Not all of us see it. The country has lost its mojo. We are no longer a democracy but a corporate oligarchy supported by one major party. The lies, obfuscation, and outright traitorous acts in order to support a lawless president and diabolical senate leader have brought us to the point of systematic collapse. Jim Jones is running the country and some idiots are drinking the Kool Aid. How can we be civil to people who have lost their insight on civic responsibility? How do you deal with people who drink the Kool Aid and instead of dying from the poison, become zombies to haunt the rest of us? Ironically, life is imitating art and these zombies are worse than flesh eaters. They are truth eaters, robbing the country of any intellectual integrity while feasting upon their own honor. Republican leadership looks like a failed experiment in hypocrisy as an altruism and they keep appointing and electing the worst of the worst and cheering them on. It is getting sickening to watch or even stay involved. My instinct is to leave my beloved country and let the wolves have it. It may no longer be salvageable.
43
How this isn't making more Americans angry, I"ll never know. All the right seems to care about is people on food stamps. Really?
26
Although the gist of this article is probably correct, I have a quibble. I recently replaced my Maytag washer with a new Maytag washer purchased from the same locally owned appliance store. Thirteen years later the new Maytag cost $200 less than the old Maytag (I'd kept my receipt).
8
Profit over a certain percentage should be counted as greed and should be taxed at 100%. Similarly wealth should be taxed and corporations should not be allow to grow after a certain limit. These are common sense laws that will make the capitalism work in a better way. Everyone will have more opportunities to innovate and work more freely.
There is no end to human greed and this should be stopped if we want to make America great again and save our planet. Senator Warren has the right ideas. So listen to her carefully and don’t forget to vote.
10
Interesting article. Mostly seems correct. The only competition many big businesses face now is the cost of buying policy makers. In fairness, I can make a lot more money in the US than I would in the EU so the extra costs of services are mostly offset with a net positive buying power of my less heavily taxed income. It’s also ironic that among the worst offenders for ripping off their customers are universities. The liberal academics love to lambast the greed of oligarchs but love their genteel, well paid 8 month a year jobs plus consulting and book deals on the side even more. If even the supposed liberal thinkers are hard at it, it is hard to expect better of mere business leaders.
4
Calling Senator Warren, Senator Warren please answer. This is what she is talking about – reinvigorating our antitrust laws, and re-shaping capitalism so that it works for more Americans not just the few. That is why she is being targeted by big business and why some – including, shamefully Joe Biden, are tagging Warren with classically sexist and demeaning term like "angry woman." This article helps debunk the myths of corporate self-regulation and trickle down economics. Maybe Warren ought to do a town hall on the internet with Philippon as her guest.
25
A good complement to Friday's opinion piece by Jonathan Rothwell on monopolistic practices in the professions.
Indeed, the "dubious theories about money-saving efficiencies" that "usually end up raising profits rather than lowering prices" is what economists have been pushing for a while. Economic policy is not about improving people's lives anymore, but about improving large corporations' bottom line.
Capitalism for the people is not popular in the halls of power anymore. It is as revolutionary as socialism used to be. We've gone a long way in the wrong direction.
8
We didn't need an MIT economist to explain to us why Comcast and Verizon care nothing about their over-charged customers. And we didn't need him to explain to us that politics (or to be precise the corrosive effect of money in politics) is at the root of this bilking of the american consumer to the advantage of the oligarchs. What we need is an American electorate smart enough and brave enough to elect leaders who will make it stop. Alas, we are not there yet. We hate Comcast and Verizon, but we don't connect the dots to electing better, smarter leaders. We just shrug our shoulders or cut the cord.
18
Certainly bolsters Bernie Sanders' arguments.
6
"Too often, both parties are still confusing the interests of big business with the national interest." And that "confusing" is hardly an accident now, is it? Money talks, especially in Washington DC.
15
I resent all the "tips" to save on travel, coupon clipping, BOGO, loyalty points etc. Another way to waste time online and be stressed. I want fair prices and assurance of quality and service.
26
Retired doctor here. The one that I know about is hospitals buying up other hospitals and physician practices to get "economies and efficiencies of scale" so as to cut prices and improve care.
What utter rubbish. No doctor ever believed this but we were overwhelmed by the lobbyists. If you have no money you have no voice.
Now of course an echocardiogram at the hospital costs double what it would be in a private office. Why? Hospitals have lobbied the government to allow them to charge more due to their "higher overhead."
Throw the demoralization of employed doctors into the mix and you have disaster for everyone but our corporate masters.
34
One could expect Republicans to sabotage antitrust enforcement. But Democrats in their neoliberal betrayal of the country (I call it Rockefeller-Republicanism-in-drag, i.e., Clintonism) did as much to undercut antitrust activity when in the mid-1970s, frustrated by the McGovern election debacle, they went to Wall Street hat in hand. Antitrust activity just coincidentally almost vanished from the scene.
American democracy hasn't been the same since. We got flat wages for working people, exponentially accelerating inequality, the Reagan Restoration, etc., and "Democrats" were complicit. The last three "Democratic" presidents, virtually anointed by David Rockefeller, weren't democrats.
https://www.theatlantic.com/politics/archive/2016/10/how-democrats-killed-their-populist-soul/504710/
2
Can’t get cable or internet in rural Michigan. Uganda, easy.
9
The biggest overcharges Americans are experiencing, when comparing to European countries, are Health Care and Education. We are talking about tens of thousands of dollars every year per family. It is shameful.
Our lack of information, fear of change, and power of lobbyists are preventing us from seeing and doing the obvious.
21
Add another $10-15k for the bronze health “insurance” coverage that pays the for profit health industrial complex to deliver decidedly mediocre care.
24
This consolidation theory applies double to healthcare, hospitals and medicines. We are paying twice or more the Euro average for those and our health overall is not getting any better.
10
This all started with Ronald Reagan, you can look it up. And we voted him in, twice. Something about "getting what you deserve "
20
Big is bad.
1
I am in complete shock. I thought the free “market” would righten all wrongs..
5
Compare the price of toilet paper or paper towels: It's nearly 3 times as expensive in the US than in Germany. It's for sure an oligarchy and should be busted!
6
Big business and their Republican enablers...
5
We need a new economic structure that is completely different than the one we have operated by in this country for quite some time now. When I introduced it on medium.com, I was told it sounds good but no one could figure out how to make it work. We are an inventive, adaptive, creative race. We can do this. https://medium.com/@teresadlonghawkes/what-is-a-natural-economy-455bea18291
It would be nice if people (journalists or commenters) who write about Europe, actually lived there. Not visiting but real life living. I did. For almost 30 years. Here is my summary of the vast amount of familiarity and knowledge I have about the US and Europe: Europe sucks when compared to the US of A.
1
A key to the solution is The Second Income Plan, suggested by the late Louis Kelso, inventor of the Employee Stock Ownership Plan - ESOP - used by 11,000 companies.
This plan does not depend upon jobs or savings. Universal Basic Incomes can be a transition device. Note: With this combined approach there is no net cost to the Treasury!
Kelso saw automation coming. He believed it could liberate humans from toil, work we do not choose to do. He thought that by age 50, almost everyone in America could receive about 50% of their income from diversified investments. Imagine the implications!
This is the key to reversing the dangerous growth of inequality and poverty. If we convince Congress to pass the necessary legislation to establish a SECOND INCOME ACT -
a necessary path can also open to an awakened nation recognizing the need to break up destructively huge companies.
A Universal Basic Income by itself has zero chance of Congressional approval. In order to provide immediate economic assistance, combine SECOND INCOMES with a transitional Universal Basic Income. These interim funds would gradually be displaced - as growing taxable earnings are realized by individuals from SECOND INCOMES. See MORE at aesopinstitute.org
To end stock market concern, 85-90% of an individual’s funds could be invested in Treasury Bills, as safe a place to put your money as exists. The remainder invested in a variety of high risk opportunities. This is a brilliant prescription by Nassim Taleb
1
Actually, things are even worse than this article says they are. Expensive service is bad. Completely broken service is even worse. Comcast is our local cable internet monopoly. It’s gotten to the point that if your internet is very slow or broken due to problems with your coaxial cable (which they are responsible for), they just won’t fix it! A few years ago, they would fix it if you complained for months, but now they don’t even bother. I have a friend who had to completely cancel her Comcast service because it just didn’t work. Now she has to use her phone as a wireless hotspot. I recently cancelled all TV channels (including the most basic channels) due to cost.
5
The natural trend, and their desire, is for unregulated businesses to become large & powerful enough to control their markets, i.e., create monopolies, and thus control prices. “Competition” & “free markets” and similar phrases are propaganda used by Big Business/Big Money & the GOP to hoodwink the populace while they set about fleecing you. The political implications aside (they have realized it’s easier to buy your advantage than create something), the bottom line is that the demand that corporate profits increase annually is not sustainable. It’s an economic perpetual motion machine.
2
I get very upset about this topic. All I see is corporations buying other corporations with the blessing of Congress. The corporations tell consumers that this will be better for them. In the long run, it is only better for the executives and their shareholders. We the consumers have to pay more for less choice.
4
I split my time between France and the U. S. so I am well aware of the disparity between our and their Broadband/Cable and Mobile costs. But Mr. Leonhardt suggests that the reason is because we've paved the way for rampant consolidation that hurts both consumers and workers. Truth is in France (hardly a Utopia of economical living), there are only 3 major companies offering these services: Orange, Bouygues and SFR. We have many wireless providers in the U. S. but with broadband most of us only have a choice of two. The price we pay certainly seems outrageous, but reason for it is certainly not supported by the a vastly different market structure, at least in France. Maybe it's a lack of capitalistic greed or government regulation, but it's not consolidation.
2
Does the $5K a year cost include lower wages or just increased costs of goods purchased? In any case, it's a staggering number. So much for free enterprise. This is the land of the monopoly.
1
Something is rotten, but it's not in the state of Denmark - it's here.
We need bipartisan solutions, including more, not less, regulation. In a word, we need to pay attention to Professor Philippon's analyses.
2
Good column.
Besides corporate concentration, there’s an additional factor that saps the strength of the American economy. Big banking has grown to occupy a huge proportion of the economy.
While some bank functions contribute to genuine economic growth, many amount to moving money around and skimming part of the profit. Arbitrage does not create, or even abet, innovation. ‘Financial engineering’ is not genuine engineering.
The altered structure of our economy has, in many ways, made it sicker. It’s (past) time for economic healing.
3
Odd that a discussion of wage stagnation over the past decades doesn't mention a rather simple economic principle: supply and demand. In this case, American policy allowing a vast increase in both legal and illegal immigration, bringing in an oversupply of workers, particularly at the bottom of the wage-distribution. On that score, Europe has been tougher, by far, than the US.
3
Something to think about: enterprise capitalism requires that corporations exploit customers to the maximum extent possible. Managers of publicly traded corporations, or even ones owned privately by groups of investors, have a fiduciary responsibility to get maximum profits by any legal means. For people in or near poverty, that means, because of their lack of economic power, they are exploited the most. This helps to lock families, generation by generation, in their lower economic status.
1
Can't go through everybody's comments, but.... Broadband access in France is 40€, INCLUDING CABLE TV AND HOME PHONE. Most cell phone subscriptions are €20, but some discount ones cost €2 (THAT'S WHAT I HAVE SINCE I HATE CALLING). That's noticeably different than what the article says.
3
I was taught in law school thirty years ago that Teddy Roosevelt busted the trusts in the early 1900's, and it would take them only about 100 years to claw it all back. My professors were right. I watched it happen right before my eyes. We need another Teddy Roosevelt to bust the trusts and round up the 1%. Elizabeth Warren looks like it.
11
Between Comcast and Verizon I was paying $150.00 a month. I changed my phone to Consumer Cellular and cut my monthly bill in half. I'm going to ditch Comcast in short order, and go back to free air TV. It is absurd that internet cost around $70.00 a month. And it is a necessary utility these days, without internet service one is shut out of mainstream society functions, medical, banking, entertainment and so much more.
Like others posting here there is no competition where I live. there is only Quest, now Century Link, basically an ongoing criminal enter prize charging the same. The company has had such a long history of customer abuse it has changed its name several times.
The upshot is, if you are poor, on SS, elderly, or disabled these necessary services cost 10% to 15% of monthly income. In other words the poor must go without, in order too remain engaged.
3
The chart comparing Broadband & Cellular fees makes no sense.
The US has the highest median wage for a major nation (Luxembourg and a few other small nations are outliers, but not really illustrative). So, if you pay a US worker $65K in salary, a $67 broadband bill is affordable. A $10K USD salary in China makes broadband unaffordable.
Secondly, the US is vastly larger than most of the countries on the list (most would fit within the area of Texas). So networks are going to have higher fixed costs.
Finally, most US firms are paying US wages, which are higher than the wages in other countries.
1
@James
Wouldn't those higher fixed costs resulting from the size of the networks be spread among more customers, therefore making the fixed cost per customer in each country approximately the same?
1
Fixed costs should be capped; the article talks about variable costs. It is foolish to applaud US corporations for their greed. Our monthly charges should not be tapped to fixed costs regardless of our annual salaries.
1
Teddy Roosevelt had it right. We need someone to get in there and break up these companies so they can compete again (and slowly start the whole process over again..)
5
One reason Americans are being overcharged is this: we have become sloppy with our money, as if we don't care.
Cell phones? People were convinced by advertising and by seeing others do it that they had to have a two year contract to get good phone service. Why? The non-contract providers USE THE SAME NETWORKS as those with contracts. In the past, people got discounts on their phones with a contract but then wound up paying a thousand or more for service during the contract. Now that smartphones cost more, no more discounts or much smaller ones relative to the cost of the phone.
I read stories about people in poverty paying 80 to 120 a month for cell phone service. Insane. You can get service for $30. a month with data and if you are really pressed there are some services at $15 or $10. (Don't think of monthly payments, look at the full annual cost.)
Cable television is another bad deal and people, gradually, are coming to realize that. You pay for all those channels you don't watch just in case you might want to watch one program a month. Plus, if you are an independent or a Democrat, you pay to have FOX NEWS propagandize against your interests.
The low cost air carriers have worked out much better in Europe than here. Why? Partly it is because the legacy carriers drive out the low cost start-ups. The big airlines target the start up until they force them out of business again and again. Only a few survive, mainly by not going head to head with the legacy carriers.
3
Yet another example of how America is where people pay for their big corporations to thrive. (Cable monopolies are another good example.) Wanna make America great again? Bring back real consumer choice!
5
As an American expat in Canada for 12 years now, I don't for a moment believe one point of this data: even after currency conversion, Canadian plans are markedly more expensive than U.S. plans, across the board, and with far fewer plan options.
2
It's bitterly amusing to hear monopolists/oligopolists praise "free markets". The only freedom they want in the markets freedom from fairness and competition.
7
But how many other countries manage to find it politically necessary to spend as much on military as we do, with bases all over the country and all over the world, our troops occupying other countries we have found it necessary to demolish, and our drones flying over cities full of people who might make the intolerable mistake of thinking they might be able to get along without our supervision, advice and discipled guidance?
2
From the column:
"Even Southwest Airlines has begun to behave less like a low-fare carrier."
Southwest is NO LONGER a discount carrier. They are what I would call a pretend discount carrier, relying on their reputation of old to get high prices now.
Southwest achieves this goal in many different ways. First, it is not listed on airline booking sites like Expedia. This means customers don't have side by side comparisons of prices and, thinking Southwest should be near the lowest, they see prices that are consistently higher than other carriers, including the legacy airlines.
To see a fare that is comparable or perhaps lower, you have to book on Southwest weeks in advance. Then, Southwest also throws up various sales around the calendar year, usually during slower travel times like just after summer or after the first of the year. These "bargain fares" are not necessarily any lower than those available elsewhere. If you can find them and book one, you might save 20 or 30 dollars.
To verify, I checked Southwest today for a flight next Wednesday, Baltimore to Austin, Tx. Non-stop, Southwest listed it for $770. United Airlines from Dulles was at $434. With one stop out of BWI, the lowest fare was $315.
Southwest doesn't charge for checked bags and they have a "low fare calculator" on their site if your dates are flexible. Otherwise, the Southwest discount pitch is aimed at people who don't fly much or check around before booking.
2
Gee, I'm not surprised by this at all. The underlying concept of the "free market" model is for the producer to gain more market share with the ultimate goal of dominating the market. At that point, the producer has "won", controlling the pricing and access to the product by the public. It's called "low road capitalism", and found through out the U.S. It's most easily achieved by the use of bribery and manipulation of government officials who control your market. The U.S. has the best government money can buy - and industries are maturing to the end point of the game where they are achieving market dominance. Probably impossible to reverse. Of course, the republicans are masters of the game ...
1
How do other countries’ average broadband speed and quality of service compare with the US? I would like to see those metrics on a comparison chart. It may be acceptable to pay more for higher speed and quality.
1
This "feels" like a problem that "should inspire bipartisan action"?
Republicans have been supporting big business over workers since the inception of the party in the 1860's. Reagan deregulated finance, destroyed worker rights, while the Roberts Five have ruled against unions at every turn. Republicans have blocked raising the minimum wage, while Republicans controlling the FCC have ruled for big telecom companies consistently.
No, this does not "feel" like something that should be bipartisan. This destruction of competitiveness in favor of oligarchies and oligarchs "feels" exactly like the Republican agenda.
No one should be confused.
7
I’ve been saying this since Reagan was elected. That is the moment when we began losing both capitalism and democracy. Today we have neither.
6
Capitalism demands constant growth, and expects that those most driven by self interest will drive the growth. The problem is not that the system is out of control, but that the system is doing exactly what one would expect a system to do that is based on selfishness.
No system based on the idea that each one should act to maximize their own self interest can produce a common good. The idea that some sort of mythical hidden hand will guide the collective to a common good is oxymoronic on its face. Self interest leads only to self interested selfishness. No wonder we can pass someone suffering on the sidewalks as though we were wearing blinders. Operating on self interest requires ignoring the needs and experiences of others.
The unbalanced and cruel condition of America is based on its devotion to unadulterated capitalism. We are committed to the existence of winners and losers, and the losers have little or no value within the system.
We teach our children to share and to understand that selfishness is wrong, but we forget the lesson when we grow up. We should not accept a continuation of a self interest as a guiding principle.
2
American capitalists HATE competition. Indeed, a free market to them means they get ALL the benefits with no cost or accountability - i.e. for free. Let everyone else pay for the costs - of healthcare, decent housing, polluted water-air-land, droughts, fires, oh and taxes.
American Airlines is a perfect example as the top management reaped bonuses galore after the stewardesses and mechanics unions agreed to cut their wages and benefits to allegedly save the airline a few years back. To truly cut costs, we should start cutting the highest expense - those at the top!
Antitrust in America is like the EPA - it is actually anti-"trust" and the environmental pollution agency respectively working against their intended purpose for profit by the few at the expense of the many.
"companies don’t need to innovate to keep profits high." Exactly. Contrary to the drug industry's argument and propaganda ads that their prices are high to cover R&D and innovation going - actually, they get most of the R&D for free from non-profits and taxpayer funded research. They're rolling in cash by bankrupting their customers with Martin Shkreli-like glee.
Free markets do lower costs - like a worker's salary, only to add most of it back to those who are the highest cost to business and society - to those at the top.
"What explains the difference? Politics." Size of wealth matters too. Obscene levels of wealth with the power to buy and manipulate politics in their favor and against everyone else.
6
This is only one service industry that is sealing from us, there are more, many more. We have no protection from these corporations as they own the politicians (most of them), and they have allowed this behavior to become worse and worse each year, as they continue to sanction monopolistic behavior. The meat and dairy folks buy our science, and pharma and healthcare are happy because they can sell us more services to treat the diseases we get from a poisonous diet. And our energy suppliers, well, look at California and PG and E. It's become one big scam to get every last penny and all our property, homes.
There is no end to greed's appetite. We must stand up together and say NO. And this doesn't even touch the Climate Crisis, which is driven by our demands and our lack of alternatives! Regardless, our power is our power if we use it individually and en masse. Find the ways to say NO,... we won't put up with this any more.
4
We’ve become the richest country in the world on the backs of the hardest-working citizens in the world who make the 1% richer every year.
9
You would think that conservatives and liberals and everyone in between could find common ground on this point, at leastif not in other areas. But our politicians and pundits are happy to lead the charge in pointing the finger at the other side, and far too many of us are far too happy to follow where they lead us. We'll get nowhere on this without bipartisan support - and by that I mean bipartisan support not just from legislators but from everyday people. Please, can we stop arguing over politics long enough to get something done on this front?
The most important part of this story: "It’s a problem that should inspire bipartisan action. Some solutions feel conservative: reducing licensing requirements and other bureaucratic rules that hamper start-ups. Others feel progressive: blocking mergers, splitting up monopolies and forcing big business to share infrastructure."
2
The biggest cable provider here just lies. They sucked me in again after I had left them for ATT ( a menu of problems and issues there and not that much cheaper ). They promised me home phone, Internet high speed and basic cable for $89.00 a month. When my first bill arrived it was $ 129.00. I got no reasonable answers from anyone about how I could contract for $89.00 and have it " presto change-o" turn into $129.00. Why is this even legal ? I left them several years ago when they ratcheted me up to $ 179.00. When the political nightmare is over I may cancel them again. Right now I need to keep up with the news. I'm old enough to remember....when expensive phones actually worked reliably for one thing. We pay a lot of money around here for dropped calls and delayed voice mails.
5
I will be 92 next August, going through the depression years on half an acre of land we grew almost everything we ate. My wife and I now live in an independent living community, we buy CSA shares from local farmers - refuse to order anything from Amazon and continue to support our still surviving local stores. We have kept our diets simple, screw the big controlling companies - there is a way to do this where we live. Some places could be tough but I think it's doable to refuse big corporate takeover. Need to be inventive and flexible.
179
@hdw I admire your viewpoint and what you're doing about it! Good on you!
3
Consumers are being hurt the most by these trends, but consumers ARE the economy. The End is near; consumers can't keep buying if wages are stagnant and prices are rising.
In sum, the policies which bring about this dangerous situation are Republican policies. And yet voters keep electing them. May as well slap yourself in the face.
8
We can't let partisan purism force us to speak in one-size-fits-all ideology.
Maytag acquired Amana in 2001 but by '05 was struggling. Haier bid $1.28 billion. Whirlpool's $1.7 billion kept Maytag/Amana from becoming a Chinese company.
The way people say "Amazon, Apple, Facebook and Google" would lead one to believe they're the nation's four largest corporations. They're not.
According to the 2019 Fortune 500, by revenues, Walmart is twice as big as Apple, which is third after Exxon Mobil. Berkshire Hathaway and Amazon are on Apple's heels. "Google" is fifteenth, after UnitedHealth, McKesson, CVS, AT&T, Amerisource Bergen, Chevron, Ford, GM and Costco. Facebook is 57th.
By profits, Apple's first, "Google" third and Facebook sixth amid a slew of conglomerated banks we "bailed out," Amazon 27th.
Yet does anyone actually believe Apple's revenues, profits or size make it magnitudes more problematic than the unregulated cult of Facebook?
Or Boeing, who despite the 737 MAX suffers no loss as our only commercial aircraft manufacturer? J&J—of opioid and asbestos-tainted body powder fame—seventh by market cap. Our banks are big, foreign banks bigger.
If I want a phone cheaper than iPhone, I have many choices. If I want broadband and certain channels cheaper than cable, I don't.
So the problem isn't size, nor acquisitions abstractly. Industries lobby as one monolithic group anyway. The problem is rooting discussion in ideology rather than consumer, and national, interest.
2
One of the papers (the McKinsey piece is based on data from the OECD paper) referenced in the opinion piece by David Leonhardt is by authors at the OECD who write that "super cycles and boom-bust effects account for one-third of the surge in gross capital share since the turn of the millennium. . . . We estimate that superstar effects and consolidation collectively contribute about one-fifth of the capital share increase". Their analysis suggests that "big business" is not the main driver of decreased labor share, contributing a smaller 20% of the decrease.
We can thank Reagan and the GOP for this. I travel a lot and have been spending more time in Europe and the difference between the US and there is stark. The standard of living is much higher and costs less. Americans worry about high taxes as if that alone is the problem when all the while, the corporations have been gobbling up other smaller corporations to create a monopoly while the politicians looked the other way bought by Koch et al and the lobbyists. Everything, from food, medical services, transportation, housing, education, etc., etc. now costs sky high compared to other developed nations. How long are Americans going to put up with this? The conservatives don't want to rattle the cage lest their stupid belief that free market create jobs which they themselves don't even believe. What is the point of creating jobs only for the 500 billionaires?
