations, to foster competition, including Republicans.
From Reagan onwards, the only President who has made any effort on the subject was Bill Clinton. And every Republican beginning with Reagan has vehemently opposed ANY efforts to promote competition! His administration was the singular change to decades of successful policy.
6
And pray tell Paul, who is the candidate that has been making an issue of this corporate greed?
4
I'm against oligopolies there should be competition. Summer's reasoning this is the issue causing secular stagnation Flaed . I also find it disturbing that summers (having gotten most of the big policy issues of his life deeply wrong) is still considered a valid voice within the democratic establishment. Note, here is solution is more company "investments", but it really completely ignores the demand side of the equation. Take the opinion of other noble winners like Joseph stiglitz. who says:
"The big lesson from all of this is captured by the familiar adage, “garbage in, garbage out.” If central banks continue to use the wrong models, they will continue to do the wrong thing."
https://www.project-syndicate.org/commentary/negative-rates-flawed-econo...
I'd also like top point out the oligopoly power should be enough for Krugman to justify breaking up the big banks, and like oligopoly systems they have been found to collude in market rigging activities
Krugmans solution, "the monopoly" leaves bad models intact. It leaves out solutions like free trade, decreased unionization hence less worker bargaining power pushing down wages so there is less demand.
62% Of Americans Have Less Than $1,000 In Savings ...
www.gobankingrates.com › ... › Savings Account Infographics
Why should these companies invest when people can't afford? wage too low to support demand? Pk's solution killed demand in Japan
"The big lesson from all of this is captured by the familiar adage, “garbage in, garbage out.” If central banks continue to use the wrong models, they will continue to do the wrong thing."
https://www.project-syndicate.org/commentary/negative-rates-flawed-econo...
I'd also like top point out the oligopoly power should be enough for Krugman to justify breaking up the big banks, and like oligopoly systems they have been found to collude in market rigging activities
Krugmans solution, "the monopoly" leaves bad models intact. It leaves out solutions like free trade, decreased unionization hence less worker bargaining power pushing down wages so there is less demand.
62% Of Americans Have Less Than $1,000 In Savings ...
www.gobankingrates.com › ... › Savings Account Infographics
Why should these companies invest when people can't afford? wage too low to support demand? Pk's solution killed demand in Japan
3
So, please explain to me again why Paul Krugman does not support Bernie Sanders? Too-big companies are a drag on investment and he economy, and too-big banks created the appetite for crappy loans that was fed by the vast array of small and large mortgage brokers. Hillary Clinton has indicated no interest in altering the too-big status quo, while Bernie has made it the cornerstone of his campaign.
3
Could it be because we elect a President, not a King?
Sanders has done literally nothing to encourage support from members of the Democratic Party. He's done nothing to help down-ballot Democratic candidates, literally ignoring them. He's provided one (1!) donation of $1,000 to a down-ballot Democrat. Yet he brags about pulling in tens of millions in donations monthly. Apparently all of it is to finance his campaign, and his alone!
By contrast, Clinton has donated over $26 million to down-ballot Democrats. Her fundraiser last week in Hollywood thrown by George Clooney was in large part to raise millions to pass along to down-ballot Democrats. And while Mr. Sanders was issuing press memos, complaining about how terrible it was that people in Arizona who tried to vote in the recent primary there, had to wait upwards of five hours, it was Mrs. Clinton who actually had staff organize and file a formal lawsuit against the state of Arizona for its voter disenfranchisement actions! In fact, that was the eighth such lawsuit her staff have filed on behalf of Americans who are having their right to vote literally stolen from them, while the media pay no attention!
So, based on actions taken, and loyalty and relationships developed, Mrs. Clinton demonstrates she'll be a far more effective President than will Mr. Sanders, who will likely tell us lots of nice things that might have been, but will lack any means of making any of them actually happen.
Sanders has done literally nothing to encourage support from members of the Democratic Party. He's done nothing to help down-ballot Democratic candidates, literally ignoring them. He's provided one (1!) donation of $1,000 to a down-ballot Democrat. Yet he brags about pulling in tens of millions in donations monthly. Apparently all of it is to finance his campaign, and his alone!
By contrast, Clinton has donated over $26 million to down-ballot Democrats. Her fundraiser last week in Hollywood thrown by George Clooney was in large part to raise millions to pass along to down-ballot Democrats. And while Mr. Sanders was issuing press memos, complaining about how terrible it was that people in Arizona who tried to vote in the recent primary there, had to wait upwards of five hours, it was Mrs. Clinton who actually had staff organize and file a formal lawsuit against the state of Arizona for its voter disenfranchisement actions! In fact, that was the eighth such lawsuit her staff have filed on behalf of Americans who are having their right to vote literally stolen from them, while the media pay no attention!
So, based on actions taken, and loyalty and relationships developed, Mrs. Clinton demonstrates she'll be a far more effective President than will Mr. Sanders, who will likely tell us lots of nice things that might have been, but will lack any means of making any of them actually happen.
2
It is even trickier than Paul Krugman suggests.While US politics have certainly enabled huge consolidations, it may not be the biggest driver.
Monsanto and Dow looked to form a behemoth. But even merged the two companies are substantially smaller than BASF. In-Bev is enormous . Companies are competing with companies run by the Chinese government.
Globalization brought global monopolies, international consolidations. We need to look globally if we want to understand corporate power, constrictive monopolies, international consolidations and the failure of domestic investment.
Corporations exist in an area that is above government, outside of national interests. That is the problem we need to learn to deal with.
Monsanto and Dow looked to form a behemoth. But even merged the two companies are substantially smaller than BASF. In-Bev is enormous . Companies are competing with companies run by the Chinese government.
Globalization brought global monopolies, international consolidations. We need to look globally if we want to understand corporate power, constrictive monopolies, international consolidations and the failure of domestic investment.
Corporations exist in an area that is above government, outside of national interests. That is the problem we need to learn to deal with.
1
The downside of mergers? One example - take a flight in the cattle cars we call airliners, an absolute necessity in our age where you are gouged to pay extra for everything from baggage to foot room. Gas half the price it was a short time ago? Fares have stayed the same, resulting in record profits. We are living in a new "Let them eat cake" age of social division. And, yes, it began with the Great God Reagan. Dig him up and scatter his bones, I say.
1
It wasn't Ronald Reagan that permitted the monopoly in the american airline industry...to the huge detriment of the flying public, but to the great benefit of the airlines.
"Verizon has shown a remarkable lack of interest in expanding its Fios high-speed Internet network, despite strong demand." I can attest to this. I live in a 300+ unit townhouse community inside the Capital Beltway in Fairfax County, Virginia. One would think that many potential customers in such a small area within an established metropolitan area (where Verizon is already the local land line company) would be prime ground for expansion -- nope. I'm wondering if it worse than monopoly, perhaps some agreement with the local cable company to stay off each other's turf?
For a lot of people - we don't need fancy studies and statistics to understand monopoly power, lack of choice, lousy service, unresponsive corporations and horrible jobs and wages - you just have to live a life in the real world to understand the effects of this sordid economy.
Let's remember too that Clinton deregulated telecommunications and let the anti-trust laws gather dust. And, I believe Obama and his administration could and can handle more than one big issue at a time - unlike P.K.'s suggestion he was too busy with the economy (which was made whole and healthy for the top and made worse for everyone else) to get in the way of constant mergers.
For the neoliberal mindset that Obama and both Clintons possess - what's good for corporations is good for everyone - monopoly or otherwise. Let's see how tough they are in the end on anti-trust, competition etc. Keeping with the past, I'll guess that anything this W.H. does that ostensibly serves the public, will be a cup of weak tea - unlike the full banquet laid out for Wall Street, corporations and the professionally connected.
Let's remember too that Clinton deregulated telecommunications and let the anti-trust laws gather dust. And, I believe Obama and his administration could and can handle more than one big issue at a time - unlike P.K.'s suggestion he was too busy with the economy (which was made whole and healthy for the top and made worse for everyone else) to get in the way of constant mergers.
For the neoliberal mindset that Obama and both Clintons possess - what's good for corporations is good for everyone - monopoly or otherwise. Let's see how tough they are in the end on anti-trust, competition etc. Keeping with the past, I'll guess that anything this W.H. does that ostensibly serves the public, will be a cup of weak tea - unlike the full banquet laid out for Wall Street, corporations and the professionally connected.
2
I've said this for years now, and I'll say it again: have the federal government spend 10 billion to install fiber-optic cross-country. Like Ike pushed for the Interstate Highway, let's call it the "Internet Superhighway"... How novel. Lots of people could be employed locally to lay down the cable and install it. Another WPA-type deal. Then have the ISPs charge $1 a month per customer and collect it for the govt. I believe the phone companies do something similar... That would help pay down the installation cost and pay for ongoing maintenance and upgrades. It would eliminate monopolistic barriers to entry and then service providers could compete on SERVICE. No data caps. No throttling. And prices would go down.
Come on. Think of the benefits to education, information access, and yes, entertainment. South Korea has 30x a local provider's max speed at 10% of the price.
Get with it, America.
Come on. Think of the benefits to education, information access, and yes, entertainment. South Korea has 30x a local provider's max speed at 10% of the price.
Get with it, America.
2
Prof. Krugman's analysis is quite correct. The only problem is that I don't remember President Clinton's Justice Department enforcing anti trust laws much more than Ronald Reagan although I could be wrong about that.
However, I think that since we are discussing Verizon and monopolies in telecommunications, Dr. Krugman owes us an analysis of President Clinton's Telecommunications Act on the ever increasing concentration of power and ownership in the industry. Surely that act does not comport with any claim that President Clinton was a champion of breaking up big concentrations of power in important industries and an enemy of secular stagnation.
However, I think that since we are discussing Verizon and monopolies in telecommunications, Dr. Krugman owes us an analysis of President Clinton's Telecommunications Act on the ever increasing concentration of power and ownership in the industry. Surely that act does not comport with any claim that President Clinton was a champion of breaking up big concentrations of power in important industries and an enemy of secular stagnation.
2
How disingenuous can you be? Mr. Krugman, Pesident Obama has had 8 years to deal with this. To say he has been preoccupied by the financial crisis is a slap in the face to anyone who can think. Outside of baking out the car industry, the rest of this problem was dealt with by the FED, not by the Whitle House. In fact, instead of dealing with antitrust, the White House was more interested in getting payouts from the banks that bought out the real culprits and never went after any individual. Your opinion may be right on economically, but politically you still have a bug up your behind for Reagan and refuse to place current blame where it clearly belongs. Why?
40
Monopolies also have an effect on lowering wages - at least for the skills important to the monopolist - given that there are fewer competitors they can get jobs from - perhaps at a higher wage if there were competition for employees.
A monopolist like big "V" will threaten to outsource knowing their existing workforce has few employment options outside the company.
If they succeed in reducing the work force wages, where will the savings and benefits go? To lower consumer costs or higher income and profits to the monopolists?
A monopolist like big "V" will threaten to outsource knowing their existing workforce has few employment options outside the company.
If they succeed in reducing the work force wages, where will the savings and benefits go? To lower consumer costs or higher income and profits to the monopolists?
3
When I see what politicians, Ryan comes to mind, who go from a modest net worth when they assume office, to millionaire status all while serving. I have to be grateful that Hillary clearly does not need the money. If offered to speak to the KKK for $225K, I might consider it. I might even be nice unless I am paid in advance.
Off topic I know but some commenters here feeling the 'Bern' are quick to accuse Hillary of crimes without evidence, just conjecture: Large gulps of the GOP trash talk. I will infer that many are GOP plants. Some are genuine though and I apologize to them for possibly tainting them with my thoughts.
Off topic I know but some commenters here feeling the 'Bern' are quick to accuse Hillary of crimes without evidence, just conjecture: Large gulps of the GOP trash talk. I will infer that many are GOP plants. Some are genuine though and I apologize to them for possibly tainting them with my thoughts.
"For we aren’t just living in a second Gilded Age, we’re also living in a second robber baron era. And only one party seems bothered by either of those observations."
May I correct you Dr Krugman?: Only one CANDIDATE seems bothered by either of those observations...
Hillary Clinton has received hundreds of millions of dollars, both personally and to fund her campaign, from these very same robber barons... And shamelessly refused any explanation, other than, "Everyone else does it..."
Bernie has not received a single penny from any of them, and has managed to stay in the game with his message alone. His modest tax return released a couple of days ago confirms this beyond any doubt.
Yet Dr Krugman does not see (or, at least, does not admit) that a very clear conflict exists and continues to support Hillary with a vengeance.
Dr Krugman is not only a brilliant man, he is a man who's strong sense and compassion for economic justice often shines through his otherwise by-the-numbers economic opinions. There must be something going on in the background that we readers cannot see... Or are we now, so far gone as a nation, as a people, that none of the old rules of fairness or integrity apply? And any idea or action that contains even the smallest grain of social conscience just doesn't make sense anymore?
May I correct you Dr Krugman?: Only one CANDIDATE seems bothered by either of those observations...
Hillary Clinton has received hundreds of millions of dollars, both personally and to fund her campaign, from these very same robber barons... And shamelessly refused any explanation, other than, "Everyone else does it..."
Bernie has not received a single penny from any of them, and has managed to stay in the game with his message alone. His modest tax return released a couple of days ago confirms this beyond any doubt.
Yet Dr Krugman does not see (or, at least, does not admit) that a very clear conflict exists and continues to support Hillary with a vengeance.
Dr Krugman is not only a brilliant man, he is a man who's strong sense and compassion for economic justice often shines through his otherwise by-the-numbers economic opinions. There must be something going on in the background that we readers cannot see... Or are we now, so far gone as a nation, as a people, that none of the old rules of fairness or integrity apply? And any idea or action that contains even the smallest grain of social conscience just doesn't make sense anymore?
5
Internet service in the US is the world's biggest communications ripoff, thanks to the cartelzation of the whole industry.
3
Hmmmm----Corporations refusing to maintain and improve infrastructure, lobbying and making political donations (via PACs) to reduce taxes on themselves and other wealthy 'persons'. Are they registered Republicans? We know that at least one of these corps (Hobby Lobby) practices its religion in the workplace. Will they someday give away their riches and roam the country working for justice and helping the needy, as Jesus taught?
2
Prof. Krugman is correct that only one of the two main political powers is concerned about robber baron behavior and monopoly power. One would have to go back to the era of Teddy Roosevelt to find serious Republican action on this issue, or even serious Republican concern that the issue exists.
But this is nevertheless a very strange column, seeing as Prof. Krugman has elsewhere made very clear his support for Hillary Clinton, who seems hardly to have met a robber baron/monopoly power from whom she wouldn't take campaign contributions, and "realistic" and incremental approach to change has been praised by Prof. Krugman, even as he ridicules Bernie Sanders, who wants to break these suckers up, put them in their place, and change the distribution of wealth toward the people who actually work to create it.
But this is nevertheless a very strange column, seeing as Prof. Krugman has elsewhere made very clear his support for Hillary Clinton, who seems hardly to have met a robber baron/monopoly power from whom she wouldn't take campaign contributions, and "realistic" and incremental approach to change has been praised by Prof. Krugman, even as he ridicules Bernie Sanders, who wants to break these suckers up, put them in their place, and change the distribution of wealth toward the people who actually work to create it.
8
As a teacher for nearly twenty years, I've grown dismayed at the consolation and monopolization of the textbook publishers and testing companies into two giant firms that produce some of the worst teaching materials I've seen in my life. And, it's shocking to see the influence they have with the large school districts with their ability to lock them into purchases to replace existing texts with whole new series, even when the districts could ill afford them during our long recession. Teachers paid the price in stagnant wages for eight years, but the publishers and testing companies replaced our text books twice during that same period. They were able to make more profits than ever, while teachers were having trouble paying their bills. The quality of the materials has gone down while their profits have gone up. How much of a stink must there be before people realize there's something wrong with this?
9
While I have no doubt monopolists can cause under investment in certain businesses, we should also note that they tend to pay workers the best. Several studies have shown wages and margins very much tied to each other. And if we look at the impact of competition through globalization, it has been anything but a win for the average worker. Likewise, markets like technology, don't show much under investment as for example Google and apple. So I suspect while we do see the trends Dr k points out, I don't know that the answer is quite so simple.
14
Odd that there is no mention of the fact that this is precisely Bernie Sanders argument. I guess the NYT will allow it's employees to write anti-capitalist screeds as long as there is no mention that this is Sander's mantra or that it was Bill Clinton's deregulation sell-out to Wall Strret that started this in the first place, not Reagon.
8
There is no incentive for politicians to kill the monopolies, because they provide money for political candidates. Supporting big business often means keeping ones job as a politician.
215
One element that Mr. Krugman misses is advertising investment versus equipment investment. Verizon has recently begun a huge advertising campaign involving a famous English comic. All of the costs associated with this are an instant write off. Investing in the equipment or software to deliver a better product creates "Assets" and our tax system makes assets more costly than communication. It is simply cheaper too tell America how wonderfull Verizon is through massive advertising than it is to do anything about improving service.
2
I would LOVE to hear Dr. Krugman try to square the very astute observations he relates in today's column with his unwavering support for the candidacy of Hillary Clinton, who is basically a supply-sider at heart allied with the robber barons in the banking, communications and pharmaceutical industries who are largely responsible for the rather unpleasant turn of events he describes.
5
Financialization = disinvestment
One of our tragedies is the ascendance of the neoliberal or conservative ideology of laissez-faire. Areas of laissez-faire are important in our lives and in a stable society. We need individual and local decision making, initiative, entrepreneurship, a free market (in context), etc. But laissez-faire as a primary system has never existed. It rapidly decays into chaos, overrun by warlords and oligarchs (e.g., the former Soviet states).
Part of the laissez-faire ideology that has overtaken our economy is financialization, which is disinvestment, the conversion of productive investments into quick cash for current short-term ‘I don’t care’ owners. Another label for this misguided practice is short-termism. It borders on fascism.
E.g., 4/15 Op-Ed by Newman, industry used to do OJT. Christina Romer reminded us that during WWII, women who had not worked entered the factories and high tech manu. of the day. OJT. www.nytimes.com/2011/08/14/business/economy/from-world-war-ii-economic-l...
E.g., many productive, innovative companies were hollowed out even against opposition from CEOs to engineers. They did it to Xerox and Compaq, tried at Pulte, and now are doing it to Boeing. Wall Street and the MBAs want to turn assets into quick profits, and don’t care about investment.
The alternative to fascism is partnership. Germany works with industry to do good work training. But our firms leave tech students with large debts and no jobs.
One of our tragedies is the ascendance of the neoliberal or conservative ideology of laissez-faire. Areas of laissez-faire are important in our lives and in a stable society. We need individual and local decision making, initiative, entrepreneurship, a free market (in context), etc. But laissez-faire as a primary system has never existed. It rapidly decays into chaos, overrun by warlords and oligarchs (e.g., the former Soviet states).
Part of the laissez-faire ideology that has overtaken our economy is financialization, which is disinvestment, the conversion of productive investments into quick cash for current short-term ‘I don’t care’ owners. Another label for this misguided practice is short-termism. It borders on fascism.
E.g., 4/15 Op-Ed by Newman, industry used to do OJT. Christina Romer reminded us that during WWII, women who had not worked entered the factories and high tech manu. of the day. OJT. www.nytimes.com/2011/08/14/business/economy/from-world-war-ii-economic-l...
E.g., many productive, innovative companies were hollowed out even against opposition from CEOs to engineers. They did it to Xerox and Compaq, tried at Pulte, and now are doing it to Boeing. Wall Street and the MBAs want to turn assets into quick profits, and don’t care about investment.
The alternative to fascism is partnership. Germany works with industry to do good work training. But our firms leave tech students with large debts and no jobs.
3
Welcome back Mr. Krugman. We missed you.
Yes, cable and phone companies are monopolies. I once switched in anger from one to another, only to get a terrible deal and similar bad service. Since then I stick with the devil I know. Free market is not working and consumers are paying a not-so-hidden extortion tax in the areas of health insurance and telecommunications.
I think states should sign "free-trade" agreements among each other to allow insurance and telecommunications prices to go down.
Yes, cable and phone companies are monopolies. I once switched in anger from one to another, only to get a terrible deal and similar bad service. Since then I stick with the devil I know. Free market is not working and consumers are paying a not-so-hidden extortion tax in the areas of health insurance and telecommunications.
I think states should sign "free-trade" agreements among each other to allow insurance and telecommunications prices to go down.
2
The government spend decades trying to break up IBM and then one day the computer giant was barely even relevant in the tech market place. The largest company in the US, Apple almost went out of business in the 1990's. Despite Krugman's claims the marketplace destroys companies that make bad choices, think GM. The government going back to an aggressive anti-trust stance given the size companies need to be to compete in the global economic is absurd. Should we break up Boeing, the largest plane maker in the world? As if our corporate tax rate doesn't hobble US companies enough lets start breaking up the successful ones.
15
This is just another example of how capitalism without regulation becomes a corrupt robber baron.
We need anti-monopoly laws strengthened and enforced. The only candidate capable of pushing for this is Bernie.
We need anti-monopoly laws strengthened and enforced. The only candidate capable of pushing for this is Bernie.
7
While I have no doubt monopolists can cause under investment in certain businesses, we should also note that they tend to pay workers the best. Several studies have shown wages and margins very much tied to each other. And if we look at the impact of competition through globalization, it has been anything but a win for the average worker. Likewise, markets like technology, don't show much under investment as for example Google and apple. So I suspect while we do see the trends Dr k points out, I don't know that the answer is quite so simple.
Sure, Jeff, they pay more - until they downsize and you don't have a job and can't get another one because competition is gone.
1
Looking at this from a slightly different point of view, FiOS only makes sense in a population-dense environment where people can afford the higher monthly bills for the technology. It's been shown that it can't make a profit unless certain conditions are true due to the very high cost of deployment. Pretty certain that all for-profit companies follow certain basis guidelines for making their investments.
How has it "been shown?" A FIOS rep spent half a day at our house getting it installed, now we pay over a hundred dollars a month for service. That is $1,200 a year from just us. the half a day of an onsite rep has been repaid a thousand times over. Take half of that for maintenance of the cables, and there is still a huge profit.
You are missing part of the point. It also gives them the power to outsource the work to non-union contractors which is happening big time.
1
I live in an agricultural town in rural British Columbia and have fibre optic tv and internet. Can't get get much less dense than that.
1
So we need to break up monopolies, but you provide no direct strategy to do so? But we can all agree it's a good idea. Kinda like banks that are too big to fail and Sanders? Does that make you a Verizon Bernie-Bro? Obama has put forth an executive order to make things "more competitive," but no specifics? I guess because we have to make such things a priority, but the best solutions are not immediately obvious, but making these a priority might get a larger attention that reveals solutions in the longer term.
2
He waited for seven years, showing both parties are owned
Increase competition? OK, let's start by breaking up the big banks.
4
Yeah, make it a crime to lend money.
1
So the Obama Administration belatedly begins something to address the Bankster and Robber Baron Era we have now lived in for a generation. We have lived this way for a generation because neither party has been really willing to address the forces that concentrate wealth for some and threaten wealth for everyone else. We've been calling this the good-old-American Way, extolling its virtues, contrasting it to and denigrating the Democratic Socialism of Europe. But the reality remains - we workers would benefit from some Democratic Socialism in the USA. If you are ready for some Trust Busting, Dr. Krugman, maybe you are starting to feel the Bern. ;-)
4
Professor Krugman:
You have an opportunity tomorrow to vote for the one candidate who gets it.
You have an opportunity tomorrow to vote for the one candidate who gets it.
4
It is the fascism in the most classic sense. Politicians serving the corporate beast. This ends badly.
2
This is worse than the Gilded Age, as the corrupt corporate world is more sophisticated ,and government has not been interested in breaking up the huge monopolies that punish ordinary Americans.
196
This analysis could also be carried into the domain of mass merchants like Wal Mart and Home Depot. As small independent retailers have disappeared, the big boxes have became ever more consolidated in their offerings to the point where it is now almost impossible for a small manufacturer with a single SKU to get (or hold onto) shelf space.
Maintaining competition should be a high priority for the federal government.
Maintaining competition should be a high priority for the federal government.