4
Please keep these educational articles coming; the analysis of unregulated capitalism is deep, complex, fascinating and really essential reading for knowing how our pockets are being picked ever so legally.
Philippon certainly sounds like he comes from the French school of economics that studies economic inequality. So I wonder if he brought his economic ideas from France to further germinate in the US or whether he education in economics is entirely American.
As for practical application, read Warren's plan to make Medicare for All affordable (elizabethwarren.com). One of her many tweeks of the system is to slow down consolidation of health facilities and so increase competition in the market place. I believe her overall plan is to save capitalism from itself. Warren's accused of being radical, but her plans just sound like smarts and education in the service of common sense.
4
Thank you for this! This is one of the biggest reasons I want Elizabeth Warren for president. She is firmly on the side of the consumer and the worker. The big corporations have had it their own way for too long; the imbalance needs to be addressed. Not surprisingly, they don't like it, but the good news is we outnumber them and can (finally!) set some reasonable restrictions on their heretofore unbridled greed. #NeverthelessShePersisted
5
The fact that we have passively accepted a horror in the White House, allowed him to kidnap children and put them in cages, allowed him to further degrade the existence of the planet, allowed him to lie and break laws daily with only one protest after the inauguration, speaks to our indifference.
The corporations and dishonest politicians on the take are in charge while we sit and watch.
1
This seems to be a true case here in Florida where Comcast has a virtual monopoly on cable service as in some complexes like mine AT&T is not allowed leaving folks no options. Comcast charges up to $200 a month for cable tv that was broadcast for free when I was growing up ,what politician can stand up to these mega billion$ giants with armies of lobbyists. Consumers need more say in govt regulation and Warren has a great case vs these monopolies however the rest of her giveaway programs do not seem doable. DeVos sec of education whose family biz is for profit schools just earned contempt of court for failing to do her job she is like most other cabinet members unfit for the jobs they got rammed into by mcconnell including his corrupt wife sec of transport.
3
Sadly, so many Americans believe the lies big money tells them to distract them as their pockets are picked.
3
And Americans will keep voting GOP until all that money trickles down to them.
3
Everyone here is talking about the Bezos and Facebook and other internet companies while ignoring the really BIG companies that Trump has helped or in some cases hindered who sell you stuff made in China...so there are supermarket chains and BIG BOX stores who started in places like Arkansas and we go to them for everything...we let Sears and JC PEnney started in this country slowly die as we march off to say it for me...WALMART....and when they are the only store in your small town or nearby and decide to close what do you do...? We are being HAD by corporate America ...UNDO CITIZENS UNITED which does not help US who are real people...PLEASE
2
Chris Hedges:
"They are no longer capitalists, if we define capitalists as those who make money from the means of production. They are a criminal class of financial speculators that rewrite the laws to steal from everyone, including their own shareholders. They are parasites that feed off the carcass of industrial capitalism. They produce nothing. They make nothing. They manipulate money. And this gaming of the system and seizure of political power by finance capital is why the wealthiest 1% of America’s families control 40% of the nation’s wealth."
5
It is called capitalism and this is how it works. A couple of German fellows explained it all nearly two centuries ago.
1
I hate Comcast. I hate PG&E. We need to get corporations and money out of politics.
3
I should be noted that the Times appears to be functioning as a private conduit for business (capitalist) agitprop, as an adopted organ of Socialist propaganda. Whatever the deficits of the business community, the Times has been in the forefront od developing its on-line business and has, over the recent past, increased the news stand price of its paper, to the extant that it has been placed out of reach of the social class it wants to represent. Plainly, this particular hobby horse is far from being played out, coming at a time pf uber full-employment and general prosperity. Go figure....
If your Republican representative tries to tell you about the evils of radical socialism, please have this article in hand. Sure, he and a certain like minded person will tell you it's from the failing NY Times. This same argument holds for the US health care system. The unconstrained free market argument is a sham.
3
The Sherman Antitrust Act protected people from predatory and usurious corporations but, after Citizens United, corporations became considered "people" as well, so all bets were off.
Get rid of Citizens United for our country to have a fighting chance....
1
Laws are useless without enforcement. The corporate employees in government are not funded to enforce antitrust laws.
1
According to Mr. Leonhardt, Democrats can't back candidates with ideas like breaking up monopolies or oligarchies (e.g., Warren and Sanders) because Americans don't like such ideas and will vote for Trump. I suggest most opinion writers don't really know what Americans want, despite the surveys they tout, which may result from faulty question structure. (I'm thinking specifically of the survey that Mr. Leonhardt used as the basis for his 11/06/19 column.)
Merely one look at the Mr. Phippon's charts shows that the Reagan era of its Milton Freidman and Laffer economics was the start of wealth consolidation.
The real truth is far too many Americans are too complacent to change because of corporate American soft sells. If they can sit around the TV and watch their sports program, favorite reality show, or read Twitter, they are happy. That is, until the next financial crisis when they realize corporate chieftains and their political cronies have placed them in servitude to their new masters --- the Kings of the Corporate Board, Hedge funds or Private Equity teams.
4
When I was young (1960s), families had one wage earner and lived comfortably. Now, 2 earners, each with 2 jobs struggle. How did that happen?
8
People don't care. They don't mind being shaved by corporations. There is no political pressure to fix this. You get what you fight for, and you get stuck with what you are prepared to put up with.
6
Health care, broadband internet, mobile phone plans, prescription medicines...
What is readily apparent is that multinational and/or mega-corporations view American consumers as ATM machines, and American workers as just another commodity that can be used and abused.
And our bought and paid for government allows this to happen. Both parties are responsible, but at least one of them now has some leaders who are listening, reacting and have proposals to reverse this.
9
Regarding cell phone use, the issue is not market. Cell phones are "natural monopolies" so require a network and standardization to work. We either regulate the rates of give up. Re-regulation is not the answer for services that require a network to be effective.
@Terry McKenna The article covers the EU's solution to that exact problem. Perhaps you didn't read it.
3
@Terry McKenna
I would counter that cell phone network infrastructure is a natural monopoly, not "Cell phones". Similarly to how electricity and gas transmission and distribution are, which is why gas and electrical rates are heavily regulated. Exactly how cell phone plan rates should be but aren't in anyway what so ever right now.
3
@Flaminia I did read it. What the EU did is another government mechanism, so blocking mergers, and forcing open access to networks. We could do that too, or regulate the rates. But what neither are is just competition, like a better towel or paintbrush.
I don't know where the amounts for Canada where taken from but I live in the country and I pay $128us for my Internet alone...and that isn't unlimited either. I must pay $105us for my television services and $75us for 2 basic cel phones...!
1
Almost everything about broadband internet says it should be treated as a regulated utility. High speed internet or better broadband has increasingly integrated into our lives.
Instead it's allowed to be treated as a bundled add on to cable TV where you pay through the nose for both or pay even more through the nose if you want and can get broadband without TV.
Providers justify their high prices by offering pseudo choices: 800 channels, charging more for HD (free over the air) or Gig speed when 25 Mbps is more than adequate for most. And, they're allowed to blatantly lie in their advertising. Ever notice the fees,taxes and equipment charges often nearly double the advertised price?
The above is mostly an urban, suburban problem. It's a lot worse in rural areas where broadband is scanty or non-existent outside the public library.
9
Whatever happened to progressive Republican trust-busters, in the model of the first and most famous one, Teddy Roosevelt?
Sorry to say, but Elizabeth Warren is right: Apple, Amazon, Google and/or Facebook DO need to be broken up. In fact, Facebook's reorg has made this fairly easy to do -- break up Instagram, WhatsApp, Messenger, etc. into several separate companies. But only a President Warren, her DOJ Antitrust Division, and a Democratic Congress could make this happen.
11
@me It was done to Standard Oil, to Ma Bell, and to Microsoft. It can be done to big tech! But come to think of it, Ma Bell is almost back and as bad as ever: we're down to just two companies from the multi-company breakup, AT&T and Verizon: break up each one into two, East and West!
3
Republicans are too often under the illusion that no regulation at all leads to free enterprise, whereas what it really leads to is monopoly, or something similar with pretty much all the downsides of monopoly.
As is not uncommon, the pharmaceutical industry is a leader in wrecking even the pretense of competition. I was happy with my pharmacist, John, who had a long history of treating me well and who knew me. But I had to dump him, didn't I?
When another big chain pharmacy bought my prescription insurance company, John's pharmacy was no longer on the "preferred list." My prescriptions at John's (actually a branch of another large chain) instantly became more expensive than at the pharmacy that had bought my insurance company.
I had to start over with a stranger, and on top of this, I had to drive another 15-25 miles a month.
Everyone knows how bad this is. All my physicians and nurses know the name of the pharmacy and the name of the insurance company that got bought. They'd been watching their other customers (patients) change pharmacies, and they were as disgusted by this as I was and am.
StatinStories.com
5
@sing75 - Please allow me to offer small amendments: "Republicans (want their voters to be) under the illusion that no regulation at all leads to (illusory) free enterprise…"
(R) Congress Critters know full well what their anti-regulation legislation leads to - bigger campaign contributions from the Predatory Capitalists who profit from reaping and harvesting the public's unprotected weal.
1
This is so true. Corporations and billionaires are always carping about the need for "tax cuts" but the "tax cuts" that average Americans actually need are cuts in fees and increases in wages. It is corporate America, not the government, that imposes the biggest tax burden on average Americans. That is what is lost in the debate about Medicare For All, the debate about Infrastructure, the debate about a higher minimum wage and just about every other issue.
10
i find it really disturbing to see an economist confusing a government sanctioned monopoly with the erosion of free markets due concentration of market power that is the result of competitive advantages. in the example of cable tv, cable companies are granted a monopoly on the provision of service in a particular area. when a government granted monopoly on the provision of service is give it is usually accompanied by a commission (as in the case of public utility commissions) that controls prices. this is completely lacking in the case of cable tv and internet service providers. in the case of Amazon, Google and Facebook non of these companies are providing an essential service that cant be lived without. nevertheless the $119 a year for Amazon is a bargain and Google and Facebook are free. Apple has plenty of competition for its phones. when it comes to health care, the market there is completely dominated by government sanctioned monopolies that once again have no controls over their pricing and profits despite the fact that in many cases they are essential to life and limb. if an economist cant distinguish between the operation of the free market rewarding providers of good service with predatory monopolies that exist because of government protections then what hope is there that the non economists will. the free market is the guarantor of our freedom and prosperity. we disparage it at our own risk.
We have a Corporate capitalistic system versus a individual system. We keep the myth of the individual as part of the American Dream. But the reality is that the corporations now control the government through their money and the politicians are beholding to them not the individual. Yes, they do try and get the public votes when they need it but as soon as the election is over they spend almost all their times benefiting the corporations. Its called oligarchy.
6
I've been saying this for years. I have never seen a big merger benefit me or my family. We are being priced right out of our homes.
7
This is why Elizabeth Warren should be our next president. She understands how lobbyists have helped "big bidness" take over our government, and how to correct it. How ironic that the Republican Party, once a champion of the free market, now champions corporate consolidations, protectionist tariffs and other curbs on competition.
13
The worst monopoly I know of is in operating systems, and I don't know how it can be permitted to continue. If you buy a computer you have a binary choice between overpriced Apple hardware and a PC with Microsoft Windows installed. Or if you buy a phone you get to chose between Apple and Android.
Behind this is the fact that developers won't write programs or apps for other environments.
In any other sphere a natural monopoly is required to be a nonprofit public utility. I think we need to do that here.
6
Not to mention the human toll of mergers and consolidations. Synergies (aka “one plus one equals one”) result in the permanent loss of good paying jobs. The private equity firms leading many of these deals profit but the employees lose.
3
Back in the 1950s in Texas, my family didn't have a TV, and so we listened to the radio a lot. I have a strong memory of the antitrust issue being discussed often in radio shows - I can't have been more than 7 or 8, but for some reason it stuck. Back then, Congress applied antitrust laws - what ever happened to those?
8
Politicians are never confuse about what matters to them, money and unlimited reelections. Forget the constituent, remember the donor.
4
Twenty-five years ago, short-haul flights within Europe were very expensive but within the USA they were cheap. Now it's the other way around.
2
These are the same corporations that tell us single payer health insurance costs far more than the private insurance we now have.
It doesn't and how could you even think that?
Just look around the world at what others pay for better coverage. This is why we can't have nice things -- that are affordable.
7
Corporations rule. With respect to health care it is the medical industrial complex. I have Medicare. I wish everyone did. No bills, no copay, no networks, no significant deductible. No approvals needed for tests. No fear of bankruptcy. I do pay for a supplement which is inexpensive. How anyone would choose private insurance instead of Medicare is incomprehensible.
10
@Tullymd prepare to defend it by voting democrat then, because the republicans want to take it away - and then go about turning our social security into a slush fund to fun their billionaire tax cut scam. All Americans need to rise up and protect our right not to be cash cows for the wealthy - we already are, but it is not sustainable. (For the average person.)
2
Dave's piece exemplifies the dilemma that underlies US merger and acquisition policy. Go simple, and you can effectively police the competitive market, as the US did in the 3 decades after WW2 that were the fastest growing in modern history. The theory was to stop combinations that significantly increased concentration in the market and the marketshare of the merging companies. Concentration and market share were easily measured from known facts. Antitrust stopped lots of mergers and acquisitions. On the other hand, go complex and you might possibly achieve rulings that are fairer to the merging firms.
The argument for complexity came from economists affiliated with the University of Chicago. One of them, Robert Bork, falsely but persuasively wrote that the only goal of antitrust was to keep prices down. If so, combination would be illegal only if it would raise consumer prices. Moreover, added Judge Frank Easterbrook, mistakenly stopping a merger or acquisition was much worse than mistakenly approving one.
Perhaps because of their great brilliance, such scholars were suggesting that a complex, expensive and uncertain art, that of economic prediction, should replace the simple task of measuring market share and concentration. For several decades now, the federal courts have bought the complexity argument. But as the statistics Dave presents make clear, complexity in antitrust defeats even the goals of accuracy and fairness.
3
This is a good article and a very important issue, always central to discussions of the political economy, which most Americans run away from as if it had nothing to do with their lives, and the two parties and mainstream media like CNN love that. Indeed, count on it.
Let's not kid ourselves, however. Did Bill Clinton realize when he said the era of Big Government was over in 1996 that you need a big government legal and economics department to police the terribly concentrated state of our markets today? And to be watchdogs better than all the failed agencies in the run-up to 2008-2009, a logical consequence of Clinton's world view of de-regulation and Alan Greenspan courting.
Let me share with Times readers the fate of the conference that you have never heard of: on October 19th of 2018 in the heart of DC itself by Ralph Nader's Center for the Study of Responsive Law at the Carnegie Center. The topic was "Destroying the Myth of Market Fundamentalism."
It was terribly attended, almost vacant despite the fact, as I've put it since, many of the speakers were the folks who would staff a Warren or Sanders administration for the mission described in this article: like Robert Weissman; like Lori Wallach; like Dennis Kelleher; like Damon Silver; Reni Steinzor...
And Warren and Sanders were not there, in fact the Democratic Party was entirely absent. Tellingly.
And let me be clear: anti-trust fits with the goals of the Green New Deal. Anti-trust alone is not enough.
These are not new trends. In 1966, Paul Sweezy and Paul Baran published Monopoly Capital, a seminal book that described the process of market consolidation that has since accelerated to a grotesque degree.
We ignored their observations and convinced ourselves that markets with only two or three players were somehow “efficient” and better able to compete globally. Since the Reagan era, these companies have gained a stranglehold over both consumers and labor.
As Sweezy and Baran explained, monopoly capitalism is a mortal threat to democracy. It’s not just that we’re paying higher prices – the real price is that these giant companies and their owners have gained control over our political system. They will not give it up without a struggle.
It’s time to take back our economy.
3
If you are interested in the toxic effect of uncontrolled capitalism look at Detroit. Wouldn’t happen in Canada or in Europe.
I am still mad about communities losing local bakeries and mom & pop restaurants to mass produced, corporate food. NYT had an article about baguettes being mass produced - so I guess the chase for margins and profit is happening in France, as well. The only "solace" is that it is evident that most individuals, everywhere are enjoying a higher standard of living. Most of us carry sophisticated computers in our pockets and have the basics of what we need. Agree that we to try harder to not to let the corporations swallow up everything that makes life and communities authentic and dynamic.
That’s one view. The other view is that half the country lives paycheck to pay check, cannot come up with $400 for an emergency, is susceptible to bankruptcy for medical bills, and has so much debt credit card and student loan burden that we are no longer free. Lobbyists write our laws.
Carrying a phone and a computer in my pocket just doesn’t do it for me.
I am sorry to be an American citizen though I was delighted in the 1950s.
1
Part of the problem with internet access monopolies is that your cable company, which typically has the faster service, has an exclusive contract in your town to provide cable. This was done a LONG time ago, when cable was intended to improve households' access to the big 3 TV networks. The city gets some fees for that monopoly, which you'll see on your bill. (IOW, you're paying their fees to the city) Since it owns all the cable, it also owns the only cable-based internet access. The only other option is the telephone company's aDSL, typically much slower than cable internet. In determining broadband access, regulators (and your cable company) also include cellular internet, making it LOOK like there's more than two players. That also makes it look like there's wider broadband access in your state. Cable and internet companies really need to fall under state regulators; it's the only way to improve access, speeds and price.
1
@mike In New York, those companies are regulated by the state. Hence a recent threat by NYS to revoke Spectrum's charter for failure to deliver on promises to expand into under served rural areas.
I wonder whether Dr Philippon has studied (or could study) if there is a connection between the effects of the GOP tax cuts in 2018 (which had only a 25% approval rating from the American people at its inception) and an acceleration in the rate of acquisitions and mergers. Dr Krugman and others have pointed out that corporations ramped up their stock buybacks at the expense of long-term capital expenditures on R&D after the tax cuts took effect. Is there a connection between that and acquisitions & mergers?
1
in my small town, I get pure spring water on tap (not treated sewage water from a river), sewerage, garbage collection, fire and police protection from my local government for less than my bill for a landline and internet connection, In other words, vital services can be provided without gouging customers. Maybe it also matters that the customers have direct access to the providers of those services when something goes wrong or prices go up. Rate-payers can fill council chambers at city hall. We can also remove those public servants from their offices at election time. Try removing Jeff Bezos, Mark Zuckerberg or Jamie Dimon.
3
One change, just one change: Government funded elections. This would change our political landscape overnight. Suddenly the donor class would not be calling the shots on every public decision that gets made.
It's time.
4
Adam Smith's Invisible Hand says our economy improves with lots of competition pushing better quality up and prices down. We have monopolies that Americans have voted for and wanted for a generation now. We wanted and voted for those results. We do not want to be Europe, or have competitive prices, or better paying jobs or social mobility where poor kids can get out of poverty. The whole UDSA wants MAGA, where the rich get all the money and the people cannot take a $500 emergency hit, because this is what we vote for. They whole country votes for this, even the liberals, because this their "moderate" liberal policies.
1
Agree. There are many other countries which enjoy a more enviable lifestyle.
1
The never ending plight of neo-liberalism ravaging the US consumer and US workers to pieces.
We have learned to accept poorer service, mediocre, and worsen infrastructure all across our energy and telecommunication systems.
We will never learn and the system will implode on its self the way it is going...or these companies will simply declare bankruptcy and forfeit all responsibility for their negligence.
Well at least those PG &E share holders got their billions in dividends over the last eight years, while their system was completely falling apart.
1
The GOP says the Democrats want to play the class warfare card. What they really mean is they want to continue the oligarchy punch down on the middle class that has been ongoing for 2 decades and more.
Where is our FDR?
“These economic royalists complain that we seek to overthrow the institutions of America,” Roosevelt thundered. “What they really complain of is that we seek to take away their power. Our allegiance to American institutions requires the overthrow of this kind of power. In vain they seek to hide behind the flag and the Constitution. In their blindness they forget what the flag and Constitution stand for. Now, as always, they stand for democracy, not tyranny; for freedom, not subjugation; and against dictatorship by mob rule and the over-privileged alike.”
2
As Tim Wu reminded us in his book on "the curse of bigness," money in politics has something to do with it but ideologues have impact. Robert Bork, as an appellate judge and law professor in the 1970s, influentially argued that antitrust was only relevant to prices -- that is, as long as consumers didn't have to face higher prices for goods, business concentration was not an issue. And look where we are now. Bork never made it to SCOTUS but SCOTUS had already bought into his notion that corporate power was OK as long as our widgets stayed cheap -- a short-term solution that exacerbated a long-term problem.
In my area, I have exactly one internet service provider. I have no choice at all. It bills me as it sees fit. I am always going over their arbitrary data cap so my bill goes up all the time.
When I shopped for a new cell phone provider, I talked to the 3 major companies. What a surprise, all the quotes were the same. This isn't capitalism. This is a monopoly and we need a Teddy Roosevelt to ride against it once again.
6
After reading this article, I'll have greater tolerance for the telemarketers who call and the sales folk who ring my buzzer hoping to interest me in one of the many telecommunications and energy companies that do business in Italy. I tend to be a loyal customer and politely decline, but it's really nice to know I have so many options.
Options that no doubt contribute to these costs being much lower in Italy than they are in the States. (Don't even get me started on medical care, which costs a fraction of what it costs in the US.)
I'll always be grateful for having been born and raised in the US. It's a shame, however, that the country of my birth is but a sad shadow of its former self.
1
Is that $5000 a year include healthcare costs? America is a free market economy only in the sense that a few people are free to make as much money as they can at the expense of everyone else. It would be nice if all of wealth that flows to a few would have some widespread positive effects on the rest of society. Americans need to consider the good Facebook or $100,000 a year wonder drugs have given us before they reject ideas like Medicare or higher education for all.
3
It’s all about constant growth and the resulting increase in the stock market.
The government created the private pension idea, 401ks, financial planners, etc., and now to make that work we need constant growth in the stock market. When companies have pretty much grown as large as they can, they scoop up competitors to bump their worth. Then they can control prices to keep growth going.
So the only way to get back part of that $5000 overage we are paying is to get in the stock market and keep the cycle going. Then the fees and costs keep flowing to the top also. The rich get richer. All rubber stamped by your bought and paid for government.
3
While I certainly follow the logic of weak regulation having caused slower innovation and higher prices in some businesses of which broadband and mobile data are very noticeable, I also wonder to which extent the higher concentration of our economy in the big cities has played a role. Groceries, for example, are more expensive in cities because of higher rent and transportation costs. Part of that is offset by higher wages, which is outside of this study's scope but cannot be ignored. Teachers now make on average over $100,000 in Chicago. That's over 2.5x what their colleagues make in France.
1
another example, cable tv. (i realize many have already cut the cable for dish or streaming. but even those used to be "free" an are now trending toward by subscription, just like apple iTunes disappearing for a monthly fee Apple Music. they get you coming and going.)
i'm old enough to remember tube tv and it cost nothing. then cable came in at $9/month. then cable went to "1000 channels" and somehow costs almost $200/month, and the premium content is additional. i already owned a tivo and liked what it does. then comcast ended its relationship with tivo and took away all on-demand programming, including the premium subscriptions i still pay for - no more access to shows i missed but didn't record, no more pay per view on-demand movie choices, no more on-demand at all, just live tv or things i remember to program. i get half the content, but no reduction in my bill. and "high definition" which is the platform of today costs $10 extra - you don't even get it as a part of basic services. additional tvs cost more. sure there are "1000 channels." but really there are only the same set of channels 3 times and lots of useless channels in between.
how bad is all this? but they are the only provider in my neighborhood.
@Aubrey I get a better quality picture with an over the air antenna than with the basic cable TV available since HD became the standard. I have cable TV because it is less expensive to "bundle" TV, internet, and phone when all I want is internet! Why is this acceptable?
1
An underlying reason for higher cable TV pricing is content suppliers who have become expert at extracting payments for services that many cable users may never view. Everyone pays for ESPN, CBS, etc. yet some may never watch them. The cable companies have been unable to resist signing deals that require payments from every subscriber. The hope is that 5G will restore competitive pricing.
@John
I never watch home shopping or foreign language channels. But in Colorado, the Big 3 (Dish, DirecTV, Comcast) refuse to put on the Nuggets or the Avalanche. Supposedly due to costs that I would be happy to pay.
@gratis We have something similar here, a longstanding refusal to carry LA Dodgers. The supplier, Time Warner paid $8B for 25 years exclusive rights, DEMANDS $4.25 per subscriber regardless of whether we watch or not. Result - Only Spectrum (Time Warner) has the games. They don't want it on a separate tier...