3
Ah. Now I understand why our highways and bridges are falling apart and our water systems are spouting evil! It's because we have a national government that's a contented monopoly--one that continues to grow and prosper without reinvesting in its core business. Instead it spreads its largesse among its dependents/shareholders (those of us who draw Social Security payments of one type or another, or are on SNAP, or are otherwise dependent on handouts from the USG).,.
Good one Dr. K. You are back to your usual gold standard treatise on economics, a subject I wish you would stick with and thank you for mentioning Verizon, I've already switched carriers after their twenty million dollar man, Lowell McAdam, had his little melt down when Bernie had the temerity to stand up to a company whose striking workers were protesting jobs being sent to Mexico where they are paid twenty percent of a U.S. salary, which quite honestly, in many American cities with the rise of housing costs, health care, food and insurance(all denied by the fed of course so they don't have to raise the amount of our Social Security payments which should be rephrased "return on savings" rather than "benefits" as many of us paid into the system for decades[sixty plus years in my case])the salaries paid by Verizon weren't that great to begin with. An extended middle digit to "Lowell" and his ilk and a big thank you to Bernie for sticking up for the long neglected American working class! Bernie Tuesday, Bernie 2016!
9
Actually given the lack of anti trust enforcement by the Obama administration, the robber barons are holding both parties hostage.
4
Only one party seems bothered? Which one is that? The party of Clinton or the party of Trump? On this issue there is not much evidence of a difference.
Clinton's husband's efforts in the 90s were not just limited, they lacked competence. Or at least they could not match up with legions of private law firms and the Reagan-Bush judges. They could not deal with Microsoft for one, and then they gave up. (Interesting that the lead lawyer on that case went on to lose the Florida recount for Gore, choosing to try gaming the recount rather than making a statewide demand.)
Obama may be bothered, or may be coming to see the problem. Good for him; better late than never. Is he the one party you mean?
Clinton's husband's efforts in the 90s were not just limited, they lacked competence. Or at least they could not match up with legions of private law firms and the Reagan-Bush judges. They could not deal with Microsoft for one, and then they gave up. (Interesting that the lead lawyer on that case went on to lose the Florida recount for Gore, choosing to try gaming the recount rather than making a statewide demand.)
Obama may be bothered, or may be coming to see the problem. Good for him; better late than never. Is he the one party you mean?
Whether Verizon or other huge companies, I have seen this profit-keeping (or investment-avoidance) behavior since the crash. A friend of mine consults for big firms and rubs elbows with movers and shakers, and not coincidentally, has a fantastic ability to be sympathetic to the tribulations of the 1%. When, at that time, I pointed out to him the negatives of wealth hoarding amidst severe unemployment as well as wage stagnation, he bleated that corporate leaders were terribly insecure with the new president. What would he do? Was this unproven black man going to ruin us all? The point is that racism became the enabler of greed.
1
All journeys begin with a single step forward. Step one to addressing the pernicious societal effects of corporate oligarchy - stop taking their money to support your political campaigns!
It's really pretty simple. But then again, many of the non-minority Clinton supporters don't actually want the government to upset their corporate/Wall Street/inherited wealth and privilege gravy train. That's the Real Problem -- and the one left unspoken yet again in this election cycle.
It's really pretty simple. But then again, many of the non-minority Clinton supporters don't actually want the government to upset their corporate/Wall Street/inherited wealth and privilege gravy train. That's the Real Problem -- and the one left unspoken yet again in this election cycle.
1
The job of the president is to enforce the laws. Reagan chose not to enforce the Sherman Anti Trust Act. Corporate power took of on steroids. We now have effective monopolies. Hence the corporate plutocracy we now are burdened with. Barring a Democratic president and congress we will continue our 30 year slide into corporatocracy another word for fascism where there is no competition..
2
Yep, this is a pretty accurate assessment. However, there is also intense political pressure yo strangle any inflation at all (for example the latest CPI went to 0.1 percent increase). In addition to inflation zealotry and a static currency, there is Piketty's predicted very slow overall growth. So, maybe we can push the Republicans around on the estate tax, as they probably would like to bring the class structure from Downton Abbey to our shores (and break up the bigger combinations).
Just like Haldane's classic biology text, "On Being the Right Size", there is a right size for corporations. Economies of scale are often used to justify larger entities but we have long passed those thresholds. Not only has domestic investment evaporated as PK reports but innovation is now a myth hyped by Madison Avenue types to give the impression of such. A thinner smart phone or a new app is not TV, the internet or DNA amplification. Real innovation has dried up. To revive it, bring back the trust busters and decent trade policy.
4
Prof Krugman seems to be atoning through the back door. His thoughts on monopolies took on a sharper edge, and now he sees HRC and the Republicans are in the mode of making oligarchy a fact of everyday life.
He did not want to look entirely in conflict with his recent thinking, so he chose a different example. He finally decided he should not be seen as rooting for a status quo government, when the country is suffering from it.
I therefore take his message today as sincere effort to change what he thinks is right for this economy, putting Senator Sanders as the more clear headed on what ails our economy. Thank you Prof Krugman.
He did not want to look entirely in conflict with his recent thinking, so he chose a different example. He finally decided he should not be seen as rooting for a status quo government, when the country is suffering from it.
I therefore take his message today as sincere effort to change what he thinks is right for this economy, putting Senator Sanders as the more clear headed on what ails our economy. Thank you Prof Krugman.
1
Here are the real 21st century Robber Barons:
- The Board of the Federal Reserve, which decides that you will pay more tomorrow for the things you buy, just because. The Fed pumps money into its favorite banks - who loan it to other banks while slicing off a bit for themselves, the 1%. The eventual result is inflation, which raises prices for everyone, which is equivalent to robbery.
- The Executive and Legislative branches of our government, which appoints members of the Fed Board, and which influence its decisions. These are the "barons" who live only to rob from those who earn wealth, because they cannot earn it themselves (Bernie Sanders and Hilary Clinton exemplify this).
- Lastly, Socialist shills such as Paul Krugman, who cheer on the thieves listed above (including writing an NYT piece demanding that Greenspan create a Housing Bubble, which then burst in 2008).
- The Board of the Federal Reserve, which decides that you will pay more tomorrow for the things you buy, just because. The Fed pumps money into its favorite banks - who loan it to other banks while slicing off a bit for themselves, the 1%. The eventual result is inflation, which raises prices for everyone, which is equivalent to robbery.
- The Executive and Legislative branches of our government, which appoints members of the Fed Board, and which influence its decisions. These are the "barons" who live only to rob from those who earn wealth, because they cannot earn it themselves (Bernie Sanders and Hilary Clinton exemplify this).
- Lastly, Socialist shills such as Paul Krugman, who cheer on the thieves listed above (including writing an NYT piece demanding that Greenspan create a Housing Bubble, which then burst in 2008).
2
Another column, with great analysis, by "Professor K"!
Some time back, I started noticing that corporate Top Line" (Revenue) growth was mediocre; but, "Bottom Line (Profits) were quite good. And, that observation continued to play-out through the long. slow Recovery.
That also plays into the short-term, quarter-to-quarter focus that many companies strive for. Investing in plant and equipment, and paying employees a fair inflation-adjusted wage, would help the corporate long-term growth. But, in too many cases, executive bonuses and compensation are based on the current quarter.
Even the first Henry Ford, a hundred years ago, saw the advantages of paying line workers a decent wage. They then could afford to buy and drive Ford autos, they became advocates for the brand, and employee turn-over was reduced.
Some time back, I started noticing that corporate Top Line" (Revenue) growth was mediocre; but, "Bottom Line (Profits) were quite good. And, that observation continued to play-out through the long. slow Recovery.
That also plays into the short-term, quarter-to-quarter focus that many companies strive for. Investing in plant and equipment, and paying employees a fair inflation-adjusted wage, would help the corporate long-term growth. But, in too many cases, executive bonuses and compensation are based on the current quarter.
Even the first Henry Ford, a hundred years ago, saw the advantages of paying line workers a decent wage. They then could afford to buy and drive Ford autos, they became advocates for the brand, and employee turn-over was reduced.
3
"For we aren’t just living in a second Gilded Age, we’re also living in a second robber baron era. And only one party seems bothered by either of those observations."
The mystery of why Paul Krugman would be constantly viciously critical of Bernie Sanders and constantly praise Hillary Clinton only deepens on seeing lines like this. This sounds a lot like Bernie Sanders. It certainly does not sound like Hillary Clinton.
Only one "party" seems concerned with breaking up corporations that are too large? Well, you can be a little more specific than that, only one faction of one party seems to be concerned, and it's a concern you've spent quite a bit of time ridiculing.
The mystery of why Paul Krugman would be constantly viciously critical of Bernie Sanders and constantly praise Hillary Clinton only deepens on seeing lines like this. This sounds a lot like Bernie Sanders. It certainly does not sound like Hillary Clinton.
Only one "party" seems concerned with breaking up corporations that are too large? Well, you can be a little more specific than that, only one faction of one party seems to be concerned, and it's a concern you've spent quite a bit of time ridiculing.
5
Verizon's market power is a result of the Telecommunications Act of 1996, which was signed into law by President Bill Clinton (the year should give it away). Perhaps, Ronald Reagan is responsible for the Telecommunications Act the same way that George W. Bush is responsible for Iraq falling apart five years after he left office and three years after Barack Obama declared Iraq a great success.
1
There is nothing "natural" about a corporation. It is entirely a creation of the law.
When governments enact laws to recognize artificial creations such as corporations, governments have plenty of power to regulate them. All it takes is political will.
The Constitution says absolutely nothing about corporations, nor about the free market, nor about private enterprise, even though Adam Smith published his book in March, 1776, four months before the Constitution, so it's not as if the founding fathers had no opportunity to be enlightened by Smith's supposed wisdom.
When governments enact laws to recognize artificial creations such as corporations, governments have plenty of power to regulate them. All it takes is political will.
The Constitution says absolutely nothing about corporations, nor about the free market, nor about private enterprise, even though Adam Smith published his book in March, 1776, four months before the Constitution, so it's not as if the founding fathers had no opportunity to be enlightened by Smith's supposed wisdom.
4
Workers too are implicated in their economic demise by voting against their interests. They helped elect Reagan and the Bush family for five presidential terms. Their breathtaking stupidity is only exceeded by the greed of their employers.
Maybe 2016 will be different?
Maybe 2016 will be different?
11
Very nice, monopolies bring about a sub optimal output scheme at higher prices. Barriers to entry are high too and as market concentration continues will get higher. Unmentioned in this disaster is that monopoly sellers tend to be monopsony buyers of input. This leads tot he paradoxical outcome that less inputs are used at lower prices. See Joan Robinson for you explanation. In other words we the people are screwed.
1
Good morning to all you bernie mania commenters. Mr. Sanders is a man with no plan. He is a parrot - he hijacked Elizabeth Warren's words and attitudes about BIG banks that he's spouting across America. He parroted what the pope said about an economically sustainable economy, and sang the popes praises, during his staged performance at the vatican. He parrots what the "black lives matter" folks say. He repeats the same things over and over, like a parrot. Meantime, what has he DONE? Did he tell the pope to keep his religion out of the lives and bodies of women? Did he tell them to stop buying up OUR American health system and trying to force their religious beliefs on every provider who works with them and every patient they treat? Has he done anything to take away their very profitable non-profit tax exemption? NO. He's not about doing - he's about yelling, wagging his finger and trying to sell himself as a humble grandpa. Why didn't HE prevent the banks from getting so big? Why didn't HE scream and yell and fight to restore anti-trust laws that Reagan dismantled? Why didn't HE stop the destruction of Glass-Stegall? Why hasn't he done ANYTHING for the general good during his lifetime of feeding off OUR taxpayer dollars? He's the Pied Piper except the Pied Piper had a plan. Maybe Senator Sanders' plan is to march America further off the cliff? Ms. Hillary Rodham Clinton has my grateful vote.
12
As another commenter said "Why not keep your Senate seat instead where you can do the most good?" I would add, and do the least damage.
Sounds like you're worried that the status quo oligopoly is at risk...
Stop swearing and maligning the good senator! We all know that presidents are leaders and the ones with a vision. Not policy wonks. They actually hire and assemble teams of technocrats and bureaucrats to do the work. Bernie has seen his law is passed how legislation is done he is well aware of policy details and nuances. Bernie is the man with the vision for our times. He has given us a preview of what we can imagine our lives could be for us, our neighbor's and the lowest wrung of our society. Please njglea enough of your calling our youth names.
1
Want to know what living in a non competitive environment feels like? Move to France!
For the last 13 years I have lived as an expatriate American in the rural south called Provence. The first thing I noticed in making purchases of all kinds including a car, house, and home furnishings was the complete lack of competition.
No bargaining in buying the car. Poor selection of grocery items and gross over charging with no check on corporate greed. Poor quality furniture construction with no concern about the competition. The evidence of poor understanding for capitalism is endless.
Socialism in France has brainwashed French citizens into thinking only the worker was entitled to security but little consideration was given to fighting monopolies and forcing competition.
The French have little grasp of healthy capitalism and private ownership simply grabs all it can get with little interference from the government or consumer organizations.
When American anti trust efforts are strangled, the outcome is an economy that simply caters to the oligarchs with little concern for the consumer and a regression to a French like mind set!
For the last 13 years I have lived as an expatriate American in the rural south called Provence. The first thing I noticed in making purchases of all kinds including a car, house, and home furnishings was the complete lack of competition.
No bargaining in buying the car. Poor selection of grocery items and gross over charging with no check on corporate greed. Poor quality furniture construction with no concern about the competition. The evidence of poor understanding for capitalism is endless.
Socialism in France has brainwashed French citizens into thinking only the worker was entitled to security but little consideration was given to fighting monopolies and forcing competition.
The French have little grasp of healthy capitalism and private ownership simply grabs all it can get with little interference from the government or consumer organizations.
When American anti trust efforts are strangled, the outcome is an economy that simply caters to the oligarchs with little concern for the consumer and a regression to a French like mind set!
6
I know Krugman's point is not really a history lesson, but he jumps from Reagan to Clinton as though the George HW Bush presidency didn't exist, when Bush Senior actually took some sensible actions to try and re-establish antitrust policies in his four years before Clinton. If Democrats are still blaming Reagan for current anti-regulatory economic policies—after 15 years of combined (and current) Democratic administrations versus 12 years of Republican ones—then they need to examine their own party's collusion and complicity in corporate deregulation (which is exactly what they are grudgingly doing in this nomination process, thanks to Senator Sanders). Here's an interesting paper from 1999 on Clinton antitrust "enforcement" policy (which I haven't finished).
http://scholarship.law.cornell.edu/cgi/viewcontent.cgi?article=1261&...
http://scholarship.law.cornell.edu/cgi/viewcontent.cgi?article=1261&...
1
When new wealth is being created, it is being used up by the expenses of running the enterprises of which some will be profitable and some will not, it's all very risky. When a business is established with steady and reliable sales, it can be a cash cow. So it's no wonder that businesses and individuals tend to opt for the least risky but most predictable options available. It's safer to reduce costs and expand businesses by mergers and buyouts of successfully operating firms and by the monopolistic operations of firms in areas where the entry of competitors is restricted naturally or by legal enforcement than to invest in innovative products and services and efforts to increase sales when significant economic growth is not occurring. These monopolistic practices assure steady and predictable sales, costs, and profits but they represent a systematic stagnation in the creation of new wealth to provide full employment as the supply of workers increases nor even to offer sufficient new opportunities for investments which can profit substantial returns for investors. In addition, they exacerbate the effects of overly concentrated wealth into a small percentage of the people, namely that it is the interests of the small percentage that determines how capital is invested, not the interests of the entire country. The wealth from the industrial economy is determined by mass production and the mass sales of goods and services growing continuously, monopolies tend to inhibit growth.
Sure, reinvigorate antitrust enforcement. That may eventually promote efficiency in the economy, but I predict its effect on aggregate demand will be minor. The answer to the problem of secular stagnation--a long-term demand shortage--is fiscal policy. We should be running bigger budget deficits, and Europe as a whole should be running much bigger budget deficits. This is the only way we can really jolt our economies into high levels of employment and output.
Don't worry about adding to the national debt. These deficits should be funded by changing the laws and letting the Federal Reserve and the ECB create money and directly transfer it to their respective governments. While we do this, we will keep an eye on inflation indicators and ease off the deficits--however financed--when the rate gets to 2 percent or so.
Will this be more effective than debt-financed deficits? No, but once people get used to the idea, it's much simpler politically. When unemployment is high and inflation is low, create money and spend it, hopefully on something worthwhile. But spend (and/or give some tax rebates). Thanks.
Don't worry about adding to the national debt. These deficits should be funded by changing the laws and letting the Federal Reserve and the ECB create money and directly transfer it to their respective governments. While we do this, we will keep an eye on inflation indicators and ease off the deficits--however financed--when the rate gets to 2 percent or so.
Will this be more effective than debt-financed deficits? No, but once people get used to the idea, it's much simpler politically. When unemployment is high and inflation is low, create money and spend it, hopefully on something worthwhile. But spend (and/or give some tax rebates). Thanks.
3
Telecom infrastructure likely needs a fresh approach across the US, in order to stimulate more growth at a faster pace. We also need to rethink how companies are allowed to financially account for outsourced employees. What should their responsibility be? Overseas outsourcing costs America more and returns less than almost any other trade issue. All of this does nothing for the US economy. We end up with less payroll dollars and a record number of people requiring government subsidies and tax breaks. Verizon, Comcast and AT&T should be investigated, analyzed and used as examples to formulate new policies. Deregulated semi-monopolies competing only with other US firms should not allowed to outsource at will without consequence.
6
Though I agree with Dr Krugman, this problem isn't limited to business. With historically low interest rates, public entities should be borrowing for infrastructure improvements. The money's almost free and we desperately need maintenance on rail, roads, water treatment and distribution, wastewater collection and treatment, energy grid, secondary water systems (here in the west), and a host of other public infrastructure projects (Am. Soc. of Civil Engineers estimates $3.6 trillion is needed in the next 5 years to maintain the status quo and clear the "deferred maintenance" backlog. The money won't get any cheaper - let's use it! It's an investment in our kids' future.
13
Another among the many reasons (as if the likely choice of Trump or Cruz -- that is, being poisoned vs being shot, as Sen Lindsey Graham so helpfully noted -- and the desperate need to fully staff the Supreme Court weren't enough by themselves) that everyone -- including (perhaps especially) those who have spent most of the last 36 years voting Republican -- needs to wake up, recognize where the real faults lie for the current parlous states of our economy and our polity, and start to rectify these problems.
Register, and then get out and vote Democratic...
...ALL the way up and down the ticket...
...whether it winds up with Hillary or Bernie at the top...
...and make sure everyone you know does as well.
It's either that, or go further down the road to perdition that we've been travelling for this entire generation.
Register, and then get out and vote Democratic...
...ALL the way up and down the ticket...
...whether it winds up with Hillary or Bernie at the top...
...and make sure everyone you know does as well.
It's either that, or go further down the road to perdition that we've been travelling for this entire generation.
Let's see how this impacts the everyday Fios customer. My cable was out. I scheduled a Saturday appointment because I work two jobs (due to the lack of full-time employment). But I needed the internet access for the second job and hoped it would be re-connected earlier in the day so I could get to work. The technician was unable to get to my home by 8 to 12, then from 1 to 5, then not at all. When I spoke to customer service, it was unable to guarantee a Sunday appointment but could schedule a technician as early as Tuesday. When I explained this would not work for me, I got a well-rehearsed apology but no guarantee. I was told I could try for Sunday but would have to call by 8 am, which, of course, I did. Fortunately, the technician showed Sunday am. When he arrived, I said, either they're not paying you enough, or there just aren't enough of you. True enough, he said. We're about to strike for just these reasons. I'm all for shareholder profits, but if it's at the expense of the actual service provided, what's the point? We're too interdependent on each other for corporations to be money-makers, first, service-providers, second. How many millions did this happen to at exactly the same time, all of whom depend on a home connection to fulfill their job responsibilities, but have no voice to object? Just keep paying those subscription fees - that's all we are to Verizon executives.
24
As someone who also works from home via a Verizon internet connection, I couldn't agree more. And I question why providers are allowed to set up contracts so that subscribers have no recourse when our service is cut -- a deduction from our monthly bill for the days of lost service is minimally fair, if not a penalty fee imposed on the provider for lost work (I can't bill for hours of work that I can't perform, obviously). Such penalties would give Verizon and other internet providers an incentive to keep services running. So why has the FCC allowed such unfair contracts?? One can only assume that they are in the pocket of Verizon et al.
2
Lundin Group pledged another $100 million to the Clinton Foundation, according to a 2007 Clinton Foundation press release. Lundin Mining has substantial operations in the Congo. A partner of Lundin in its Congo operations, Freeport-McMoran Copper & Gold, gave the Clinton Foundation as much as $500,000, according documents released by the foundation that present its contributions in the $250,000-$500,000 range. What did the mining giants get in return?
The State department, under Clinton’s leadership, entered into talks with the Congo in 2010 over its dispute with Lundin and Freeport-McMoran in what The Financial Times characterizes as “in support of Freeport.
http://www.forbes.com/sites/richardminiter/2016/04/17/why-did-congo-offe...
I'm sorry, but there's lots of evidence that money has tainted clinton positions, and that her speeches, her husband's speeches, and donations to the foundation would make it suspected she'd do much about monopoly power. Her failure to understand the banking oligopoly and the need for beak up suggests that as well. The fantasy lies in refusing to admit money influences poicy
The State department, under Clinton’s leadership, entered into talks with the Congo in 2010 over its dispute with Lundin and Freeport-McMoran in what The Financial Times characterizes as “in support of Freeport.
http://www.forbes.com/sites/richardminiter/2016/04/17/why-did-congo-offe...
I'm sorry, but there's lots of evidence that money has tainted clinton positions, and that her speeches, her husband's speeches, and donations to the foundation would make it suspected she'd do much about monopoly power. Her failure to understand the banking oligopoly and the need for beak up suggests that as well. The fantasy lies in refusing to admit money influences poicy
11
Might help you to see what the Clinton Foundations does with the funds.
Those of us who have been Bernie supporters should be circumspect about criticizing Hillary in this instance. She's more likely to be like Bill regarding anti-competition prosecution than like Republicans.
A good place to gain insight into possible policy is this paper by Robert E Litan and Carl Shapiro published by Berkeley.
http://faculty.haas.berkeley.edu/shapiro/antitrust.pdf
The Clinton administration took on MS and won although ultimately MS's anti-competitive behavior was curbed by agreements rather than forcing the company to breakup. The software and IT world would look dramatically different had that administration not prosecuted MS, and won (the consent decree was extended several times and didn't expire until 2011).
The authors point out that not only was the Clinton administration far more prosecutorial than Reagan, or Bush, but States Attorney Generals in that time were as well.
Note that far more States are now run by Republicans whose anti-competition positions and actions are going to mirror those attitudes shown in Congress and of their supporters who control State capitols.
A good place to gain insight into possible policy is this paper by Robert E Litan and Carl Shapiro published by Berkeley.
http://faculty.haas.berkeley.edu/shapiro/antitrust.pdf
The Clinton administration took on MS and won although ultimately MS's anti-competitive behavior was curbed by agreements rather than forcing the company to breakup. The software and IT world would look dramatically different had that administration not prosecuted MS, and won (the consent decree was extended several times and didn't expire until 2011).
The authors point out that not only was the Clinton administration far more prosecutorial than Reagan, or Bush, but States Attorney Generals in that time were as well.
Note that far more States are now run by Republicans whose anti-competition positions and actions are going to mirror those attitudes shown in Congress and of their supporters who control State capitols.
17
Being better than the republicans isn't the proper metric to have. That's precisely what has led to the usa being an oligarchy. the dem establishment has been running on the merits of being slightly better than the other party. That has not done anything to change the overall direction of the destruction of the middle class.
GOP Ideology is rife with hypocrisy. We've heard endless free market mantras with ever growing frequency and stridency since 1980, that increased competition without government intervention would create the strongest economy. But the opposite has happened. The options available for consumers have gone down while prices have gone up. Take the cost of air travel. The number of carriers has fallen while prices continue to rise, despite steep decline in fuel prices. Likewise phone companies. Likewise banks. All the big business are often more active in promoting their stocks than their goods and services. If the US economy is ever to be strengthened, there must be a reversal of that balance, where companies have more incentive to invest in expansion and production rather than the focus on quarterly stock earnings. The US is being ripped off by the 1% who do everything in their considerable power to hoard their ill-gotten gains at the expense of the 99%. While Wall Street continues to prosper, causing ongoing economic imbalance, Main Street will continue to suffer, as it has, uninterrupted, since 1980. The economic infrastructure that's been foisted on the public is in need of replacement. Trickle down economics has turned into a huge cesspool of the filthy rich filling their ever growing coffers while joining in the unceasing war on the middle and working classes. That's not the American I want to leave for my children and grandchildren. Got the message GOP?
28
When something does not work, we just pour on more of it here in America the Stupid.
Time to turn to "socialist" Europe again and treat the delivery system (cable, fiber optic, etc.) as we do interstates. It should be provided and maintained by the government, but public and available to competing providers. Enough of the corporate monopolies/bottlenecks.
27
"Robber Baron recessions"? Oops. Maybe someone should crack open a history book.
* During the 1870s and 1880s, the U.S. economy rose at the fastest rate in its history, with real wages, wealth, GDP, and capital formation all increasing rapidly. By the beginning of the 20th century, gross domestic product and industrial production in the United States led the world.
* Real wages (adjusting for inflation) rose steadily. In terms of constant 1914 dollars, the average annual incomes of all American non-farm employees rose from $375 in 1870 to $573 in 1900, a gain of 53% in 30 years.
* During the 1870s and 1880s, the U.S. economy rose at the fastest rate in its history, with real wages, wealth, GDP, and capital formation all increasing rapidly. By the beginning of the 20th century, gross domestic product and industrial production in the United States led the world.
* Real wages (adjusting for inflation) rose steadily. In terms of constant 1914 dollars, the average annual incomes of all American non-farm employees rose from $375 in 1870 to $573 in 1900, a gain of 53% in 30 years.
3
Chalk that up to the invention of the Bessemer converter, which dramatically cut the cost of steel.
Now tell me about the Panics of 1873, 1893 and 1896. Robber barons loved 'em - they put the entire country on sale!
1
Unfortunately for the union workers, the majority of the lost jobs have been automated rather than outsourced. This is a problem that is becoming more and more prevalent. By the way, the low wage non union worker need the work too. After the Union's contract is up, the Union should have to compete with everyone else. I have been out of work and shut out by Unions, that is not fair to the unemployed.
3
What boggles the mind, Mr. Krugman, is that it has taken so long for "leading economists" to figure this out. WE consumers have known for years the damage caused by BIG business being allowed to buy up all their competition. WE live with it every day with lost jobs because of businesses being shuttered, an increasingly doubtful food chain, increased prices in health care, utilities, entertainment, limited choice in every retail category and everything that affects average people's lives. Economists numbers are meaningless unless they are balanced with social consequences and you are right, "we aren’t just living in a second Gilded Age, we’re also living in a second robber baron era." This time it's global. Governments must Stop giving "corporate welfare" to BIG corporations and fund small, locally owned, employee owned, community serving businesses with no outside investors and a strong social conscience if we are to have an economically and socially sustainable country.
24
I'm not fully convinced here. Krugman's only example--Verizon--strikes me as flawed. In my market, Verizon's FIOS competes with Cablevision's internet service. I assume that FIOS competes in a number of markets. That would suggest that it has incentive to improve service. That it doesn't may well be due to other factors--poor management, perhaps?
Even in fields where 3 or 4 companies dominate, they still compete with each other. And in fields where service is critical, even monopolies or near-monopolies worry--or should be worrying, about new competitors coming from unexpected directions. Historical examples of this include network television having to compete with cable, bookstores having to compete with Amazon, etc.
I'm not suggesting that monopolies are good or even that they are neutral in their impact. But I'm not convinced that monopolization has been a meaningful brake on investment. I would think that the lack of demand would be the key factor here.
Even in fields where 3 or 4 companies dominate, they still compete with each other. And in fields where service is critical, even monopolies or near-monopolies worry--or should be worrying, about new competitors coming from unexpected directions. Historical examples of this include network television having to compete with cable, bookstores having to compete with Amazon, etc.
I'm not suggesting that monopolies are good or even that they are neutral in their impact. But I'm not convinced that monopolization has been a meaningful brake on investment. I would think that the lack of demand would be the key factor here.
1
Could we be witnessing enforcement of unfettered capitalism again, with a helping hand from 'politicking' by congress, and leaving ordinary folks holding the bag? Inequality at its 'best'? The corporations puffing up their chest, accumulating capital and not investing in their infrastructure, and in a 'just' service to its customers, is bound to come tumbling down, hopefully sooner than later. Government intervention to protect consumers is of the essence, so the corporations can be held accountable...and do the right thing. Unless we enjoy being 'milking cows'.
6
A core issue that needs more disclosure, even though much of it is a direct result of deregulation, Citizens United, and Republican policy, in general.
8
I have a personal view of this playing out. My brother has a small business which installs cabling and wiring in new and remodeled homes, and installs major items like big TV's and sound systems in existing homes.
The absolute worst, bottom feeding job in that field is to work for the major cable companies. They are always "hiring" but they don't hire. They offer independent contractor deals, to use the workers' own vehicles and tools on fixed price deals that always take more time and work than they pay for. The companies demand long hours and unreliable scheduling. Working for them is awful and dead end.
Those would be good jobs if they went to work on a regular schedule, got paid by the hour for time at work, and drove company trucks and equipment to do the work. There are a few of those jobs, and those are good jobs, but they are by far the minority.
Why can they get away with treating employees so badly? The same reason they get away with treating customers so badly -- there is almost no place else to go.
The absolute worst, bottom feeding job in that field is to work for the major cable companies. They are always "hiring" but they don't hire. They offer independent contractor deals, to use the workers' own vehicles and tools on fixed price deals that always take more time and work than they pay for. The companies demand long hours and unreliable scheduling. Working for them is awful and dead end.
Those would be good jobs if they went to work on a regular schedule, got paid by the hour for time at work, and drove company trucks and equipment to do the work. There are a few of those jobs, and those are good jobs, but they are by far the minority.
Why can they get away with treating employees so badly? The same reason they get away with treating customers so badly -- there is almost no place else to go.
58
In the absence of full-employment economic policy, labor always gets the shaft.
1
I get that we are being ripped-off by big business, but I don't buy the lead-off example of Verizon not growing it's fiber business because it doesn't have to. There are some really fast and cheap wireless technologies on the near horizon that are going to obsolete fiber networks as an end-point connection technology. I doubt you will see much infrastructure expansion of Comcast either. As it was with the railroads, the unions are the ones milking the system in the face of changing technologies.
Have you checked private sector union percentage? Thought not.
1
Homer Davenport ran a series of political cartoons in the late 19th- and early 20-centuries that closely follow the events that Dr. Krugman details. The mention of robber barons is particularly apt. One of his cartoons helps explain how the moneyed spin the story to seem inclusive to the poor. In the cartoon linked here from 1896 please notice the family in the background: http://www.ereadups.com/blog/homer-davenport-cartoons/
3
There are a lot of suspect vague generalizations here about investments (the real overall problem is probably that there is plenty of spare capacity around) but there is no doubt the growth of oligopolies many of them in areas of the economy where the cost of entry is very high is disturbing. The airline industry is exhibit A here. A reduction in the number of carriers and "managed capacity" programs (with help from falling fuel prices) are maximizing airline profits and keeping seat prices high. The same phenomenon can be observed all over the economy but the remedies are not simple. There is no doubt that consolidation does in and of itself (remember economies of scale) create more efficiency and hence great profitability. It's certainly an area that needs a lot more attention but beware of simplistic remedies.
2
Many commenters assume that Hillary will protect monopolies while Sanders is the one who will take them head on. I don't quite see that, in the last 35 years the only President who actually put any effort into reducing monopolies was Bill Clinton. During the campaign both Hillary and Sanders (advocating different approaches) have been more focused on reigning financial institutions than monopolies like Verizon, but that is likely to change. There is an implicit assumption that Hillary will favor corporations over labor with not much evidence that it will be so. Eventually progressives will have to face the fact of a Hillary presidency. It is important that loud voices be raised insisting Congress and the President to pay more attention to corporate greed. Hillary will listen, that is what she prides herself in doing, and so will Democrats in Congress. Sanders can continue the good fight together with Warren in the Senate. Unlike those constantly denigrating her I believe that together with Hillary they will make a good team.
12
Apart from being a 'good' listener, what's your evidence that Hillary will move in the direction you think she will. Seriously, stand and deliver. And that goes for Dr. K as well.
Yes, concentration of economic power is bad. It's even worse when this leads directly to political power. Verizon and the other cell phone companies have significant oligopoly power but at least their executives don't normally parade in and out of important government positions such as Treasury Secretary through the revolving door. Why then does Krugman see no problem with the big banks and claim that they don't need to be broken up?
10
Kasich trotted out the confidence fairy in response to this very question last week with no pushback from the interviewer. Businesses are profit maximizes. The idea that they won't invest because high federal debt makes them fearful for returns is a zombie idea that needs to be double-tapped.
12
Besides, a real capitalist knows that uncertainty is nothing to fear. It's called risk.
We could do with fewer of what I call fraidy-capitalists. Maybe a higher marginal income tax would make them hustle a little more, the way they did under that evil socialist Dwight David Eisenhower.
We could do with fewer of what I call fraidy-capitalists. Maybe a higher marginal income tax would make them hustle a little more, the way they did under that evil socialist Dwight David Eisenhower.
1
Free markets require a referee. Our Constitution clearly assigns that role to the federal government.
Yet, federal legislation to protect free market competition is abstruse, and the will of federal administrators to intervene is lackluster. The current vague, difficult to prosecute, anti-trust laws should be replaced by a specific list of forbidden business practices. Foreign companies should be encouraged to compete in our domestic markets.
Free trade competition by foreign companies has busted more American monopolies and cartels than federal intervention. Consider the car manufacturers GM, Ford, and Chrysler. They leisurely ripped off American consumers for years until foreign car makers like Toyota cleaned their plates, and eventually drove two of them into the ditch in 2008.
Foreign companies are not able to compete in protected industries like domestic air transport and communications. The customer satisfaction index for United and American airlines would surely improve if Singapore Airlines and British Airways were allowed to compete in the domestic market.
Although Asian electronics companies supply most of the equipment for domestic communications giants, they could not effectively compete in our culturally-oriented communications services market. We're stuck with Verizon and AT&T!
Yet, federal legislation to protect free market competition is abstruse, and the will of federal administrators to intervene is lackluster. The current vague, difficult to prosecute, anti-trust laws should be replaced by a specific list of forbidden business practices. Foreign companies should be encouraged to compete in our domestic markets.
Free trade competition by foreign companies has busted more American monopolies and cartels than federal intervention. Consider the car manufacturers GM, Ford, and Chrysler. They leisurely ripped off American consumers for years until foreign car makers like Toyota cleaned their plates, and eventually drove two of them into the ditch in 2008.
Foreign companies are not able to compete in protected industries like domestic air transport and communications. The customer satisfaction index for United and American airlines would surely improve if Singapore Airlines and British Airways were allowed to compete in the domestic market.
Although Asian electronics companies supply most of the equipment for domestic communications giants, they could not effectively compete in our culturally-oriented communications services market. We're stuck with Verizon and AT&T!
11
I wouldn't mind seeing a change in the foreign-ownership rule for airlines, to base it on seat-miles.
You know that some kind of change is coming anyway. The proof is in the name that US Airways took after the AA merger: "American Airlines Group."
The old AA had been trying for decades to tie the knot with British Airways, and the name of BA's corporate parent is . . . wait for it . . . International Airlines Group.
Best, I think, to get ahead of the lobbyists whenever that's possible. Set the structure first, and let them react.
You know that some kind of change is coming anyway. The proof is in the name that US Airways took after the AA merger: "American Airlines Group."
The old AA had been trying for decades to tie the knot with British Airways, and the name of BA's corporate parent is . . . wait for it . . . International Airlines Group.
Best, I think, to get ahead of the lobbyists whenever that's possible. Set the structure first, and let them react.
The solution is simple - look to Chattanooga. Public alternative for fiber optic broadband internet causes Comcast and Verizon to actually compete. Better service to consumers and more local employment opportunities.
The best possible response to a Reagan driven failure to enforce antitrust enforcement would be to correct the issue through the power of federal, state, and local government competition. Not only because it would be effective, but also as a historic mic drop response to Reagan's moronic declaration that government is the problem.
The best possible response to a Reagan driven failure to enforce antitrust enforcement would be to correct the issue through the power of federal, state, and local government competition. Not only because it would be effective, but also as a historic mic drop response to Reagan's moronic declaration that government is the problem.
32
Opelika, AL is a "gig city" with municipally provided wireless/phone/cable. True competition with Comcast and Spectrum. Investment in the local economy and superior service. What's not to like and emulate?
1
The situation in a nutshell: competition declines when the cost of competing increases. Regulations and taxes affect the cost of competing. More regulations and higher taxes increase that cost and lead to less competition. Less competition means higher prices and lower wages (because less competition needs fewer employees). Higher prices and lower wages mean the rich get richer and the poor get poorer.
1
It is not regulation per say but what kind of regulation. Government regulation is most often the friend of big business and makes it impossible for competitors to compete.
3
The logic of @Reasonable Many's statement resembles a mathematician discussing the force of gravity while looking at a bridge that collapsed after being built with bad materials by a bribe-paying company, then not maintained.
"F=ma" and "F(g)=m1m2/r2", he says, ignoring the bribes, the shoddy construction, the money siphoned off by corrupt maintenance contractors and featherbedding unions.
In fact, we need to consider the awful state of US broadband -- sliding further behind such highly-regulated economies such as Europe and South Korea -- and bring in smart financial engineers and smart business sociologists, who can identify where rent-seeking, monopoly corruption, and regulatory regimes captured by the corporations are preventing lively competition and better service and economic growth.
"F=ma" and "F(g)=m1m2/r2", he says, ignoring the bribes, the shoddy construction, the money siphoned off by corrupt maintenance contractors and featherbedding unions.
In fact, we need to consider the awful state of US broadband -- sliding further behind such highly-regulated economies such as Europe and South Korea -- and bring in smart financial engineers and smart business sociologists, who can identify where rent-seeking, monopoly corruption, and regulatory regimes captured by the corporations are preventing lively competition and better service and economic growth.
6
@Reasonable Man
Boston
In a nutshell you're barking up the wrong tree. Regulation is not the main driver of cost in most businesses. And if you're paying high corporation taxes you are by definition making a lot of money (or much less likely have an inefficient tax avoidance strategy).
Boston
In a nutshell you're barking up the wrong tree. Regulation is not the main driver of cost in most businesses. And if you're paying high corporation taxes you are by definition making a lot of money (or much less likely have an inefficient tax avoidance strategy).
7
Republican policies are only for obscenely rich oligarchs. Their votes are bought and sold like monopoly money and future jobs after ripping off the government is determined by those Congressional votes and their constituencies go along with this like sheep in order to obtain their votes for social votes like limiting access to bathrooms. or anti abortion policies.
Hillary Clinton has been accused of being in the pockets of big business, but even if there is truth in this she must bend to the will of her constituency if she is elected and that constituency will not tolerate it. This is the true legacy of Bernie Sanders and the Occupy Wall Street movement.
]
There is a reason third world countries are called banana republics as their economies are completely controlled by monarchic corporations who milk the country for everything and leave that country in ruins. Dictators share in this vampirism and that is our Republican country as we become a banana Republic ourselves, but in our country voters still have some power to affect this by our pocket books, and sweeping the old Congress away and either voting for Hillary or Bernie.
Hillary Clinton has been accused of being in the pockets of big business, but even if there is truth in this she must bend to the will of her constituency if she is elected and that constituency will not tolerate it. This is the true legacy of Bernie Sanders and the Occupy Wall Street movement.
]
There is a reason third world countries are called banana republics as their economies are completely controlled by monarchic corporations who milk the country for everything and leave that country in ruins. Dictators share in this vampirism and that is our Republican country as we become a banana Republic ourselves, but in our country voters still have some power to affect this by our pocket books, and sweeping the old Congress away and either voting for Hillary or Bernie.
23
Sci Am Mind published a report about the mental health of senior executives in major corporations. They found that these individuals were significantly higher than the general population on social psychopathology or schizophrenia. The report results were entirely anonymous with regard to corporations or individuals. In the words of the authors, manager had significantly reduced sensitivity to the damage their decisions had on others or society. I would go so far as to say that they also are unable to have a long term view of their decisions on the growth of the organization and future competiveness in their market place. Results that I have seen in most of my past employers. I feel fortunate to have retired a long time ago.
14
Verizon is hardly a monopoly with its 25% of marketshare and the telecom company spends about $17 billion a year expanding its internet business. Admittedly, this level of business expansion is the exception during the Obama depression with its 2% GDP growth falling now to near zero.
Krugman's cause for the Obama depression? Ronald Reagan's ghost! Yes, the president whose liberalization of our economy created the longest period of peacetime expansion without a major recession (1983-2007) is apparently at fault for Obama and the Democrats reversing that liberalization with the most progressively punitive tax code since Hoover and the largest levels of peacetime borrowing, spending and regulating in American history.
Krugman's cause for the Obama depression? Ronald Reagan's ghost! Yes, the president whose liberalization of our economy created the longest period of peacetime expansion without a major recession (1983-2007) is apparently at fault for Obama and the Democrats reversing that liberalization with the most progressively punitive tax code since Hoover and the largest levels of peacetime borrowing, spending and regulating in American history.
2
How conveniently you left out 1979 - 1983, a period of recession caused by the Reagan & the Fed's attempt to rid the economy of inflation that had been plaguing the US since the Eisenhower administration. The policy worked by at what cost in jobs and people's lives which never entered into the calculations. Also, how conveniently you give credit for the recovery that followed that recession far beyond the end of Reagan's administration. His policies were disastrous, especially the "revision" of the tax code which started the unprecedented shift of wealth from the lower and middle classes to the 1%, and the unprecedented budget deficits and increase to the national debt. Even his former Vice-president George H. W. Bush saw that despite his vow of "no new taxes", that taxes had to be raised for the government and economy to function. Higher taxes followed during the Clinton administration and the economy did even better. But, of course that was Reagan' plan all along? What nonsense.
1
And we all know how this period of "peacetime expansion without a major recession" ended.
Staying at a 10,000 foot level of observation, is it that robber barons are reluctant to invest due to lack of need, or that said investment will be rendered obsolete shortly due to technological advancements, or that shareholder demand for larger profits is steering the ship, or all 3?
I never trust employees and their motives for striking. A more nuanced look at the Verizon employees grievance may well disclose that they see large profits and they believe they're entitled to a slice of it.
At ground level, Verizon may just be wiser than we think. Running wires to peoples homes and businesses is very 19th Century. Wireless technology is certain to overtake this model, at some point. Soon? Maybe.
The thing is, I can't imagine the Verizon CEO not investing money when he/she knows it will garner a healthy return. As for the secular-stagnation theory, does anyone expect robber baron corporate America to manage to that notion? No.
I never trust employees and their motives for striking. A more nuanced look at the Verizon employees grievance may well disclose that they see large profits and they believe they're entitled to a slice of it.
At ground level, Verizon may just be wiser than we think. Running wires to peoples homes and businesses is very 19th Century. Wireless technology is certain to overtake this model, at some point. Soon? Maybe.
The thing is, I can't imagine the Verizon CEO not investing money when he/she knows it will garner a healthy return. As for the secular-stagnation theory, does anyone expect robber baron corporate America to manage to that notion? No.
1
"I never trust employees and their motives for striking. A more nuanced look at the Verizon employees grievance may well disclose that they see large profits and they believe they're entitled to a slice of it."
And if they're not entitled to a slice of it, just who is? The shareholders who, unless they are also employees, create no value and do no actual work for the company? Why should the interests of people who feel entitled to be paid for not working (which, again, unless a shareholder is also an employee that is essentially the definition of "investing") have supremacy over the interests of those who actually produce/provide the goods or services that are the reason the company exists?
That, in a nutshell, is what's wrong with our economy and our country.
And if they're not entitled to a slice of it, just who is? The shareholders who, unless they are also employees, create no value and do no actual work for the company? Why should the interests of people who feel entitled to be paid for not working (which, again, unless a shareholder is also an employee that is essentially the definition of "investing") have supremacy over the interests of those who actually produce/provide the goods or services that are the reason the company exists?
That, in a nutshell, is what's wrong with our economy and our country.
2
"I never trust employees and their motives for striking. A more nuanced look at the Verizon employees grievance may well disclose that they see large profits and they believe they're entitled to a slice of it."
Do you mean that employees don't have a stake in the success of the company they work for? I see.
Do you mean that employees don't have a stake in the success of the company they work for? I see.
2
Your handle says it all. But very weak in the imagination department.
Sorry, large companies do not look for profits to invest and grow, they look for expanding market potential. Monopoly or not, if Verizon saw a growing market they would reinvest. Everyone understands that we are selling within a stagnate market. The consumer base is shrinking if changing at all. Profits are only relevant in so much as they show how large any given company must be to survive inside a given market.
The day I was able to switch from Comcast to Fios, I was thrilled. Fios is so much better than Comcast and its cable. I really don't understand Krugman's rant about Verizon not investing in Fios. The biggest problem with Verizon and Fios is customer service. Every time I have an issue with my WiFi or internet service (Fios), I deal with a surly union member who hates his (all workers have been men) job and the company, and seems to do as little as possible. Face it, the Verizon workers just want more money to go with their already good wage and benefits package, but are unwilling to provide customer service in return.
2
What is Verizon's wage and benefits package, Tony? Since you say it is good, I'm assuming you are familiar with it... Please provide the details...
We're all waiting...
We're all waiting...
1
Krugman is clearly correct about diminishing competition; however, I wouldn't put the blame squarely on Reagan. Rather, you could just as easily blame Jeff Bezos who famously upended entrepreneurial thought by inverting the question, "How much can we possible charge for a book?" to the rather ingenious "How little can we possibly charge?" Ours is a world of a different sort of monopoly.. or rather, it seems, ours is a time of natural monopoly.
No one can really compete against Amazon because Amazon isn't taking advantage by profit maximization, and it has already achieved nearly perfect economy of scale. Amazon is just one example. You can't really compete against google because it works well and it is essentially free for most users. Even with the cable giants.... It's so expensive to lay the groundwork of connectivity that once a provider is established, it makes virtually no sense for another company to lay duplicate lines to secure just a fraction of the market. It's kind of like building a second Golden Gate Bridge. Sure you could decrease traffic, but it would be pretty difficult to justify.
If it were just mergers that were the problem, than it could be solved easily enough with scrutiny, ingenuity, and available financing (all of which we have). But I can't really see self defeating regulation requiring Comcast or Amazon to charge its customers more in order to open the door wider for competition and better services.
No one can really compete against Amazon because Amazon isn't taking advantage by profit maximization, and it has already achieved nearly perfect economy of scale. Amazon is just one example. You can't really compete against google because it works well and it is essentially free for most users. Even with the cable giants.... It's so expensive to lay the groundwork of connectivity that once a provider is established, it makes virtually no sense for another company to lay duplicate lines to secure just a fraction of the market. It's kind of like building a second Golden Gate Bridge. Sure you could decrease traffic, but it would be pretty difficult to justify.
If it were just mergers that were the problem, than it could be solved easily enough with scrutiny, ingenuity, and available financing (all of which we have). But I can't really see self defeating regulation requiring Comcast or Amazon to charge its customers more in order to open the door wider for competition and better services.
1
I have long suspected that the U.S. is a country of "high density of low technology."
Contrary to the mantra and cliche' that we are a high-tech nation, in reality we lag in comparison to "most" industrialized countries.
My guess is that the U.S. is an early adopter of innovations, and due to a tradition of massive investment of large financial resources, it throws gigantic amounts of money into new technogies as soon as they surface.
Railroads, highways, airports, telephone grids, the internet, cell phone networks.
Other countries proceed more cautiously and more slowly also due to the lack of large investment capital.