I would not debate the fact that if there is less competition, rates (prices) will be higher, but the figures shown for the U.S. cost of internet service or cell service is much higher than my experience - and much higher than what I see advertised in different venues (SE and NE). I would place U.S. costs pretty much with the average or a little below the average shown in his charts.
Maybe his data is from Cambridge, MA - and maybe the rates are higher there - I don't know.
@jrgfla The advertised rates are almost never what you end up paying, especially once the new customer discount ends.
The health insurance industry has defined the minimum ethical standards for business in the U.S. The internet providers are in full compliance.
3
The health insurance industry is equivalent to an organized crime syndicate without the violence. Though thousands die needlessly
each year.
So when does this consolidation of everything and Citizens United bring us the ultimate consolidation. We use to worry about Communism and now it's the evil Socialism. I'm more worried about Capitalism becoming our government. One Company One Government. "Our Ford" is in our future if we don't take control of that that wants to control us.
1
The merging of corporatism and government is the definition of fascism.
1
I am tired of hearing about the woes of our large corporations and their tales of 'consolidation means more choices at lower prices for our consumers'. It's a sad thing when someone can book first class on a flight only to find out that flight was cancelled by the airline or they switched planes and they were downgraded to economy. The airline will say the passenger can re-book to another flight but there is a fee.
There is only one company that offers cable on my street. I pay a lot of money. The internet service is good through my wireless, but the hot spots are slow. It's not worth the $200+ I pay.
I have to keep lots of money in my bank account in order to avoid fees and for that, I get around 10 cents in interest.
These corporations make millions selling our private information and the law states they have a right to do so and we have no right to stop them.
Yes, we are being overcharged by big business and they get to laugh all the way to the bank and back.
6
Instead of moving forward and taking advantage of technology, I have regressed due to costs on a retiree's pay....Tracfone that I rarely even turn on, no cable, killed Netflix due to poor service with DVD's. Internet may be next, I'll just use the public library.
2
Great that someone’s articulating this, but zero surprise to the average American consumer. From health care to Amazon for everything else, we are being rule by big business.
3
In the US our economy is based on consumer spending. Consumers have to have money to spend. Henry Ford figured this out 100 years ago. One would think that our brilliant corporate CEO’s would know this too. Isn’t that why they’re paid the big bucks?
1
How depressing, I also moved to the US from France almost 40 years ago, I still remember how the US was ahead on so many fronts including environmental protection etc.
Then the republicans and big money took over; end results?
A nightmare.
When will we wake up?
7
Leonhardt’s estimate of $5,000 is far too low, as he isn’t including healthcare. Americans pay about twice what Europeans pay per year for healthcare, and American healthcare is substandard. Add another $5-10,000 a year to cover our healthcare ripoff, and you’re getting closer to the true costs of corporate over-charges.
2
Sadly, no surprise in all of this. In addition to the points Mr. Leonhardt makes, there are several other factors driving the lack of competition and decisions against the public interest by the so-called regulators and enforcement agencies:
1. Many of the lawyers and regulators in the Justice Department's Antitrust Division and the FTC's Bureau of Competition come from major corporations and the big law firms that represent them. In addition to the inherent biases of many of these professionals, most of these individuals are no doubt affected by the desire to return to big business or Big Law after working in a government position regulating mergers and competition.
2. Most corporations now focus on shareholder profit. The well-being of customers, employees, nearby communities, and the overall economy is viewed solely through the lens of what maximizes profits and minimizes negative PR.
3. As discussed elsewhere, the influence of money on politicians, particularly those in Congress, has infected antitrust/competition legislation, rulemaking, and regulation at every level of the federal government.
3
Mr. Leonhardt's piece is mostly on the money. However, you might want to look at pay and benefits at airlines, and see how that model could be replicated in other industries. I work for one of the majors that has no unions (other than pilots). Since 2007 our pay raises have been 4%, 3%, 3%, 5%, 0%, 4.2%, 5%, 3%, 4%, 14.5%, 6%, 4%, and 4% this year. 2011 was 0% because the company was not allowed to give pay raises due to a unionization vote after we merged with another airline that had unions. The 14.5% raise was due to a change to the profit sharing formula, making it less generous, based on employee surveys where people said they're rather have a guaranteed amount in their pay every month than an annual lump sum. But a couple of years later, the company restored the old profit sharing system anyway, but kept the pay raises. We will get profit sharing checks in February equal to about 20-22% of our 2019 pay. Now, a cynic might say our pay is only as good as it is because the company wants to keep unions out. And I'm sure there is more than a grain of truth in there. But if this is how the company wants to bust unions, it sure beats Pinkerton thugs. As for consumers, the last I heard our revenue premium was something like 15%, meaning people are willing to pay 15% more to fly on us than one of our competitors on the same route at the same time. And, adjusting for inflation, I don't think air fares are any higher than they were in, say, 1973.
1
I think many of us thought about some of these issues, but outstanding that Philippon has pulled all of this together. and good that some Republicans and Democrats get the point.
Capitalism isn't bad; what is bad is how it has been corrupted in the US.. Businesses use Congressional influence to stop innovation by other businesses. 'Greed' is the opposite of capitalism because greed takes money out of the economic system and out of good companies where it can't work and grow. And frankly some level of regulation is what smooths the system for companies to be success AND it forces innovation and new research, companies and products and services. (ex. environmental issues - look how many companies grew to provide services and manufacturer new lower pollution equipment. think how many are employed because of this). All these people that want no regulations have no clue to the disruption of the economic system with out it.
This book just shot to the top of my must read list. Hope it's a best seller because the message is critical.
@Thoughtful1
The United States abandoned capitalism for corporatism.
I believe I can speak with experience having been in insurance regulation for some 30+ years.
I hope The Times will do a similar article on the pricing of automobile and homeowners insurance.
The public believes big insurers also set prices together, but that is very far from the reality. In addition to the big insurers, there are thousands of insurers across the country, big and small, each regulated by the State in which it does business. Just because an insurers rates are approved in CA doesn't mean those rates are automatically approved in MA or NY. Each State's regulatory cost is complained about daily by multi-state insurers.
But each insurer is trying to hold on to or enlarge its market share by being cheaper, faster, better that State Farm, Allstate, Travelers, Progressive, Liberty Mutual, GEICO, AIG, et.al. Yes, some have to match the big insurer's rates, but the big insurers' are equally as worried about the other big insurers.
This is a far cry from AT&T and Verizon controlling the cell phone market or the airlines, i.e. Delta, UAL, American, and Southwest.
2
Well, now that so many are realizing the extent of the rip off perpetrated by monopolistic industries, perhaps it's time to find out all about the measurement game the government has playing when they tell us that inflation has been low to non existent for decades. Yes, I'm talking about convenient substitution, weight changes, quality adjustments and the like. The CPI numbers they've been peddling may be "statistically valid" given their definitions but they sure have less and less to do with consumer actual price experience.
3
I fly into Phnom Penh, Yangon, Columbo, Bangkok, Luang Probang and in 5 to 10 minutes I have phone and internet access for about $5-. Fly into USA...and the nightmare of bad service and high costs begins....
178
@TedO That's my experience as well going in the opposite direction. I can hear my phone calls clear as a bell when I'm in Europe. When visiting my mom in a fancy gated development in Fresno, California I can't even get a phone signal.
13
Business schools and especially MBAs have spelt the death of truly free markets and enterprise. A pox on all MBA granting institutions.
3
I find it ironic that Republicans call themselves the free market party.
283
@aaron
Because they can get things for free in return for political favors
23
@aaron
Are you OK with Democrats being socialists?
A lot of Republicans are RINOS, we should be electing true conservatives.
1
@aaron
This is the free market when one has monopolies. The natural result of unregulated free markets is monopolies. The only thing that stops it is government regulation. Job killing socialist undemocratic government regulation, according to the GOP and monopolists.
29
I agree that anti-trust enforcement has become a joke in America. However, what are the actual quality of the services provided in these other countries and are they ubiquitous? How much government subsidy is embedded in keeping these prices lower? Many other countries have higher tax rates that are displacing through subsidies market rate pricing in the comparison with American broadband and cell rates.
If you can tell me that Chile, Poland and rural China have broadband speeds and availability like the US. Then I do have a true gripe. Private infrastructure investment is passed on the consumer in the US. This isn't always the case in more socialist countries.
I don't have a Phd and I could have told you that. Can someone do something about the Pharma debacle? Thank you Trump for attacking Gilead. Sick, sick people.
Mr. Leonhardt has it wrong again, as his agenda gets in the way of facts. Internet use cost has gone down and consolidation has lowered cost and improved access. Another fly in the Leonhardt ointment for economic woes is one of scale and the European landscape in comparison with the American continent. Small is not necessarily less expensive and certainly not better for aviation or your local drug store. This is another example of David Leonhardt leaping before looking and knowing little about what he writes from his narrow left focused cocoon.
1
American greed.
2
“Philippon estimates that the new era of oligopoly costs the typical American household more than $5,000 a year.”
As the late healthcare economist Uwe Reinhardt famously put it, “It’s the prices, stupid!” And Europeans have universal health care.
1
Plain and simple observation is returning to economics! I see it increasingly in the columns by Krugman, Leonhardt, Manjoo, and in the prominence of a few political candidates (thanks, Bernie 2016). It leads to an almost Marxist analysis, because almost Marxist is what is based on really existing capitalism (in joke). Sorry, right-wing zealots, reality always wins in the end.
1
In Americas interests he said
Our corporations need feed
Spreading capitalism across the globe
In Exxon and Walmart rode
Building military bases to secure the investment
Hero worship they'll be no resentment
Up the Defense Department budget goes
You never know where the next foe
Corporation demand tax cuts and incentives
Off shore profits we must forgive
The country splits workers or corporate interest
Social programs they resist
Stagnant wages working for less
Stock market surges who would have guessed
Cut to unemployment welfare and babies milk
While the rich fart through silk
Corporation hire lobbyist former congressmen
While for the poor boy its off to war again
3
Elizabeth Warren for President.
5
Great article, thanks
2
Business people are greedy crooks, no kidding.
2
This is precisely why wealthy, educated Republicans who detest everything about the character and behavior of Trump still support him. Those who benefit from the growth of big corporate wealth and power need Trump to distract the MAGA idiots from this current economic reality. That Trump does so by appealing to the worst instincts of “the masses” seems to be of no importance to the greedy.
3
Thank you, GOPzilla!
1
Market economics do indeed rely on competition to put pressure on price and quality. But do you really think just a simple contrast of fewer bigger vendors vs. thousands of local suppliers explains what we have today?
Leonhardt blames Home Depot for the loss of local hardware stores, but does not provide any data on what those old-timey locals charged (more) and what they offered for sale (less). Do we really think our internet and phone services would be better and cheaper if we replaced several huge national companies with thousands of local boutique vendors?
And anyone worried about long term dominance of a few companies simply does not know history. Compare the Fortune 100 of today to 100, 50, and even 10 years ago.
2
Now I see why Trump is so contemptuous of the EU and pleased with Brexit.
1
This problem is part and parcel of our political problem. The rich so dominate the two parties, particulrlaly the Republicans, and they don't like enforcement of anti-trust laws. We hear a lot of complaints from the Republicans about socialism but their complaints are limited to governmental assistance for the average citizen. When it comes to welfare for wealthy white men, like lax enforcement of anti-trust laws, flood insurance for expensive residences on the Atlantic and Gulf coasts, subsidies for millionaire farmers and those affected by Trump's "easy to win" tariff war, water delivery systems for wealthy California farmers, bankers who make bad decisions and many others, there are no complaints.
3
These companies think of the public as cash cows. They shake down our elders who need medications, overcharge us for garbage products that fall apart, rip us off with outrageous health insurance premiums, Next, they will try to come for our social security and medicare - use it to fund their gigantic, billionaire tax cuts and tax rebates - which we pay out of our own wallets. Our kids pay for that with their future. These giant corporations also treat American workers like slaves - I won't shop at Amazon for this reason, They definitely treat their warehouse workers like mules. Walmart does not pay their people enough to exist, all while destroying family shops and buisnesses - and we pick up the tab by giving them giant tax breaks they don't deserve, and by funding the welfare their workers need just to survive. Towns die on the vine, while corporate entities grab all the hope and run for the hills, never paying back in taxes to our communities. They are parasites. Tell it like it is. This is gangsterism. They are gangsters in suits. And it is not about red or blue - they have us fooled into fighting one another and screaming at poor immigrants while they rob us blind and laugh their way to the bank. We need to fight back as a country. We have done it before, we can do it again. No more 'golden age' for the few while the rest of us suffer.
3
Of course big business is overcharging you. This is not news, even though Mr. Leonhardt writes as if it's news to him. And if this is a valid concern, which it most certainly is, why does the NYT seem to keep attacking the only presidential candidates who promise to do anything about it as too elitist and radical and out of step with too much of the American public? We all know about the Gilens and Page study that shows our government does not respond to the needs and wishes of the general public. There is a presidental campaign in progress and two of the leading candidates are trying to make this a core issue. How can Leonhardt write an article about this while conveniently forgetting to mention that? It's why half the American public don't have enough money in the bank for a major car repair. Why do we pay a couple of credit card companies exorbitant fees for every purchase we make? Why do students pay higher rates for their student loans than the banks who lend to them pay to borrow money from the fed? Why are our plane fares and communication costs so high? The government is captive to the oligarchy and the big businesses it owns. Please start covering the issues that are plaguing this country in a comprehensive and consistent way.
3
"Consolidation is great for corporations — and bad for almost everyone else."
but...but corporations are people too, my friend.
can it really be possible that a columnist for the august NYT's is shocked, shocked I tell you that our economy operates for the benefit of corporations first, last and always?
and always has.
1
Take the newspaper industry. The highest profile newspaper is the NYT. It has three or four times as many digital subscriptions as any of its competitors. (The numbers increase daily.) Its stock has been steadily rising for 5 years and is considered by many the best in the industry. The typical American newspaper keeps losing revenue. The Times is doing swimmingly.
And because of the NYT's influence, Trump has given them exclusive interviews, coming to THEIR offices. People who want to disclose secrets disproportionately choose the Times. And Times exclusives dwarf the number from any other source. So the Times not only reports the news -- it also makes the news. What the public knows and doesn't know is controlled by the Times more than any other source.
Journalism has long abandoned the view that it is possible, or even desirable, to be objective. The Columbia Journalism Review has made that clear. "People have opinions and a newspaper is produced by people." So the biases of the NYT tend to dominate the industry.
The Times could have referred Trump to the Post. It could have referred the anonymous Resistance member in the Trump administration to the WSJ. It could have referred the undisclosed info about the whistleblower to the LA Times. But that's laughable. After all, this is a competitive business and stockholders expect their due.
Control of the news is a frightening power and there is a monopoly problem lurking here that harms you and me.
Until this year I relied on a tiny Nokia cell with a real keyboard that let me make calls and send texts. It was useless online with a screen too small to read web pages that took too long to load. Then I dropped it.
That phone isn't made anymore. Nokia was swallowed and spat out by Microsoft when it failed to break in the smartphone market. I replaced it with a slick Sony 4G LTE. Texting and calling are as easy as before, but for my uses not better than my 3G Nokia.
I soon realized it wasn't a cellphone anymore but a virtual umbilical cord connecting me to Corporate America.
It runs on Google's Android OS, which tells Corporate America all they need to know to pick as much money as they can from my pocket. They know where I am, live, bank, shop, buy (and want to buy), eyeglass Rx, shoe size, health provider, car -- all they need to put a commercial bullseye on my back, with sucker stamped over it.
My old Nokia was a lousy corporate spy because I never went online or used it to buy anything. No tracking because -- to save battery -- it turned off completely between use.
Now I'm on the receiving end of an avalanche of ads, click-bait, teasers, all kinds of stupid dog tricks, and lies, lies and more lies on a crystal OLED with more colors than I have brain cells.
And Mr. Leonhardt tells me I'm overpaying $5,000 a year to serve as a dedicated ATM for corporate giants.
That's $5,000 more than most corporations paid in taxes.
There are still people in the States who didn’t know any of this?
1
It used to be that when bankers and corporate leaders tanked the economy, they were lynched. We need a return to those times since the system of keeping them in check otherwise has failed completely.
1
I am loving Thomas Philippon for shining the light on what has happened in the USA!!!
However, let me share something about Australia with everyone reading the NY Times. Here in Australia we have the illusion of competition. There are also 2 of everything. 2 grovery stores (Woolworths, Coles), 2 airlines (Quantas, Virgin), 2 transpor companies (Linfox, Toll), 2 telecoms (Telstra, Optus), 2 big land development [housing] (Stockland, Lendlease) and this is the biggest scam going on in Australian housing--- can you imagine the house prices in Australia - INCREDIBLE, everyone is indebted right up to the eyeballs, literally slaves to the mortgage holders (banks), and there are only 4 banks in this country. There is NO competition here.
I guess the same is happening to USA. I was so shocked when I had heard (many many years ago) that the CEO of Woolworths here had joined the board of Walmart in the US. I was sure that this is not going to be good for Walmart, and I have read how Walmart has been poorly treating their employees.
I also remember how cheap the USA was when I lived there. USA has really turned 180 degrees on competition and all this means is that the living standard of the middle class and poorer folks is going to get really really bad. They are not going to have any disposable income.
1
Speaking as a retired CPA, America ask yourself where exactly does this $5000 of annual additional retail costs go? Hedge Funders, who add absolutely nothing of value to those retail products you buy. Capitalism, as we now know it in America is immoral beyond belief. And how are those Hedge Funders able to do this? Divide and Conquer - labeling those that want reasonable anti-trust rules and higher taxes on corporations and the wealthy as liberals, idiotic government bureaucrats, and occasionally communists. Every economic decline is US history has been caused by GOP greed and drastically lowered income tax rates for corporations and the top formerly progressive tax rates - in 1929, 1983-1987, and 2008. Coolidge, Reagan and W. When will middle class America ever learn? When they quit listening to the right wing GOP Fox News (sic) divide and conquer lazy labeling, and read, think, and learn the truth about what truly causes economic inequality. Only by learning this truth will American of every stripe once again earn their true measure of freedom - financial and otherwise. You might want to begin by reading the Preamble to the Constitution: “.... promote the general welfare, and secure the Blessings of Liberty to ourselves and our Posterity ....”. It was the intent of our original founders to escape the feudal systems still in place in parts of Europe, and follow in the footsteps, ironically of this author’s political heritage. Liberty, Equality & Fraternity!
2
One doesn't need a Ph.D. in economics to understand this!
Just try living middle class in the good ole USA. If one has less??? Live a Spartan life and never become ill!
2
Trump is clearly a criminal, and his GOP henchmen are accessories to his crimes, but isn’t play for play in politics just legalized bribery?
It’s no surprise that we have higher prices with such a corrupt system.
1
I am disappointed that Leonhardt offers only a superficial description of the dangers of oligopolies, then does not offer ANY suggestions for solution or even any incremental improvement. Do better, David.
Thanks for nothing, Citizens United. Buy second-hand when possible.
1
He’s writing about what everyone knows. And the DOJ anti-trust division has been moribund for decades. The idea I guess is you work there and then go work at BigLaw and you don’t make trouble by interfering with a big deal and the fees generated if you want to get there. Economists are an even bigger problem. They are the ones that invent cockamamie theories about market size and power and entry barriers and Blah Blah Blah why competition won’t decrease and prices won’t rise. Meanwhile ATT after telling the court prices won’t rise after acquiring Time Warner just raised DirecTV rates yet again. No consequences to a large company for lying to the court. That’s for little people. But don’t vote for a former law professor who wants to get a handle on this corporate concentration because she’s “a socialist.” Giant companies with little to no competition on the other hand are ardent free marketers. And The GOP has their back.
2
Fine and necessary article.
Yes, unfortunately.
"...both parties are still confusing the interests of big business with the national interest."
No.
"...both parties are still confusing the DONATIONS of big business with the national interest"
There... fixed it for you!
3
Add the extra cost of the Republican tax break for the super wealthy and the cost of our stupid and greedy health/sickness for profit industry and American people are paying $15,000 to $20,000 more per year for our "system". Think about what you get in return for that.
2
Ever wonder why few critics don’t use the word “capitalism” when writing columns like this one ?
The problem is not “big business”.
The problem is capitalism. It will not willingly allow anyone or anything to regulate it.
So, capitalism runs rampant, until there is no place left for it to run to.
1
The best way to swing back is to BUY LESS. How about a day here in the US where we dont buy anything ?
1
Thank you David.
Philippon is correct but many including myself have been saying this for a long time.
Capitalism as it grows and matured leads to a dysfunctional mess. Like most organisms. I experienced the same phenomena in Cambridge a decade before Professor Philippon. And I am sure many before me with respect to other technologies.
Point is, we need to change and recalibrate. Bernie and Warren are offering a way out to save capitalism. Petty brains like Dimon and Gates are trying to use snake oil or snake charms to woo the masses. It does not work after a while.
Bravo Philippon, Piketty and Saez. The French have revolution in their DNA.
4
Thank you. Bill Gates/Microsoft is the poster child for this; whitewashing his monopoly money with his Foundation like Rockefeller before him, having built a company too big to break up. But also think of the drug company charging $20,000 per year for HIV medication developed with government patents, the banks charging $50 for an overdraft, the entire medical field where there is still no price competition or quality reports, and there are 70,000 medical error related deaths per year, etc. etc. Corporations avoid paying taxes, corrupt politicians through "first Amendment contributions", pollute now with near impunity including climate change, and receive vast amounts of government welfare.
https://www.businessinsider.com/scandals-show-us-is-a-lot-more-corrupt-than-americans-realize-2019-3
3
Finally a long long.overdue review of American abandonment of our Anti Trust laws. It began with the misguided breakup of a Regulated monopoly, ATT. It moved to the disassembled coupling of Electric Power Infrastructure from Service.costs. No American company cares about a 20 year Rate of Return which Electric, Water and Telcom lines, pipes and poles cost. This is why you don't have fiber to the home.. while the rest of the civilized world.has had it for years.
Wal Mart is the worst antitrust example. Sure.. prices are cheap... but all made in China. millions of American small businesses and jobs... destroyed. The small grocer, the friendly main street hardware store, the little clothing store..
Teva Pharmaceuticals... buys up all the generic drug makers of a type..then has a monopoly..! Raises prices from $5 to $150 for 10 year off patent drugs.
We have no more Teddy Roosevelts. Our current Right Wing Big Business Money Politics founded on Guns, Antiabortion, and enmity toward minorities will continue to eviscerate America... for decades
4
Business Class 101- monopolies.
2
It is not only the prices forced by monopolies... It is the quality which went downhill. Anyone has a new dishwasher requiring $$$ to replace a pump, a plastic shelf, a mother board after 3 years of use? How about washing machine? Even Coleman stove came not working out of the box!
A kids shoes falling apart after 2 months?
And just yesterday- went to home depot to buy flower bulbs- imagine this- EVERY box we bought (6 in all) which listed 9, 30 0r 40 flower bulbs had from 9 % to 22% fewer bulbs than listed!!
It is a death by 1000 small and large cuts...
3
Most countries in the world wouldn’t stand for monopolies and oligopolies the way we do. But most Americans are uneducated, which is a polite word for stupid. And they toss around words like “socialism” without having a clue what they mean. How did we become the poster child for the end of the free market? Well, of all people, Thomas Jefferson warned us. The rich, he said, would buy the government and then we were finished. It happened and we’re finished.
3
Mick Mulvaney already has spoken the words Trump will use to respond to this "news": "Get Over It." And our Stable Genius will add: "This is precisely what it means to Make America Great Again!"
The FB and Google monopolies will prevent this article from getting wide dissemination.
1
Mr. Leonhardt, you KNOW, you ADMIT, that major corporations are out of control. And yet, you are one of the New York Times columnists who keeps urging the Democrats to nominate only people from the conservative wing of their party.
Do you not see the contradiction between deploring the power of America's major corporations and arguing against the only candidates who would even try to do something about this problem?
5
The oligarchy is here. Time for a revolution, Sanders-style.
3
I am 75 years old and I pay multiple escalating charges that didn't used to exist. $130/mo for Verizon Cell Service, $137/mo for AT&T cable, and $76/mo for Mediacom (the only internet provider where I live). Every other month the cost of these services seems to creep up a few dollars with no explanation. Additionally I pay over $100/year fro Prime, (although I haven't been informed by Amazon what I'm paying and when,) and $9/mo for Netflix. That's $3640/year and rising for cellular communication, news and entertainment. The more these companies consolidate and grow, the higher the fees become and the worse service becomes. These are pretty much standard "necessities" in today's world.