As a consequence we end up with a lot of 1.0 tech and we are stuck with it forever. Other nations enter slowly, don't invest as much in version 1.0 and can quickly upgrade to 2.0 and further development without having to rip apart the initial infrastructure.
I came to the U.S. in the mid 70's. Radial tires were a novelty here, while in Europe they had been the standard for a decade. Why? Because monopoly industry still made money using old equipment and old tech, and did not see the point of investing in the next generation of products. And, as a result, the U.S. tire industry got wiped out by foreign competition.
Same for cars and now high tech, in the form of high performing networks.
Let's face it: this is not a high-tech country, we are just very 'high density low tech."
Later: it's our mentality that prevents the implementation of true innovation.
Contrary to the mantra and cliche' that we are a high-tech nation, in reality we lag in comparison to "most" industrialized countries.
My guess is that the U.S. is an early adopter of innovations, and due to a tradition of massive investment of large financial resources, it throws gigantic amounts of money into new technogies as soon as they surface.
Railroads, highways, airports, telephone grids, the internet, cell phone networks.
Other countries proceed more cautiously and more slowly also due to the lack of large investment capital.
As a consequence we end up with a lot of 1.0 tech and we are stuck with it forever. Other nations enter slowly, don't invest as much in version 1.0 and can quickly upgrade to 2.0 and further development without having to rip apart the initial infrastructure.
I came to the U.S. in the mid 70's. Radial tires were a novelty here, while in Europe they had been the standard for a decade. Why? Because monopoly industry still made money using old equipment and old tech, and did not see the point of investing in the next generation of products. And, as a result, the U.S. tire industry got wiped out by foreign competition.
Same for cars and now high tech, in the form of high performing networks.
Let's face it: this is not a high-tech country, we are just very 'high density low tech."
Later: it's our mentality that prevents the implementation of true innovation.
21
Finally! I've been saying this for years, in the comments of this colomn and elsewhere, but I rarely hear about it from other economists. Robert Reich and Joe Stiglitz are exceptions. The antitrust division of the Justice Department has been asleep for 35 years. We now have significant monopoly power in the airline industry, pharmaceuticals, telecommunications (both cellular and broadband), computers and software, health insurance, banking and so many more. How does monopoly power directly affect the public? What about tax law? What about trade policy and the chronic trade deficits? These are the issues that create the inequality that seems to be at the center of economic discourse.
26
This is exactly the sort of proposal I thought liberalism was about. Capitalism is good, but needs government to shape the conditions under which it operates. Markets need competition (hence anti-trust laws), customers need information about what they're buying (hence the need to standardize difficult to understand products), and the parties to a transaction need to bear the costs and benefits of the exchange (the reason why we need a carbon tax). Then government needs to redistribute some of the benefits of such a market to the least well off so everyone benefits from such a system.
19
Well said. This old FDR Democrat has arrived at the supportable conclusion that the best economic system, one that is creative and lifts most boats, is found in well regulated capitalism.
1
The focus on competition is very welcome and overdue. But remember that a business in the US needs to be very, very large in order to support the complex compliance and human resources bureaucracies necessary to avoid labor and employment law allegations, some of which, like "disparate impact" are incredibly difficult to avoid running afoul of. In some states, like California, it can take multiple years to even open a Burger King outlet, due to the need for community reviews and time required to defeat CEQA nuisance complaints by competitors. And it seems unlikely to me the pressure for competition will be kept up for long. Verizon's unions, even more than Verizon's management and shareholders, benefit from an anti-competitive situation in which monopoly rents support above-average pay for average workers. And the workers least able to seek other work are most likely to have a voice in the administration in Washington. The most skilled don't need an advocate in their corner, and don't usually bother to get one.
2
Yes, by all means, DO bring back the pre-union robber baron era.
What Republican, anti-labor hog wash.
What Republican, anti-labor hog wash.
1
The name of Donald and Melania Trump's youngest son, Barron, is a narcissistic reflection of the brazen sense of entitlement of the donor class. What are the odds that all of the presidential candidates except Bernie Sanders have been on the Wall Street payroll? Be it Hillary being paid by Wall Street for secret speeches, Cruz's wife on the Goldman Sachs payroll and his single Senate campaign financed by said firm, Kasich employed by Lehman Bros. and Trump's admitted pay offs of politicians to do his will, the plutocracy's myopic purpose is to attain a monopoly of power and wealth while pauperizing and pulverizing the globe in the process.
11
What about "big banks"? They're not quite monopolies, though arguably they engage in some monopolistic behavior.
Bernie Sanders has made a big issue of breaking up the "big banks."
But, as The Times reported this week, the big banks are effectively breaking themselves up, under pressure from regulators acting under Dodd-Frank. http://tinyurl.com/znuzqcu
Aren't big communications companies also "systemically important," in their own way? Shouldn't they merit the same kind of regulatory pressure as the big banks?
Bernie Sanders has made a big issue of breaking up the "big banks."
But, as The Times reported this week, the big banks are effectively breaking themselves up, under pressure from regulators acting under Dodd-Frank. http://tinyurl.com/znuzqcu
Aren't big communications companies also "systemically important," in their own way? Shouldn't they merit the same kind of regulatory pressure as the big banks?
12
Well, it's settled. No matter *what* Krugman says, it is an opportunity for the berniebots to spam the thread and not let a reasoned discussion take place.
Anyway, ignorance is bliss. On the topic:
Yes, I have been arguing for a long time that one way to deal with CO2, for example, is to de-monopolize the electricity business. The problem is that "free market" has been co-opted by the right to mean laissez-faire, Feudalistic Capitalism, and those on the left can't get past the words to the original definition.
Distributing electricity (the grid) must be completely separate from generation, and operate like a common carrier. Then the market can decide, given an equitable structure of subsidies and internalized costs, on the best alternatives to fossil fuels.
Anyway, ignorance is bliss. On the topic:
Yes, I have been arguing for a long time that one way to deal with CO2, for example, is to de-monopolize the electricity business. The problem is that "free market" has been co-opted by the right to mean laissez-faire, Feudalistic Capitalism, and those on the left can't get past the words to the original definition.
Distributing electricity (the grid) must be completely separate from generation, and operate like a common carrier. Then the market can decide, given an equitable structure of subsidies and internalized costs, on the best alternatives to fossil fuels.
18
The so called Bernie bots you talk about are just able to see that what PK is discussing is part of a larger issue or suite of issues. We, I'll include myself among your bots, can see that there has been a profound loss of workers rights in the past 35 years coupled with an obscene rise in income for the wealthiest Americans. In addition corporations like Verizon mentioned here don't feel a need to invest in improvements because they have near monopolies in their regions. And yes, this is directly related to what PK is discussing in this article.
Krugman threw his hat in the ring for the establishment/status quo Democrat who, along with her husband, has been instrumental in making the Democratic party the 2nd party of the plutocracy, who cowed from and co-opted to every right-wing economic meme, who made the Democratic party an accomplice to enacting the vision of Reagan and neo-liberals from Friedman, Hayek, von Mises, and the wishes of the financial mediocrities. And this champion he's chosen -- Clinton -- thinks all that needs doing is tinkering with the "successes" (hahahahaha...) of the Obama Administration, that Dodd-Frank is close enough, that the ACA was a real solution, that letting Wall Street of the hook and forgetting the people they ruined was fine, ..., and that this tinkering will get done in the face of GOP obstruction (and Sanders' agenda won't) because well, no Clinton supporter who proudly proclaims all that rational realism can ever explain that.
A lot of Krugman's audience just simply don't take him seriously anymore. They really never should have, but that's neither here not there.
A lot of Krugman's audience just simply don't take him seriously anymore. They really never should have, but that's neither here not there.
Well, I disagree. You see from the Bernie side the long term inability to break up monopoly power can easily be see as the corrupting influence of big money on politics. and the revolving door. Both have been central to the clinton family. If you understand "US Prosecution of White Collar Crime Hits 20-Year Low ...www.ibtimes.com/us-prosecution-white-coll.", and the money influence probably played a central role in the lack of banking prosecutions in the obama administration as well. This is not a party issue, but a problem with the status quo of both republicans and democrats. You could make the argument that the establishments of both parties are actively working against the outsiders who would work on this problem in a more effective manner. That the purchase of favors, legislation, and candidates has led to the oligarchy that gilens describes. One could argue it's influenced tax policy, and the very things seen in the panama papers. tHE LACK OF CRACKDOWNS ON tax havens. In essence these are all forms of legal political corruption, bought and paid for by big money. so it's very reasonable to question what clinton's motivations towards actually solving these problems would be. It's why the over 100 million dollars earned by the family via big money speeches deeply matter
To anyone paying attention to various markets, a study was unnecessary. There is a good reason why, for example, gasoline prices have remained high even in the presence of a continuing glut in supply, and that reason is oil companies have so little competition, and are so entwined, that what appears to be robust competition is not. The same can be said for food, for clothing (quick, point out significant differences, including price and quality, between allegedly competing department stores) and even automobiles. Monopolies or quasi-monopolies rule the roost in America.
14
The Federal regulations affecting competition are imperfect. While Verizon may be able to not focus on improving their network, it is hardly unique. There is a cycle to the improvements in technology. It wasn't long ago that FIOS was thought of as cutting edge. The huge capital costs may inhibit newcomers but overall the strides made over the last decade are truly impressive.
There are many examples of where bigness stifles competition, Look at the airline industry today. It went through decades of cut throat competition where bankruptcy and reorganization were the norm. Now there are a handful of carriers and little downward price pressure. The status quo will be challenged ----as just part of the cycle by some innovative low cost carrier.
While Dr Krugmans insights are always helpful, how about using his insight to focus on the problems of education or taxation or the implicit inflation that is destroying the middle class. If government is going to try and fix something, there are plenty of long term problems that need to be addressed by the only entity that can make structural change----the government,
There are many examples of where bigness stifles competition, Look at the airline industry today. It went through decades of cut throat competition where bankruptcy and reorganization were the norm. Now there are a handful of carriers and little downward price pressure. The status quo will be challenged ----as just part of the cycle by some innovative low cost carrier.
While Dr Krugmans insights are always helpful, how about using his insight to focus on the problems of education or taxation or the implicit inflation that is destroying the middle class. If government is going to try and fix something, there are plenty of long term problems that need to be addressed by the only entity that can make structural change----the government,
3
Corporate execs of publicly held companies are driven by a combination of self-interest and fiduciary interest to maximize near term profits. Typical CEO pay packages tie stock option grants and bonuses to meeting profit and growth goals over the next 6 quarters. For companies like Verizon, that results in the behavior described in this essay. Wall Street's rules for stock valuation keep the country focused on short term growth rather than long term vitality. If we want different behavior, we must first change the rules. Insanity is doing the same thing over and over and expecting a different result.
23
American corporations Socialize Costs and Privatize profits. They do not pay for their fair share of maintaining the infrastructure that supports our society.
How about some charts which Krugman in his new role as politician seems to forget even in his blog. Here is a reference that contains lots of data. In particular, there are charts from the BEA giving after-tax (note this Richard L.) corporate profits as a percentage of GDP, effective corporate tax rate, and employee compensation as a percentage of GDP. They go from 1930 to 2013.
http://www.nytimes.com/2014/04/05/business/economy/corporate-profits-gro...
Here is one that is missing for this discussion, private domestic investment as percent of GDP, https://research.stlouisfed.org/fred2/series/A011RE1Q156NBEADomestic
As you can see while it has been rising a bit recently it is still way below the level not only since the Bush recession, but since WWII.
I think these charts give the lie to a couple of conservative claims:
1. High corporate taxes are responsible for the lack of investment and are good for everyone.
2. High real corporate taxes are bad for the economy.
One might ask where has the money gone. One answer is into cash held by corporation and doing the economy no good.
See St Louis FED article Why Are Corporations Holding So Much Cash.
Another answer is into executive compensation. I am afraid to give another URL, but it is easy to find charts illustrating this.
Krugman and Bernie (!) are correct. The corporations are robbing us blind.
http://www.nytimes.com/2014/04/05/business/economy/corporate-profits-gro...
Here is one that is missing for this discussion, private domestic investment as percent of GDP, https://research.stlouisfed.org/fred2/series/A011RE1Q156NBEADomestic
As you can see while it has been rising a bit recently it is still way below the level not only since the Bush recession, but since WWII.
I think these charts give the lie to a couple of conservative claims:
1. High corporate taxes are responsible for the lack of investment and are good for everyone.
2. High real corporate taxes are bad for the economy.
One might ask where has the money gone. One answer is into cash held by corporation and doing the economy no good.
See St Louis FED article Why Are Corporations Holding So Much Cash.
Another answer is into executive compensation. I am afraid to give another URL, but it is easy to find charts illustrating this.
Krugman and Bernie (!) are correct. The corporations are robbing us blind.
29
Zero percent interest rate monetary policy freezes money in place independently of business decisions.
Typical of Paul Krugman, never hesitating to call the spade a spade. It require a great courage to call the king indeed has no clothes.
By appropriately calling a leading multinational Verizon a Robber Baron, Krugman not only exposes the dirty side of Laissez-Faire capitalism, but also exposes specter that is haunting America. Though there are persistent evidence for decades that key economic sectors like investment banking, commercial banking, energy, housing, out of regulators sight have resulted in enormous short-term gains for the few, fatal harm for the many, and severe damage to the public good.
Amazingly the fanatic Any Rand free-market fundamentalists keep stoking the fires of laissez-faire anti-regulation policies swearing "I will never live for the sake of another man, nor ask another man to live for mine".
Extremely disturbing is that these American Ayn Randers push for legitimacy of laissez-faire, no matter it runs counter to overwhelming historical evidence.
Free-market fundamentalists explain away every financial crisis as bumps on the road to economic nirvana all that is required is the government just get out of the way of business, oblivious of the fact that these economic crises occurred because government got out of the way of business. They occurred because regulators were asleep, or captives of their respective industries.
By appropriately calling a leading multinational Verizon a Robber Baron, Krugman not only exposes the dirty side of Laissez-Faire capitalism, but also exposes specter that is haunting America. Though there are persistent evidence for decades that key economic sectors like investment banking, commercial banking, energy, housing, out of regulators sight have resulted in enormous short-term gains for the few, fatal harm for the many, and severe damage to the public good.
Amazingly the fanatic Any Rand free-market fundamentalists keep stoking the fires of laissez-faire anti-regulation policies swearing "I will never live for the sake of another man, nor ask another man to live for mine".
Extremely disturbing is that these American Ayn Randers push for legitimacy of laissez-faire, no matter it runs counter to overwhelming historical evidence.
Free-market fundamentalists explain away every financial crisis as bumps on the road to economic nirvana all that is required is the government just get out of the way of business, oblivious of the fact that these economic crises occurred because government got out of the way of business. They occurred because regulators were asleep, or captives of their respective industries.
39
Leave it to the good Professor of economics to begin his column about the evils of monopolists with an example that utterly fails to prove his point.
Mr. Krugman may know a thing or two about economic theory but he knows next to nothing about running a business. He has no knowledge of Verizon's internal investment analysis yet is certain it is purposeful under-investment in a vibrant market segment, if only to deprive workers in that segment more job opportunities. Bunk.
Because he favors government regulation in general and regulation by this President in particular, he ignores the recent (and likely unlawful) regulation of the Internet by the FCC that has caused the rate of investment in broadband to fall across the industry.
Whatever the merits of the larger argument about the risks of monopoly power, his use of the Verizon example implies that he didn't have many other examples to prove his point.
Mr. Krugman may know a thing or two about economic theory but he knows next to nothing about running a business. He has no knowledge of Verizon's internal investment analysis yet is certain it is purposeful under-investment in a vibrant market segment, if only to deprive workers in that segment more job opportunities. Bunk.
Because he favors government regulation in general and regulation by this President in particular, he ignores the recent (and likely unlawful) regulation of the Internet by the FCC that has caused the rate of investment in broadband to fall across the industry.
Whatever the merits of the larger argument about the risks of monopoly power, his use of the Verizon example implies that he didn't have many other examples to prove his point.
1
Other than citing one questionable example, you haven't come up with examples either.
6
Leave it to Airman to complain that Krugman "utterly fails to prove his point" and then attempts to prove his own point with a single word: "Bunk".
2
Mr. Airman, how would a multi-tiered pay-to-play broadband service given me, the consumer, a faster, cheaper, internet experience?
1
This anti-competitive or monopolistic corporate behavior can be dealt with in a reformist way as the Obama Administration is trying to do or in transformational way as Senator Sanders proposes.
Part of the transformational approach to dealing with the domestic and global economy is transforming the unjust, unsustainable and, therefore, unstable international monetary system. One way of doing this is raising the issue of fluctuating or pegged exchange rates and considering the feasibility of a carbon-based international monetary system with a monetary standard of a specific tonnage of CO2e per person. The conceptual, institutional, ethical and strategic dimensions of such system are presented in Verhagen 2012 "The Tierra Solution: Resolving the climate crisis through monetary transformation" and updated at www.timun.net .
Part of the transformational approach to dealing with the domestic and global economy is transforming the unjust, unsustainable and, therefore, unstable international monetary system. One way of doing this is raising the issue of fluctuating or pegged exchange rates and considering the feasibility of a carbon-based international monetary system with a monetary standard of a specific tonnage of CO2e per person. The conceptual, institutional, ethical and strategic dimensions of such system are presented in Verhagen 2012 "The Tierra Solution: Resolving the climate crisis through monetary transformation" and updated at www.timun.net .
As this column makes clear, our society has accepted a bogus argument. Businesses and their political allies, relying on the concept of economies of scale, have claimed that the consumer benefits from ever larger firms. The ancient principle that capitalism requires vigorous competition has faded from view, although corporate leaders continue to pay it lip service.
Economies of scale do contribute to more efficient production in manufacturing and some service industries, but only up to a certain point. Beyond a certain firm size, diseconomies of scale emerge. U. S. Steel, when it was created in 1901, already exceeded the optimum size of a manufacturing concern, and it immediately began to lose market share to smaller firms.
Professor Krugman properly focuses on the way monopoly power distorts investment decisions, but it is also important to note that such companies lose efficiency.
Economies of scale do contribute to more efficient production in manufacturing and some service industries, but only up to a certain point. Beyond a certain firm size, diseconomies of scale emerge. U. S. Steel, when it was created in 1901, already exceeded the optimum size of a manufacturing concern, and it immediately began to lose market share to smaller firms.
Professor Krugman properly focuses on the way monopoly power distorts investment decisions, but it is also important to note that such companies lose efficiency.
5
The mantra is no longer "The economy, stupid" but "The automated technology, stupid" The consequence of the innovation coupled with rise in human population will have consequence for the "globalization". We need every village to be self sufficient. This trend of automation was and is still clear since the invention of the "computer" - all the dots have been connected - smart software and hardware. So, nation deal with this. As a liberal supporting Bernie, I think the economists of all stripes from the 90's should hang their hats, especially Dr. Summer's. I am really worried that he will have a position of say if Mrs. Clinton wins the prize.
"The obvious next question is why competition has declined. The answer can be summed up in two words: Ronald Reagan. ... A new doctrine, emphasizing the supposed efficiency gains from corporate consolidation, led to what those who have studied the issue often describe as the virtual end of antitrust enforcement." -- P. K.
So, how was this doctrine introduced and imposed? Not simply through lax enforcement, but also with regulatory rule changes.
"In November 1982 the very government agency that is supposed to regulate the stock market adopted Rule 10b-18, which instead encourages corporations to manipulate stock prices through open-market repurchases." -- William Lazonick http://nyti.ms/YLlW5X
"“These buybacks were treated as stock manipulation for decades because that is exactly what they are,” Ms. (Senator Elizabeth) Warren said. “The S.E.C. needs to recognize that.”" -- Andrew Ross Sorkin http://nyti.ms/1QheLoq
"“While I am concerned that the SEC lacks the tools to properly evaluate this issue, I am also disappointed that the SEC’s official response does so little to even acknowledge the stock buyback phenomenon we are seeing in financial markets.” -- Senator Tammy Baldwin, by David Dayen http://bit.ly/1YCB9if
An obvious regulatory improvement would be retirement of the confounding and exculpatory S.E.C. "safe harbor" rule.
Need our nation wait until the end of the term of S.E.C. chair Mary Jo White in 2019 to “promote competition” and restrain market manipulation?
So, how was this doctrine introduced and imposed? Not simply through lax enforcement, but also with regulatory rule changes.
"In November 1982 the very government agency that is supposed to regulate the stock market adopted Rule 10b-18, which instead encourages corporations to manipulate stock prices through open-market repurchases." -- William Lazonick http://nyti.ms/YLlW5X
"“These buybacks were treated as stock manipulation for decades because that is exactly what they are,” Ms. (Senator Elizabeth) Warren said. “The S.E.C. needs to recognize that.”" -- Andrew Ross Sorkin http://nyti.ms/1QheLoq
"“While I am concerned that the SEC lacks the tools to properly evaluate this issue, I am also disappointed that the SEC’s official response does so little to even acknowledge the stock buyback phenomenon we are seeing in financial markets.” -- Senator Tammy Baldwin, by David Dayen http://bit.ly/1YCB9if
An obvious regulatory improvement would be retirement of the confounding and exculpatory S.E.C. "safe harbor" rule.
Need our nation wait until the end of the term of S.E.C. chair Mary Jo White in 2019 to “promote competition” and restrain market manipulation?
10
As usual - facts mixed in to coverup the baloney. Verizon, Krugman's pick as an undeserved "monopolistic" corporation - it invested $28 billion in 2015; hardly chopped liver; while, yes, its investment in FIOS - wireline business - is shrinking; in fact Verizon sold off a good segment of it. Verizon is betting the farm on Wireless - that is, Mobile - for the future; and that's where it is investing. Any doubt about competition in Wireless? Many choices but, face fact, Verizon's service is usually the best because of - its heavy investment.
It's amazing that a Nobel Prize winning economist doesn't - or pretend he doesn't - understand Capitalism. OK- there are a few monopolys everyone hates - but uses. They are the airlines and the cable companies. Can you name any significant others? As for the huge profits corporations are obtaining - where are these? Well - the auto companies have had a great year - finally - but no monopoly there. And the nation's manufacturers are struggling with tiny growth and diminished profits. Even the banks just reported reduced profits.
The problem with the economy - 2% growth - is a direct consequence of the rabid anti-business policies, regulations, and taxes inflicted on the US corporate world. In Obama, and in his administration - we have the worst for business since WWII which explains tepid growth that leads to most of the ills Krugman complains about. Wage inequality, lack of demand, unemployment, and so on. Fix it and we'll grow.
It's amazing that a Nobel Prize winning economist doesn't - or pretend he doesn't - understand Capitalism. OK- there are a few monopolys everyone hates - but uses. They are the airlines and the cable companies. Can you name any significant others? As for the huge profits corporations are obtaining - where are these? Well - the auto companies have had a great year - finally - but no monopoly there. And the nation's manufacturers are struggling with tiny growth and diminished profits. Even the banks just reported reduced profits.
The problem with the economy - 2% growth - is a direct consequence of the rabid anti-business policies, regulations, and taxes inflicted on the US corporate world. In Obama, and in his administration - we have the worst for business since WWII which explains tepid growth that leads to most of the ills Krugman complains about. Wage inequality, lack of demand, unemployment, and so on. Fix it and we'll grow.
What you say is nonsense. Here is a reference that contains lots of data. In particular, there are charts from the BEA giving AFTER-TAX corporate profits as a percentage of GDP, effective corporate tax rate, and employee compensation as a percentage of GDP, all from the BEA. They go from 1930 to 2013.
http://www.nytimes.com/2014/04/05/business/economy/corporate-profits-gro...
http://www.nytimes.com/2014/04/05/business/economy/corporate-profits-gro...
1
What a load of dissimulating horsetwaddle. These people are just making excuses for sitting on money, which is the natural thing to do when putting it in banks costs money.
1
Odd that Professor Krugman should choose Verizon, and particularly Fios, as an example of monopoly power. It is nothing of the sort. Their competition is cable. Verizon can and does offer Fios service right on top of neighborhoods served by cable.