2
And you know what anyone commenting here will do about it? Nothing. Absolutely nothing. They’ll have another 5 dollar coffee and move on to the Style Section.
Duh, you need a study to figure this out.
This is why they passed the Sherman Antitrust Act 100 years ago.
David's is one of the brains guiding America?
Which is why we need to turn Elizabeth Warren loose on the Zuckerbergs, Dimonds and trumps of the world. They've rigged the system against working people and we need to not only cut the riggings, we need to get our money back.
5
Consolidation occurs in industries which are capital intensive, high barriers to entry and customer switching costs are high. What's new this time is cheap money to fuel the mergers. What's not new is that years of Republican government (8 years of Bush and all but two years during Obama with Republican control of Congress) since 2000 intentionally led to the concentration of economic power and the inevitable feedback loop of political power that goes with it. Republicans see nothing wrong here. The rich--the ruling class-- deserve, and are actually morally entitled to, political and economic power over the masses. The rest of us can go pound sand.
3
With a great sucking sound, corporations siphon money out of local economies and into the coffers of the ownership class.
1
About a decade ago I cut cable TV altogether.
Comcast pretty much has a lock on Philadelphia and cable internet only for several years was offered at a fairly reasonable monthly rate.
For the past few years Comcast cable internet ONLY is more expensive than cable TV plus cable internet plus VOIP.
??
Comcast has been streaming TV for a couple of years making the cable TV set top box obsolete however, paying the monthly rental fee for the cable box is still required.
??
Every year I had to call customer service before my
'deal' expired and the monthly bill went up $$$.
And you better keep track of that expiration date because there would be no reminders so you are SOL if you don't call before that date the monthly rate would jump significantly.
This required speaking to two or three people to get another 'deal' for another year.
Gave in and got a two year contract in 2018 to save myself one year of aggravation.
2
I had to laugh in a way with my misery.
Bought a screen door at Lowe’s. Had to get it delivered since we had no pickup truck. Cost?
$79.00. I wonder what percentage goes to the driver. I wonder how much delivery would have cost if Lowe’s didn’t own such a large share of the home improvement business.
2
We are paying a big price for being extravagant consumers -- at least those of us who can afford it: many Americans have very little. (Of course, many hundreds of millions around the world can't even imagine the plethora of products available to us, with costs we complain about.)
Yes, I'm staggered and outraged at our phone/cable/internet bill every month, with the single dollar amount for a lengthy paragraph of items bundled together with befuddling faux explanations. From formulaic plumber billing books that demand $125 to drive out and fix a leaky faucet in five minutes to plane fares to healthcare (read 'healthcare') charges -- our economic system is driven by investors, mergers, billionaires, de-regulation, and deals that Republicans are helping literally oil.
Yet, we rejoice over low gas prices, buy trucks and big SUVs, replace all kinds of items to get the newest gadget and gizmo, and fall prey to Peach Blitz Gatorade, because, well, why not.
An unpopular rant, I know. But we have choices, despite the pressure big corporations are forcing on us, as I click on Amazon over and over. We might be victims of greed capitalism. But as prey -- we can't give up our freedom to make some choices in the-art-of-the-deal thrust upon us.
3
This is what decades of neo-liberal economic policies gets you.
This is what too much freedom means. It means fewer regulations and giving corporations permission to pick your pockets at will.
This is what happens when you buy into American myths like that the market is rational and will eventually raise all boats
- and the myth that government is bad.
This is what happens when you let banks and corporations get away with focusing on short-term profit for themselves at the expense of long-term economic stability for society
- and when you let those banks and corporations, in the name of short-term ROI, make lazy or risky decisions – and then you bail them out if those decisions result in disaster.
This is what happens when you let oligarchs run the country and own our elections.
This is what happens when a country is so benighted that it thinks that its myths, like exceptionalism and individualism, will come to the rescue.
No need to worry - we have those myths as insurance.
It’s like watching a train wreck unfold in slow motion - and we're on the train.
And none of this is an accident – it was all carefully planned and orchestrated starting with the 1971 Powell Memorandum. And then Reagan, the Bushes, the Koch brothers, the Supreme Court and Citizens United, Bill Clinton, the GOP's Faustian bargain, and on and on.
And we stood by and watched it all happen– because we thought we had it so good.
Until we didn’t.
9
Just an additional point about the Whirlpool's consumption of Maytag: Whirlpool may use the name to sell product, but the quality has fallen dramatically. After two friends told me about the failure of their Maytag products, I checked Consumer Reports and there was a rating less than what the old Maytags were getting.
These corporations are spending huge dollars on lobbyists and campaign funds, plus higher family members for their boards (does that not meet the definition of bribery?). In order for change to occur, the strings from the puppet masters to our political leaders will have to first be cut. Good luck with that!
5
Thanks for bringing more attention to this phenomenon. It's one of the root causes (along with lobbying and unlimited money in our political system, both of which contribute to it) of our growing inequality, which itself is leading to a loss of social cohesion and our current political gridlock.
Keep banging the drum.
2
Up in Montreal I have one choice for broadband and three expensive choices for cell service.
The Canadian Goverment, in it's socialist wisdom, has barred foreign ownership of television and telecommunications offerings.
But there's a big reason why the US and Canada have high prices - our countries are sprawling and the governments give providers local monopolies with the catch that they must provide service to people who would otherwise be uneconomical.
So urban dwellers get to pay inflated rates to make it cheaper for those who want to live in the hinterlands. In essence, they pay more for housing and taxes while those in the burbs and countryside get a break.
Just take a look at all of the fees on your cell and home phone service. Now you know who's driving up your costs.
1
I live in a area served by centurylink through a aging telephone line. Literally kB speeds. They ignored my complaints for years until I cancelled my service in favor of a satellite connection. I was flooded with calls about what they could do to keep me as a customer, I said deliver what I pay for. That they could not do. In fact, I removed their telephone line from my property.
2
That's why Bernie Sanders' consistent argument - that to put a stop to this "new era of oligopoly" candidates running for office must refuse accepting campaign funding from these corporate interests and their backers - is so compelling. If candidates refuse donations from these wealthy corporate-connected donors and their powerful corporate interests, they do not have to do their bidding once elected. What a brilliant idea! This could even lead to the restoration of representative democracy in our country.
3
and you've completely left out that these things actually work in the rest of the world.
I can be in the middle of no-where in Australia and my cheap mobile phone purchased at the airport works.
In the US I can be driving down a major freeway in a metropolitan area and my cell signal drops, is staticy and just plain poor.
I pay nearly 80.00 a month for Internet that is... not as good as it should be for that price.
2
I have little hope the best Congress that money can buy will do anything to curb monopoly power over us.
A President not dependent on Wall Street, Corporations and Investment Banks for campaign funds could initiate bills , sign regulatory orders and instruct the DOJ to bust the trusts is America's best bet to get out from under monopolies.
1
If we're overcharged by $5000 and, underpaid due to monopolistic suppression of wages, we will be losing members of the American middle class until that changes. Elizabeth Warren will deal with that.
6
It used to be that food, cars - everything was more expensive in Europe than in the USA. I urge Americans - go to Europe today and you will see that by and large things there are cheaper, better quality and more energy efficient. Over the last 20 years Europe has overtaken the USA in standard of living in so many ways. Healthcare in Europe is way better at far lower cost. It is everywhere you look.
7
This is exactly why Elizabeth Warren will get my vote.
3
It's difficult to establish an anti-trust movement when at least half of the political spectrum is on the monetary take. As if 6 digit salaries weren't enough, lobbying is the politician's retirement plan. Even Obama is worth 40 million now. You'd better believe he owns shares in Google. Oligarchic oligopolies are a scam through and through. Once established, they are almost impossible to eradicate. Well, they've been established. You only wish the corrupt leaders had the decency to charge $10 a month for broadband. No wonder Putin is more popular than Trump.
1
You hit the nail on it's head. Oligopolies are destroying healthy competition in this capitalistic society, making things more expensive for everybody else...for less choice as well. This has only one way to go, if unresolved, a rising inequality that, if not curbed, shall boomerang and destroy the very capitalism that, by 'virtue' of having lost a modicum of 'Ethics', has mounted an assault on this democracy...by allowing greed and selfishness the upper hand. Even politics, the art of the possible, is being corrupted by the heavy handed 'rich and powerful' mafia called lobbyists. How coiuld they lose, when they've got us trapped, and their hands in our pockets?
All this very true but remember that shareholders are the big beneficiary of this so the only true losers here are the bottom third of the US population by income which typically is not exposed to the stock market.
1. Where does the money wind up? While it temporarily goes to the corps, it eventually goes to executives and shareholders, i.e. the Rich & Super-Rich.
2. You can see this in the many charts that show income & wealth distribution in the US. Here's a good one:
https://www.nytimes.com/interactive/2017/08/07/opinion/leonhardt-income-inequality.html
3. This situation has been repeated for centuries. 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. In the olden days they hired gangs of thugs called knights to extort money from the peasants and merchants. Today they hire politicians to pass laws that benefit them financially.
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, e.g. the 18th century decline of the Dutch Republic.
4. The great success of America has been that before the tipping point was reached, something has always happened that reverses the flow of money upwards, e.g. the rise of unions, FDR's reforms.
5. We have an opportunity today to again reverse this flow. There are two candidates (and ONLY) two candidates that understand the problem and have proposals to to something about it. They are Elizabeth Warren and Bernie Sanders.
Please, for the sake of the country, support one of them.
2
I WISH it were only $5000 per year! The MSM in the USA still does not get it. We are unequivocally, without question, the USSIA—the United States of Special Interests of America. There are armies of lobbyists—not just in DC—representing rich and powerful interests of every stripe, spending billions of dollars to get what they want: the ability to shape, nay, write legislation that will benefit their clients. We the People don’t stand a chance, especially since education in this country has become so weak that the average person has little clue concerning how or why things have evolved thusly. And the MSM does not help. A column like this one is, intentionally or not, a smokescreen.
The problem goes much deeper than that, and somewhere Mr. Orwell is saying, “ I told you so.”
2
And that's why we need Elizabeth Warren. With all due respect to Obama/Biden, under their watch, the fleecing of the American consumer/worker was unabated.
1
‘talk is cheap.’ When some elected reps actually DO something about this, I will be amazed.
So much for Reagan’s notions about deregulation, eh?!?
1
Deregulation as practiced by 45 is not saving US money and in the long run will cost $$$
My gas and electric power costs are 1/2 of my minimal Internet and cell phone
I watch OTA TV
and Internet is now an absolute necessity for every person
sad
2
1. Where does the money wind up? While it temporarily goes to the corps, it eventually goes to executives and shareholders, i.e. the Rich & Super-Rich.
2. You can see this in the many charts that show income & wealth distribution in the US. Here's a good one:
https://www.nytimes.com/interactive/2017/08/07/opinion/leonhardt-income-inequality.html
3. This situation has been repeated for centuries. 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. In the olden days they hired gangs of thugs called knights to extort money from the peasants and merchants. Today they hire politicians to pass laws that benefit them financially.
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, e.g. the 18th century decline of the Dutch Republic.
4. The great success of America has been that before the tipping point was reached, something has always happened that reverses the flow of money upwards, e.g. the rise of unions, FDR's reforms.
5. We have an opportunity today to again reverse this flow. There are two candidates (and ONLY) two candidates that understand the problem and have proposals to to something about it. They are Elizabeth Warren and Bernie Sanders.
Please, for the sake of the country, support one of them.
2
Very interesting article, however the real overcharging is by our government. They have no competition and no accountability for huge amounts of waste and fraud that absolutely dwarfs the corporate abuses.
1
I think Mr. Leonhardt is conflicted. In most columns he advocates moderation, yet at the same time he points to $5,000 consumer rip-offs and monopoly infecting all reaches of the economic system per NYU's Tom Philippon's work. Leonhardt also presents the Saez, Piketty, Zucman results relating to grotesque income/wealth inequality and the monumental cutting of tax rates for the top 1%. It's hard to square his political moderation while he's simultaneously shouting that the house is on fire. It just doesn't work.
1
Capitalism run amok. Consumerism is our new religion, and mega-corporations are the high priests at the altar. The faithfful flood not to church on Sundays anymore. Rather they flood on Saturdays to big box stores & shopping malls. Either those or onto the Internet where the "Submit Payment" tab is clicked thousands of times a second.
Big business's mantra: Shall we Prey...
2
This is news? Been going on since The Great Communicator handed the country over to the corporatists.
Free enterprise is a hoax, a lie, always has been.
Look at the hedge funds and Wall Street.
Executives from JP Morgan and Goldman Sachs should be in prison. Billions in fines the last decade and yet these monopolists walk free.
Trump is the end result of handing the country over to an idea that has its roots in slavery and class warfare.
Land of the thief, home of the slave.
3
Long overdue article about our political corporations along with the result of mergers and buyouts. GOP maneuvering for big business profits has created a mess for consumers....... and for our democratic country...... and inequality of our people.
Why do you think all eyes are on Trump? The media has had him in handcuffs since 2015 and the smart educated people swallow this diversion it whole.
Nice to see this work.
Breaking up monopolies is becoming more of a pipe dream dream. Maybe I’m overreacting to the 20/20 piece I watched tonight, but to me it was pretty clearly a hit piece on Warren wrapped in a fluff piece on Jamie Dimon. I could barely contain myself watching the interviewer pitching him softballs, doing her best to disguise them as tough to hit. But when she failed to challenge his vague, whitewashed answers, it was all too clear what was going on. The Jamie Dimon I recall was the guy who made a fortune on the backs poor borrowers at Associates Financial. It was the biggest subprime finance company in the country back when we handled a class case against it for cheating poor people with inflated interest charges, in violation of its own contracts with them. I well remember our luncheon speaker at our annual consumer law conference back then, who referred to those loans as economic slavery. The speaker was Rep. John Lewis, a man who knew what he was talking about regarding slavery. I knew Wall Street would be bringing out some big guns. I just didn’t expect that 20/20 interviewer to be one of them. Game on.
1
@Dale Irwin
I meant 60 Minutes, not 20/20. Not much of a tv watcher, for obvious reasons.
A better word than "consolidation" is monopolization.
America desperately needs Elizabeth Warren. But apparently she's unelectable. Who's to blame for that? Americans get what they deserve, I'm afraid. They pay for it, too.
2
Yeah it’s called “low road” capitalism.
As the Times 1619 Project so aptly describes, the American model for capitalism is based in large measure on the business plan for slavery.
Low wages for worker bees and obscene CEO compensation: it’s the American Dream for the insatiable avarice that is the credo of big bid’ness in America.
It has become endemic that the USA, once the paragon of open market competition that kept prices reasonably low, has abandoned the consumer in favor of allowing "free markets" to consolidate, effectively limiting competition.
https://www.theatlantic.com/magazine/archive/2016/10/americas-monopoly-problem/497549/
We need to mitigate this travesty by public funding of all federal elections to prevent big corporations from dominating our major markets.
1
This paper as well as Piketty's need to be daily reporting in the NYT's as well as other free press outlets. This is proof that our system as become an oligopoly that influences our government with massive economic incentives for the politicians.
Free markets are not allowed in the United States. Once the elite parasites of the republican cult are exposed and that their favorite punching bag, the Europeans, are bettering us in free market capitalism, maybe Joe Six Pack will finally get the message and kick the republican bums out of office. There are a few Democrats that could stand the boot as well.
Educate, organize, register, vote in 2020.
These large corporations have commandeered the U. S. government
Corporations rule. They write our laws.
2
plus the scam 'contracts' that these companies engage in - I dumped my TV when it jumped from 60$/month to $150 without my realizing that was the contract I had signed, No more TV for me. At least most no longer force you to pay for a whole year but let you o pt out when you want..But i just got stabbed by Flosport, signed up for access at 8$ a month and leave when you want, was billed for a whole year immediately, and then when I wanted out after two months that was only available for a 13$ a month fee. Bait and switch..
We have two internet service providers in my city. They cost the same and both have lousy customer service.
171
@Zep same here.
7
@Zep
This problem is the same all across America, and ought to be the sort of thing that can bring us together to do something about it nationally.
13
@Zep What's customer service?
44
What can be done about monopolies and the high prices and lack of competition that results?
You can vote for Elizabeth Warren or Bernie Sanders. You will get enforcement of the anti-trust laws and an affordable healthcare to boot.
It’s a little more than ironic that the candidates that Mr. Capeheart seems to vilify, are the very ones who will work to give us the economy we need.
It’s as if in some parts of the economy free markets are effective at managing competition, while in others, such as healthcare, free markets are not really possible.
In both case government intervention is needed to manage the markets for the common good, to prevent monopolistic tendencies in one case and enforce reasonable prices in the other.
1
The natural end of an unfettered free market is monopoly.
3
Add to all this - most barely pay their share of taxes, or pay not taxes at all. Nor do their executives. They're bankrupting us personally and they're bankrupting our country.
2
Here in America, the lower 95% exist solely to be monetized.
It gets worse every year and can't wait to see what happens in the future given the kleptocrats running "our" government.
3
This US trend needs a strong president like Bernie. If a Biden gets in, we’ll all pay more... for everything.
1
@De Sordures
Glad I'm not the only one who agrees that Bernie has been and is the only consistent voice for fundamental change that will benefit working people.
1
Capitalism by it's nature is predatory.The best way to maximize shareholder value is to capture the market and extract maxim profit. Corporations through lobbying have taken regulatory control of the government. When poverty reaches a certain level of the population there is revolt usually violent. You don't go from being king of France one day to having your head cut of the next without a reason.
2
There is another great book called “The Myth of Capitalism”(authored by Tepper and Hearn) which addresses the massive consolidation and lack of competition in airlines, banking, food supply, internet, telecom, etc.
This is super concerning and never ever talked about by those who should be.
2
"Overcharging You $5,000 a Year" I guess in that scenario the author, who has absolutely no experience running a business, is using another author, who also has absolutely no experience in running a business, to decide what operating expenses and prices really should be. But that's a common tactic with Socialists.
Any resemblance between American Capitalism and private enterprise, is purely coincidental.
1
This is the “rigged economy” that Sen. Warren and Sen. Sanders have been talking about. We need to rein in these bad actors pronto.
2
Is there any way to transmit this information to the poorly paid republican voters who are certain that our biillionaire class deserve their fortunes and whom should not be taxed because that will inhibit god's will?
1
Correct!
Inequality has risen for 3 reasons. We accepted the redefining of "free market". Free markets as defined by Milton Friedman, was where many producers offer a variety of products to meet the needs & wants of the consumer. The government was to police markets assuring that a small number of entities were not fixing price or quality of what they produced. If a particular industry was such that only one producer could be supported then it was government's role to police that industry so it did not abuse its power.
Friedman said, "But we cannot rely on custom or conscious alone to interpret and enforce the rules; we need an umpire. These then are the basic roles of government in a free society; to provide a means where we can modify rules, to mediate differences among us on the meaning of rules, and to enforce compliance with the rules on the part of those few who otherwise would not play the game."
Today the definition of a free market is one that is free of all government regulation. It is not clear how this change in definition came about but it became widely accepted as a result of such popular talk shows like Mark Levin and Sean Hannity. Many look at these hosts as a member of the news media instead of the entertainment industry. They advocate government getting out of the way of private industries rather than watch over them to assure their control does not end up in the hands of a few. ... http://lstrn.us/1BtQaWp
1
Nothing new here. The US government has been corporate-owned for many years now.
4
Oh great, another French know-it-all economist attempting to deride our economy. It would seem France needs economic advice much more than we do.
@TL read the article, look at the charts, try and learn something.
This is what Warren is saying.
Drug store chains are another problem for consumers. They are all owned by a couple of conglomerates. Moisturizer shouldn't be so expensive.....
3
A core economic issue of our times.
Important column! Kudos.
2
I am in Leiden, NL (familiar to some as Holland) right now, where I travel quite often. Healthy food is noticeable cheaper here. For example, at the market on Saturday I bought artichokes 2 for 2.49 euro, while in CA they are grown less than 10 miles from my house and cost 3.50 to 4.00 each. Eggplant? 98 euro cent apiece. My phone and cable bills in the US are double those of my son. His health insurance less than half what it costs in the States. Don’t get me started on the other benefits: easy transit, favorable vacation policies, safe streets, affordable education.... The list is huge.
Sorry, fellow Americans, you’ve been had. It’s no longer the American Dream. It’s become the American Scam. You are the marks, and the grifters are Big Business, Congress, and the lobbyists in Washington.
624
@Nostradamus You need some flexibility in purchasing artichokes. Sure, they can be $3 and up in the supermarket, but there are many roadside produce operations that sell them for as little as 7 for $1. Not kidding.
5
@Nostradamus I think you are absolutely correct. I could only afford to eat fine fresh organic food because I worked in public education as a teacher for 32 years and saved enough retirement finds, along with my pension and social security and a home to sell to downsize. Most Americans are struggling exactly as you describe, and then there is the opioid epidemic....
33
@Nostradamus Outside of New York, Boston, LA and SFO, I'll wager that the cost of housing more than matches the lower cost of internet. I wonder, also, if a high tax rate as NL have serves as a damper on the price of goods and services there.
(Yes, I do agree with the thrust of Mr. Leonhardt's column. I just wish that he'd stick to economic issues.)
3
Mr Leonhardt - We don't need so much education to know this is true. We live it every day as we shop for goods and services. We used to guard against "monopolies" and now they grow without restraint. I detest using these vicious marketplaces but I can hardly find a bookstore with a book I want to buy - just go to Amazon! Same with every other product that's no longer available within a walk or a drive to a local store. And I'm afraid there's no going back!
From an 82 year old who remembers when...
205
@Joan & Sam Teller I'm a mere 73, but I'm guessing there are tens of millions less smart than you who don't realize the effects that corporate mergers and consolidation have on them.
22
@Joan & Sam Teller my teenage sons take for granted that there’s one or two providers for the things we need and that you should pay for “the best” no matter what. They have a very different way of thinking and to them, we are “ok, boomer” hopeless.
15
@Joan & Sam Teller I live in senior housing that is growing here in my state and a boon to us but we have only ONE choice of internet because the company that owns the housing RHOME has made that internet company their choice FOR US. This is not sect 8 housing either! So you take what they offer (very expensive more than $125/month for TV and internet or nothing). Another way companies force THEIR choices on us.
20
At the root of it all is money in political campaigns. Prohibit corporations from spending money on ads, lobbyists and campaigns and you remove their baleful influence. Public supported campaigns will remove the influence of corporations, give more time to representatives to do their work instead of running around begging for money and may even convince them to do the business of their voters instead of that of their rich contributors. Either we go the way or we will forever be at the mercy of oligarchs.
1
Very sadly, the corporate money machine is taking over hospitals. People receive massive bills despite insurance and now they are suing people when they can't pay. I have to wonder what kind of people sit on a hospital board of directors and let people suffer for an extra buck. And then of course, facebook, who has been free to exploit users and even do psychological testing on users without permission. And now they want to get into the 'pretend' money business. Greed hurts. It hurts us all but the few. It is destroying the environment and folks' peace of mind. It simple cannot work. Much like the self imploding greed machine of the Trump family, it will ultimately fail. Unfortunately, the mess it leaves may be unfixable.
160
@lulu roche But if we don't let zillionaire monopolies be greedy and corrupt, how will we ourselves scam our way to becoming billionaires? You don't expect everyone to share do you? American exceptionalism demands it be a zero sum game where the ends justify the means. But jokes aside– this is the only us vs them that matters right now, all the others are propaganda imposed from the top down.
9
@lulu roche
Ever hear of Elizabeth Warren 's plan?
12
@George I'm afraid that Americans have become so brainwashed by the monied interests and their employees in Congress that they are scared to death of Elizabeth Warren's plans. Americans trust the liars more than the truth tellers.
14
The issue is that American politicians have been bought by big businesses. Americans call it Lobbying, the rest of the world calls it bribery.
Call it whatever you like, explain it however you want but one sentence sums it up. Too much money in politics.
297
@PaulaC. Amen!
9
@PaulaC. Then why or why did many of you in your state elect the money grubber in chief we have????
3
@PaulaC. That's finally the _one_ and _only_ issue in these benighted United States. All the others follow neatly in order.
2
I used to worry about our country being turning into Europe; these days, I pray for it.
2
We are fortunate to live in a democracy where every citizen can evaluate the impact of our present economic and political situation and vote at the polls and with our purchasing power to bring our country back to sanity. Unfortunately, this freedom requires informed decisions and a somewhat aligned vision of what sanity looks like. Right now we are lacking in both areas.
Many who are at greatest risk support people and policies that openly and proudly undermine their position. This paradox is not new in human history. I wonder if we can learn as a society to defy historical trends and identify where our best interests lie. And if we are able to do this, can we do it fast enough?
3
Vote for trust-busting, pro-regulatory, wealth-taxing Elizabeth Warren! Once again, nibbling around the edges of a problem like this oligarchic power grab won't produce the kind of re-balancing and structural change that is necessary.
9
My Cable/Internet provider Spectrum charges me $13.50 per month, up from $11.98 as a “Broadcast TV Surcharge”. When I questioned them on that charge they told me that the channels broadcasting charged them to broadcast so they passed that charge on !
I told them, and this is true, I never watch any of those channels and that they can delite sending me those channels and stop charging me for something I did not need or use.
They apologized but said they could not do it.
2
At the risk of repeating myself, I will say it once more. Any system, from those in the vast universe to our own bodies cannot properly function without a regulatory component. Just as we take medicine to regulate our blood pressure, sugar level, and so on, the vital component of any society, the markets need the same medicine: Regulatory forces.
The political and regulatory environment were pro-competition and pro-consumer, as I used to teach in my marketing courses. All f that is gone and we have runaway capitalism, driven by making more money as a sport. Bring back considered regulations to make the market function for all
10
This is where progressives shine. Fighting corruption. The big oligarchies lobby our big regulatory government and keep entrepreneurs out of the running. I am acquainted with several inexpensive and effective medical solutions that will never see the light of day because of Medicaid and unnecessary regulatory issues. We may be losing more than 5K per household just in this arena alone I would think.
5
US healthcare is also a victim of concentrated wealth by the extraction of money by merging insurance conglomerates, middlemen distributors of devices and drugs and privatization of hospital systems.
11
That's what happens when you have a political system in which the politicians can easily be bought and sold. The voters basically get what they ask for.
8
When corporations discovered the best investment they could make was massive donations to political campaigns, consumers began paying the price for their greed.
The most essential corporate obligation is to enrich investors. The most essential obligation of every politician is to keep major donors happy.
A close look at candidates' donor lists will provide a good idea of who actually represents the voters and who is a political tool beholden to Big Bidness.
16
@Kris Aaron
The donations / lobbying of politicians is actually surprisingly cheap. Its amazing what a $20,000 campaign contribution can buy. The return on investment is way better than just about anything except perhaps winning the lottery.
3
We were discussing this fact last week when ma-bell and the airlines were broken up. Now days no one (due to power and greed) takes this on. I am so sad when I see how we have lost the USA values we had 30 years ago.
15
The one advantage that Americans used to enjoy was that all of the other goods that we buy were cheaper than Europe and largely anywhere else in the world- largely because Americans are blessed with large credit lines and very few tariffs on imported goods.
Well, at least the credit line thing is still holding true.
5
@Hugh G
I believe this is still generally true for automobiles, including the fuel required to power them.
The root cause -- The Citizen's United decision by the Supreme Court that allowed unlimited amounts of money to flow in secret to politicians. They cannot get elected without the money, and over time have had to adapt and represent the interests of secret corporate donors, and even other nations, over their voters. The swamp was created, and only swamp monsters can thrive in it today. The beginning of the end of American Exceptionalism and global leadership?
21
@MM I find that doubtful, since many, if not most, of the mergers that created these mega-corporations occurred before the Citizen's United decision.
That's not to defend the decision or to claim that is is helpful to the companies, but i cannot see it causing things that occurred before it existed.
2
Great piece. Thank you.
Just to underscore how affordable cell phone prices are in France: I have installed a 4G router in my home, with unlimited data usage (we use upward of 800 Go per month) at a monthly cost of 30 $.
7
David,
This is about money, more importantly, those who control the money control all the political levers as well.
The beginning may have been about excessive monies in politics, those monies bought many votes, much-slanted legislation, and finally the courts. Keeping the American oligarchs wealthy was the game, everyone did their part. Sadly, the electorate voted against their best interests because the narrative is controlled and too many Americans cannnot discern truth from lies.
Currently, Corporations are awash in monies and thanks to trump their tax rate dropped from 35% to 21%, unless they can find loopholes and there are many loopholes. So the 1% control more money than the entire middle class. The coup d'etat is that we are awash in assault weapons, the NRA demands to sell more weaponry.
10
@Carol Mr. Tomasky, in another article in the paper today, points out that it is the .00025 — and not the 1% — that control more wealth than the 150M people at the other end of the money spectrum.
1
This is a "no-brainer" and has been obvious, for a long time, to anyone who cared to look. Bigger is not better when it comes to corporations...of any sort. What's more it flies in the face of capitalism which is all about competition. This trend towards consolidation began to accelerate with Reagan. Citizens United will make it impossible to reverse.
12
How about the banks? The biggest have gobbled up all sorts of smaller businesses through the years, resulting in a "too big to fix" scenario.
Just look at the pennies in interest they are paying on today's savings accounts, while doling out millions in executive bonuses.
16
Once upon a time when all was “normal,” there existed natural monopolies. Blue Cross Blue Shield was nonprofit, and Americans could afford medical coverage at rates within their income. The telephone company, the post office, and the utilities were all regulated by congress and local governments. There was a middle class.
It was once upon a time, but it wasn’t a fairy tale, it was America. Now it’s a horror story owned by our government, Republicans and Democrats. They are all in this together.
A little capitalistic socialism is the answer to finding even keel in this lunacy. Bring back realistic regulation.
19
@David J
It's a very long time ago, and I was just a child, but I think I can recall one of those natural monopolies charging something like $1/minute (or more?) for a long-distance phone call. That was back when $1 would get four children into a double-feature at the local movie house.
1
@BayArea101
The cost of technology falls every year as adoption and implementation creates huge economies of scale. What we have seen recently is business consolidations seeing this trend as an opportunity to milk these cash cow businesses. Communications using fiber were given a huge boost when the original fiber companies went bust and others picked up the assets for cents on the $.
This is an excellent article that provides data. The problem is that US politicians are easily corrupted because elections are not funded by the state. Hence the lobbyists own the politicians and servile hacks are appointed to the post of regulators. The FCC recently rubber stamped the merger of T-mobile and Sprint. Why? Mr. Son of Softbank bought Sprint, could not turn it around and so he went to Trump towers showered praise on Mr. Trump and FCC commissioners rubber stamp the deal and say it would lead to better competition! Which merger has led to lower prices. I think the only candidates today who can end this unlimited corruption is either Sanders or Warren. Biden and Trump are more of the same. I hope there is enough wisdom among Americans to bring meaningful change next November. Both FCC and the US Justice department should be ashamed of themselves for having rubber stamped the merger of the 3rd largest and 4th largest wireless phone service providers. They do not even have a fig leaf here.
18
Great article. But, you left out the part where these large corporations who dominate markets also don't pay their fair share in taxes. So, not only are we paying non-competitive prices with poor customer service, we're also paying the cost of government that is now controlled by these corporations. Time to dust off the phrase "robber barons"?
38
Actually this is something I learned about when studying economics decades ago. Capitalism which relies principally on the economies of scale inevitably creates concentration and thus oligarchic corporations. It's a phenomenon that has been observed from the late 19th century in numerous different economies (Trusts in the US, cartels in Germany). This is not some great new discovery. The particular problem in the US is that politico/legal system has again allowed corporations to capture the political process. It has also happened before in the late 19th and early 20th centuries with exactly the same result. The public were gouged.
14
I began to notice the corprate concentration trend when the stock quotations pages shrank from four to three. They're now down to two.
Full disclosure: My pension fund owns large chunks of public companies, real estate, etc. That's one reason I have an excellent pension, with an after-tax net well above the median income in Canada. So coporate concentration has been very good for me. I suspect that many voters in my age bracket think on these things, and tend to vote accordingly.
5
@Wolf Kirchmeir
That is the plain truth that all of these would be socialist ignore. Pretty much everyone depends on an ever rising share price for public companies. Pension funds, 401/403/Roth, college and charitable endowments, personal savings, and yes, taxes. No one seems to think that taxing wealth out of existence and relying on taxing wealth to fund government services is a contradiction.
3
@Wolf Kirchmeir Your 401K has increased very well I am sure, but the US Health & Aging System will get that money back from you. You just get to hold on to it for a while, feeling that you are part of the club.
1
@Wolf Kirchmeir Unfortunately you're right because as long as "I've got mine" the heck with the rest of you who get nothing.
1
This is a great piece, but it leaves out the impact that corporate consolidation has on the business of popular culture. Currently, the same company owns Disney, ABC, Fox, ESPN, Pixar, Touchstone, Lucasfilm, Marvel, A&E, Lifetime, The History Channel, Vice Media, etc. Another company owns AT&T, Warner Brothers, HBO, Cinemax, New Line Cinema, CNN, Turner (including TNT, TBS, TCm) DC, The CW, Adult Swim, DirecTV, Hanna Barbera, etc. Another one owns NBC, Universal, Comcast, Dreamworks, Telemundo, E!, Syfy, Fandango, Rotten Tomatoes, among others. I could go on, but this is
This process has caused millions of people to be fired from jobs at very profitable companies. It’s not to difficult to see where this is headed. Washington will continue to green light this process until all mass culture is owned by 3 or 4 companies. Prices will skyrocket for consumers and, in my opinion, a lot of the most beloved companies are going to close. They won’t flourish under this cold corporate shell.
People are down on tech companies, but at this moment, a creator making a film or TV series at Netflix or Amazon, is still making a show for a single company, instead of one tiny piece of a mega-mega-mega hodgepodge of cultural entities. And in fact, this is where a lot of the best talent from the companies listed above are currently going.
6
@Reid Rosefelt
I always wondered why it takes 5 or more production companies to produce a film these days. And why do TV shows have so many "Executive Producers"?
4
60% of the economy still goes to worker pay? I must admit I find this hard to believe, unless 'workers' includes CEOs, CFOs, COOs and other CO_s, managers and others who don't fit the old time 8 to 4 hourly wage earner profile (of course, many hourly wage earners today don't fit that profile either).
4
@The North 50% in the US, 55% in Europe.
The oligarchs have gained control, partly with the support of the Citizen United decision, and their constant rant through Republican lackeys about the benefits of deregulation. That regulations stifle innovation is a red herring; regulation is what keeps America safe from rapacious monopolistic oligarchs - think Thalidomide the next time you hear about the FDA holding back progress in medicine.
14
@Mister Ed I blame willfully ignorant, intellectually lazy voters who are so easily manipulated by divisive social issues, clever advertising and outright lies.
We live in the Land of Gouge. We do not notice the bleeding because our collective heads are kept spinning. We do not feel the pain because we are exceptional.
11
@Mark Dobias And because of the steady diet of entertainment: even the Democratic debates were staged like a beauty pageant. And the steady diet of cheap and available junk food. It’s bread and circuses all over again.
2
Companies insist that bigness brings cost-savings, and they are right. but when bigness means the end of competition, the U.S. Congress can divide companies up as it has before.
Anyone looking for a political party to blame are invited to look at most corporate board members, who almost uniformly follow along with progressive Democrats.
3
Going to need a source for that datum that most corporate board members are progressive Democrats! I find that extremely hard to believe.
@L osservatore: Poppycock. Our government is owned and operated by and for ALEC and the Club for Growth. Nobody on a normal salary can afford to belong to either group.
@L osservatore
Is that true? Please please please tell us where you got that information from. If it's true then there needs no desperately needs to be a correction.
We all know that political parties tend to boost their creds by the misdirection of information but major companies and corporations run by almost exclusively Democrats? I find that hard to believe.
I am now 69 years old and I used to support candidates that I believed would help the greatest number of us. The Republicans when in charge caused great harm for most folk as they seem to be now. From my observations I have become more and more a Democrat. I truly believe in the founding documents of the country and I identify myself self as American, Christian (even though I don't believe the dogma) and hopefully a good person.
The Republicans have proven to me they don't care about most folk who don't fit the old WASP profile(White Anglo Saxon Protestants) that was common when I was young. My parents raised me to respect all folk and to believe that all human beings have the rights in the U.S.A's founding documents. No country is perfect but at least we had a roadmap to make things better.
Now your comment implies that there is no one who can or will look out for the common folk, this is what causes revolutions. That terrifies me.
Just an old white man's opinion.
Thailand has a vibrant and competitive small and medium enterprise sector, which by some estimates is the most entrepreneurial in the world. The result is incredible creativity and variety in the most competitive of those sectors, such as food establishments. Somehow, despite all the American style justifications that low cost follows from size, domestic goods are very affordable, even at local wages. A side benefit to this: the happiest people in business are those with a sense of control and ownership. The gloomiest are employees stuck in hourly jobs at large multinational operations where they and the customers are often viewed as interchangeable parts in a giant machine. America has by and large lost the vitality of small and medium enterprises. and gained the high prices of too many business moats. Bipartisan action to split monopolies and to reduce barriers against small business formation is urgent.
7
Europe takes care of its citizens from healthcare, education, telephone and internet communications , environment, transportation etc , with rules and regulations.
In the United States of America predatory greed is in charge of all the previously mentioned topics.
A healthy society needs to make everyday’s necessities affordable and accessible to all citizens .
24
@inter nos We cut Standard Oil down into several competing companies. We can do that with all these behemoths. A moderate or conservative Democrat might do the trick, but a socialist would only make an unmanageable mess of all of it.
3
@L osservatore There is presently no socialist running in the 2020 presidential election. Sanders is a democratic-socialist, a far different thing, and Warren is an avowed capitalist. So not to worry.
3
We need a reincarnation of Teddy Roosevelt today. He broke up monopolies in oil & steel in the 1900's by passing & enforcing anti monopoly legislation. Elizabeth Warren may be that reincarnation, but to start we have to reverse the disastrous Supreme court decision that gave Corporations the rights but not the responsibilities of personhood thus allowing big money to buy elections.
23
It would appear that the price increases resulting from the merger of Maytag and Whirlpool are attributable to Trump's trade policies(or lack their of). The biggest concern regarding mergers would be the stifling of inovations as new start ups in various industries would have a hard time getting established.
4
France covers about 250,000 square miles and it is one of the largest European countries. The USA covers nearly 4 million square miles, much of it sparsely populated. The cost of building infrastructure is high and it is not reasonable to give away access if that is what the author is advocating. Version, ATT, Sprint/T-Mobile do sell access to their networks. Google uses them for their cellular service as do many smaller carriers. Cable is expensive but many are moving to streaming services (which are not cheap either but digital entertainment is not a necessity of life). Of course in either case you still have to purchase internet access most likely from a cable company or from Verizon. When they came on the scene the critique of Home Depot and other big box stores was that they were putting the little guy out of business by selling products for too little. This is still true. There are many small local businesses which I go out of my way to support. I do this because I prefer their products (food), the level of service, and because I can afford it as it cost more (sometimes a lot more). The problem with Leonhardt articles is that he always starts with a "problem" then looks for data to support it. There is not real investigation and objective review.
1
@Daphne What you say could be true if the price of service was lower in high density US cities such as LA, NYC, Chicago etc. But the prices there too are higher. The article does show clearly the US is the highest priced service for cable and wireless service. Even Australia is cheaper than the US.
7
@Daphne Railroad history shows both how "natural monopolies" arises, and how regulation makes them behave to benefit all. Including themselves, oddly enough: when railroads were forced to co-operate, shipping by rail increased.
I think the analogy and parallels with the internet are obvious enough.
3
While I generally agree that monopoly power has increased in recent years to the point of economic inefficiency, no doubt due primarily to the amount of corporate money in our political system (which I assume is what makes Europe different), overall I have to say that my quality of life, at least that portion owing to modern conveniences (technology), is higher than ever before. What I want to see is a fairer allotment of profits between capital and labor (higher wages), and fairer regulation that truly represents the people, not primarily moneyed interests.
3
I pay extra each month for some kind of international calling plan since I talk regularly to my sister in Paris. Even so, it costs her almost nothing to call me, so if I initiate a call, she always tells me to let her call me back. I have no idea about the rest of my obfuscated phone bill.
9
@Nancy
It doesn't cost you anymore that the $5/month you pay for international calling (if you are using Version). Unlimited usage.
Faux capitalism means giant corporations control the 'means of production'. The oligarchs that control these corporations assume control of the politics and, hence, the economy. How is that different from socialism, in fact?
The communications industry is good example. In 1984 the govt decided to break the AT&T monopoly up into seven regional Bell operating companies, RBOC's. This, over time, allowed competitive local exchange companies, CLEC's to emerge. Then, what we have now, after years of consolidation, are 3 major monopolistic companies, AT&T (again), Century Link, and Verizon. Today these 3 pretty much control the Internet as well as they have planted their minions into the FCC: Rampant price fixing, limited innovation, etc follow. The cable companies offer a weak, poorly managed alternative. The last few years of my career were spent in this industry so I saw first hand the effects of 'consolidation'. There is a way to overcome this for this particular industry that would turn the majors into wholesalers, a massive effort though.
The farming industry is another example. Giant corporations, with the assistance of the govt, are able to buy up individually owned farms at bargain prices due to Trump's trade war. Think prices are bad now, just wait.
Thank you Mr Leonhardt for this column. I tie this massive problem into the idea that the US is now a cauldron of corruption. Corruption kills democracy. Worried here? Yes.
15
The people who have already commented that the root of many of the problems with our system of governance in the US is campaign finance contributions, otherwise known as legalized bribery, are spot on. I challenge both parties to take on this issue for the next election. It is something all knowledgeable people can get behind. It is the root of the problem. And more importantly, correcting it, even with baby steps, is the right thing to do.
12
@Michigan Native Good Luck. According to SCOTUS, Money = Speech and Corporations = People. The Roberts court has been placed by the Federalist Society, themselves a money driven entity, largely funding campaigns and young lawyers everywhere.
With Fox News cheering them on via white aggrievement, it's hard to believe the working poor will figure it out. It's much easier to get angry at people of color (and TG), even if they are just as poor or marginalized as you.
Our uneducated electorate works out fine for the owners of capital and their managers, so it is doubtful change will be easy and certainly not in baby steps.
Even Betsy Devos says our K-12 system is an utter failure.
2
Where are the courts, the SEC, and the legislators on monopolies?
Something tells me they've all been bought and sold.
16
Interesting that Whirlpool was picked as an example because Whirlpool signifies so much that is now wrong. They used to be a proudly-made-in-America products. Now, who knows what we get. There are few appliances as reliable and straight forward as refrigerators once were. Now, of course, they are computerized. If you buy one and there is a problem, Whirlpool doesn't employ their own service people. They are "contracted out". Someone will come to check out your problem, then describes it over the phone to someone, somewhere, who tells them what to do. If that doesn't work, you call for service and the same guy comes back and goes through the routine again. Finally, someone from somewhere (in Georgia this time), calls to tell you it's your fault. You opened the door too often. I tried to find a local service person, but there are none.
This is how we now do business. And it happens because we accept it. Perhaps the next time a robot will come.
14
@SuseG Durable goods like refrigerators, ranges and dishwashers have become shockingly flimsy and disposable unless you're able to spend thousands more for high-end brands like Sub-Zero and Wolf.
2
We need to start applying our antitrust laws to the banks. One doesn’t have to have a degree in economics to see what’s wrong. All you have to do is look at your monthly statement.
I had a dispute with Citibank over wrong information they gave me about the length of time for a cashiers check to effectively clear to my account.
When I complained to the federal agency that oversees banking they simply repeated Citibank’s defense of their actions.
But I had only asked the agency whether their were federal rules concerning providing accurate information to customers? If there were, I asked that they send me a copy.
Instead they wrote back and told me that Citibank had given me accurate information. How could they know what actually transpired between me and the bank clerk? They didn’t know but like little robots they dutifully recited Citibank’s defense as if that was the only side of the story.
That’s what happens to consumers when any industry is too big to fail.
12
Congress for sale, Roberts Court, "Money is speech", giving the ability for oligarchs to buy the ability to write law, crony capitalism is what we live with today, as members of Congress get richer.
21
Overcharged $5k per year--while making less. Monopoly power drives prices up, while workers are stripped of leverage by bogus non-compete "agreements." In most cases, these are signed essentially under duress, and with no risk of duress for the employer. What happened to the free market? Is this a new serfdom?
12
This is a great revealing article. However moderate Democratic candidates practice the same strategies of accepting money to their campaigns or pacs that come from the sources of this article. How will any of those candidates (Biden, Buttigieg, Klobuchar) flake themselves off. They are beholden. It’s a problem that ends with no real reform. Sorry but if the Democrats really mean to shake up the current log jam of corporate consolidation and investor value that is leach on every hard working middle and working class person then they have to take themselves off the corporate ‘pipe’. Warren and Sanders do it now. Buttigieg is giving us a good example right now of what caving to money looks like. It would be exciting if all of a sudden all the others saw the light and signed on to only small donations.
10
Don’t know where the Mexican cell phone figure comes from but, where I am, it costs a fraction over $10 per month for unlimited calling throughout North America plus a reasonable amount of data. Nowhere near the figure in the article!
6
The irony is that in the long run the trends of political influence and corporate mergers will not only ruin our democracy and cost consumers more, but spending by consumers will shrink, putting everyone in a bind. The greed and corruption of companies and politicians is relatively short-sighted. Economic downturn will be harsh. Loss of our democracy, which is well on its way, will move further toward completion.
10
@peter bailey
What you're saying used to be true, but with most of the 1000 largest corporations being global and a huge, growing, thriving middle class in the Far East, not just China, the US middle class is no longer vital to corporations. Or at least not nearly as vital as it was, and certainly less vital every year.
4
@Peter good point. China’s middle class is reported as 400 million people. Our shrinking middle class is reported
at best to be 150 million. Most of our corporations produce in China to sell in China and the US. Not too surprising that they are loath to criticize China regarding Democracy movements in Hong Kong. State run or corporate run. Same thing.
1
This column should be read in context with today's news article describing the impact of Senator Warren's wealth tax on billionaires - begging the question how many billions does one person need to feel "rewarded" for innovation. It's not a reward when whatever electronic capacity you developed means the consumer is paying more, the worker is paid less, and billionaires game the system at every point in the continuum. Our economic system is deeply disconnected from any understanding of a humane way of life.
27
Yes! Monopoly in markets for goods and services - and monopsony in labor markets (when there's only one big employer in town). And we will not be able to address this problem - or any of the big problems that require our collective action to solve (climate change, mass-incarceration, gun control....) until first we address the corrupting influence of money in politics - through campaign finance reform and lobbying regulation. The book to read is "Republic, Lost" by Lawrence Lessig.
14
I would compare the internet to the marijuana business. There is this thing, cheap to produce, that people want, and it stays expensive because so many people see a way to make a profit that between government regulators and deep pocket investors, the free market can’t get ahold of it. I can’t blame businesses for trying to make money, but I can blame the government for regulating industries entirely to the benefit of business owners. There’s is nothing to stop huge semi-monopoly corporations from charging an extra $5,000, so they do. They take their cues from our healthcare industry.
10
At the heart of nearly every problem in America is the insidious power of money in politics. It takes millions to run for office, so the people with the money own our elected government. And since Citizens United, the power of corporations has grown enormously.
So antitrust regulations are weakened, unions are kneecapped, wage protections are gutted, and corporate taxes are slashed. And we the people are powerless.
There’s a reason Elizabeth Warren’s message resonates with many Americans.
17
@Elizabeth A We are not "powerless". We just need to stop playing by the rules that the corporations and the elites set up for us. It's time for the civil war.
1
This is why I support the Elizabeth Warren. Do we think, really, that we are going to reverse the pro-business changes that have tightened their grip on this country for the last few decades with compromise and incremental "corrections" to reign it in? The pro-business lobbyists will devour that kind of effort. We need to return to policies that put the middle class first, and that will require a heck of a lot of determination, and some vision. Do I think she's perfect? Of course not. But I think she does understand how pro-business politics has gutted the middle class. And I think she's got a plan to correct it. It'll be a lot of work. But now is the time to start.
19
Ripping people off is called 'doing business ' in America. As a business get larger, they get more powerful and the ripoffs and scams become larger.The government could help to slow or limit the cost of things like broadband or or cell phones, but government is owned by the wealthy few. Ordinary Americans( the ones who are not in the 0.1% of wealth distribution) have no influence over policy. Ask yourself why there are 3 billionaires in the presidential race and why all but 2 of the remaining non-billionaires are taking large donations from the wealthy elite.
10
This barely touches on what this corporate consolidation - facilitated by the recent tax cuts - has done to workers. Big companies are using their market share and big data to squeeze every penny out of workers while providing less and less in terms of pay and benefits.