Fios provides fiber optic services all the way to the home. In order to do this Verizon has to run fiber optic cable on every street, avenue, lane, and cul de sac in any given area. It's very expensive to do. More importantly to this story, payback is measured in tens of years, and is only guaranteed if enough people sign up for the service.
Verizon didn't stop running fiber because of lack of competition allowed them to sit back; they had competition. It stopped because the up front costs were so high and the payback horizon so far off. Blame corporate short-sightedness, not lack of competition, for that.
Fios provides fiber optic services all the way to the home. In order to do this Verizon has to run fiber optic cable on every street, avenue, lane, and cul de sac in any given area. It's very expensive to do. More importantly to this story, payback is measured in tens of years, and is only guaranteed if enough people sign up for the service.
Verizon didn't stop running fiber because of lack of competition allowed them to sit back; they had competition. It stopped because the up front costs were so high and the payback horizon so far off. Blame corporate short-sightedness, not lack of competition, for that.
2
Addressing the over concentration and lack of competition in a variety of industries (including banking and finance) is a necessary step to address the inequality issues facing us. We also need to eliminate stock buy-backs and reexamine how and when equity is used as compensation. Eliminating advanced advice on earnings is another necessary step.
None of these steps require congress.
None of these steps require congress.
8
It doesn't? How else to do what you suggest?
Anyone who doubts this is so should check the behavior of Walmart. Upper management is quite conscious of the disinvestment in poor (mostly rural) communities, as stores go under maintained and get dingier. They closed all the "Walmart Express" experiment which were located in poor communities, meanwhile management is frantically trying to move the Neighborhood Markets "Upscale" to carve out a niche serving the higher end consumers.
Many Working and minority neighborhoods have declined to levels of economic deprivation equivalent to those seen during the Great Depression, while we have created an economic regime that fragments the social links that kept people alive during the Depression. Meanwhile, the Republicans never saw an anti-Poverty Program could resist attacking and defunding to gratify their base.
So it's been a triple whammy attack on the poor and minorities.
Let's be quite clear, it is Republican Governance (or lack thereof that has created many of our problems, including a Justice and Department and Judiciary reluctant to pursue anti-trust actions.
Many Working and minority neighborhoods have declined to levels of economic deprivation equivalent to those seen during the Great Depression, while we have created an economic regime that fragments the social links that kept people alive during the Depression. Meanwhile, the Republicans never saw an anti-Poverty Program could resist attacking and defunding to gratify their base.
So it's been a triple whammy attack on the poor and minorities.
Let's be quite clear, it is Republican Governance (or lack thereof that has created many of our problems, including a Justice and Department and Judiciary reluctant to pursue anti-trust actions.
20
I remember the controversy when President Reagan reigned in the Securities Exchange Commission. The act led the emergence giant mergers paid for with junk bonds promises and not much else. The entertainment media in particular began to gobble up and consolidate the myriad of information systems both in print and broadcast media. The diversity of sound reasoning that became available to citizens around nation was narrowed to perhaps, at best, the level middle school thinkers. At the same time in order to purposively destroy organized labor fortunes in manufacturing were allowed to move overseas..
16
Preamble to the 99.9% United States Constitution
We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.
Preamble to the 0.1% Private Domain Constitution
Me the Personal Resident of my Private Domain, in order to form a more perfect Self, establish tax avoidance Justice, insure domestic and foreign real estate and personal property, engage expert legal and financial counsel for net worth defense, promote political insider donations in exchange for advantageous personal and corporate Welfare, and secure the Blessings of tax haven Liberty to myself and my Posterity, do ordain and establish this Constitution for Me, the Personal Resident of my Private Domain.
We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.
Preamble to the 0.1% Private Domain Constitution
Me the Personal Resident of my Private Domain, in order to form a more perfect Self, establish tax avoidance Justice, insure domestic and foreign real estate and personal property, engage expert legal and financial counsel for net worth defense, promote political insider donations in exchange for advantageous personal and corporate Welfare, and secure the Blessings of tax haven Liberty to myself and my Posterity, do ordain and establish this Constitution for Me, the Personal Resident of my Private Domain.
10
It's the same old tune. When a company's advertising is more creative and polished than their product, we know we are in trouble. What is laughable is that these robber barons will lambast the governmental bureaucracy while creating one themselves. And they would have government use their model for performance. Take the roads and bridges that need constant upkeep and watch pro business congressmen and senators deny funding for that purpose. Then take the insurance industry. Yes, they seek big profits from illness. A few years ago my family physician quit practicing to take a job in the insurance industry because he claimed he couldn't refuse the offer. When a physician can make more money denying service than treating ill patients, something is wrong. So we have companies with great TV ads and ordinary, or weak service making money hand over fist because there is no competition. To them nothing surpasses the gilded image. To these captains of industry indifference to the customer is the hallmark of their industry. They talk free enterprise and competition, but in reality it is only talk. Think! Too big to fail! Now translate: no competition = lousy service. Do you see the connection?
19
It is sometimes difficult to comprehend how much damage Reagan did to America, whether with the semi-religious embrace of deregulation, the crippling attack on labor, elevating greed in business philosophy, reversing logical energy policy, soiling the environment, shifting the burden of taxes, tripling the debt, or ignoring infrastructure it all still lingers with us and continues to do damage to America.
The failure to reign in monopolies and reward those who refuse to reinvest in America will repeat the cycle that led to the devastation of manufacturing in America.
The failure to reign in monopolies and reward those who refuse to reinvest in America will repeat the cycle that led to the devastation of manufacturing in America.
19
Why don't we call these profits what they are: artificially high profits. The soaring stock market is based on artificially high profits. Most of these profits are really R&D, expansion, and employee incentive money, that is going to the wrong people, investors. But that is okay because the rich folks will know exactly when the next best thing will come and Verizon's stock will begin to fall. the big investors will pull their money out in time. The rest of us will lose our shirts. The Verizon CEO will get his golden parachute for bleeding the company dry for those large investors and eventually running the company into the ground and destroying the employee's lives. And so it goes, business American style.
16
Two more words to add to the list: shareholder value. The focus on the short term and shareholder value as the yardstick of success, has reduced competition as companies have gobbled each other up to achieve growth targets. Organic growth and investment in research, infrastructure and worker training takes years to see a return and Wall St etc would crucify a company who decided to take this course. The result, along with reduced competition, is less than full employment since one way to achieve growth is to reduce expenses, this growth isn't real but sure looks good on paper and on those quarterly investor conference calls. There are few exceptions to this rule, Amazon is perhaps the most well known......
8
It could also be that "concentration" is efforts by businesses to scale up in order to better amortize the (growing) costs of regulation and a byzantine tax code of the very big governmentism that Mr. Krugman is so enamored of. As for Verizon's lack of interest in expanding its Fios network, perhaps the answer to that can be found in the Obama Administration's regulatory takeover of these private networks via the new "net neutrality" regulations. Businesses have little reason to use their increasing cash flows on investment in the Obama (toxic) economic environment. It's not a "lack of competition" but rather a lack of "supply side" incentives, as Keynesian (fiscal & monetary) policies in all major nations focus on increasing "aggregate demand," while their governments pursue anti-capitalist economic policy agendas that suffocate innovation and investment. "Secular stagnation" sets in precisely as a result of these sorts of government interventionist agendas (as happened during The Great Depression), not because businesses eschew competition. Count me skeptical of Obama Administration efforts to "increase competition," as we can rest assured that it will involve even more of the anti-capitalist interventionism he has focused on to date, which has produced the worst post-war recovery in our history. So we know full well what is bad for the economy - the kinds of interventionism and the big government that leftist economists like Mr. Krugman, Reich, Stiglitzm et al love.
It really is amazing how obtuse people are to the fact that zero percent interest rate policy freezes up the flow of money, even after a decade of it.
I was going to let you just rant, but then when you claimed that "government intervention" was linked to the First Republican Great Depression, I just had to call you on that.
It was government intervention AFTER the start of the Depression that SAVED capitalism from itself. Saved the banks by establishing confidence by creating the FDIC.
It's bad enough that you are wrong. But to be 180 degrees wrong suggests you shouldn't be allowed to vote.
It was government intervention AFTER the start of the Depression that SAVED capitalism from itself. Saved the banks by establishing confidence by creating the FDIC.
It's bad enough that you are wrong. But to be 180 degrees wrong suggests you shouldn't be allowed to vote.
1
Capitalism - (Competition Rules) = Feudalism
15
Barnie has been screaming for Breaking up the Big Banks and the currrupting Wall Stret. What Krugman is saying it is not just the Banks but the entire "CORPORTE" landscape needs to be broken. In most towns it is either Lowes or Home depot; staples or Office Depot; AT&T or Verizon (MCI became the hammer on the AT&T only to be gobbled up by the AT&T's baby - Verizon); and on and on. Exxon's purchase of Mobil was completely monopolisti. Looks like only the Auto industry is competitive and that is because of the foreign competition. Trump talks about looosing jobs Japan and China. That's because the Japanese car makers compete succesfully with Ford and GM.
Yes,in theory, increased size brings in efficiency and in theory the customers benefit. In practice, the increased efficiency deepens the pockets of the owners. These capitalists have no social conscience. They want poor to go to war and defend them in the streets and other lands. Laffer provided the "intellectual(?)" rationale to Ronald Reagan. He is talking again. His theories were a pure hogwash and looked like he was on the take of the Republican PArty. And Milton Friedman was another pony intellectual
I am a Hillary supporter. but I hope she focuses not only on the big banks but also all big corporations - United Health, Insurance industry, big Pharma, and food producers . Break them all and make them compete and let the OWNERS become more efficient.
Yes,in theory, increased size brings in efficiency and in theory the customers benefit. In practice, the increased efficiency deepens the pockets of the owners. These capitalists have no social conscience. They want poor to go to war and defend them in the streets and other lands. Laffer provided the "intellectual(?)" rationale to Ronald Reagan. He is talking again. His theories were a pure hogwash and looked like he was on the take of the Republican PArty. And Milton Friedman was another pony intellectual
I am a Hillary supporter. but I hope she focuses not only on the big banks but also all big corporations - United Health, Insurance industry, big Pharma, and food producers . Break them all and make them compete and let the OWNERS become more efficient.
14
You are living a pipe dream if you think Clinton will bite the hand that feeds her. She will try to make you think she is but it will just be a. Superficial love nip.
And the author's answer is Clinton?
16
If Hillary Clinton is going to be associated with, or blamed for, every single thing her husband did, then yes. After all, he tried to "revive anti-monopoly efforts."
Bernie's been ranting about banks, when banks and "Wall St." are less a problem than the laxity in enforcing anti-trust laws. Maybe Bernie should change his message to "break up everything."
However, Dr. Krugman does show once again that "trickle down economics" is a failure. The rich keep their money, they don't reinvest or create more jobs--unless those jobs are in Asia or for Asians who come here on work visas that the GOP lobbied for to keep their corporate masters happy.
Bernie's been ranting about banks, when banks and "Wall St." are less a problem than the laxity in enforcing anti-trust laws. Maybe Bernie should change his message to "break up everything."
However, Dr. Krugman does show once again that "trickle down economics" is a failure. The rich keep their money, they don't reinvest or create more jobs--unless those jobs are in Asia or for Asians who come here on work visas that the GOP lobbied for to keep their corporate masters happy.
1
Oh, I finally got it! "Free Market" means free from competition. At least, it means that to the owners of the companies and those who look out for them. Well, duh! Sorry it took me so long. I kept having faith in the system....
10
Paul:
In this column, you make a fine argument as to why people should vote for Senator Bernard "Bernie" Sanders and a political and economic revolution, and why people should not vote for Hillary Clinton and the status quo (a.k.a. nominal/ostensible change).
Yes, the economic and political system is rigged against the 99-percent, and no Wall Street-backed Democrat or any Republican will work to change such a perverted economic/political system.
Your column explains the fire-in-the-belly of Senator Bernard "Bernie" Sanders' supporters.
Thank you.
In this column, you make a fine argument as to why people should vote for Senator Bernard "Bernie" Sanders and a political and economic revolution, and why people should not vote for Hillary Clinton and the status quo (a.k.a. nominal/ostensible change).
Yes, the economic and political system is rigged against the 99-percent, and no Wall Street-backed Democrat or any Republican will work to change such a perverted economic/political system.
Your column explains the fire-in-the-belly of Senator Bernard "Bernie" Sanders' supporters.
Thank you.
16
OMG! Are you now advocating that we "break up the big corporations" maybe even (gasp) banks as well to promote competition? I'm glad that the spirit of Teddy Roosevelt has finally awoken in you and that you, too, "Feel the Bern" of those "malefactors of great wealth" (aka "robber barons") who are choking our economy and its workers in the death grip of "'secular stagnation.'"
16
Robber barons still and again. I seem to recall something in the Bible about not coveting your neighbor’s house, your neighbor’s wife, or his male servant, or his female servant, or his ox, or his donkey, or anything that is your neighbor’s.
3
If you are going to quote the Bible, then please also remember that every 50 years the Hebrews had a Jubilee Year, when all debts were forgiven and land was returned to its original owners. That apparently was an attempt to keep too much wealth from accreting into too few hands. Which is exactly the problem being discussed in these pages.
2
Stopped when I read the word "bible". Not interested in quotes out of a book thousands of years old. How about you cite something relevant?
1
do those injunctions just cover the average joe, or do they also apply to international corporations?
2
Unregulated, or better yet, deregulated capitalism at your service. You don't have to be an economist to know which way the wind blows...
3
Well I guess you could break up the phone companies...again.
Well, well, well, Prof Krugman is finally becoming more flexible! We need government regulation period. The whole cable and internet industry is ripping us off, as reflected in our convulted bills; Europe is better on this, although they do not have the unlimited offers we do...The answers are simple, getting them is complex; And Krugman does not help; Can we just not have more government regulation and get on with it??
3
I am glad to see Paul Krugman back to his excellent economic analysis.
10
"There are, then, good reasons to believe that reduced competition and increased monopoly power are very bad for the economy."
Exactly! You don't get any more trenchant than bombshells of insight like that! It's hard to believe nobody had deduced that before 2016.
Or maybe this stroke of genius:
"The obvious next question is why competition has declined. The answer can be summed up in two words: Ronald Reagan."
Except that's intentionally misleading. The answer is more complex. It goes like this: Reagan and the political periphery around his thrust set up a organism to brow-beat the political world into accepting the neo-liberalism of quacks like Hayek, Rand, von Mises, Friedman. The Democrats, as the supposed party of the people and the political opposition to such a political program, decided it was easier to tuck their tails, be co-opted, play me-too market fundamentalism, chime in with goverment-is-bad, and become a neo-liberal party that wasn't bothered at all alienating it's natural economic constituency. But of course, Krugman -- loyal Democrat apologist and neo-liberal economist that helped egg the Democrats to their new 2nd party of the 1% -- isn't going to say that.
Exactly! You don't get any more trenchant than bombshells of insight like that! It's hard to believe nobody had deduced that before 2016.
Or maybe this stroke of genius:
"The obvious next question is why competition has declined. The answer can be summed up in two words: Ronald Reagan."
Except that's intentionally misleading. The answer is more complex. It goes like this: Reagan and the political periphery around his thrust set up a organism to brow-beat the political world into accepting the neo-liberalism of quacks like Hayek, Rand, von Mises, Friedman. The Democrats, as the supposed party of the people and the political opposition to such a political program, decided it was easier to tuck their tails, be co-opted, play me-too market fundamentalism, chime in with goverment-is-bad, and become a neo-liberal party that wasn't bothered at all alienating it's natural economic constituency. But of course, Krugman -- loyal Democrat apologist and neo-liberal economist that helped egg the Democrats to their new 2nd party of the 1% -- isn't going to say that.
2
The Robber Barons control the political process, through campaign finance and lobbying; and they control the media, through their ownership of it and advertising on it. Do you think they will ever go along with anything that would shrink their cash cow? They are as likely to do that as to kick away from the window the ladder they used to rob your house.
10
But what about the affect of people abandoning land lines for cell phones? Isn't this a much larger source for the shrinkage of the need for workers than any issues you bring up here?
Why have you never discussed technological innovation as a source for the loss of jobs here and all over the globe? Am I missing something when I assume that this is the primary cause for the reduction of the need of human labor in America and around the world?
I am waiting for you and other pundits to discuss the affects of technology in all aspects of production and services on the overall reduction of labor and therefore jobs. Everywhere I look, computers are reducing the need for workers and I read that factories produce goods with a fraction of human labor previously needed because of robotics and other technology.
Am I mistaken that all the factors that come from the mouths of pundits and politicians about job loss and redistribution of wealth from workers to investors are drops in the bucket compared to technological innovations?
Maybe pointing out villains with human faces makes for better entertainment.
Why have you never discussed technological innovation as a source for the loss of jobs here and all over the globe? Am I missing something when I assume that this is the primary cause for the reduction of the need of human labor in America and around the world?
I am waiting for you and other pundits to discuss the affects of technology in all aspects of production and services on the overall reduction of labor and therefore jobs. Everywhere I look, computers are reducing the need for workers and I read that factories produce goods with a fraction of human labor previously needed because of robotics and other technology.
Am I mistaken that all the factors that come from the mouths of pundits and politicians about job loss and redistribution of wealth from workers to investors are drops in the bucket compared to technological innovations?
Maybe pointing out villains with human faces makes for better entertainment.
1
While what you say may be true in the future, but there are plenty of things workers could be doing today that are not being done.
Fixing and expanding roads and bridges.
Designing and building a new power grid.
Improving education with smaller classes, etc.
More research of all types.
Even preparing for mining in the Asteroid Belt.
And so on.
The reason these are not being done is mistaken ideas about public debt.
For the future, what we have to do is to insure the benefits of technology are spread throughout the population, not just at the top. Shorter work hours, higher wages per hour or day, great benefits for all, etc. Otherwise the future will look like William Gibson's "Neuromancer."
Fixing and expanding roads and bridges.
Designing and building a new power grid.
Improving education with smaller classes, etc.
More research of all types.
Even preparing for mining in the Asteroid Belt.
And so on.
The reason these are not being done is mistaken ideas about public debt.
For the future, what we have to do is to insure the benefits of technology are spread throughout the population, not just at the top. Shorter work hours, higher wages per hour or day, great benefits for all, etc. Otherwise the future will look like William Gibson's "Neuromancer."
9
I would argue in this particular instance there should be more work not less. How does people abandoning landlines for mobile cut down on jobs? All evidence supports the idea that millions more have phones than even 20 years ago. While we aren't laying cable, cell towers are sprouting up all over the land. Server farms are being built. Networks are being created.
Our mobile service in this country is an embarrassment. I can go to Australia and get a signal nearly everywhere. In the US, with 300m more people in a similar land mass I can't get a signal in my own office. We put up with it because we have no options. It's expensive and unreliable, unlike the rest of the Western World.
If business wasn't so greedy and didn't have a virtual monopoly perhaps some of these issues would be addressed. And people would be employed to do it.
Our mobile service in this country is an embarrassment. I can go to Australia and get a signal nearly everywhere. In the US, with 300m more people in a similar land mass I can't get a signal in my own office. We put up with it because we have no options. It's expensive and unreliable, unlike the rest of the Western World.
If business wasn't so greedy and didn't have a virtual monopoly perhaps some of these issues would be addressed. And people would be employed to do it.
94
PK is clearly desperate to be Bernie's VP nominee so its no surprise to find him marching even further from truth than usual. It would be hard to find an industry more highly regulated by local, state and federal authorities than telephone service. The purported lack of interest in business growth by Verizon will come as a surprise to those like me who are inundated by multiple offers each week for some VX deal on Fios, new service packages and phones or to those aware of its recent bond issue or to those watching it trying to acquire poor doomed Yahoo. Nor does his current myth explain why, if such a dominant monopolist, Verizon stock sports a price that is less than 65% that of the average telecom firm. But then egregious artistry with facts has always been PK's trademark as in op-eds. Hopefully his academic work was more truthful.
Doesn't follow Krugman closely.
In the "conservative" mind, the scrappy entrepreneur is conflated with the monopoly corporation. An entrepreneur creates value; the monopolist captures a market and holds it hostage. Everyone I know has a phone or cable company story. After Judge Greene's AT&T divestiture order in 1982, wireless and Internet entrepreneurs were able to penetrate markets newly freed from AT&T's death grip. I resold long distance services in the early 90's for Affinity Fund, a private company that bought time in bulk from MCI. Living in Jersey City, I placed two ten-second calls to a phone in Manhattan. At the time, Bell Atlantic charged by the minute, and Affinity charged by the tenth of a minute. The bills came: BA charged me 26 cents for the call; Affinity charged a penny.
Stanley Kaplan was a scrappy kid from Brooklyn who taught people to prepare for the SAT when common wisdom said that one could not prepare for that test. I met him when I taught for Kaplan in NYC in the 1990's. He had sold his company to The Washington Post in the 1970's, and by the time I was there Kaplan had a monopoly in NYC. I remember that we in the Manhattan office disputed statements made in the GMAT instruction. When we took or concerns to corporate, just a few blocks away, we were told to mind our own business. The book was wrong, but who cared?
Monopolies are often lazy and greedy, like the politician who is born on third base and thinks he hit a triple. (In the voice of John Goodman) I'm talking to you, Donnie.
Stanley Kaplan was a scrappy kid from Brooklyn who taught people to prepare for the SAT when common wisdom said that one could not prepare for that test. I met him when I taught for Kaplan in NYC in the 1990's. He had sold his company to The Washington Post in the 1970's, and by the time I was there Kaplan had a monopoly in NYC. I remember that we in the Manhattan office disputed statements made in the GMAT instruction. When we took or concerns to corporate, just a few blocks away, we were told to mind our own business. The book was wrong, but who cared?
Monopolies are often lazy and greedy, like the politician who is born on third base and thinks he hit a triple. (In the voice of John Goodman) I'm talking to you, Donnie.
8
But when AT&T was a monopoly, I paid $10/month for my landline and my phone was never out of service.
Preventing monopoly power is one of several reasons that government regulation of markets is absolutely critical in a healthy, open economy. Markets do not "self-regulate" today any more than they did when the railroad and oil barons were looting the country. This tendency towards concentrating economic power seems to be an ever-present danger, which if not checked can easily offset the many advantages of market-based economies. This is especially true when market fundamentalist ideologues take control of government, as they did in the second Bush Administration. The result was predictable- a de-regulatory frenzy: a whole series of "regulatory captures", insider crony-capitalist deals, no-bid contracts, and ultimately, a financial de-regulation-based financial collapse. We are still dealing with the economic after-shocks eight years later.
Krugman and Summers are absolutely right. Monopoly power has re-emerged as a significant threat to the US economy, thanks largely to the excesses of Reaganism, which is now religious orthodoxy in one of our political parties. De-regulation and market fundamentalism are not the solution to the current stagnation. They are its cause.
Krugman and Summers are absolutely right. Monopoly power has re-emerged as a significant threat to the US economy, thanks largely to the excesses of Reaganism, which is now religious orthodoxy in one of our political parties. De-regulation and market fundamentalism are not the solution to the current stagnation. They are its cause.
22
So what monopolies are you concerned with that you're still blaming Reagan? Amtrak? Microsoft? Apple? Google?
John
Oh, tiny little market sectors like health insurance , financial services, telecommunications, bio-tech, technology, and defense, which together only constitute over 50% of GDP. By the way, Reaganism and market fundamentalism did not end with St. Ronnie. Ever hear of something called "mergers and acquisitions"? How about "inversions"?
Oh, tiny little market sectors like health insurance , financial services, telecommunications, bio-tech, technology, and defense, which together only constitute over 50% of GDP. By the way, Reaganism and market fundamentalism did not end with St. Ronnie. Ever hear of something called "mergers and acquisitions"? How about "inversions"?
2
Donald Trump? I don't know. Was that supposed to be a rhetorical question at the end? It doesn't register as one.
I've certainly never heard Hillary Clinton talk about breaking up any big corporations, or getting rid of corporate money in politics that surely fuels pro-monopoly policies.
Remind me again why I hear so many anti-Bernie articles from you?
I've certainly never heard Hillary Clinton talk about breaking up any big corporations, or getting rid of corporate money in politics that surely fuels pro-monopoly policies.
Remind me again why I hear so many anti-Bernie articles from you?
22
If you can explain to me HOW Sen Sanders imagines he can tackle this issue other than waving his arms in the air and RECOGNIZING it, I'll consider changing my vote. He's been in Congress 30 years and never sponsored a major bill to address any of this. Yet somehow here at the end of his career he's going to take this on and save the world? Okay. If you say so.
I'm glad he recognizes it and we're talking about it. What I'm not so clear on, is how he plans to do anything about it. My long term memory seems to be better than many Sander's supporters. I remember the work to get the ACA through Congress. I remember the compromise it took. And most people were more or less in favor of it. And yet you somehow imagine a fantastical mist will fall over the eyes of the bought and paid for Congress people and they will happily vote against the best interest of their corporate masters.
I would suggest you come back when you've gotten out of the phase of imagining everything you want will magically happen.
I'm glad he recognizes it and we're talking about it. What I'm not so clear on, is how he plans to do anything about it. My long term memory seems to be better than many Sander's supporters. I remember the work to get the ACA through Congress. I remember the compromise it took. And most people were more or less in favor of it. And yet you somehow imagine a fantastical mist will fall over the eyes of the bought and paid for Congress people and they will happily vote against the best interest of their corporate masters.
I would suggest you come back when you've gotten out of the phase of imagining everything you want will magically happen.
82
Sure, you appoint people to the justice dept who enforce anti trust legislation. the same way you appoint folks who'd put bankers in jail
5
This essay of Krugman demonstrates what's wrong with macroeconomics. Imprecise discussion of what is the CAUSE can lead to endless sophistry in assessing BLAME.
Krugman decides it is monopoly power that is the cause of higher profits and lower wages. He and Larry Summers
"have come to the conclusion that growing monopoly power is a big problem for the U.S. economy — and not just because it raises profits at the expense of wages…. profits are at near-record highs, thanks to a substantial decline in the percentage of G.D.P. going to workers."
Yet an even more basic reason that profits go to capital as opposed to labor is that their is too much labor. As the population grows, and as illegal immigrants stream into the country driving down the average educational attainment of workers, to much supply of unskilled workers drives down the wages they can demand in a free market. That is Econ 101.
The reason Donald Trump appeals to many forgotten Americans is that many of those forgotten Americans can see with their own eyes what Nobel Laureates in economics deny with their abstract theories: Illegal immigration, the outsourcing of jobs facilitated by NAFTA and free trade, increase the pressure for wages to decline.
Perhaps monopoly is a second cause, but it is not needed, as is obvious to the hated "white patriarch" who has lost his manufacturing job to outsourcing, and finds himself competing with illegal immigrants for a gardening job.
Liberals are in denial.
Krugman decides it is monopoly power that is the cause of higher profits and lower wages. He and Larry Summers
"have come to the conclusion that growing monopoly power is a big problem for the U.S. economy — and not just because it raises profits at the expense of wages…. profits are at near-record highs, thanks to a substantial decline in the percentage of G.D.P. going to workers."
Yet an even more basic reason that profits go to capital as opposed to labor is that their is too much labor. As the population grows, and as illegal immigrants stream into the country driving down the average educational attainment of workers, to much supply of unskilled workers drives down the wages they can demand in a free market. That is Econ 101.
The reason Donald Trump appeals to many forgotten Americans is that many of those forgotten Americans can see with their own eyes what Nobel Laureates in economics deny with their abstract theories: Illegal immigration, the outsourcing of jobs facilitated by NAFTA and free trade, increase the pressure for wages to decline.
Perhaps monopoly is a second cause, but it is not needed, as is obvious to the hated "white patriarch" who has lost his manufacturing job to outsourcing, and finds himself competing with illegal immigrants for a gardening job.
Liberals are in denial.
6
I don't think it is contested that too much illegal immigration drives down prices of unskilled jobs that "nobody wants", or even where those jobs are to be had, they pay below living wage.
There were two approaches that "liberals" had, in response to offshoring.
1. Upskilling.
2. Broad-based edcuation.
Anyone setting policy would have to reconcile themselves to some amount of social engineering. But that too would have to be done on the basis of some universal principles rather than selective empowerment.
I doubt that illegal immigration has reached the levels to which it directly affects wages across the nation. Skill- and cost-levels are surely the greater determinants.
Even without immigration, the anti-labour stance is universal across the world. It is exacerbated by the power of the businesses and labour laws that portray people demanding fair pay as obstructive to the lives of "everybody else", except when you are on the other side.
Your central point is undeniable : That excess of relatively lower skilled workers will always earn as the market demands. Dr. Krugman's point is that the market is distorted in favour of employers who cannot offer a reason why the salary of managers grow while both service levels and wages decline.
Liberals may be in denial about the social engineering aspect. But they are not in denial on the role of the state when all wealth from growth go to the top rather than distributed equitably.
There were two approaches that "liberals" had, in response to offshoring.
1. Upskilling.
2. Broad-based edcuation.
Anyone setting policy would have to reconcile themselves to some amount of social engineering. But that too would have to be done on the basis of some universal principles rather than selective empowerment.
I doubt that illegal immigration has reached the levels to which it directly affects wages across the nation. Skill- and cost-levels are surely the greater determinants.
Even without immigration, the anti-labour stance is universal across the world. It is exacerbated by the power of the businesses and labour laws that portray people demanding fair pay as obstructive to the lives of "everybody else", except when you are on the other side.
Your central point is undeniable : That excess of relatively lower skilled workers will always earn as the market demands. Dr. Krugman's point is that the market is distorted in favour of employers who cannot offer a reason why the salary of managers grow while both service levels and wages decline.
Liberals may be in denial about the social engineering aspect. But they are not in denial on the role of the state when all wealth from growth go to the top rather than distributed equitably.
1
Go to https://www.fas.org/sgp/crs/row/R42965.pdf and you will see that your claims about NAFTA are nomsense. Our trade with the NAFTA countries was only 5% of GDP. Our problem is well known:
In "Wealth and Democracy." Kevin Phillips points out that there is a feedback in economic distribution because as the rich get richer, they use their wealth to get more power. They then use their power to get more wealth and so on. There seems to be a tipping point where this process becomes impossible to reverse. When inequality becomes bad enough, the country soon goes down the tubes. He gives several examples, e.g. the 18th century decline of the Dutch Republic. Chrystia Freeland used 14th century Venice to illustrate this process in a Times article, but history is replete with other examples.
According to Phillips, the great success of America has been that before the tipping point was reached, something has always happened that reverse the flow of money upwards, e.g. the rise of unions, FDR's reforms.
Will that happen this time?
In "Wealth and Democracy." Kevin Phillips points out that there is a feedback in economic distribution because as the rich get richer, they use their wealth to get more power. They then use their power to get more wealth and so on. There seems to be a tipping point where this process becomes impossible to reverse. When inequality becomes bad enough, the country soon goes down the tubes. He gives several examples, e.g. the 18th century decline of the Dutch Republic. Chrystia Freeland used 14th century Venice to illustrate this process in a Times article, but history is replete with other examples.
According to Phillips, the great success of America has been that before the tipping point was reached, something has always happened that reverse the flow of money upwards, e.g. the rise of unions, FDR's reforms.
Will that happen this time?
5
Yes, reading this brings to mind "unskilled workers."
1
Excellent column, Dr. Krugman. Your description of secular stagnation, high corporate profits, and low investment and employment hits home.
With respect to your discussion of Verizon, we see an interesting paradox. The 1996 Telecommunications Act attempted to bring competition to the telecommunications arena. 20 years later, that effort has been relatively unsuccessful with respect to landline and wireless carriers. The industry has re-consolidated due to heavy infrastructure costs and, as you point out, relatively weak anti-trust enforcement.
For that matter, consolidation has been a key driver in the U.S. economy over the past 30 years. Witness the consolidation taking place in business services (law, accounting), commercial real estate and, increasingly, in health care,
With respect to your discussion of Verizon, we see an interesting paradox. The 1996 Telecommunications Act attempted to bring competition to the telecommunications arena. 20 years later, that effort has been relatively unsuccessful with respect to landline and wireless carriers. The industry has re-consolidated due to heavy infrastructure costs and, as you point out, relatively weak anti-trust enforcement.
For that matter, consolidation has been a key driver in the U.S. economy over the past 30 years. Witness the consolidation taking place in business services (law, accounting), commercial real estate and, increasingly, in health care,
9
I think it is more nuanced.
It is interesting that Verizon has agreed to build out FIOS in the City of Boston on the week the strike commenced but also when it closed the deal to sell it, as part of the wireline access, in three states on the West Coast to Frontier Communication.
To be clear, I do not disagree with the thesis of monopoly. That is why we always make monopoly, or even duopoly, regulated and the related businesses are largely utilities. Alas, the delineation is fading fast. For example, wireless telecom is not regulated because everyone can get in on the game. Besides the four big networks, regionals could buy excess capacities. In this case, competitions are like the early deregulation of airlines. Remember the airlines? Bankruptcies were often and no one was making any money? Until the recent mergers.
I believe neither monopoly nor free-for-all is the answer. Instead of blaming rubber barons - shrewd people will find ways to exploit the situation - you need a hybrid model where there is some level of regulation without strangling the competitive landscape. This is not unlike everything else. Centralized government can be efficient under benevolent rules but too dangerous from insulation while direct democracy is chaos to the making. That is why you have republicanism (not to be confused with the political version).
It is interesting that Verizon has agreed to build out FIOS in the City of Boston on the week the strike commenced but also when it closed the deal to sell it, as part of the wireline access, in three states on the West Coast to Frontier Communication.
To be clear, I do not disagree with the thesis of monopoly. That is why we always make monopoly, or even duopoly, regulated and the related businesses are largely utilities. Alas, the delineation is fading fast. For example, wireless telecom is not regulated because everyone can get in on the game. Besides the four big networks, regionals could buy excess capacities. In this case, competitions are like the early deregulation of airlines. Remember the airlines? Bankruptcies were often and no one was making any money? Until the recent mergers.
I believe neither monopoly nor free-for-all is the answer. Instead of blaming rubber barons - shrewd people will find ways to exploit the situation - you need a hybrid model where there is some level of regulation without strangling the competitive landscape. This is not unlike everything else. Centralized government can be efficient under benevolent rules but too dangerous from insulation while direct democracy is chaos to the making. That is why you have republicanism (not to be confused with the political version).
3
America's rigged 'free-market' monopoly/oligopoly system is working just fine for the cable, internet, cellphone service, healthcare, pharmaceutical and campaign bribery industries, all because the psychopathic cult of Greed Over People has reduced America to a 0.1% economic organ-harvesting racketeering syndicate and a CEO/lobbyist extortion exercise.
FROM https://www.newamerica.org/oti/the-cost-of-connectivity-2014/
The 2014 Cost of Connectivity report demonstrates that US customers pay more than those in Asia and Europe for comparable Internet service.
The average cost of plans in nearly every speed tier selected was higher in the US than in Europe
The most telling finding was that the few locally-owned (municipal and government) networks in America delivered better value to their customers when compared on a price-per-megabit basis to competing cable and telecom providers in their own cities.
Examples of locally/governmentally owned networks are Chattanooga, TN, Bristol, VA, and Lafayette, LA, with some of the fastest and most affordable high-speed residential products available in the country despite their low population densities.
The study found that US municipal broadband providers offer some of the fastest speeds available in the country at relatively affordable prices.
Prima facie evidence that America is a giant 0.1% rip-off scam.
Sounds like time for a political revolution, doesn't it Professor ?
Feel the Bern (version 2.016)
FROM https://www.newamerica.org/oti/the-cost-of-connectivity-2014/
The 2014 Cost of Connectivity report demonstrates that US customers pay more than those in Asia and Europe for comparable Internet service.
The average cost of plans in nearly every speed tier selected was higher in the US than in Europe
The most telling finding was that the few locally-owned (municipal and government) networks in America delivered better value to their customers when compared on a price-per-megabit basis to competing cable and telecom providers in their own cities.
Examples of locally/governmentally owned networks are Chattanooga, TN, Bristol, VA, and Lafayette, LA, with some of the fastest and most affordable high-speed residential products available in the country despite their low population densities.
The study found that US municipal broadband providers offer some of the fastest speeds available in the country at relatively affordable prices.
Prima facie evidence that America is a giant 0.1% rip-off scam.
Sounds like time for a political revolution, doesn't it Professor ?
Feel the Bern (version 2.016)
596
This "psychopathic cult of Greed over People" has a name: capitalism. It isn't psychopathis, greed is a feature, not a flaw of capitalism (capitalism is amoral).
I love capitalism but without strong government regulation and oversight, capitalism will destroy all but the 1% or so. This is why we need "big government" and this why the Republicans are so intent on drowning it.
I love capitalism but without strong government regulation and oversight, capitalism will destroy all but the 1% or so. This is why we need "big government" and this why the Republicans are so intent on drowning it.
3
As usual, this totally distorts history. Reagan was interested in taxes and not regulation. The great President who moved away from anti-trust was Carter. And it represented a massive change in the consensus of economists both of left and right.
And one of the very worse is the Citigroup Administration. It consolidated the failed banks into a smaller number of 10 great banks. It allowed outrageous consolidation of airlines. Let's elect Hillary and given Bob Rubin his fifth term in office.
Finallly, half of S & P earnings are earned abroad. Why should they invest at home when the tax system encourages investment abroad and follows a trade policy of encouraging imports. Imports are not just t-shirts, but Boeing components.
And one of the very worse is the Citigroup Administration. It consolidated the failed banks into a smaller number of 10 great banks. It allowed outrageous consolidation of airlines. Let's elect Hillary and given Bob Rubin his fifth term in office.
Finallly, half of S & P earnings are earned abroad. Why should they invest at home when the tax system encourages investment abroad and follows a trade policy of encouraging imports. Imports are not just t-shirts, but Boeing components.
18
To add, a trade deficit which the US consistently has followed means excess imports, and that includes components.
3
The true Free Market thrives on competition. In the current American corporate driven economy, self-proclaimed Free Marketeers are the biggest supporters of mega mergers, the killer of competition.
82
Wouldn't monopolies be the natural outcome of mature free markets since government interference to limit them is even more contrary to free markets?
1
But aren't corporations and mergers products of the "Free Market"? In other words, doesn't the "Free Market" produce dynamics that inevitably leads to non-competitive outcomes?
1
No place else to go? In my neck of the woods, Verizon is in perpetual competition for customers with Cablevision. Which means incessant junk-mail from both services and a continuous stream of nuisance commercials on TV (I can practically recite them from memory after the first 120 viewings). These days I'm getting offers to "switch to Verizon" even though I've been hooked up to that service for years now. Why isn't the money they're spending on these ads being used to pay their employees- or, for that matter, being applied against my cable bill? Certainly, it's the corporate-profit motive at work and there's just no end to it.
135
Right, where I lived in NJ we had Comcast and Verizon. It was a town of 2,000 people. It was five miles away from a town of 3,500, 10 miles from Trenton population of 84,000, and nine miles from Princeton, which has 30,000. In the town I now live in, there are >2,000 people in my development alone, many would jump at FIOS, but FIOS isn't available. The total contiguous population is almost 175,000 without all those big gaps in between. That's not to mention the businesses, like Duffy's that run 120 TVs at a time. It would be a huge success, but there are no plans.
2
This is the way a duopoly behaves. They try to steal customers from each other through advertising and initial sign-up discounts, which really are cheap expenditures for these firms as opposed to investment in actual capital expansion and paying workers.
Support the Verizon Workers.
Support the Verizon Workers.
3
In my area, ATT/U-Verse and Comcast are the big players in the cable market. In San Diego, it's Cox. Verizon doesn't have a lock on many markets. However, having dealt with Comcast in the past - worst customer service in the WORLD - I'd probably go with Verizon if that were my only choice. But after having cut the cable cord 10 years ago, I can't say I miss any of the cable providers. Between my digital antenna, Roku and online streaming, I'm covered. And it's a pleasure to know I will never, ever have to deal with Comcast's execrable customer service reps again.
1
Corporate culture plays a role. I once was a Verizon customer. I found them stinkers to deal with. I think they viewed their customers as the enemy. Apparently, they view their workers the same way.
In all the varied social and economic issues that Krugman raises, he rarely if ever mentions culture, whether at the corporate or national level.
It's an open question in my mind whether culture determines economic behavior, or economic behavior shapes culture.
Krugman, like most economists, would have us believe the latter. In most cases, though, it's probably a two-way street.
In all the varied social and economic issues that Krugman raises, he rarely if ever mentions culture, whether at the corporate or national level.
It's an open question in my mind whether culture determines economic behavior, or economic behavior shapes culture.
Krugman, like most economists, would have us believe the latter. In most cases, though, it's probably a two-way street.
22
I switched from Verizon to Comcast in NJ after two bad experiences: after moving into a new place, I couldn't get my land-line phone to work. I called and spent an hour being shunted about. After 9 transfers and an hour (mostly on hold) I was back where I started and had no relief. Eventually a Verizon line-man found that a connection had not been made in the basement.
Then one day I couldn't make an out-of-state call. My bill was in arrears. Indeed, they had sent my statement in an envelope which looked exactly like junk mail so I filed it in the round file. There was no phone call, no mail warning, no information at all (and I do pay my bills --- my credit ratings are in the top quintile). I switched that day.
I don't fault the employees who ran me around --- my guess is that they are young, underpaid, and overworked, and happy not to be outsourced to India, where everyone rapidly reads from a script and the English accents are all too often barely comprehensible. If we live in a "service economy" why is the service so bad most of the time?
Then one day I couldn't make an out-of-state call. My bill was in arrears. Indeed, they had sent my statement in an envelope which looked exactly like junk mail so I filed it in the round file. There was no phone call, no mail warning, no information at all (and I do pay my bills --- my credit ratings are in the top quintile). I switched that day.
I don't fault the employees who ran me around --- my guess is that they are young, underpaid, and overworked, and happy not to be outsourced to India, where everyone rapidly reads from a script and the English accents are all too often barely comprehensible. If we live in a "service economy" why is the service so bad most of the time?
4
To be fair, you could be right about the quality of service in India. But then again, big Indian mobile telecom providers outsourced their services to IBM (which had their own call centres).
As someone who ran on-floor sales 3 years ago for a support company, I can tell you that sales personnel are as "unconcerned" about customers no matter where they come from. But service personnel know the value of resolving problems. They tend to be more thoughtful and make up for gaps in their education after a while.
The broad perspective on this is that if support is bad, it is because people have not been taught well enough. When they are taught well, they do it well. We had instances in which we have resolved problems that 3 principle OEMs could not.
I wouldn't tar Indian support services with that broad a brush, even though your anger is probably appropriate.
The reason why your service could have been bad is that it was too hard to solve your problem for the measurements the employer had. 9 times out of 10, service personnel are able ( when they know how) to resolve problems.
And your broad point about cheap service jobs in India is exactly right. But the same way in which everyone wants an iPhone among these "low end service people" for reasons they can only guess at, those who have airconditioned homes as a matter of normalcy in the US are undercut by cheaper personell with barely a bump in the service.
The only people with win-win, are the employers.
As someone who ran on-floor sales 3 years ago for a support company, I can tell you that sales personnel are as "unconcerned" about customers no matter where they come from. But service personnel know the value of resolving problems. They tend to be more thoughtful and make up for gaps in their education after a while.
The broad perspective on this is that if support is bad, it is because people have not been taught well enough. When they are taught well, they do it well. We had instances in which we have resolved problems that 3 principle OEMs could not.
I wouldn't tar Indian support services with that broad a brush, even though your anger is probably appropriate.
The reason why your service could have been bad is that it was too hard to solve your problem for the measurements the employer had. 9 times out of 10, service personnel are able ( when they know how) to resolve problems.
And your broad point about cheap service jobs in India is exactly right. But the same way in which everyone wants an iPhone among these "low end service people" for reasons they can only guess at, those who have airconditioned homes as a matter of normalcy in the US are undercut by cheaper personell with barely a bump in the service.
The only people with win-win, are the employers.
Capitalism is based on the maximization of profit. Whether it is children losing hands in factories, coal miners being crushed in unsafe mines, people falling asleep at machinery working 12 hour shifts six and a half days a week, murdering union organizers, it is profit.
Christianity did not "civilize" capitalism.
Now the controls on capitalism are being carved away.
Now with Citizens United the corporations can buy congress. Eric Cantor went from the House of Representatives to a $2 million dollar a year as an "investment adviser". He advises the bank on how to buy and sell the American congress.
Good work Eric!
Commingling politics with the economic system made the Nazis great!
What do you think the republicans are doing.
Christianity did not "civilize" capitalism.
Now the controls on capitalism are being carved away.
Now with Citizens United the corporations can buy congress. Eric Cantor went from the House of Representatives to a $2 million dollar a year as an "investment adviser". He advises the bank on how to buy and sell the American congress.
Good work Eric!
Commingling politics with the economic system made the Nazis great!
What do you think the republicans are doing.
The job creators have received a lot of money to create jobs over the years. But we do not know and do not ask what they have done with it. If we did, we would learn how much has created jobs in this country, how much has created jobs in other countries, how much has gone in personal consumption, and how much has been employed in making bubbles rather than jobs.
These percentages should be available and known so that our debates can be over their meaning. But instead the debate is whether we can gather the data without being communists.
These percentages should be available and known so that our debates can be over their meaning. But instead the debate is whether we can gather the data without being communists.
34
And they aren't even creating the promised jobs after all the tax and regulation cuts.
Another long term problem that began with Ronald Regan is the increase in tuition for colleges. It has tremondously outpaced inflation, and is now prohibitively expensive for many people. Education is such an important ingredient for maintaining leadership in a competitive world. And so we see someone like Bernie Sanders proposing free education as a major issue.
64
All by design -
Roger Freeman, a key educational adviser to Nixon then working for the reelection of California Governor Ronald Reagan, "We are in danger of producing an educated proletariat. That's dynamite! We have to be selective on who we allow to go through higher education.”
Roger Freeman, a key educational adviser to Nixon then working for the reelection of California Governor Ronald Reagan, "We are in danger of producing an educated proletariat. That's dynamite! We have to be selective on who we allow to go through higher education.”
2
And who will pay for the "free" education? Look in the mirror.
1
So now we know that you don't have to be a Russian oligarch to be a robber baron. That they exist everywhere and they care two hoots for the market economy or open markets.
And of course, all that talk about "choice for the consumer" is just lip-service.
So what's new ? Nothing.
Most people with any technical bent-of-mind can interpret how X causes lead to Y consequences. Over-powerful unions are just as bad as over-powerful corporations, both thriving under bad regulations and enforcement. And neither caring about the damage to the end-user.
And this applies to ALL industries in every country. It didn't need globalization to make the practice universal.
Hence the pressing need - long since stopped being paid even lip service to - to regulation, and world wide best practices. If you can regulate availability of nuclear material, as there was the meeting to do a few weeks ago in Washington DC. you can regulate labour obligations of any industry in any country. In this case it doesn't even need enforcement, but just ratings of the performance of countries.
Who is under the illusion any more that there is anything in human behaviour that cannot be understood and regulated with the focus being on outcomes ? It is simple enough to understand : Our constitutions tell us what the goals are, why do we ignore their "inspiration" ?
You could even regulate the average multiple that you pay a CEO with respect to the average salary in a company. Is that rocket science ? Maybe.
And of course, all that talk about "choice for the consumer" is just lip-service.
So what's new ? Nothing.
Most people with any technical bent-of-mind can interpret how X causes lead to Y consequences. Over-powerful unions are just as bad as over-powerful corporations, both thriving under bad regulations and enforcement. And neither caring about the damage to the end-user.
And this applies to ALL industries in every country. It didn't need globalization to make the practice universal.
Hence the pressing need - long since stopped being paid even lip service to - to regulation, and world wide best practices. If you can regulate availability of nuclear material, as there was the meeting to do a few weeks ago in Washington DC. you can regulate labour obligations of any industry in any country. In this case it doesn't even need enforcement, but just ratings of the performance of countries.
Who is under the illusion any more that there is anything in human behaviour that cannot be understood and regulated with the focus being on outcomes ? It is simple enough to understand : Our constitutions tell us what the goals are, why do we ignore their "inspiration" ?