When my company acquired two other large companies last year they used it as an opportunity to reduce pay and benefits to the lowest of the three firms involved. That is for rank-and-file workers and managers. The C-suite types made out nicely.
10
Living in Ireland for past 5 years....
Everyone here switches internet provider, insurance company, gas and electric company. Some people switch annually, getting the best deal every time.... the companies are kept on their toes and have to compete....
In the US I still have Allstate....for the past 30 years I've had Allstate.... there just isn't a change/switch culture in the US. My Tesco cell service here comes with 10GB data per month unlimited calls and costs me €15. My car insurance (0ver $1200 in DC) costs just €450. But car tax is high and gas prices are sky high... so guess what.... the budget for the month gets used up one way or the other.....
1
You might add that these large corporations have no hesitation to squeeze every last penny out of customers, no matter how unfair or deceptive. (This wasn't always the case, but corporations have no shame these days.)
We went to Seaworld. Regular parking costs $25--already a ripoff--but "up close parking" costs $33. We paid the $25, then noticed after we parked and were walking to the entrance that the up close parking was around 20 feet closer than the regular parking. So, we could have spent an extra $8 to save 20 feet of walking.
7
situation report from Europe...
Cell phone per month 20 dollars, free talk domestic, 20 GB
Internet per month 10 dollars
my phone operator is 3, a company out of Hongkong
my internet is a coop here in Denmark
and we have many.many providers here, very hard copetition
- so it can be done....
7
Yes, more leisure time is potentially a good thing—but especially for large corporations. They will proceed to ensure that it will be filled with even more (profitable) “entertainment.”
Can’t let (the people) have too much free time. They might start to think—about whether the present scheme of things is a good, or even desirable, scheme of things. Leisure time is one thing. Free time is another. Time itself has become a commodity—we will be “given” a 40 hour week when it’s profitable.
Frightening, no?
4
A very insightful piece.
A large percentage of the American middle class, and to some extent even the blue collar class, have bought into the economic conservative bible that government is inherently inefficient and that the private sector is inherently efficient.
Coupled with this mantra is the belief that we are all saddled with a disproportionate taxes to pay for government and particularly the pay and benefits for government workers.
Nonsense.
The private sector spends recklessly on these mergers as well on countless other areas that are all passed onto we the consumers.
The public can see just what the public sector costs but cannot see through the smoke and mirrors of corporate inefficiency.
As we have fewer and fewer choices in cell phones, travel and countless other areas, we are stuck with incredibly bad decisions made by those who will still live in unprecedented wealth.
I'm still a "blue dog" moderate and I don't intend to vote for Bernie or Elizabeth but we do need to rein in the private sector.
FDR was lambasted by Republicans for his early programs.
But he was correct in his belief that he was saving capitalism, not destroying it.
We have that same challenge today.
13
@Kevin O'Reilly Some of us do believe the pubic sector is grossly inefficient. I can cite many examples from relatives that work for state agencies, utilities, transportation, law enforcement.
@tom No one questions that the public sector has more than its share of inefficiencies.
But it gets back to whether we pay a "disproportionate" portion toward public sector legacy vs. the hidden "tax" in our consumer lives with the privates sector.
I have no doubt that a detached study by economics scholars can give us even more details as to our "debt" to the private sector.
After reading some of these comments all I have to say is give me a break. I live in an apartment in nyc. Chickens? Really. Also with the closing of all Barnes and Nobles in Queens I do not have access to any physical book store. Many people in this country are in the same situation. We are pretty much stuck and that is the problem.
5
The American economy suffers from unfair wealth distribution, and inefficiency which always reduces total production and the total amount of wealth to be distributed. In order to successfully rectify the problem, it is necessary to identify the true cause.
I submit that the true cause is the corruption of our markets by monopolies. Some monopolies arise "naturally" e.g. they would evolve in a free market because economies of scale continue to increase at all levels of the demand curve therefore favoring existence of only one supplier. An example is the local electric utility.
But most monopolies occur either from corrupt behavior or are created by government (which sometimes also involves corrupt behavior). Examples abound. Our grossly over-generous copyright and patent laws create the greatest number of our monopolies. Each patent and copyright grants a monopoly, almost always with no limits on the prices that the monopolist can charge. Copyrights are the primary source of Bill Gates vast fortune. They are also the source of the wealth of those in the entertainment and sports industries. Patents are the main reason that drug prices are so high is the US.
Every major real estate development is requires approval in nearly every detail by government officials. Influence over those government officials must be obtained in order to do any major development. The situation just begs for the corruption that occurs as a result.
11
There are a few places in the country that still have competition. Here in Concord, NH we have three grocery chains and a Coop. There are two bookstores, two major drugstore chains as well as small actual pharmacies. And four hardware stores. Home Depot and Lowes, of course, but also Aubuchon and Ace Hardware. There is also a Costco down in Nashua and in Manchester there is a large Mall that is actually expanding. We do have state controlled liquor stores but the prices are so much lower that people regularly come over from Maine, Vermont and Massachusetts to buy from them. We have both for-profit and non-profit hospitals and a major medical school. We do have a shortage of regular doctors, but it is easy to see a specialist without a huge wait except for rheumatologists. And almost all take Medicare.
Real Estate taxes are high here, but no sales tax (except on restaurant meals and hotels) or tax on earned income. And we have amazing parks, hiking trails and farms protected, if they choose, by land trusts which give the public access for hiking and fresh produce close to town.
The fly in the ointment is still cell phone and internet prices.
4
@Susan in NH
Comcast has us by the nape of the neck with pricing for their internet and cable. I pay a couple of dollars short of $100 a month for internet and basic cable.
But everything else you wrote is right on. We have very good schools and in some cities, free kindergarten and all day kindergarten is now in Nashua schools.
In Nashua, there is Aldi, Whole Foods, and 3 different chain grocery stores.
What is the difference between big state owned farms of the bye-gone era of the Soviet Union and big corporate farms in the US? What is the effect of big box stores on communities compared to Mom and Pop stores of yesteryear? Less family farms, fewer jobs, lack of distribution of wealth. We all work for the state or we all work for a monarch or we all work for a few corporations. No difference.
24
This article offers a great description of American capitalism. Unfortunately, until we start seriously controlling lobbying and big-money political campaigns, rich corporations will continue write their own regulations and successfully bribe congress to pass them. Currently, one generous lobbyist's voice speaks louder than a million consumers. Money talks, and it only speaks for itself.
16
I am not an economist but have always believed that most larger mergers do nothing but cost everyone jobs with no benefit to the consumer. There are some that make sense like a very large company buying a small company that has a product but can’t deliver to scale or just plain needs financial help. Also those where territory coverages don’t overlap.
6
This seems to be an unpopular opinion, but we should all consider that:
- wages in the US are significantly higher than in Europe, for the same job
- taxes are lower in the US, generally speaking
... meaning:
- not only can the US population more easily afford the higher cost, but also
- that US corporations have to pay higher wages and therefore have to charge more
Just food for thought
1
@Randy
Taxes may be higher in Europe, but almost every country in Europe has some type of nationalized health care. Figure in our health care costs and I think you'd see we are not really coming out ahead.
I'm also not sure where you are getting your info, but I think individuals working in what we typically consider minimum wage jobs (fast food, service industries) get paid significantly more than what they are paid in the US. In the US you'd have to work 3 jobs to survive on minimum wage.
And I'm not sure who you've been hanging out with, but you unsupported assumption that the the US population can afford these higher costs is not the reality I've seen.
23
@Randy Wait, taxes here are in fact comparable to taxes there, oddly enough:
Consider all we pay here to fund government:
-huge property taxes (not the norm in europe)
-these property taxes are disproportionately higher for normal people as new $1M Manhattan condos are taxed on just a fraction of the value
-State taxes
-NYC income taxes, for example
-Court system fines and jailing, frequently predatory as detailed in the Furguson, MO report. Disparate racial impact.
-Health Insurance premiums, deductibles, and co-pays gone from your paycheck all the same.
1
The benefits that Europeans receive far out way the wage gap. Basically free medical care, superb public transportation systems, a subdued rat race, culturally and socially engage citizens, very low levels of gun violence, and most importantly much higher levels than Americans of overall satisfaction with life. Americans have exchanged higher wages for a hard grinding life. Not a great bargain.
2
When Google Fiber came to Salt Lake City, I was sure they'd bring lower prices, but they did not. They were exactly the same price as Comcast and AT&T and Century Link. They don't have to be lower price, they just have to be there to make money.
11
I'm genuinely astonished at what we have to put up with when flying most American airlines (in my experience, Alaska Airlines is an exception). Poor service, ever-shrinking room, being herded like cattle, high prices and on and on.
Flying in Australia and New Zealand is an utterly different experience. Even in the hinterlands of Alice Springs, the airport is clean and efficient. Self-service terminals allow customers to print boarding passes and baggage claim stickers, but importantly, there are numerous airline personnel nearby to help if there is a glitch.
Boarding is noticeably not done via the odious American practice of divvying everyone up by class; you know, the people who spend the most n the company's credit card, members of the military, and other privileged classes board first. In Australia and New Zealand, it's much more efficient, no class signaling necessary.
Almost from the moment the wheels are up, flight attendants are eagerly handing out newspapers and drinks, including free wine or beer. The planes are clean and do not rattle.
What's more, all of this costs less than flying on most American airlines.
It's remarkable how willing we Americans are to be treated so poorly by large corporations. Almost as if we have been brainwashed to think that their interests are our own.
36
@CB Evans CB W
We are just as unwilling to be taken advantage of as anyone else, but we feel stuck in a system that allows no room for our concerns if they might hurt profits for the big corporations. What we need is new anti trust legislation & strong enforcement. We'll need to overturn Citizens United to do it.
1
@CB Evans You hit the nail on the head, there. SO long as the sheeple fear to rise up, rock the boat, etc, the corps will rule.
1
@CB Evans : The same is true of the airline industries and airports of East Asia.
U.S. airlines claim that they offer child-sized seats, charges for carry-ons, and other indignities because passengers "value low prices above all."
But seriously, who in their right mind would pay more than necessary for a tiny seat on a jam-packed, dirty plane with stressed-out flight attendants, flying out of an antiquated airport like LaGuardia?
I have been chasing cheap internet for about 15 years. I paid 19.95 a month and had many free services, television and so forth until they learned to charge for it. It has crawled up every month since. I had what today would be several hundred dollars in services.
That same 19.95 barely pays for one channel. The internet bargains are now few and far between.
9
A proposed acquisition or merger's impact on aggregate consumer demand should be the very first hurdle it has to pass, and the burden should be on the corporations (not the understaffed FTC) to prove that the proposed acquisition or merger will have a positive impact on aggregate demand.
8
@Brad Why worry about aggregate demand when everybody can just pay for things with a credit card? Then when nobody can pay that back, it's bailout time for the banks!
Elizabeth Warren is proposing a greater tax on billionaires and wants corporations to pay their fair share of taxes. Most of us are happy to hear this discussion because most of us realize that WE, each one of us, are integral to the whole. Corporations and people with good ideas need individuals to purchase what they sell. Furthermore, we build the roads, staff the hospitals, repair the utility lines, educate the children, feed the population, make the tools, answer the phones, respond to customers, and even MAKE MORE PEOPLE, who will be future contributors and consumers. We are all in this together. The idea that only one person, or company, can hoard wealth, or use others to make their profit, and give little or nothing back, is an old idea that is in deep need of recalibration.
26
As anyone with a modicum of intelligence should know, if only by observation. Capitalism does not increase choices it restricts them.
The last thing a business wants is competition. And, they will do anything in their power (and sometimes even beyond) to restrict or eliminate competition.
Looking only at telecommunications, the breakup of Ma Bell (the real AT&T) was an unmitigated disaster for the consumer, but it created plenty of millionaires and billionaires.
Now, of course, AT&T was a monopoly. But, a benevolent one if their ever was one. Break it up, the government screamed.
And well, what do we have now? A balkanized mishmash of three piddling companies, no doubt colluding to keep prices high and ANY competition out.
You can have competition in small business but with massive businesses, they can do pretty much whatever they like. Because, they've almost grown to large for the government to control or exert any real influence over.
In NYC, what did forcing ConEd, under Governor Pataki, to divest themselves of almost all their power generating capacity achieve? Well, they were forced to buy power on the open market and bingo HIGHER PRICES!
Let supermarkets compete on price but keep strategic industries like telecommunications and power under a large benevolent monopoly with strict government control or let the government control them directly. In either case the public is far better off.
11
Elected officials shouldn't be allowed to own stocks. Give them a generous salary and pension and index it to median wages. But no health benefits. Make them purchase health insurance and feel how expensive it is.
36
Healthcare is one of the biggest barriers to small business formation. All other wealthy developed countries have universal healthcare financed by progressive taxation while we still have regressive premiums and sky-high medical prices because our government will not negotiate drug and provider prices. Single-payer healthcare would be a stimulus to small business formation by removing the healthcare cost barrier. See "Fix It" Healthcare at the Tipping Point on YouTube
24
@Bill Thar When I made my small business run that was my big hurdle, aside from producing a product, the care of the employee has to be high on the list of priorities, instead of near the bottom with the opinions of drills and electric motors, we have been relegated to just being a Part, a Number, a nameless piece in the Machine, as many have warned for long long time, is now staring us in the face daring us to remove it from the middle of industry and finance: Greed, when borne on the backs of employees and customers, Just for the sake of it's 'investors', which is NOT good.
Re-Nationalize our monetary system, get the Fed Reserve back out of it, since that is where the problem starts, the ones setting that 2% inflation goal that we are well under right now. And from then on people want Their bit of compound interest, not knowing that was a scam in the old days to compound daily, meaning that the people doing the compounding have a finger on the scales when it comes to pricing further downline, pushing the debt onto someone else, cannot keep piling up forever: It is all built on credit, and that credit is using imaginary zeros, but real people make those imaginary zeros do magic for them.
Which is where we get our present crop of CEO's, people who found compound interest, on someone else's dime, was the way for Them to get rich, not YOU.
Bring back the gold standard and get us off Petrodollars Fiat, which have no solid basis other than heat and CO2. We need Less of both.
Doesn't seem like the prices have been adjusted for real purchasing power in each country (PPP)? If not, the comparison has little meaning.
1
@eleezeeum
The book has a whole chapter on PPP ;)
Great piece! Validates my experiences and mental notes from frequent visits to Scandinavia and comparing costs of goods, services and taxation there.
A few years ago when our DSL was acting up the repairman told us the 2 local providers, Verizon & Comcast had basically divided up the towns in Massachusetts. Only 40 miles from Boston, a tech hub, and we have one option for broadband. Even worse was a planning conference for local govt planning boards & community development agencies I attended a few years ago. I was horrified at the stories of towns in western MA, 90 minutes from Boston and a stones throw from the multi-college hub of Amherst, and their access to broadband was horrible. Local small businesses were stymied, trying to attract customers via digital platforms, and small rural towns, couldn’t attract digital remote workers who might like the small town lifestyle.
Apropos mr. Jones from Newburyport with one broadband provider. Verizon “wired” his city with fiber optics. When they learned they would have to also wire neighboring poorer Salisbury, as it was on the same phone exchange, they never turned on the fast service in Newburyport. I’m sure ALL of us are being charged in our phone bills for the infrastructure “improvement” that was never turned on.
This isn’t “flyover” country. We have been totally bamboozled.
23
I feel your pain. Here in Baltimore Comcast has an actual legal monopoly for cable. We can rent a dish from AT&T, but it’s not reliable. Therefore, Comcast doesn’t bother to keep their technology up to date. If I can’t access the internet, my business is down for the day.
The county has Verizon.
4
I lost whole days not being able to work because of Comcast. Now our town has fiber optic Ting, which is a small company. It’s not cheap at all, but at least it works well and reliably.
1
Consider the subsidies you have paid to farmers (direct, crop insurance and renewable fuel mandates) and how this has contributed to concentration and monopoly in agricultural industrialization. This has merely benefited the Ag giants like Bayer which profit from overproduction and low prices of commodities produced from their monopolization of seed markets. Thus keeping farmers hooked by the vicious cycle of overproduction, low prices and public subsidy. And furthering a grossly unsustainable and environmentally injurious system of industrial agriculture. How does one compute the costs of hegemony and economic coercion on the earth and our future as a civilization dependent on food monopolies?
14
In Las Vegas, I pay close to $100 a month for internet alone, no TV or phone. A friend in Los Angeles pays around $50 a month for her internet, and it is twice as fast as mine. I'm a teacher, and I have to have the internet for work. There are two providers in Las Vegas, and you can guess how competitive their pricing is.
9
Adam Smith: "Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer.
"The maxim is so perfectly self-evident, that it would be absurd to attempt to prove it. But in the mercantile system, the interest of the consumer is almost constantly sacrificed to that of the producer; and it seems to consider production, and not consumption, as the ultimate end and object of all industry and commerce."
10
Business in America prices to what the market will bear and uses scale. In this manner, it sets the price as high as it can to produce optimal stretching for maximum gross profit margin. While, also it seeks to avail economies of scale which means growth of market share and volume. Buying a competitor at a premium gets the operating leverage and lessens the competitiveness of everything.
4
P.S.--I forgot to add, things which keep prices low in France also include the fact that France pays for all elections and televised debates. There are no television ads for candidates. We do have lobbyists, but they can't buy votes with donations.
Wages are not so high, and union members, doctors and lawyers earn the most. There is a general support for unions here, and has been for some time.
Also, drug advertising is forbidden, which prevents unwanted salvos from BigPharma. Drug prices are low because each new drug must clear three ministries and a commerce department, to see if the drug is effective, if its testing practices were legal and sufficient, to analyze the cost per pill to determine if it's realistic, and to determine if health insurance will pay for it.
At the end, France makes BigPharma a "take it or leave it" price for the medicine, which BigPharma takes, as Europe follows the French model in drug pricing.
The U.S. would do well to follow this practice in reducing drug prices.
58
@Lilou
I agree that the influence of unlimited and untraceable money in the American political system is the cause of the problem. When the U.S. Supreme Court ruled that money was "free speech" it was a poison pill inserted into the mouth of our struggling democracy. Worse than the sum and total of all of Donald Trump's incompetence and insulting tweets. And this was done by well-educated men who speak softly and hit our democracy with a very big stick. Trump is only a symptom, not the cause of our problems.
2
@Lilou This: "Also, drug advertising is forbidden, which prevents unwanted salvos from BigPharma"
This used to be the case here until the 90's (reversed under Clinton).
Attention Generation Z, all those ads used to be illegal!
3
@Robert Scull -- I can't speak strongly enough against Citizens United, Super Pacs, lobbyist donors, lobbyists writing legislation (in thanks for their donations) and the influence money has on our elections.
Money has always been an influencer, as in the kid's truism, "He who has the most stuff, wins!"
The silent deals made between the wealthy were already too much.
Living in France has let me see a much less frenetic political scene. With the government paying for elections and debates, there's no constant bombardment on the airways or in the mail. Candidates do prepare very detailed programs, which are printed in brochures and distributed for free. A person has to read, and watch the debates, to be informed. Donating to campaigns is not considered a prudent use of funds.
Being well-educated does not eradicate a strong internal belief system. If you believe that money is speech, all the case precedents in the world will not change your mind, because belief has its basis in intangible, unprovable information -- like belief in god, or belief that people of color are animals. That's why so many well-educated people make callous or cruel decisions -- it's their belief, not their logic, that is the problem.
2
"Lobbyists — and, by extension, regulators — justify mergers with dubious theories about money-saving efficiencies. Somehow, though, the efficiencies usually end up raising profits rather than lowering prices."
We proudly proclaim that we live not just in a capitalist society, we live in a ruthlessly capitalist society. Isn't that just the right thing to do -- become efficient, hire more lobbyists, eliminate competition and raise profits? Mr. Leonhardt is beginning to sound like Bernie Sanders.
Seriously, the role of lobbyists in our government, the corrupt and overwhelming influence of wealthy donors and corporations on our government has become a national disgrace.
Thanks for a great review of Thomas Philippon's book.
26
I can no longer afford to live in the U.S. Among my considerations is the cost of broadband and a mobile phone, which are prohibitive, with no choice of carriers.
Here, I pay $70 per month for broadband, unlimited calls on my mobile and television -- and this is to the most expensive carrier.
My salary, rent and taxes are low. An equivalent apartment would cost $1,500 to $2,000 per month. I pay 1/4 of that, without government subsidy. I don't need to pay for a car, because public transport is ubiquitous and efficient.
Foods are the same price, but offer clear labels of place of origin, and ingredients, so it's easy to avoid the sugars and chemicals that permeate U.S. foods. Green fruits and veggies are sold alongside pesticide-grown (pesticides will be illegal next year) for the same price. Hormones and anti-biotics are forbidden in meats, as is chlorine-washed chicken.
Health care is free. Happily, I have little need for it, but it's good to know it's there.
Boutiques and small stores are the lifeblood of Paris shopping and culture. You form relationships with your regular shops, their salespeople and owners. Shopping is altogether more pleasant, not more costly.
I like our laws which support small businesses and competitivity. Anytime I see the Macron government try to copy the U.S., I worry--like his own tax break for the rich. He is what in the U.S. would be called a Democrat, or Social Democrat, but his capitalist streak is a concern.
49
@Lilou This. "My salary, rent and taxes are low. An equivalent apartment would cost $1,500 to $2,000 per month."
This. "I pay 1/4 of that, without government subsidy. I don't need to pay for a car, because public transport is ubiquitous and efficient."
We are getting so badly ripped off here!
2
@GenXBK293 -- Yes. Unfortunately, greed and capitalism are what the U.S. is founded on. Remember, the founding fathers were escaping taxation without representation from England. They managed to set up a representative government, but the idea of not paying taxes never went away. And guess what? The Republicans still do not represent their constituents.
Gen X-ers are no worse off than boomers or millennials ... most Americans suffer from a fundamental "me, me, me" mindset, that makes it difficult for them to share more of their wages, or even their time, for the good of the country. It seems no one understands that "raising all boats", means higher taxes make life better for everyone.
Americans have only lived the aggressive, "cowboy capitalist" life, and have no reference for sharing, looking out for one's neighbor, etc. We haven't endured centuries of unfair monarchies and bloody wars, as Europe has. Europeans became Socialist in response to cruel monarchs, and hey, it works!
The Declaration of Independence talks of supporting life, liberty and the pursuit of happiness.
So far, U.S. healthcare, insurance companies and BigPharma are not supporting life. Liberty? One has to look only to the Southern Border to see that idea has little support. Pursuit of happiness? The billionaires have pursued the happiness of becoming wealthy very well, to the detriment of 90% of the American people.
1
We've become an economocracy with practical functionality geared towards corporations, and the lower taxed capital gains they produce for their stakeholders. Oligarchy is accurate. And I bet part of our drop in esteem in world view isn't only from the mess of Trump/Republican special interest and governing for power versus governing for solution, it's that we must appear as oligarchical as the Russians. What's to choose between China, Russia and America if we don't allow a government for the people to function?
23
at least since I relocated from Bayreuth to NYC in 1970, I never experienced "fair markets". In fact, Courts were not too busy then, but sure to uphold covert Monopolys, except when MCI won vs. AT&T, that was a David vs Goliath moment. Super rare. Landlords vs Tenants, another NYC total scam operation. Exceptional Unfairness, No-Rule-Of-Law, lousy health services, and food safety, overpriced pharma, and rigged elections are not flaws, they are embedded features of American "quality" of life.
18
Why write about things that none of our governments in America will deal with. The simple answer to your complaint is that corporations own all of our governments and all of our regulators. Until the last decade, we still had the courts to balance things in favor of the people. Now we have the Trump courts. This form of government is called an oligarchy. We are there.
46
@Patrick Stevens
I have been waiting for years hoping that the middle and working classes will come to their senses and take to the streets. There is a quote attributed to Karl Marx that sums up unfettered Capitalism:
Lenin wrote, “When it comes time to hang the capitalists, they will vie with each other for the rope contract.”
1
"Flights are cheaper."
Cheaper is a gross understatement. Please visit easyjet.com and check out prices for flights. They're a fraction of the cost of a flight of the same distance in the US. Oh and fuel is easily twice as expensive there.
This huge discrepancy deserves an investigative report of its own.
13
European airlines face stiff competition from trains, especially over short distances. I never take a plane unless I’m leaving the continent.
8
A variation on this theme is employment. Just as big corporations can raise prices because competition is low, they can also suppress wages and benefits because competition is low. The corporations know they've got you, and you can't do a thing about it.
31
As we are forced to rely on the internet and cell phones, we have all forced the cost of life to be too high for many people. Again, this is what happens when lobbyists do whatever they want in the US. The practice should be outlawed.
13
I’m waiting for my cell bill to go up once Sprint and T mobile merges. One would think it would benefit the consumer but apparently not due to financial podcasts.
5
@AW I feel for you. My bill doubled within a year after Time Warner was bought out and now is Spectrum.
U.S. capitalism is designed to generate immense profits for corporations utilizing minimal investments in their products, services or employees. U.S. consumers pay through the nose in every single case. Corporations control the legislatures and courts and consumers have no voice in the U.S. system.
21
“There are signs that the politics of antitrust are shifting.”
Hopefully this is not just election year rhetoric and will pick up steam in 2020 by repealing the disastrous Citizen’s United ruling. This is the corruption of the American political system that Elizabeth Warren speaks of and the American people are no longer willing to accept the status quo.
21
@mlb4ever Sitting on one's behind and complaining is "acceptance". Unless people actively work against corporations at every turn, and treat them like the enemy they are, nothing will change.
@mlb4ever
And that’s why the oligarchs and Wall Street will use all their power not to get her elected.
This “taxation without representation” is a lot more than $5k when you add in subsidies for energy, ag, and healthcare. We need a 2nd American Revolution to overthrow King Oil, King Corn, King Bank, King Pharma, King Data, and Citizens United. We need sweeping decentralization to restore vitality to our democracy and shared prosperity to our economy. We need politicians who can make this case loud and clear.
34
Concentration of power has proven to be too much for a human being to resist or control.
What has worked with this country and others who remain truly great countries is to represent the will and wisdom of it’s people.
When we allow the will of the people to remain unheard we slowly backslide to chaos.
This wisdom cannot be heard when the truth is no longer accepted as the rule.
These large corporations are forming our new government right before our eyes. The have what most people want - stuff. All dressed up as what is needed.
What we really need is the truth and champions of the truth. A great people can live up to the truth and maintain standards that are looked up to by others struggling to survive.
It’s available to our current government and our large corporations - will they realize the wisdom of their people is more valuable than that next gazillion dollars?
3
I realize I must be unusual, but I sensed this many years ago and I just refuse. I use as few big corporate products and services as I possibly can. I refuse to save money by supporting them, like Amazon Prime, etc. We do not have cable, have an antenna, though we do have Netflix. I still have a flip phone whose plan costs me $30/mo on Verizon. I rarely text. I still use cash as much as I can. I know that I'm just tweaking around the edges, but I go without where I can. It's my tiny private rebellion......
29
I’m with you. No Amazon anything after Jeff Bezos eliminated health insurance for Whole Foods part-time employees.
And I use cash wherever possible.
@LS Voluntary simplicity all the way! I keep hoping that folks will notice they don't really need the constant "upgrades." I yearn for even just one day of buy-nothing consumer strike because I think corporate America would freak out.
A solution that could limit mergers and oligopoly is to make the corporate tax system progressive, like the personal income tax system. Obviously, the numbers would be different, but if any corporation with less than $10M in revenue (NOT profits!) was not taxed, less than $100M at 5%, less than $1B at 10% and on up, it would make sense to have smaller corporations. They would likely be more agile, less politically involved (can't afford it), and nicer to workers (the CEO would know a larger percentage of the workers). I don't find much not to like with such a system; perhaps other commenters will?
7
My assumption is that taxation in most countries is very similar. The way I describe it is that in some countries taxation has been privatised by letting companies grow so big that they're able to set the prices, there is no free market anymore. Other countries are managed by the state.
Living on the German side near Basle I can see this, Switzerland being a capitalistic country with some big winners, on the German side a managed market with prices almost a third. The only exception is anything involving a car.
There is one side effect that I notice: a lower pricing structure makes people calmer.
Another good book on this subject is: The corruption of Capitalism by Guy Standing.
5
Yes, US business has been a oligopoly for several decades. In addition to costs going up these large corporations changed tax policies to their advantage. If you started your career in the 1960's-1970's you could be assured of a comfortable retirement with something called a pension. By the 1980's pensions were disappearing. Today only (as of 2017) on about 16% of companies offered a pension plan. Soon it will be zero.
14
Another reason for stagnant wages in many professions is due to the fact most U.S. corporations view these professions as dying or dead, being replaced by future technology and automation. The fallacy of this thinking is a complete and utter disregard (or downright contempt) for craftsmanship. No matter how well AI and robots are programmed, handling all the nuances in most professions is still best handled by a human beings, but humans (employees) are a corporation's biggest expense.
Increasingly, I see poorer quality in the products which I purchase at the store, produced through full or partial automation with very little quality control. Corporations would rather deal with the few who complain versus the mass of consumers who simply accept it. But the answer is not naive nostalgia for the past either. A past corporation's greatness came from its collective mission and purpose, but most corporate mission statements these days are a mish-mash of sterile jargon meant not to offend anyone. And certainly not to give their employees a sense of why they do what they do.
Do they even teach ethics anymore in business school? Or is it: do what you can until you are sued? Morality should not be marginalized for efficiency, but then robots don't have souls which probably makes things a lot less messy.
14
@Chad I see few craftsman today in any of the trades - or occupations generally. Nobody has any sense of self-worth, or pride. They are completely focused on chasing the next paltry fall of crumbs from the rich man's hand.
1
We are trapped in a system of price fixing for higher profits. We must resist. Consumers must stop purchasing goods with high profits baked into the product. Avoid sales taxes wherever possible. We the people are being devalued and we are forced to pay interest on a money that we create.
3
And made New York a safe city (almost) in the process.
There is a lot of truth here.
In Atlanta I was paying nearly $250/month for cell phone service, internet and basic TV. In France, I don’t have TV, but pay only 75 euros/month (just over $80) for a cell phone with unlimited service throughout Europe & the UK, a land line with unlimited service throughout Europe, the UK AND North America, plus internet.
I just received my water bill. It averages 30 euros/month. I am still waiting to see my electric & gas bill. But my impression has been that it is actually cheaper to live here.
Property taxes are ultra-low. Mine come to less than $1500/year. And guess what? One of these two taxes is going away within two years. The other will be slashed in half when I turn 70 (end of next year)!
Along with very inexpensive health care (I pay 94 euros/month for a supplemental policy; the rest is free), I am saving over $500/month without Medicare.
It has made sense to retire in France.
20
Hopefully you don’t have many heirs as the Napoleonic approach to wills can be brutal (unless you don’t die in France). Everything gets to be split equally regardless of what your will may say and dealing with the post death bureaucracy can be frustration at its finest. Other than that, I’ll add that my non-French parents enjoyed their last few years in France where they lived quite well on their modest pensions. They were treated well and kindly. Medical system sent out nurses on a daily basis for a nominal copayment with minimal confusing insurance malarkey. Both died peacefully at home in the end, how they wanted, instead of expensive and futile end of life treatment you’d get here where, let’s face it, most of society sees the elderly as a burden.
7
@Tom Berry I just sold my CA house and am also a resident of France. You are so right on the costs--it's half of what I paid in the USA. I am able to live without a car due to reliable public transportation--that saves a chunk! Also, our town is large enough to have a wide selection of cafes and restaurants plus individually owned businesses (bakeries, coffee/tea, cheese, butcher, etc.). That it has 2 (!) flourishing bookstores speaks 'volumes' about the cultural aspect for a town of less than 30,000. My 'CA' town had one large corporate bookstore...with a population of 350,000. C'est la vie charmante , n'est pas?
6
@Consultant Wrong on this - as of 2015 one now has a choice when buying in Europe of placing one's assets under EU inheritance law or American inheritance law as part of the "Acte Authentique." (My asset is in a US Trust.)
4
Real government regulation, which would go a long way toward solving the problems articulated here, is long gone from American government. The erosion of regulation began with Nixon, if not Eisenhower, and has continued at varying pace ever since. Bringing it back will take time, but it’s necessary if we are to solve our very serious problems with monopoly.
15
Great piece, thanks. I live in Germany and it is interesting to see how politics and industry still see the states as a start-up, free-market mecca to be emulated. Seems that analysis needs to be revised.
18
I have noticed the difference in costs for cable 20 years ago, when I moved from Germany to the US. Cellular went the same way. Walk through any larger European city and you see thousands of small privately owned stores. Of course chain stores are abundant as well, but don’t dominate. If you want to buy a car you can chose from a score of companies, with a recent trend for consolidation. Prices for food and personal care are significantly lower in the E.U thanks to competition.
America has become an oligarchy: financially, politically and economically. Most members of the senate are multimillionaires and currently three billionaires are running for president!
We need the new green deal. Otherwise we will end up in a polluted, corrupted and rigged country where few own almost every capital and amass riches while everyone else falls into decrepit poverty. It’s time for a make-over of the American constitution and the political and economic system.
30
Finally. It's obvious to many who struggle under the weight of its effects. But because media has continually consolidated, there's little impetus to cover this story. Keep it coming.
25
Yes. This is why Warren & Sanders have traction, because we all know we're being bled dry by the companies with which we have little choice but to do business. Not only that, we have to sign contracts that force us to give up right to class-action suites and pre-agree to arbitration.
Of course no where is this worse than in health care. The greed is out of control and monopolies are largely to blame. I'm not sure what I feel more strongly–my powerlessness or my fury.
88
@Amanda Marks
Succinct and so well said.
5
This has been progressing for decades, as I have been pointing out each of those years.
It issuch ais such a pleasure to hear many others agree.
10
Big stores actually end up employing fewer people at lower wages than the places they drove out of business.
Home Depot got rid of the knowledgeable tradespeople they first had. They replaced them with minimum wage employees and then cut their numbers.
Now they've replaced most cashiers with self check stations.
Who is going to be left to buy anything when nobody has a job and those that do are making minimum wage?
66
All investors, managers, and business academics are trying to make companies more powerful and profitable; in fact, they make their livelihood from their share of the proceeds. (Perhaps we should include lawyers politicians as well.)
There are no significant forces on the side of making companies more competitive.
Antitrust law itself is difficult to articulate and nearly impossible to enforce. None of its core concepts work well for transient digital services, often "given" away. Nor is antitrust really relevant. Gone are the days when consumers could rely on multiple big companies to keep each other honest.
To gain market power, the companies capture some benefit in transaction costs: the difficulty of labor coordination, or understanding digital licenses, or contesting local cable monopolies. This is the level of detail that requires regulation, in any market other than contested fungibles.
We don't need more antitrust or more sweeping laws or blanket hatred against big companies. The Consumer Protection Agency needs the authority to regulate transaction cost asymmetries in non-trivial markets with simple taxes on practices that reduce competition or impose unfairness on consumers.
5
You said:
“But we have a long way to go. Too often, both parties are still confusing the interests of big business with the national interest. And American families are paying the price.”
It would be more correct to say” Too often, both parties are still confusing their interests in political campaign contributions with the interests of American families.
In Europe they call it bribery and corruption.
41
As an American living in Germany since 2003, but with a home in the US as well, I see this all the time. My US cell phone costs are double, US WiFi is triple (at least), dining out is at least double at home (US), as well as food prices, and all travel related costs are significantly more in the US (airfare, rental car, lodging). Auto service (as noted in an earlier comment), fuel, and electricity are considerably more expensive in Germany. Additionally, retailers still follow the old practice of markdowns only twice a year. What I never could figure out was the reason for these discrepancies. This article provides some insight.
14
@Tina
Yes, precisely. And you haven't even mentioned the health insurance for which you don't have to pay a fortune, or the many more weeks of vacation and parental leave - "soft dollar" benefits that go straight to enriching one's personal bottom line here.
22
@Tina Yes, and energy is the one thing that SHOULD cost more in U.S. to help cover it's external costs (climate, environment, public health, oil wars, etc.). And it's only higher in Europe due to taxes (i.e., revenue for the public good).
Here in U.S. we don't tax coal, nat gas or electricity at all; only tax residential fuel oil; tax petro/gas at much lower rates (same as in 1993 in fact), and tax solid waste at much lower rates... good ole Amerikan corrupt, corporate, crony capitalism!
My cell plan is under 35 euros/mo. with unlimited texting/calling and 1 gb of data which I rarely use up. Broadband internet at home comes in about 25 euros. Not superfast but it does the job. And thanks to the EU, we have EU-wide free roaming. Americans have been sold down the river concerning the virtues of the unregulated market.
31
Ralph Nader said it many years ago. We are all corporate raised. It’s a great effort- albeit worthy, to buy from family owned establishments, buy second hand, barter, chip in, share- all things that once came naturally. Even more difficult to avoid big med, big tech, big pharma, and all the rest -yet worthwhile.
9
The graph showing the share of the economy going to worker pay says it all. Business has ruled America since Lil Abner sang "He makes the rules And he intends to keep it thataway / What's good for General Bullmoose Is good for the U.S.A."
We may have abandoned GM (General Bullmoose) for other corporate overlords, but the myth persists that feeding and caring for corporations will magically cause the people to prosper. We love corporations so much they are now considered people and even have a right to free speech and to manipulate our elections.
In Europe, one difference I see is less naivete' - they are fully aware that corporations are not benevolent and need regulation, and that people come first.
Our worship of business is a real sickness that has reached a terminal stage. We rally against immigrants and people of color but Citizens United is passed without mass demonstrations.
101
@Bohemian Sarah For a country supposedly in love with corporations -- according to some -- I rarely come across people praising them (though perhaps they should be). https://us.macmillan.com/books/9781250110541
Free trade and little regulation often means that there will be a drive towards monopoly and less competition. It could be regulated so that there would be more competition and less monopoly. It’s like although America has had and still have great success with innovation in many different categories. However it’s like you are slowly being contained by corporate and financial power. They have climbed the ladder to the top and now they kick down the ladder trying to get rid of any threat of competition
12
I began noticing this a few years ago. I spend about half the year in France and life here is so much cheaper than on the East Coast of the US. And its not just internet service:insurance, real estate taxes, health care, airplane tickets, elder care facilities, train tickets, food, wine, and, of course, the big gorilla, health care. There are some exceptions: anything to do with a car is very pricey. And also high end finished consumer goods like computers.
Some of this is possible due to the miserable salary levels in France of many professions, hence the yellow vest movement. The health care is excellent and reasonably priced but an experienced nurse holding life and death in his hands doesn't even earn $3000 a month. That is appalling.
Since the 1980s, Democratics and Republicans have abandoned the antitrust laws (along with their constituents) and, with the regulatory capture occasioned by a corrupt legislative system, we have what we deserve. And don't think Bloomberg is going to save you!
24
Monopolies and oligopolies will always result in higher prices and lower service, product standards.
But looking at a list of the 10 biggest firms in France most were established long, long ago, as far back as the 17th century.
The US list is substantially modern by comparison. The big tech companies that appear to be dominating everything everywhere are US not French.
While European wages have held up this is also impacted by the size of their public sectors and high taxation. In some respects the EU is just cannibalizing its private sector. In addition the EU is made up of individual countries, so merger decisions will be impacted by both diplomacy and politics.
1
Walmart really began this era of consolidation. Remember when they moved into many small towns, often right across from K-Mart, (which managed to be compatible with the local stores). Walmart then undercut everyone, especially the locally owned stores and drove them all out of business. When the town centers died so did the local economies and we as a nation have suffered. Walmart jobs are locally unsustainable, but their example has been the model the corporate world has followed. All the big box retailers, the tech companies, the telecoms are doing exactly the same thing. Time for an economic restructuring.
19
@6Catmando
The tragedy in America is that we have watched it all happen, including the murder of small town centers by Walmart, and nothing of any consequence was done about it. That sums up my American experience: a nightmare where you are fully aware of the monster and unable to stop it.
Thank god for the free press keeping us informed, particularly all the small-town newspapers who relentlessly covered the death of the downtowns. Now we need to get to the bottom of why it is so impossible to achieve lasting change in America that benefits people and not corporations.
4
@6Catmando. You are so right about Walmart. Which is why at the age of 68, I have in total perhaps spent less than $50 combined throughout my life at Walmart. I have boycotted them almost entirely throughout my life, as I now do Amazon as well. I refuse to support any company whose practices are so detrimental to our society. I only wish a few other citizens would grasp this idea and join me. If they did so in numbers, of course, these problems could be fought and maybe even won.
6
@Bohemian Sarah Well, it would be nice to think of the small-town newspapers keeping us informed, but they're mostly gone now--another victim of the increasing consolidation in the industry and the effects of the Internet, which allows anyone to post "news" free to anyone who wishes to read it.
4
America became more socialistic, with the federal bureaucracy loading up regulations that only the biggest companies could afford to implement. Private ownership of the means of production is still permitted, but the "government" in the form of an unelected, unaccountable bureaucracy, has a heavy hand driving those businesses.
Our charity hospitals charge as much as for profit hospitals, and much more than hospitals in other developed nations because hospital administrators own Democrats. That's why it is so difficult to introduce the price and quality transparency that Trump has attempted. The big medicine cronies are not going to give up their largesse without a fight. And they assert that reducing government or consumer spending will throw gramma under the bus.
Medicare reimbursement rates [what they are paying hospitals and other providers] are going up 7% next year. Is that because nurses, technicians and custodians got a 7% pay increase? Nope. But the executive bonuses are up, big medicine having stymied many efforts to even reduce the rate of increase of medical costs, much less claw back the obscene excesses.
The bigger the federal intervention, the more cronies get excess profits. It is the fundamental basis of socialism. Education, health care and housing costs are prime examples.
2
@ebmem
Sorry.. you lost me there. Europe has more "socialist" governance than the US.
We have far cheaper and superior health care, public transportation that is vast, amazing services for elderly etc..
The difference, in my understanding, is that people here understand that if everyone is looked after, all of us thrive. That attitude helps to fight back against the dominance of large corporations who are thus prevented from ripping us off. It also means that we have better regulation when it comes to privacy. So much for the land of the free and the brave.
64
@ebmem You read the article and are arguing for less regulation based on some free market doctrinaire when the evidence shows we need more regulation?
16
@ebmem
You mean in Europe residents get more in return for their taxes such as healthcare. If that is socialism, sounds good doesn't it.
9
I worked in the oil industry for 35 years and can attest that Mr. Philippon’s thesis has had a material effect on gasoline prices in California. It’s not coincidental that over the past 15 years the number independent service stations has declined dramatically in both northern and southern California. The majors now dominate both distribution and marketing in most communities. When asked about high prices the majors will point to California’s special fuel blending requirements and high state taxes but never mention the loss of independent retailers and the consequent pricing coordination it affords the majors.
15
@Peabody
And the oil business has been at the forefront of carefully crafted false messaging like what you cite, since the Carter administration and the oil embargo while tankers sat offshore, filled with oil.
2
Writing from Europe right now where I travel and visit family. I say that there is also the American mentality to shop and buy brands that are familiar. We seem lazy to explore alternatives.
Here in Europe I say independent hotels, bakeries, coffee shops, small food markets e.t.c. In America we frequent the Marriott’s, Starbucks and Walmart’s instead. In Switzerland a large grocery chain is a cooperative and not a for profit business. Where capitalism cannot function due to numeral reason like in the healthcare industry, Hospitals are partnerships between companies and government with price controls.
I just add that the consumer has a responsibility.
But ultimately in the US disrupters drive prices down - see Uber and AIRBnB. Unfortunately the flip side in Europe is that disrupters often do not get into the market due to the very control government executes; e.g. Taxi.
4
@Jzu
When Obama was elected to the Illinois legislature, a charity hospital hired his wife for a part time job paying her $175,000 per year as director of outreach. When he was elected to the Senate, her pay was doubled for the same part time gig. Where is capitalism in a system where a charity hospital charges as much as a for-profit hospital despite being able to avoid property, income, and sales taxes? You are confusing capitalism with socialism.
It is also funny that you think a coop is necessarily a non profit enterprise. Tropicana is a coop, and they sell orange juice at a profit. Generally at a higher price than products not included in the coop marketing.
4
@Jzu
Uber is a lousy example. Workers have been hugely exploited by the gig economy. Same is true for Amazon prime.
Airbnb has driven up rental prices for people who actually live in communities where landlords can make more money on airbnb than they can on annual rent to locals.
Further, it is harder and harder to find inexpensive airbnb places to stay and to find places that are really run by individuals. I like airbnb because I prefer to have a kitchen when I travel, but I worry about what it has become.
13
you're right. but in Paris e you get complete broadband and tv package at home for a third of New York City
Yes, I pay over $200 a month for cable, internet and wifi. I pay to watch a 3 hour football game - two hours of which I am paying a cable company to watch commercials.
25
@Harry I can remember when cable stations were commercial free. After all, that’s why you paid for cable. Now they have more ads than the three networks had in the 70’s.
2
After living in Europe for a number of years, I was on work assignment in central MI in 2018. My Italian colleagues and I noted, very quickly that almost everything in the States is more expensive, from services, utilities and insurance, to the most basic of things like groceries and sundries. Also, make no mistake, if you want to go shopping for groceries you have 2 choices Meijer and Kroeger. All the other smaller chains (1 where I lived) amount to a very small percentage of the "competition." And their prices were't any lower. And the big gorilla in the room is health care which is a total scam in the States.
105
I work in tech industry and keep wondering why our government keeps letting all the big companies, including some I have worked at, continue to buy up so many other companies.
Their additional financial leverage and market positions only make it harder and harder for other companies to compete.
The standards for deals getting approved need to change! The playing field is not level or fair. Just because Apple and Google compete with each other doesn’t mean it’s a competitive marketplace! And consumers and employees lose out.
30
@Bob "I ... keep wondering why our government keeps letting all the big companies, including some I have worked at, continue to buy up so many other companies." Bob, I assume that you don't really "wonder", that you're only being rhetorical. But, just in case you don't, Vote Democratic!
We don't shop with our brains. People complain about Goggle tracking them and knowing their every move. But no one gives up Google and uses Ecosia or DuckDuckGo for searches.
President Trump is not the end of our way of life, it's our own lack of imagination. Shop for next year, not tomorrow.
9
@George. Speak for yourself,George. Some of us (me, for example), do exactly the things you mention, plus many other things, to act against these things. If you don't, shame on you. I in fact do shop with my brain, and I vote with my pocketbook. It's easy and fun. Join me.
This book needs to be in the curriculum for every high school consumer ed class. Since that’s a pipe dream, I”m going to gift it to everyone on my Christmas list, especially young voters.
16
As if there’s funding allocated for consumer education courses in public high schools.
9
I suspect it is even worse than the graph shows. The rate for broadband internet in France od $31 actually includes TV and landline too, and can often be bundled with cell phone service giving you unlimited mobile data and 50GB of monthly roaming to most countries worldwide... The rip off in the US is even clearer then.
37
Our elected officials are getting kick backs (donations) from big corporations to stifle competition.
This is true in every industry - particularly internet, phone, tv, cable.
Also why is the car industry allowed to purposely confuse customers about what they are buying? And why don't we know the true cost of what we are purchasing?
24
Shipping companies could not run both air and ground services, and Kinkos was independent from any shipping company. I'm old.
4
Personal experience on both sides of the US Canada border tells me this is nonsense, at least with the leading broadband and cellular figures. Compare the usage of practical plans, include common overages, and Canada’s costs far outstrip that of the US. My mother’s internet was cut out in Canada after hitting a data limit. At her home, not on cellular!
2
So consider your one-person experience far more than aggregate data?
GOP control of government is one big reason. Accepting more mergers allows for more deregulation, a Republican mantra.
24
@DENOTE REDMOND
Gee, has your cellphone or broadband cost gone up in the last three years?
I'm still waiting for the reduction in my health insurance and co pays to recover from the huge gifts Obama gave to big medicine. What happened to the $2500 savings per household?
2
Well I am paying more for health insurance. But that’s because I actually have it now, thanks to not being a preexisting condition anymore.
8
A unique capitalist medical-industrial complex makes American health care uniquely expensive. Another unique thing about the United states is protracted electoral campaigns. The cost of campaigning requires candidates for President, Congress, state governors and legislators, and even local offices, to raise millions of dollars. Once in office, elected officials must devote substantial time to raising even more money for the next election cycle.
Many of the donors that can provide that sort of money represent companies and industries. They understandably seek to fund candidates who offer the best return on investment. Part of that expected return surely include free rein to maximize the wealth of executives and institutional investors without burdensome regulation or restrictions. That includes maximizing monopoly rents through mergers and consolidation without antitrust concerns.
One of our political parties is, in fact, totally devoted to removing regulatory impediments to their wealthy donors acquiring ever more wealth. The other party seems incapable of impeding that acquisition, perhaps because their own obligations to donors preclude them from doing so.