You could even regulate the average multiple that you pay a CEO with respect to the average salary in a company. Is that rocket science ? Maybe.
18
We need not worry about over powerful unions in this country. They do not exist.
3
Thank you, Dr. Krugman, for this precise analysis of one of the many economic culprits that has led us to the state we are in. While not the only reason, the re-emergence of monopoly is indeed among the unhealthy "lifestyle habits" we have allowed to take over the goal of sustainable, and beneficial national economic well-being.
Incredibly, I see Sanders vociferous supporters are already ganging up in their vendetta against your reasoned opinion! Why they can't (or won't) translate your message about monopolistic endangerment to Sanders message of greed on Wall Street (for greed surely is part of the problem with companies like Verizon), and give you a standing ovation for your connection of the dots is a puzzle.
But then, they have already claimed you (and the NYT) have been bought and paid for by Team Hillary. I guess they can't bear to admit now that you are right.
Incredibly, I see Sanders vociferous supporters are already ganging up in their vendetta against your reasoned opinion! Why they can't (or won't) translate your message about monopolistic endangerment to Sanders message of greed on Wall Street (for greed surely is part of the problem with companies like Verizon), and give you a standing ovation for your connection of the dots is a puzzle.
But then, they have already claimed you (and the NYT) have been bought and paid for by Team Hillary. I guess they can't bear to admit now that you are right.
27
There is a pretty simple and obvious answer to your pondering about Sanders' supporters failing to see PK's brilliance regarding Hillary. To me, this was a barely concealed commercial once again to promote Hillary, but this time against the Republican nominee (still think it's Paul Ryan in a last minute establishment defense of their Party control), because Paul is getting comfortable that Hillary will prevail in the Democratic race, so now he must ensure that she prevails in the general as well.
Of course his arguments against Monopoly are sound and perfectly right as well as obvious, but....electing another establishment one percenter will definitely not upset that particular Monopolistic apple cart.
Of course his arguments against Monopoly are sound and perfectly right as well as obvious, but....electing another establishment one percenter will definitely not upset that particular Monopolistic apple cart.
1
I just wrote the comment you claimed I wouldn't write. But then the question becomes, why is Krugman able to describe the problem in the economy so well, but unable to see that the Democratic Party has enabled the Republicans to create this climate by always moving to the center while the Republicans are always moving further right?
A Party that is too afraid to fight for what it claims to believe in, might as well believe in nothing. Clinton voted for the Iraq war for purely political reasons, thinking that voting against it would hurt her re-election chances. This was not only wrong tactically (I did a study that showed that congress people that voted against the war faired better in later elections) but strategically and morally.
Clinton wasn't trying to regulate Wall Street when she was senator and the Republican Party was gutting the middle class. She played along, and took their money.
If you don't want an economy where a CEO making $18 million a year running a company that makes billions in profits and pays zero taxes cuts healthcare for it's workers, end the status quo. Notice that their CEO is not criticizing Clinton, he is attacking Sanders.
But it doesn't matter much who is elected. What is really important is what will the People do? Will we bend over, close our eyes, and think USA, USA? or will we get a critical mass of people on the streets to force the government to do the right thing? No matter who is elected congress will only act if the People do.
A Party that is too afraid to fight for what it claims to believe in, might as well believe in nothing. Clinton voted for the Iraq war for purely political reasons, thinking that voting against it would hurt her re-election chances. This was not only wrong tactically (I did a study that showed that congress people that voted against the war faired better in later elections) but strategically and morally.
Clinton wasn't trying to regulate Wall Street when she was senator and the Republican Party was gutting the middle class. She played along, and took their money.
If you don't want an economy where a CEO making $18 million a year running a company that makes billions in profits and pays zero taxes cuts healthcare for it's workers, end the status quo. Notice that their CEO is not criticizing Clinton, he is attacking Sanders.
But it doesn't matter much who is elected. What is really important is what will the People do? Will we bend over, close our eyes, and think USA, USA? or will we get a critical mass of people on the streets to force the government to do the right thing? No matter who is elected congress will only act if the People do.
2
More likely, I think Sanders supporters would see this column as a validation of Bernie Sanders campaign. Krugman reinforces Sanders approach without mentioning Sander's name.
1
Verizon has been destroying our only reliable emergency communication system in a power failure here in NY-- our copper wire landlines.
I,was at a hearing recently where Verizon workers described severe cutbacks in maintenance to let the copper wire lines fail.
Verizon both lures ( with ads) and tricks ( by not telling you if you call them for another purpose) customers to switch phone service to battery- dependent FiOs away from copper.
They use the profits for ads to increase their monopoly- like power, not for maintenance.
There are other cell phone carriers.
1) don't get a Verizon cell phone
2) if you are fortunate enough to still have your reliable copper wire land line, be vigilant that they don't switch you off of it ( ask any Verizon repairman-- from my experience: they will come with orders to switch you, assume you requested it and so don't mention it, but will tell you if you asked.)
I,was at a hearing recently where Verizon workers described severe cutbacks in maintenance to let the copper wire lines fail.
Verizon both lures ( with ads) and tricks ( by not telling you if you call them for another purpose) customers to switch phone service to battery- dependent FiOs away from copper.
They use the profits for ads to increase their monopoly- like power, not for maintenance.
There are other cell phone carriers.
1) don't get a Verizon cell phone
2) if you are fortunate enough to still have your reliable copper wire land line, be vigilant that they don't switch you off of it ( ask any Verizon repairman-- from my experience: they will come with orders to switch you, assume you requested it and so don't mention it, but will tell you if you asked.)
23
Actually, my experience with emergency communications is exactly the opposite: when power lines go down, so do the copper (or for that matter fiber optic and coax cable) lines. Only cellular service remains. When we had a devastating October snowstorm in 2011 that knocked out power for 6 days, cell service was the only way we were able t communicate.
Reply to Baldomero: yours worked due to battery backup.
Here our copper lines worked, fits phones and cell phones (which couldn't be recharged anyway) were out
Here our copper lines worked, fits phones and cell phones (which couldn't be recharged anyway) were out
I wish I could recommend 100 times.
To some degree Verizon's story is no different than any told in America. Grab what you can while you can, eat, drink and be merry for there is no tomorrow.
Ours has become an exploitive society where it is perfectly acceptable and even encouraged that any one person, business or corporation extract as much from the members as possible.
Only in America or third world countries do the citizens live with such a backward social contract where the majority of the people making up the society actually suffer in order that the minority prosper and only in America does that same citizenry actively promote those who suppress them. Maybe something in the water.
Unlike other very large and powerful societies we have a choice to elect those who make our laws and yet we have consistently chosen those representing a small fraction of the citizenry who own rather than the majority of those who work.
This production has been featured on our political stage before and always casts players from a hand picked troupe who have rehearsed and had their lines memorized for years while waiting to replace the aging actors preceding them, yet the audience never seems to grow tired of the same throw away lines.
It is time to make a break from the past and there is only one person in the cast onstage who is even close to offering that and he is an old man whose only rteal promise is to bring the youth of our nation along with him, but that promise alone makes him worth it to the next generation.
Ours has become an exploitive society where it is perfectly acceptable and even encouraged that any one person, business or corporation extract as much from the members as possible.
Only in America or third world countries do the citizens live with such a backward social contract where the majority of the people making up the society actually suffer in order that the minority prosper and only in America does that same citizenry actively promote those who suppress them. Maybe something in the water.
Unlike other very large and powerful societies we have a choice to elect those who make our laws and yet we have consistently chosen those representing a small fraction of the citizenry who own rather than the majority of those who work.
This production has been featured on our political stage before and always casts players from a hand picked troupe who have rehearsed and had their lines memorized for years while waiting to replace the aging actors preceding them, yet the audience never seems to grow tired of the same throw away lines.
It is time to make a break from the past and there is only one person in the cast onstage who is even close to offering that and he is an old man whose only rteal promise is to bring the youth of our nation along with him, but that promise alone makes him worth it to the next generation.
169
The 50 so-called united states are all suckers for being played against each other.
1
One would think that the vociferous promoters of the "free market" would be at the front lines of monopoly busting but, alas, the Republican Party of Teddy Roosevelt is long gone. The Reagan myth that government regulation is always counter-productive and never inducive of a vigorous economy is going to die hard, despite all the evidence to the contrary. (The same goes with global climate change, social safety net, and on and on.)
A lot of people are going to be hurt as we learn history's economic lessons again and again.
A lot of people are going to be hurt as we learn history's economic lessons again and again.
226
All the free marketers offer when capitalism's many failures appear, is the No True Scotsman logical fallacy (that isn't real capitalism) or cries of "that's crony capitalism" as if there is any other kind.
2
Krugman has become a virtuoso apologist for the centrist element of the Democratic Party. Enforcing antitrust laws is a function of the DOJ. It is one area where Obama had no need for Republican support. Further, the entire "recovery" has left the vast majority of Americans with a smaller portion of the nation's wealth. If Obama was preoccupied with recovery from the recession, he should have been using every tool available to help working Americans. As we know, that is not the case. The administration's handling of mortgage fraud shows that.
Consider K's current positions:
The biggest banks are larger than ever...No problem
TPP places even more power in the hands of giant corporations....Lukewarm, lukewarm.
HRC makes millions from the banks....no big deal.
In American life, a major function of the Democratic party is to pay lip service to populism, to make minor efforts on the people's behalf while embracing the .01%. Look at Obama's administration—wall to wall bankers. No members of labor, no progressive forces.
Issuing a "directive" with less than a year left in the presidential term is about as meaningful as the study groups that are appointed after a great scandal is exposed.
Saying something doesn't represent a "philosophy." Consider Obama's pledge to put on comfortable shoes and march with strikers when their rights were threatened—and his cowardly absence from the Wisconsin workers' struggle.
The problem is much more than just the Republicans.
Consider K's current positions:
The biggest banks are larger than ever...No problem
TPP places even more power in the hands of giant corporations....Lukewarm, lukewarm.
HRC makes millions from the banks....no big deal.
In American life, a major function of the Democratic party is to pay lip service to populism, to make minor efforts on the people's behalf while embracing the .01%. Look at Obama's administration—wall to wall bankers. No members of labor, no progressive forces.
Issuing a "directive" with less than a year left in the presidential term is about as meaningful as the study groups that are appointed after a great scandal is exposed.
Saying something doesn't represent a "philosophy." Consider Obama's pledge to put on comfortable shoes and march with strikers when their rights were threatened—and his cowardly absence from the Wisconsin workers' struggle.
The problem is much more than just the Republicans.
374
Nope, the major problem is the repubs. And if
Cruz were ever to get into a more powerful position than he holds now, we can kiss our already suffering middle class goodbye. With no more prosperous middle class to buy the capital holding class's products, they too will suffer
A hugely stupid & unnecc. End to a formerly great America.
Cruz were ever to get into a more powerful position than he holds now, we can kiss our already suffering middle class goodbye. With no more prosperous middle class to buy the capital holding class's products, they too will suffer
A hugely stupid & unnecc. End to a formerly great America.
6
Thanks for the memory jog. Was thinking the other day, what would have happened had we just let it go in 08? I mean, no intervention at all. One probably outcome, lots of people would have lost their houses and a whole bunch of bankers, be they investment or commercial, would have lost everything, except their Panama accounts of course. What did we get bailing out the industrial and banking giants? Lots of people lost their homes and the aforementioned bankers and industrialists got richer than they were going in. The executive branch, including Prez Obama, picked the winners. We lost and so it goes.
You are as delusional as Glen Beck. Bernie bros do not seem to understand that there is a right wing in this country whose power is ubiquitous. We never hear from these blinkered ideologes any mention of the largest wealth transfer in American history, the ACA. A trillion dollar transfer from rich to poor is a mere trifle when with a wave of Bernie's magic wand we will enact a $15 trillion dollar tax increase, providing free college, health care and pink unicorns for every Amercan. Bernie bros are a bigger threat to progressive change than Ted Cruz.
6
Fascinating commentary especially considering that the candidate whose water you've been carrying lo these many weeks and months is the one Democrat in this current political cycle most likely to see to it that the very practices you apparently abhor can continue unabated.
The irony here is delicious indeed.
The irony here is delicious indeed.
355
Read Hillary's platform.
6
“we aren’t just living in a second Gilded Age, we’re also living in a second robber baron era. And only one party seems bothered by either of those observations.”
Mr. Krugman is absolutely right, and this is a very big factor in the worsening problem of economic inequality, which hurts all Americans except the top one percent. Which is why it is so puzzling that Mr. Krugman supports the wrong candidate for President.
Bernie Sanders is the candidate for the 99 percent. He has made solving economic inequality his number one priority. That is why he does not pander to special interests the way Hillary Clinton does.
After all, *identity politics* is a waste of time. We are all humans with the same nature. Solving economic inequality would raise the standard of living of the neglected 99 percent of Americans. Sanders is the best candidate to restore competition to our economy, and to make it serve all Americans.
4/18 @ 4:57 am
Mr. Krugman is absolutely right, and this is a very big factor in the worsening problem of economic inequality, which hurts all Americans except the top one percent. Which is why it is so puzzling that Mr. Krugman supports the wrong candidate for President.
Bernie Sanders is the candidate for the 99 percent. He has made solving economic inequality his number one priority. That is why he does not pander to special interests the way Hillary Clinton does.
After all, *identity politics* is a waste of time. We are all humans with the same nature. Solving economic inequality would raise the standard of living of the neglected 99 percent of Americans. Sanders is the best candidate to restore competition to our economy, and to make it serve all Americans.
4/18 @ 4:57 am
194
Timothy Bal
Bernie doesn't pander? You mean except for promising "free college" to the same people attending his rallies? Sure, there is exactly zero chance his tax increases to pay for it will happen, but Bernie "doesn't pander". Right.
Bernie doesn't pander? You mean except for promising "free college" to the same people attending his rallies? Sure, there is exactly zero chance his tax increases to pay for it will happen, but Bernie "doesn't pander". Right.
5
By aggressively pricing Internet speed and access to data to what amounts to penalty rates, the major cell phone networks are impeding the digital revolution. In this context, "competition" and "infrastructure build-out" take on new meaning. Later this year the City of San Jose, CA in partnership with Facebook will deploy a new technology which Facebook dubs "Terragraph". The project will attempt to bring a robust Wi-Fi signal to San Jose sufficient to penetrate physical barriers and extend a good signal to suburban areas of the City. The technology has been tested on Facebook's campus in Menlo Park. Yes, this facilitates Facebook's products. And, it is not clear at this time how "Terragraph" will impact Verizon or AT&T long term but you may not have to pay for a "hot spot" that gobbles up data at a monopoly price anymore - at least if you live in Silicon Valley.
15
All the more reason to vote for Democrats this fall.
61
The worst part of a company growing so big like Verizon is indifference to its customers as evident by the virtual non-existence of "Customer Service." Their automatic service is geared very well to helping you pay a bill or order new service, not solve a problem.
I was on a cellular Family Plan, but I not the account holder, I had an extra line. Yet when they wanted to call the account holder about the late payment they insisted on robo-calling my number, requesting to speak to the account holder by name despite the fact that the account holder used what Verizon designated as the primary line on the account, then refusing to speak to me because I was not the account holder, but they also would not accept information as to which of the lines the account holder used, yet continued to call me.
I have worse horror stories dealing with them over FIOS, and DSL service. I ordered installation of a package. The previous day I was bombarded with at least 3 text messages reminding me of the appointment accompanied by at least 3 robo-calls and at least 3 emails, and then on the day of the appointment they called me at 3PM to say THEY couldn't keep the appointment.
They are accountable to no one. The FCC and FTC are a joke and companies governed by the FCC are those who have routinely been the worst players in the market and the subject of scorn for most customers. How many people are truly happy with the Phone, Internet and Cable providers? Why are so many so eager to Cut the Cord?
I was on a cellular Family Plan, but I not the account holder, I had an extra line. Yet when they wanted to call the account holder about the late payment they insisted on robo-calling my number, requesting to speak to the account holder by name despite the fact that the account holder used what Verizon designated as the primary line on the account, then refusing to speak to me because I was not the account holder, but they also would not accept information as to which of the lines the account holder used, yet continued to call me.
I have worse horror stories dealing with them over FIOS, and DSL service. I ordered installation of a package. The previous day I was bombarded with at least 3 text messages reminding me of the appointment accompanied by at least 3 robo-calls and at least 3 emails, and then on the day of the appointment they called me at 3PM to say THEY couldn't keep the appointment.
They are accountable to no one. The FCC and FTC are a joke and companies governed by the FCC are those who have routinely been the worst players in the market and the subject of scorn for most customers. How many people are truly happy with the Phone, Internet and Cable providers? Why are so many so eager to Cut the Cord?
90
Interesting but unsurprising. It is in the nature of capitalism for companies to become monopolies unless limited by factos such as regulation, culture and the nature of the market in which they operate.
What I am truly curious about is if this is mostly happening in the U.S. or also in Europe and the world in general. The prevailing liberalization of market regulations have certainly not been limited to the U.S., after all.
I am also wondering if reinstating regulations to prevent companies from reaching monopoly status would help reducing capital accumulation and therefore inequality, or are they separate issues?
What I am truly curious about is if this is mostly happening in the U.S. or also in Europe and the world in general. The prevailing liberalization of market regulations have certainly not been limited to the U.S., after all.
I am also wondering if reinstating regulations to prevent companies from reaching monopoly status would help reducing capital accumulation and therefore inequality, or are they separate issues?
15
"only one party seems bothered by either of those observations."
Which one? I don't think President Clinton will do anything that might reduce the profits of her friends, and I'm sure President Cruz wouldn't do anything.
Which one? I don't think President Clinton will do anything that might reduce the profits of her friends, and I'm sure President Cruz wouldn't do anything.
80
There is one person who is bothered. Vote for Sanders
1
From Hillary's platform:
"Hillary supports ending the “carried interest” loophole, enacting the “Buffett Rule” that ensures no millionaire pays a lower effective tax rate than their secretary, and closing tax loopholes and expenditures that benefit the wealthiest taxpayers to pay for her plan to make college affordable and refinance student debt.
We need an economy where companies plan for the long run and invest in their workers through increased wages and better training—leading to higher productivity, better service, and larger profits. Hillary will revamp the capital gains tax to reward farsighted investments that create jobs.
Boost public investment in infrastructure and scientific research. One of the best ways to drive jobs and improve our nation’s competitiveness is to invest in infrastructure and scientific research. Hillary has called for a national infrastructure bank that would leverage public and private funds to invest in projects across the country. She will call for reform that closes corporate tax loopholes and drives investment here, in the U.S. And she would increase funding for scientific research at agencies like the National Institutes of Health and the National Science Foundation."
Of course, if you use the argument
If X is bad and Hillary is for X, Hillary is bad. If Hillary opposes X, she is lying,
I have nothing to say.
"Hillary supports ending the “carried interest” loophole, enacting the “Buffett Rule” that ensures no millionaire pays a lower effective tax rate than their secretary, and closing tax loopholes and expenditures that benefit the wealthiest taxpayers to pay for her plan to make college affordable and refinance student debt.
We need an economy where companies plan for the long run and invest in their workers through increased wages and better training—leading to higher productivity, better service, and larger profits. Hillary will revamp the capital gains tax to reward farsighted investments that create jobs.
Boost public investment in infrastructure and scientific research. One of the best ways to drive jobs and improve our nation’s competitiveness is to invest in infrastructure and scientific research. Hillary has called for a national infrastructure bank that would leverage public and private funds to invest in projects across the country. She will call for reform that closes corporate tax loopholes and drives investment here, in the U.S. And she would increase funding for scientific research at agencies like the National Institutes of Health and the National Science Foundation."
Of course, if you use the argument
If X is bad and Hillary is for X, Hillary is bad. If Hillary opposes X, she is lying,
I have nothing to say.
10
Verizon and others are using their publicly-granted infrastructure to exploit communication protocols which originated in government-funded work and are owned by no one.
The fight over Net Neutrality revealed the dynamic of Verizon claiming proprietary exploitation rights over communication which they have been allowed to capture by a public grant.
This dynamic also explains why South Koreans view internet functionality in the U.S. as primative.
The politics of the U.S. do not appear to sustain the necessary courage to demand public communication serve the public utility.
The fight over Net Neutrality revealed the dynamic of Verizon claiming proprietary exploitation rights over communication which they have been allowed to capture by a public grant.
This dynamic also explains why South Koreans view internet functionality in the U.S. as primative.
The politics of the U.S. do not appear to sustain the necessary courage to demand public communication serve the public utility.
107
Sorry, but this column is incomplete, leaving out any discussion of the positions of Sanders vs Clinton on monopolies. Reagan was a long time ago. Discuss Citizens United now giving more power to corporations and blocking reform.
Thomas Piketty, French economist, author of Capital in the 21st Century said the Sanders insurgency is historic, and represents a break with the small govt, low tax legacy of Reaganism that has affected even the Democrats.
Piketty quote in his recent op ed— “the US enters a new political era. The Vermont senator’s success so far demonstrates the end of the politico-ideological cycle opened by the victory of Reagan at the 1980 elections.”
But now to pass anti monopoly legislation, even if it should gain support, is blocked by big money that gets bigger each election, sponsoring our candidates, and congress. Let’s talk Citizens United when talking about corporate monopolies and their hold on US politics.
Many in both parties are enslaved to big money, but hate that they have to spend all their time fund raising from the rich and powerful before and after they take office. This is what we need columns on--a rare issue where both parties often have the same view.
Thomas Piketty, French economist, author of Capital in the 21st Century said the Sanders insurgency is historic, and represents a break with the small govt, low tax legacy of Reaganism that has affected even the Democrats.
Piketty quote in his recent op ed— “the US enters a new political era. The Vermont senator’s success so far demonstrates the end of the politico-ideological cycle opened by the victory of Reagan at the 1980 elections.”
But now to pass anti monopoly legislation, even if it should gain support, is blocked by big money that gets bigger each election, sponsoring our candidates, and congress. Let’s talk Citizens United when talking about corporate monopolies and their hold on US politics.
Many in both parties are enslaved to big money, but hate that they have to spend all their time fund raising from the rich and powerful before and after they take office. This is what we need columns on--a rare issue where both parties often have the same view.
170
Well, yes and no.
The feds went after IBM just as the personal computer revolution was breaking. They went after Microsoft a year or two before SmartPhones, Android and IOS came along.
ATT of today isn't really ATT of yesterday - it's a brand name that was bought in a merger by Cingular. The "monopoly" of hard wired home telephones is more or less worthless.
If you work for Apple, you've grown wealthier. If you work for the old ATT, not really. Virtually all of society has benefitted from better technology and better service for lower cost.
The feds went after IBM just as the personal computer revolution was breaking. They went after Microsoft a year or two before SmartPhones, Android and IOS came along.
ATT of today isn't really ATT of yesterday - it's a brand name that was bought in a merger by Cingular. The "monopoly" of hard wired home telephones is more or less worthless.
If you work for Apple, you've grown wealthier. If you work for the old ATT, not really. Virtually all of society has benefitted from better technology and better service for lower cost.
4
And what exactly is your point relating to Verizon's monopolistic practices, lsbor repression and poor Svc?
1
IBM and T anti trust started in Carter years. Microsoft Clinton years. I know of no other monopoly action started during a Republican administration dating back to the beginning of the 20th century. Usually these cases take time to put together. Cable companies are granted local monopolies, and as a consequence should be regulated as such. They aren't and that is the problem.
2
Companies with monopoly power don't just inhibit innovation and put a damper on job growth, they also contribute to a dumbed down labor force fearful of being tagged with the label "refuses to follow the company line". Anyone who's missed a flight due to TSA bungling or airline employee incompetence knows how it feels when fed a line of malarkey from a robotic employee more machine than human.
19
Yo, Krugman. The subject of this column offered you a great opportunity to atone for some of your over-the-top Burning-the-Bern columns.
Bernie Sanders went out & stood with striking Verizon workers in New York City (as he has stood again & again with other workers). He spoke in support of the unions' efforts to gain better working conditions and fair compensation.
Meanwhile, your fave Hillary Clinton was nowhere to be seen on the picket lines. I wonder why. Maybe it was because Verizon executives paid Hillary $225,000 for a May 2013 speech. (Of course Hillary claims huge honoraria don't influence her views in any way.) Or maybe it was because Verizon has contributed at least $350,000 to the Clinton Foundation. Or maybe it was because the Clinton Foundation has an initiative that "partners" with Verizon.
In so many ways, Hillary's ties to mega-corporations temper her enthusiasm for measures that alleviate income & wealth inequality. Yet Bernie Sanders is the candidate you write (in a recent blogpost) that you "distrust." You may be a world-class economist, but something doesn't add up here.
The Constant Weader at http://www.RealityChex.com
Bernie Sanders went out & stood with striking Verizon workers in New York City (as he has stood again & again with other workers). He spoke in support of the unions' efforts to gain better working conditions and fair compensation.
Meanwhile, your fave Hillary Clinton was nowhere to be seen on the picket lines. I wonder why. Maybe it was because Verizon executives paid Hillary $225,000 for a May 2013 speech. (Of course Hillary claims huge honoraria don't influence her views in any way.) Or maybe it was because Verizon has contributed at least $350,000 to the Clinton Foundation. Or maybe it was because the Clinton Foundation has an initiative that "partners" with Verizon.
In so many ways, Hillary's ties to mega-corporations temper her enthusiasm for measures that alleviate income & wealth inequality. Yet Bernie Sanders is the candidate you write (in a recent blogpost) that you "distrust." You may be a world-class economist, but something doesn't add up here.
The Constant Weader at http://www.RealityChex.com
763
Senator Sanders is a man with no plan.
11
Off the top turnbuckle, knee to the throat, match over.
2
http://www.reuters.com/article/us-usa-election-idUSKCN0XA222
"Democratic presidential contenders Bernie Sanders and Hillary Clinton joined striking Verizon workers' picket lines on Wednesday"
http://thehill.com/policy/technology/276149-clinton-says-verizon-should-...
Democratic presidential front-runner Hillary Clinton joined rival Sen. Bernie Sanders (I-Vt.) in positioning herself with workers striking against Verizon on Wednesday.
“Verizon should come back to the bargaining table with a fair offer for their workers,” she said in a statement.
She echoed a union claim that “Verizon wants to outsource more and more jobs” and said that the company “should do the right thing and return to negotiations.”
"Democratic presidential contenders Bernie Sanders and Hillary Clinton joined striking Verizon workers' picket lines on Wednesday"
http://thehill.com/policy/technology/276149-clinton-says-verizon-should-...
Democratic presidential front-runner Hillary Clinton joined rival Sen. Bernie Sanders (I-Vt.) in positioning herself with workers striking against Verizon on Wednesday.
“Verizon should come back to the bargaining table with a fair offer for their workers,” she said in a statement.
She echoed a union claim that “Verizon wants to outsource more and more jobs” and said that the company “should do the right thing and return to negotiations.”
15
Do we even have a DOJ anti-trust division anymore?
143
Prosecution of White Collar Crime Hits 20-Year Low ...
www.nationofchange.org › ... › Human Rights
NationofChange
Sep 11, 2015 -
If you change your frame of reference from left Vs right, to Gilens observation that we live in an oligarchy you realize there problems exist on both sides if the isle. You also understand the rise of the "populists" on both sides of the Atlantic. almost all the editorial writers of the nytimes are still stuck with the same L Vs right mindset. Hence their analysis is usually flawed, incomplete, doesn't have predictive value, and should be junked.
www.nationofchange.org › ... › Human Rights
NationofChange
Sep 11, 2015 -
If you change your frame of reference from left Vs right, to Gilens observation that we live in an oligarchy you realize there problems exist on both sides if the isle. You also understand the rise of the "populists" on both sides of the Atlantic. almost all the editorial writers of the nytimes are still stuck with the same L Vs right mindset. Hence their analysis is usually flawed, incomplete, doesn't have predictive value, and should be junked.
bill b
Yes. We still have an Anti-Trust Division within the AG's office.
It's one guy, with a windowless office in the basement, who's been told that he can work from home as often as he likes
He has held the job since the Reagan years. Others in the office have heard of, but never seen him.
Yes. We still have an Anti-Trust Division within the AG's office.
It's one guy, with a windowless office in the basement, who's been told that he can work from home as often as he likes
He has held the job since the Reagan years. Others in the office have heard of, but never seen him.
2
Great comment, pretty much sums up one aspect of the problem.
2
Americans have a perverse affinity for monopolies as part and parcel of their seemingly limitless ability to vote against their own self interests in hopes of one day joining the elite classes themselves.
How else to explain not only decreased competition among businesses, but the gerrymandering that has lead to the Republican stranglehold on local and increasingly national seats in government?
How else to explain not only decreased competition among businesses, but the gerrymandering that has lead to the Republican stranglehold on local and increasingly national seats in government?
43
Sorry, I'm as progressive as anyone I know (and a Sanders supporter), but as we say around here, this dog won't hunt. I own a few shares of VZ in my IRA, and so follow the stock. Its stock price has not gone up more than others in its segment (and not as much as the overall market - beta of .2) since the end of the Great Recession, and currently pays a utility-like dividend of just over 4%. Such dividends are typical in "mature industries", defined as those in which markets are stable and new technologies are slow to emerge. While I agree that boards and executive managers are taking far too much out of US public companies, that is a corporate governance issue not at all unique to VZ. Perhaps its decision to slow its investment pace in FiOS is due to an analysis of potential returns (customers just aren't inclined to pay more for the benefits of same in relation to alternative), or reflects knowledge of a coming technological advance that would too soon obsolete the investment. So, if VZ has begun extracting monopoly rents, why doesn't that reflect in its stock price relative to others? A 4+% dividend rate indicates that management believes VZ stockholders can better reinvest returns themselves, at least at present.
None of which is intended to imply that VZ's unionized workers don't have justification to strike. Just doubt that it has much to do with FiOS.
None of which is intended to imply that VZ's unionized workers don't have justification to strike. Just doubt that it has much to do with FiOS.
10
A nice title, "robber barons," but I prefer the action words: threat and theft. For Cruz, social security, an "entitlement" funded by taxes on workers, distributed accordingly, with an extremely low administrative overhead and safe from bubbles, dips, shocks, and recessions, has to be "reigned" in! A worker funded safety net--equivalent to the 5th largest global GDP--"threatens" to bury us!
Yet, private domestic debt is nearly 90 % of GDP (FRED), pointing to wage stagnation and families living on the margin, and draws no concern.
Elections are about political economy, directing power and money toward particular goals and hands, creating acceptance by tying these decisions to cultural and social ideas. Republicans turn-of-the-century lassiez-faire plan increases burdens on the poor, uses statistics to justify its inevitability and expands a monopoly of capital through threat and theft.
Last week, Wells Fargo paid $1.2 billion for bad mortgages; Goldman Sachs has paid $5.1 billion for "shady deals," Morgan Stanley, $2.6 billion; JPMorgan Chase, $13 billion. Total penalties: a staggering $204 billion!
But the system faces its a quandary: studies show marginalized unemployment no longer produces capital returns; Justice has cracked down on policing poor communities as a source of municipal financing, costs can no longer be assigned to government, and victim blaming doesn't solve the problem.
Balance sheet politics hides the face of poverty.
Yet, private domestic debt is nearly 90 % of GDP (FRED), pointing to wage stagnation and families living on the margin, and draws no concern.
Elections are about political economy, directing power and money toward particular goals and hands, creating acceptance by tying these decisions to cultural and social ideas. Republicans turn-of-the-century lassiez-faire plan increases burdens on the poor, uses statistics to justify its inevitability and expands a monopoly of capital through threat and theft.
Last week, Wells Fargo paid $1.2 billion for bad mortgages; Goldman Sachs has paid $5.1 billion for "shady deals," Morgan Stanley, $2.6 billion; JPMorgan Chase, $13 billion. Total penalties: a staggering $204 billion!
But the system faces its a quandary: studies show marginalized unemployment no longer produces capital returns; Justice has cracked down on policing poor communities as a source of municipal financing, costs can no longer be assigned to government, and victim blaming doesn't solve the problem.
Balance sheet politics hides the face of poverty.
359
Walter, actually businesses fund 50% of the payroll tax (6.2% of employee salary up to cap), with employees funding the other 6.2% up to the cap. Cruz and other republican's effort to "reign in" social security is a actually gift to businesses to eliminate this (tax deductible) expense. It wasn't enough that many businesses eliminated their pensions; now they're going after social security.
4
What Dr. K. describes are not just the effects of St. Ronnie, but the knock-on effects of the Grover Norquist " drown government in the bath tub " movement, which is aimed at making sure government doesn't have the resources to regulate.
Sure enough, JPMorganChase is the one with the ' money room ' according to Jamie Dimon:
http://www.businessinsider.com/jp-morgan-has-a-secret-money-room-2013-2
while regulators are having their budgets slashed.
Dr. K.'s point about investment being chiefly in mergers and acquisitions is of course also exactly en pointe, since it is a widely-reported fact that literally Trillion$ in cash are held by U.S. corporations ' off-shore ' with corporations saying they have no use for the profits without repatriation.
Unfortunately, repatriation has been tried before, and corporations grossly lied about what they would do with such funds:
http://www.nytimes.com/2009/06/05/business/05norris.html
At any rate, corporations proclaiming that they are making so much money they can't get all their profits to the correct banking account would seem to be a rather nice problem for capitalism to have, but since it's happening under a Democratic POTUS - hmmm - well, instead, let's talk about the big bad evil government regulators with their boots on the neck of business; turn on CNBC !
Sure enough, JPMorganChase is the one with the ' money room ' according to Jamie Dimon:
http://www.businessinsider.com/jp-morgan-has-a-secret-money-room-2013-2
while regulators are having their budgets slashed.
Dr. K.'s point about investment being chiefly in mergers and acquisitions is of course also exactly en pointe, since it is a widely-reported fact that literally Trillion$ in cash are held by U.S. corporations ' off-shore ' with corporations saying they have no use for the profits without repatriation.
Unfortunately, repatriation has been tried before, and corporations grossly lied about what they would do with such funds:
http://www.nytimes.com/2009/06/05/business/05norris.html
At any rate, corporations proclaiming that they are making so much money they can't get all their profits to the correct banking account would seem to be a rather nice problem for capitalism to have, but since it's happening under a Democratic POTUS - hmmm - well, instead, let's talk about the big bad evil government regulators with their boots on the neck of business; turn on CNBC !
178
When Verizon workers went on strike last week they were mainly protesting the inevitable obsolescence of certain types of work – they are the copper line rotary phone version of leather harness workers of a dawning twentieth century in the teeth of a persistent rise in the number of autos, the diminished importance of horses and the need to move on.
The young rely on their cellphones and eschew the hard line in the home. My cable company now provides me with an Internet phone, acts as its own carrier and offers unlimited free phone calls (including long distance) anywhere in the U.S. and Canada, for a few bucks a month. Increasingly, those free phone calls aren’t ending in hard lines maintained by Verizon’s striking workers and their brothers, but other Internet phones and cellphones.
But Paul’s sermon today is about the rising perils of monopoly power, and yet again how Ronald Reagan was responsible for original sin and foot fungus. Verizon is hardly Jay Gould and it DOES employ almost 180,000 people. Note as well that the average compensation of those who struck is well OVER $100,000 per year: pretty comfortable harness maintainers; and there’s still a fair amount of harness to maintain.
Our infrastructure providers such as Verizon always have been semi-monopolies, though they’re less that today than at any other time in their histories. Frankly, I’m a lot more concerned about Apple and Microsoft than about them.
The young rely on their cellphones and eschew the hard line in the home. My cable company now provides me with an Internet phone, acts as its own carrier and offers unlimited free phone calls (including long distance) anywhere in the U.S. and Canada, for a few bucks a month. Increasingly, those free phone calls aren’t ending in hard lines maintained by Verizon’s striking workers and their brothers, but other Internet phones and cellphones.
But Paul’s sermon today is about the rising perils of monopoly power, and yet again how Ronald Reagan was responsible for original sin and foot fungus. Verizon is hardly Jay Gould and it DOES employ almost 180,000 people. Note as well that the average compensation of those who struck is well OVER $100,000 per year: pretty comfortable harness maintainers; and there’s still a fair amount of harness to maintain.
Our infrastructure providers such as Verizon always have been semi-monopolies, though they’re less that today than at any other time in their histories. Frankly, I’m a lot more concerned about Apple and Microsoft than about them.
2
The problem isn’t Verizon and wasn’t Ronald Reagan: it was Barack Obama’s missed historical calling beyond the obvious one. Granted, he was distracted as anyone would be by the deepening Great Recession following his 2009 inaugural, but he focused for two years before he was stopped by a rising tide of conservative resistance on twentieth century liberal objectives: free cheese and Band-Aids. And a cap-and-trade that failed for want of DEMOCRATIC votes.
Instead, he should have focused on twenty-first century challenges, primary among which isn’t as much global climate change as it is the gradual disappearance of human labor with nothing to replace it; and what to do about creatively using the resources of government to redefine human labor so that it retains its relevance.
The problem wasn’t Ronald Reagan, whose visions dealt with the challenges of other times, but Barack Obama, who might have seen the real challenge of his time and didn’t. And it’s Paul Krugman, whose powerful mind is turned not to solutions for present-day and future challenges but to telling us whom to hate for original sin and foot fungus.
Instead, he should have focused on twenty-first century challenges, primary among which isn’t as much global climate change as it is the gradual disappearance of human labor with nothing to replace it; and what to do about creatively using the resources of government to redefine human labor so that it retains its relevance.
The problem wasn’t Ronald Reagan, whose visions dealt with the challenges of other times, but Barack Obama, who might have seen the real challenge of his time and didn’t. And it’s Paul Krugman, whose powerful mind is turned not to solutions for present-day and future challenges but to telling us whom to hate for original sin and foot fungus.
4
richard - Ummmm, yeah; reading this post, we have the impression you've found some of Bill Lumbergh's lost dialogue from the movie ' The Office '.
14
The vanishing of labor is a horrible problem. If work is done by robots, the money earned goes to the owners of the robots. There will be less and less need for people who do not own robots, and fewer and fewer ways for them to make a living. We will be left with the robot-owners and their flunkies.
One answer to the vanishing of labor is to let the market take care of the problem. The market does not waste resources preserving unneeded entities. The other answers are ways to handle the unneeded entities, in this case people, by buying them off with bread, circuses, and drugs, or reorganizing things so there will be something for them all to do.
One answer to the vanishing of labor is to let the market take care of the problem. The market does not waste resources preserving unneeded entities. The other answers are ways to handle the unneeded entities, in this case people, by buying them off with bread, circuses, and drugs, or reorganizing things so there will be something for them all to do.
8
Skewed income distribution in society, huge profit-wage gap, profits without investment, and continued official indulgence to monopoly business practices all combined together is a sure recipe for economic depression and stagnation-never in tune with the basic spirit of capitalist market economy.
90
As a lawyer, I've watched monopoly burgeon and the anti-trust act gather dust. Professor Krugman and the economic studies confirm my observation. It's way past time to rein in that runaway stagecoach.
By the way, two of my friends (the only two Verizon customers I know), both long-time Verizon customers, have dropped Verizon for more efficient service providers. Losing customers may prod Verizon to take positive action.
By the way, two of my friends (the only two Verizon customers I know), both long-time Verizon customers, have dropped Verizon for more efficient service providers. Losing customers may prod Verizon to take positive action.
315
All you have to do is get a copy of Verizon's 10K, and their share holders report to see how the profits are distributed.
First is the directors pay which includes a few thousand shares, along with about $250K in pay. Then you have a CEO grossing about $20mil total.
But the big payout goes to the funds who have several million shares. Vanguard and Black Rock for instance hold more than 5% of the outstanding shares.
So it you are like most "investors, you bought into a fund, and that is where your gains and dividends come from. There are abut six or eight large funds that have these large holdings in various companies, and they have a big say in how the company operates, and even who some directors are.
So where Dr. K misses the point, it is not just management that keeps these companies from investing and giving more benefits to the employees, it is these big stockholders. Could the funds be limited to how much of any company they could own? Try it, and see who is the first to demand leaving it alone. I must admit, I do have a few shares of Verizon, it pays a good dividend as does AT&T. Some of you might remember when Ma Bell allowed the employees to buy stock at a discount. It was pretty much an employee owned company, and had good employee loyalty. That is long gone.
Some of you think Sanders would change the corporate behavior, what have you been smoking? Just try it, tell all those fund investors you are cutting their dividends, and retirement funds. Sure you will!
First is the directors pay which includes a few thousand shares, along with about $250K in pay. Then you have a CEO grossing about $20mil total.
But the big payout goes to the funds who have several million shares. Vanguard and Black Rock for instance hold more than 5% of the outstanding shares.
So it you are like most "investors, you bought into a fund, and that is where your gains and dividends come from. There are abut six or eight large funds that have these large holdings in various companies, and they have a big say in how the company operates, and even who some directors are.
So where Dr. K misses the point, it is not just management that keeps these companies from investing and giving more benefits to the employees, it is these big stockholders. Could the funds be limited to how much of any company they could own? Try it, and see who is the first to demand leaving it alone. I must admit, I do have a few shares of Verizon, it pays a good dividend as does AT&T. Some of you might remember when Ma Bell allowed the employees to buy stock at a discount. It was pretty much an employee owned company, and had good employee loyalty. That is long gone.
Some of you think Sanders would change the corporate behavior, what have you been smoking? Just try it, tell all those fund investors you are cutting their dividends, and retirement funds. Sure you will!
98
David,
Where you are mistaken is in the belief that Senator Sanders' supporters count on him to change the world. That is not what the vast majority of us believe, nor what he is advocating. We *ALL* change our condition by going out to vote for change. That means not only voting for Sanders himself, but voting for all of the most progressive candidates available down-ballot. That means voting in our primaries, in the general election, and in all elections to come, including the mid-terms. That also means holding those we elect accountable now and for the entirety of their terms and ensuring they know we are watching and will vote them out if they do not do the job they were elected to do in Congress and state houses.
Continuing to vote for the establishment doesn't get you to change. Voting against it does.
Where you are mistaken is in the belief that Senator Sanders' supporters count on him to change the world. That is not what the vast majority of us believe, nor what he is advocating. We *ALL* change our condition by going out to vote for change. That means not only voting for Sanders himself, but voting for all of the most progressive candidates available down-ballot. That means voting in our primaries, in the general election, and in all elections to come, including the mid-terms. That also means holding those we elect accountable now and for the entirety of their terms and ensuring they know we are watching and will vote them out if they do not do the job they were elected to do in Congress and state houses.
Continuing to vote for the establishment doesn't get you to change. Voting against it does.
271
Look at it this way, David: For the sake of the political revolution Sanders is only asking us to jeopardize our investment funds. For political change to a system, some might argue, not terribly more burdensome than today's, some folks were willing to pledge their lives and their sacred honor as well. Count me as a fund holder who is willing to take a relatively modest risk for Bernie.
10
Yes far better to complain about large corporations, like you and Paul Krugman do, and then ridicule anyone proposing doing anything about it.
8
Would Hillary strongly pursue
These vile Robber Barons anew,
Not quite so likely
As impassioned Bernie,
A choice as POTUS one won't rue.
These vile Robber Barons anew,
Not quite so likely
As impassioned Bernie,
A choice as POTUS one won't rue.
132
There is simply no evidence that Hillary would be any less aggressive against monopolies than Bernie.
24
"So lack of competition can contribute to “secular stagnation”"
Well, well! I'm glad Professor Krugman follows Larry Summers in giving this vital topic the full op-ed treatment. I agree with the last statement in this op-ed, we are most definitely living in a second robber baron era. I disagree that the monopolies we now have, in all sectors of the economy (banking first and foremost) are chief contributors, rather than a symptom of the oligarchy we are now living in. http://wp.me/p2KJ3H-29L That makes Bill Clinton's snark all the more infuriating. http://wp.me/p2KJ3H-2bS
With Congress having done next to nothing over the past four years, we have been living in an economy that is controlled exclusively by the .01%, with government exactly where Grover Norquist wanted it: small enough to asphyxiate in a bathtub. Without a real ability to end inversions, force corporations to invest at home, collect real taxes, we will see no real growth of jobs or increase in wages. There aren't compelling reason for corporations to do what they should. Without real budgets, government agencies won't be able to do what they were meant to.
That is why we need Bernie Sanders' political revolution, rather than Hillary Clinton's incrementally myopic aspirations (http://wp.me/p2KJ3H-2bS). Secular stagnation, the one we now live is 95% the product of money in politics and a slow death of democracy. What ails us can be fixed-only if we take back our country.
News roundup: http://wp.me/p2KJ3H-2bS
Well, well! I'm glad Professor Krugman follows Larry Summers in giving this vital topic the full op-ed treatment. I agree with the last statement in this op-ed, we are most definitely living in a second robber baron era. I disagree that the monopolies we now have, in all sectors of the economy (banking first and foremost) are chief contributors, rather than a symptom of the oligarchy we are now living in. http://wp.me/p2KJ3H-29L That makes Bill Clinton's snark all the more infuriating. http://wp.me/p2KJ3H-2bS
With Congress having done next to nothing over the past four years, we have been living in an economy that is controlled exclusively by the .01%, with government exactly where Grover Norquist wanted it: small enough to asphyxiate in a bathtub. Without a real ability to end inversions, force corporations to invest at home, collect real taxes, we will see no real growth of jobs or increase in wages. There aren't compelling reason for corporations to do what they should. Without real budgets, government agencies won't be able to do what they were meant to.
That is why we need Bernie Sanders' political revolution, rather than Hillary Clinton's incrementally myopic aspirations (http://wp.me/p2KJ3H-2bS). Secular stagnation, the one we now live is 95% the product of money in politics and a slow death of democracy. What ails us can be fixed-only if we take back our country.
News roundup: http://wp.me/p2KJ3H-2bS
473
Reversing secular stagnation means creating good jobs, lots of them. For that, we need to completely reverse the basis on which government now does business and go back to the guiding principles of FDR by completely erasing the horrors that Republicans have instituted in the name of Ronald Reagan, but at the direction and with the money of the Kochs and their enablers and enforcers.
It will take the tenacity of a leader with an ambitious vision, strong charisma, and dogged determination to see through revolutionary changes. This nation isn't accustomed to overthrowing robber barons. The choices we have in front of us are more robber barons to lead us or either one of a neoliberal dynastic candidate and a democratic socialist visionary. Our choices are more oligarchy, middle of the road oligarchy, the continuation of the status quo with limited hopes, or complete change.
Hillary Clinton is the candidate of only going as far as legislators will take her, both in Congress and state houses. She is the candidates of states' rights versus the rights of all Americans to have equal access to their rights: the right to earn a living wage, have healthcare, and receive an education without which there is no possibility of living a decent life. http://wp.me/p2KJ3H-2bN
That takes us back to the issues that were improperly settled at the end of the civil war, allowing states to oppress as they please. It's about time, in 2016, that we said "no more!" http://wp.me/p2KJ3H-2bT
It will take the tenacity of a leader with an ambitious vision, strong charisma, and dogged determination to see through revolutionary changes. This nation isn't accustomed to overthrowing robber barons. The choices we have in front of us are more robber barons to lead us or either one of a neoliberal dynastic candidate and a democratic socialist visionary. Our choices are more oligarchy, middle of the road oligarchy, the continuation of the status quo with limited hopes, or complete change.
Hillary Clinton is the candidate of only going as far as legislators will take her, both in Congress and state houses. She is the candidates of states' rights versus the rights of all Americans to have equal access to their rights: the right to earn a living wage, have healthcare, and receive an education without which there is no possibility of living a decent life. http://wp.me/p2KJ3H-2bN
That takes us back to the issues that were improperly settled at the end of the civil war, allowing states to oppress as they please. It's about time, in 2016, that we said "no more!" http://wp.me/p2KJ3H-2bT
280
Bernie's followers keep repeating the mantra that Bernie has different positions on the issues than Hillary does, but their policy platforms are nearly indistinguishable.
It's easy to call Hillary weak, but a lot harder to provide any evidence of it.
It's easy to call Hillary weak, but a lot harder to provide any evidence of it.
34
Hillary is more likely to solve these issues than Bernie is. Her experience and practicality will be much more likely to succeed.
37