One might therefore assert that the unique monopoly rents and exorbitant health care costs Americans pay are what corporations have purchased from elected officials who have an insatiable need for campaign funding. It's the cost of living under a system of "democracy" defined as "One Dollar, One Vote."
173
@ebmem Gee, another expert on CA who does not live there. I spent most of my life in California and don’t remember the elimination of Republican primaries. Furthermore, California has had a lot of Republican governors . Finally, sure it has one party rule, but the majority of states also have it. Oh wait, one party rule is great if it is Republican.
14
@ebmem
Memphis has some serious problems and there have been some major fires in the recent past in Tennessee. One thing that did help your state was a massive federal program that still pumps a lot of money into your economy. It's called the TVA.
11
@Ted
California has, of course, addressed many of the issues and is a utopia. Around the turn of the century, they eliminated Republican primaries, which cut down substantially on campaign costs. All they have to do is get a couple of Republicans to split the vote and the top two vote getters in the jungle primary are both Democrats. It was a strategy that worked for the Clintons in 1992 and 1996.
Single party rule in California, under Democrats, has shown the way for the rest of the country. High utility rates coupled with third world reliability is a demonstration project. When Democrat government officials make sure that their friends get above market prices for wind and solar energy, there isn't enough money left for infrastructure or fire prevention.
Democrats and RINOs are determined to make gifts to their cronies, which include imposing regulations that only the biggest businesses can afford a compliance staff.
1
I try to exist as much as possible outside of corporations. I shop at thrift stores and off of craigslist. I borrow books from the public library. I garden and have a few chickens.
I don't do it because it makes much of a difference to the corporation. I do it because it feels better. My mood and mental health are better when I am not making Jeff Bezos ever richer, even by a few dollars. It also makes me feel like I'm doing my bit to combat this climate crisis by consuming less.
Join me. Stop supporting these behemoths as much as you can.
338
@Pseudonym. Very inspiring. I do some of the same. I would do anything to have a few chickens and a garden and maybe a goat. I do get free range chicken eggs from PA and grass fed beef and grass fed raw milk and butter and cheese, fresh off Amish farms. And the library is one of my best friends. I still have to give up Amazon, and I will!
24
@Pseudonym
I use the library. When I find a book that I want to own, I order it through my local bookstore--not from Amazon. That way I help keep the bookstore in business and also support the author. And I want printed versions of books to keep in my own home, not digital versions up in the "cloud" that can disappear at the whim of some despotic government.
50
@Pseudonym personal poverty only delights corporations in that people are too exhausted scraping by to get too politically active. Do what feels good, do what you need to, but vote and get your neighbors to the polls.
28
This trend is to please and line the pockets of the all-mighty shareholders and CEOs at the expense of everyone else.
16
There has been complete abandonment of antitrust policies over the last 40 years.
Too many examples to list. Fleet Bank should never have been allowed to take over the Bank of Boston. Bank of America should never have been allowed to take over Fleet Bank. Complete decimation of competition in commercial banking.
And the airline industry. Forget about it. One big oligopoly.
We need antitrust enforcement bigly!
60
You have picked a crucial issue to write about. I hope you will continue explore this issue because our multi-decade drift to monopoly, and the creation of a lucrative merger and acquisition industry does not appear to be the best interests of the larger society. The wealth and income gap, a steady decline in the quality of services offered with no real improvements even as prices increase is evidence that our free-market capitalism is not adapting to the broadly shared needs of the average worker.
Clearly, there seems to be a lessening of the regulatory powers of government institutions established after the Great Depression. I will read Dr. Philippon's book and will be interested in his take and studies of our economy on the causal factors and what needs to be done to restore the inherent benefits of free and open competition and where we are failing to properly regulate.
We already know that concentration of corporate power creates a very powerful influence on regulators and public policy. The late Mancur Olson, found that the corporate quest for greater market share by using undue political influence, revolving door, to create lax anti-trust, manipulation of regulations, etc. in order to get a larger slice of the economic pie has resulted in shrinking the size of the whole pie.
Leasing parts of the Interstate Highway System to private foreign sources is only a crack in our economy. I suspect that cable, and communication will experience a similar investment.
11
What's scary is when you are applying for a job and realize that the company you are applying to swallowed a company you once worked at. I've seen this with Montefiore in the NY Metro area. In other words, it's almost impossible to get a fresh start if there are just a few mega corporations in your area in your "specialty".
The other thing I've noticed in the last 25 years is that companies do not value their customers. They don't have to because they are the only game in town. Therefore, they can do whatever they please no matter what the laws or regulations are. Since they own our politicians there's no incentive for either side of the equation to behave with integrity.
All this unchecked buying and merging makes our lives difficult in ways we never anticipated. We think we're giving our SSNs and other data to one company. What we don't realize until it comes up somewhere else is that that one company is doing business or owns other companies we buy from, work with, dislike, etc. Our interconnected world is great for monopolies but not for us.
53
@hen3ry
I agree. I dislike Koch Industries and Nestles and try to purchase their types of products bu other manufacturers. Unfortunately, you never really know if you succeeded or not.
1
It is 2019 and this is revelatory? W used to advovate "market" freedom so the American people would have greater "choice." The rallying cry for neocons and centrists alike was "let the markets decide." Yep, that worked out really well. For the markets. We the people were sold "needs" like the internet, cell phones, itunes,cable T.V. and now have added three or four more bills to our monthly budgets. Television used to be free and a telephone bill was maybe fifty dollars a month. And we only worked one job of forty hours a week. And price fixing used to be illegal. I am sure it just coincidental that comcast and verizon charge virtually identical prices. So happy for all the choices!
51
I never complained about telephones and telephone service until 1984. When ATT was broken up, the service became awful and I often started yelling at the phone. Having my own phone is mixed: without a doubt, I like the convenience. I don't like the frequent spam calls, the robocalls, the price, the advertising, the fear of hacking, and "your call is important to us," which is by definition an oxymoron.
The world changes, and fortune favors the adaptable, so I try to adapt. But with the amount of money sloshing around in telecommunications, one would think a decent system would have evolved so that the advantages were maximized and the disadvantages minimized.
20
I used to work in the Dairy industry doing Bovine Podiatry which is essentially taking care of the animals hooves. It's a little known specialty which in the age of consolidation is more important than ever yet still somewhat neglected. Why? As the farms went from 50 -100 cows to 1000 to 10000, which means the swallowing up of the "little" guys by the giant conglomorates the idea of a farm as a place for humans and animals to live and work together is lost. Now the cows are just units and the humans that care for them are expendable. It is more "efficient" but that efficiency comes at a high price. Then as I looked around I noticed that the same trend is happening in things from toothpaate to eyesore, oil and gas to coal. Probably the real reason for the increased concentration of wealth in a few.
21
The traditional premise of 'regulated capitalism' is that the regulations enforced on the corporations by the government would be for the benefit of the public, and constrain the natural tendency capitalism from resulting in monopolies and cartels dominating the economy.
However, in the United State's evolved version of 'regulated capitalism', the regulations are enforced on the public, and benefit the corporations regulated... which are ending up in monopolies and cartels. The corporations have 'captured' the political process, and thereby the regulators. The public is still involved - they pay, and vote as influenced by the corporations, now 'citizens' per the Citizens United case, and fully entitled to influence the political process.
The corporations have co-opted the regulators, and along with the plutocrats are taking over the political process. Guess who pays, and who benefits in this arrangement?
21
@Jim Brokaw Very true, but sometimes it flames out in spectacular fashion. One only needs to look at Boeing today.
Study after study and year after year: since the election of Ronald Reagan, we have seen stagnation of wealth and wages for 80 to 90% of the population. Sure - some periods of middle income growth - but they have been the exception. Yet year upon year just enough of the population votes against their best interest - resulting in gilded-age concentration of wealth and power that now has a rather docile populace in a vise grip of fear (e.g., you will lose your health care or jobs) and anger (e.g., liberals and immigrants are to blame). A sense of the commons and community and social responsibility has been replaced by "rugged" individualism which is more like everyone out for themselves.
36
@scpa —-absolutely true assessment (with the exception of landline phones). Why is it so impossible for the American population to actually learn it, and do something constructive about it.
Corporations, large and small, have learned this lesson well; buy up the competition and then proceed to dominate. Once there is no competition, you can charge whatever you want and limit customer service. It is a hideous, odious strategy that has left us with almost no choice. From airlines to internet providers and even local mattress retailers, the result is the same; higher prices and less choice for consumers.
18
I live in a rural part of the west, ID, where town is 1.5 hrs away, we have an analog land line because there isn’t power for a substation closer for digital lines (a National Forest). We have a state phone company that covers this particular area, RTI, and for long distance pay Verizon, for a total of $100 between the two. Internet service is satellite, HugesNet, a monopoly, $100/mo for 20G. If you want to be connected to the outside world, that’s the cost. After 35 yrs in AK, where family thought we were remote, there are many, many more lower 48 places around the country just as remote and financially technologically isolated.
13
@Suryasmiles
I live about 30 miles east of Cincinnati and about 2 miles off of a four-lane highway. We are most definitely not in the middle of nowhere. We didn't get broadband or cable TV until last summer. I completed my Masters degree, which had a huge online component, while paying over $100 a month for HughesNet because I had no choice. I often went over the data cap and had to either pay more or do some downloading at my job (I'm a public librarian) to make it work. If it's storming or even just raining forget it, your Internet is gone. I started every class by describing my Internet handicap to the professor just in case.
We finally got fiber optics last year. Why? Because the "market" was building a subdivision somewhere to the east of us and they had to run it down our road to get it there. Previously, our township trustees had been told that we didn't have enough "density" to warrant running lines. And it's still not cheap.
As a librarian, one of the goals of my profession is bridging the digital divide. Internet service is a vital as electricity these days. We need a National Internet Service Act and we need it now. I'm not holding my breath.
2
The great myth of capitalism/free markets is businesspeople love competition. They extol its virtue, ability to bring down prices and give the best value to the customer. The reality is they are working every day to eliminate competition and drive them out of business.
But we have a myth.
73
Warren Buffett was asked what about a company draws his attention. He answered “a big moat that is getting bigger.” By that he meant companies that are huge in their area of business, in businesses that have a high barrier to entry and which is only getting tougher to crack.
1
@David Leonhardt, what you failed to mention is that this is also happening at a furious rate in the healthcare industry. Its bad for our health.
Also both political parties are complicit in allowing consolidation to happen. Why? because we have never had a progressive President since FDR. We have had conservative leaning Democrats. Its hard to point our the differences between them. At least until the allegedly criminal administration of our current President.
30
@Gary Valan
Yes, "centrist" Democrats and neocon republicans are cut from the same cloth regarding business.
Predatory capitalism is what we have. When I recently bought a new cell phone through AT&T and acquired a "free phone" for my spouse I was told I had to change my phone number. The salesperson transferred my data from the old phone to the new and clearly understood that I would no longer be using the old number. Except that AT&T kept billing my for the old number. When I finally had the time to spend on the phone with AT&T, after waiting a half hour on hold, I learned that AT&T was still billing me for my old number. AT&T finally shut off the old number but refused to refund me the two months of billing for the old number even though AT&T admitted the records showed I had not used that number since buying the new phone. Turns out the second phone was not free because AT&T collected money from me that they were not entitled to and the customer service manager at the AT&T call center in Texas was quite defiant and nasty about it. A TOTAL RIP-OFF. BIG CORPORATIONS DO NOT CARE ABOUT CUSTOMERS THEY TAKE AS MUCH AS THEY CAN GET AWAY. I will ditch AT&T as soon as I can but is there a better provider out there? This run in with AT&T clearly revealed a corporate culture of greed and contempt for the consumer.
51
You can transfer your number to Tracfone and it will cost you about $8 a month
I did this with an iPhone and it has worked beautifully for several years.
I get better reception since Tracfone runs off of all system towers so you are not restricted to one network
Initially I worried about running out of data, but it has not once been an issue since most of the time you have WiFi access so that protects you
Give it a shot! Working well here. Not looking back
2
Also like you my original provider was ATT - you will need to call them and unlock your phone and then Tracfone can port you over. No problems worked like a charm
Good luck!
1
I am increasingly mystified by David Leonhardt’s agenda. A few weeks ago, he reported on Emanuel Saez and Gabriel Zucman’s book, The Triumph of Injustice, which argues that the richest 400 individuals pay a collective federal, state and local tax rate lower than all other Americans. He has also written about the spectacular unfairness and dysfunction of American healthcare. Now he reports that US telecommunications companies have rigged mergers to reduce competition and enable price gouging. Yet he consistently argues that progressive solutions, like the wealth tax and Medicare for All proposals of Senators Sanders and Warren and Senator Warren’s proposals for labor participation on corporate boards are unwise or destructive to the economy, and he has refused to endorse the most progressive candidates who recognize the threat posed by wealth inequality and who have devised and promoted the very solutions proposed by Professors Saez and Zucman. Just what is his point? That the concentration of wealth and corporate hegemony are destructive, but we can’t do anything about the problems because it would be too disruptive? Adopting that perspective ignores the slow but inexorable destruction plutocracy has unleashed on American society.
41
@Ockham9 -- it seems like Leonhardt might be that vanishing thing, a centrist. Against monopolies and mergers, and against more progressive ideas that seem to be 'a tax too far'. There's only one place that he might end up, that's in the middle. Of course, in the United States politics of the last 25 years, that 'middle' has moved steadily to the right, so that what is 'centrist' politics in the US is seen as right wing in Europe. Of course, compared to China, the US probably seems hopelessly liberal, with all our 'personal freedoms'.
What things look like depends very much on where you stand. Where I stand, it looks like David is pretty much trying to find the center, but the real center, not the 'halfway between Republican and Democrats'.
8
Before 1984 there was one phone company - AT&T, or Ma Bell as it was known. They were a regulated monopoly: in return for being a monopoly, they had to agree to oversight and price controls among other rules, but they had no competition. As a result they could afford to invest in its infrastructure, R&D, and employees, and still give a steady, if unspectacular, ROI. Everyone was a winner.
But then came Divestiture: AT&T agreeing to break itself up into several companies - one that retained long distance and Bell Labs and Western Electric, and regional local companies. In return, they got rid of all oversight. It was a big gamble, but the people in charge knew the odds were in their favor. Because while at first it seemed like AT&T would be losing, in the long run, they knew they could rebuild an effectively new monopoly, but one that was unregulated. I guess their gamble paid off!
Over the past few decades, many other companies followed this example, and due to the "trickle down" system that was erected, companies were encouraged to do anything they could to maximize shareholder returns over all other considerations. As a result, the working and middle class has suffered greatly and paid the bill for it. And even the Treasury has suffered, as massive amounts of taxes have been denied us as companies have been legally encouraged to avoid them. And all of this benefits one particular, very small minority: the oligarchy.
This has cost Americans much more than $5000.00.
54
Brilliant article. In Sweden I pay $20 for cell phone for two people, around 10GB. In the US I pay $120 for Google Fi. This is nuts. Same with Internet. About$80 for 50 GB/s, in Sweden I pay $30 for 250 GB/s. How is that even possible in the US? We were the ones that pioneered competition! And don't start talking about insurance. Auto insurance is 5x higher in US than Europe, same with home insurance. Oh well. At least gas is 1/4 of Europe . . .
67
@Fooled
"At least gas is 1/4 of Europe . . ."
And it should be 8x the price, as that is the ONLY thing drivers and manufacturers will respond to: Price Shock. Make gasoline burning so hurtful to the wallet (as it is to our environment and our future...) to make us abandon this crazy technology of internal combustion engines.
1
"The European economy certainly has its problems, but antitrust policy isn’t one of them. The European Union has kept competition alive by blocking mergers and insisting that established companies make room for new entrants."
Meanwhile, in the U.S., we have fewer and fewer companies. And the profits flow into fewer and fewer hands. It's worse than just Wall Street, where at least there are publicly traded companies (where anyone can buy shares and participate in the profits). More and more U.S. firms are being taken private.
We need to return to a well-regulated capitalism, one that benefits all of us.
38
The Great American Rip-Off continues unabated.
The 'free-market' fraud is alive and well.
Time for a progressive revolution against corporate America.
Bernie Sanders and Elizabeth Warren are on the right track.
483
@Socrates
No, Warren and Sanders are one the wrong track. Sanders wants to substitute government run monopoly for both private monopoly and private competitive businesses. Sanders and Warren both want to tax success to death, regardless whether that success came from monopoly or fair competition in free competitive markets.
Sanders was chairman of the House committee that oversaw the VA, which is pure socialized medical care, Sanders' favorite government activity. Sanders ignored the many complaints and warnings that the VA was making people wait so long for care that they not only suffered during the interim but actually died before receiving care.
@Socrates They are, but they’ll never get elected. The Empire will strike back... hard.
6
@Socrates
Hear, hear. I note the vicious backlash against Warren is simply boiling, via bots, party shills and paid commentators. She must be terrifying Big Business. Good. She's got my vote.
20
Mr Leonhart, please explain why European economies are stuck at <1% growth and class mobility is virtually non-existent?
Also, doesn't one guy own practically all telecom in Mexico? Perhaps companies simply charge what people can~will pay?
2
actually economic and social mobility are greater in most European countries, the UK, Canada, AUS and NZ than in the USA at this point. google it. you will find the research and the results.
62
@Eric One serious handicap to the European economy is the austerity economic scheme that began with Margaret Thatcher. If you read about Britain, there is a lot of news about the homeless problem, pensioners short of basic necessities and the welfare system that has been cut to the bone. Balanced budget mania has reduced funds that are desperately needed. Germany has been big on austerity and their economy is struggling. The same problem happened with Greece iand Italy when the EU expected them to function on a balanced budget. Talk about going cold turkey. at the end of the day only average working people suffer.
4
@Eric
At my supermarket in Brooklyn, there are at least 39 different kinds of soda but I only have two options for Internet service. It's not what I'm willing to pay, it's what I must pay.
15
I really enjoyed this article. I’d like to see how these same principles are exploited by the large utility companies and regulation of solar so that states like where I live dissuade homeowners from being able to use solar power under the guise that the homeowners are not paying for the grid and thereby keeping rates up overall.
8
Maybe parties confuse the interests of big business with nationalism because from Reagan firing air traffic controllers in the 80’s to the Citizen’s United decision, the public has witnessed a near complete corporate takeover of our government. It has been a slow continuous roll that is only now being addressed by Sanders and Warren.
Billionaires worrying that their opinion might not be the loudest in the room isn’t necessarily a bad thing.
There has to be a return to sensible taxation and fair economic policy or we are well on the way to becoming a country of exceptionally wealthy and “the rest of them”.
79
To my mind, the turning point was the Clinton Administration approving the creation of ExxonMobil by merger in 1999. Considering how much Democrats hate oil companies, the notion that a Democratic administration would approve two gigantic oil companies merging would have seemed laughable back in, say, the 1970s.
13
@Steve Sailer disagree. I agree with the several here saying it started with reagonomics.
5
@Basho249 agree it started with Reaganomics, but the Exxon Mobil merger was another nail in the coffin.
2
@Steve Sailer
Reaganomics certainly exacerbated and continues to exacerbate the problem. But I'd argue that the turning point dates back to 1971: the Powell memo.
1
I moved to the Suburbs just before the rise of Home Depot. When they opened, they had a huge variety of items and good prices. Over time, the local hardware stores were squeezed out...my two mile drive for a paintbrush became a 12 mile drive, and the quality and variety of items is nowhere near where they began....cheap house brands have squeezed out the quality items, and then we finally got some competition again...a Lowes opened up. You now need to spend MORE money to get high quality items from companies that serve high end contractors....I miss all those local guys (and yes, we DID patronize them) .
There reached a point in the early 90s where I realized every single transaction with a big company had been gone over by an MBA who said "How do I get $20 more out of this transaction"....the best example is the nonsense fee Verizon charges you when you buy a new phone....a fee for "phone upgrade", which makes no sense..I'm already paying a fee, it's called the sale price of the new phone. There are many more examples.
161
@Casey
In many places you don't even have the Home Depot/Lowes competition. Home Depot came into lower Westchester maybe 15 years ago. One went in down the road. A new shopping center was created down the road out of an old industrial park - replacing a huge family owned stone and mason supply yard.
A Lowes was slated to go in there. Home Depot overbid for the space and sublet it to a BJ's. They kept Lowes out for years. The nearest Lowes was across the Hudson.
Home Depot dominated the county for years before a Lowes got in. Meanwhile the old tradesmen that could help you got replaced with minimum wage help and then their numbers got cut. Stores actually got darker.
Meanwhile brand names like Milwaukee made cheaper versions of their tools for Home Depot.
A few good local lumberyards have survived (lots have closed). I prefer them but their hours are far shorter.
14
@Casey
Add to that most things you buy at Home Depot do not last or arrive broken. Lowe's has delivery charges for "crossing the bridge" for Cape Cod even in winter not based on mileage. Buying at a local non profit salvage has better outcomes.
6
@ Casey
AT&T routes their customer service calls to the Philippines to save on wages and benefits and add to their profit. Every service call requires three agents and 45 minutes to solve a simple problem. It’s maddening.
Why not pay a fair wage and hire American workers? Is it not named American Telegraph & Telephone?
It would please this American to speak to an American agent when AT&T is charging me over $100 a month for mobile service, rather than a heavily-accented English one, however well-meaning.
With little competition, AT&T has no reason to change when customers are held hostage by a lack low-cost adequate options. I’m certain I’m not the only one who dislikes foreign customer service agents in American markets who provide slow, barely passable service on top of it all.
8
Another way to look at monopoly power is from the vantage point of the suppliers for monopoly enterprises. Large enterprises today demand detailed product specifications and punishing delivery requirements for suppliers. This produces specialized suppliers expert in the requirements of particular monopolies (see Boeing, Walmart, et.al.) Unfortunately, this specialization produces suppliers vulnerable to extreme price reduction demands from the monopolists, and no alternative market for the suppliers to sell their wares. Boeing at a time of record profits and a massive product crisis is cutting the throats of long time suppliers with demands for price concessions. Every time your see a "price cut" sign in Walmart, think of the enterprise supplying this product, the owners trying to figure out how to make a profit and the workers who suffer as a result.
This is not free market capitalism but remarkably similar in result to the crony capitalism of Eastern Europe and other parts of the world. Is it any wonder that our democracy is beginning to take on the features of authoritarianism?
15
@David If you can purchase a product that is not subject to being a supplier to a big box, I think you get a better product. For example, I have been very happy with every Sthil product I have purchases. Not cheap, but they last forever and can be rebuilt.
2
@David. YES! This is it exactly. I have never purchased from Walmart because I long ago read an article about their hardball strategy with suppliers. Using their pickles as an example, the article showed how they demanded that everything from the cucumber to the glass jar to the label all be stripped down to its cheapest component, depriving each supplier along the way a fair price for a good product, all in the name of providing maximum profit to the Walton family, at that time he richest family in the U.S. A pox on them.
1
It's about time that someone pointed out that we are in a second robber age.
128
@StatuteofLiberty. I meant a second robber baron age.
5
@StatuteofLiberty Agree, greedy criminal sociopaths are now in complete control without the slightest fear of ever going to prison.
1
It's not only the cost of internet access that is better in most parts of the developed world. The quality and bandwidth are generally much better elsewhere. In the US we pay more for just good enough, not excellence.
54
Thank you for this excellent piece.
31
Globalization is not the main reason for the decline in the labor share of income in the US. The McKinsey & Company study, for example, estimates that only 11% of the decline is due to reduced labor bargaining power due to globalization. Yet, globalization is being blamed for wage stagnation and for exploding inequality in the US and is a somewhat popular idea across the political spectrum. This is the case despite the fact that serious economic studies show otherwise.
It's a favorite tactic of demagogues on both the left and right to blame foreigners for problems that are actually made right here in the USA. The Trump trade war, for example, is a great diversion from the real causes of wage stagnation in the US. Focusing attention on our trading partners' supposed "unfair" trade practices distracts from the actual causes of wage stagnation and exploding inequality. The main reason for rising income inequality in the US was the drastic reduction in the top marginal income tax rates since 1980. And the cuts in the corporate tax have also been an important factor: After-tax profits of US corporations reached record highs as a share of GDP following the Great Recession. Yet, the GOP-controlled Congress passed one of the largest corporate tax cuts in history as soon as there was president in office willing to sign it into law.
Europe is just as exposed to global competition as the US and yet has not seen a similar decline in its labor share.
52
@Doug Rife
Not equal opportunity "left" and "right", not by a long shot.
Being outnumbered is no reason to blame the powerless for what the powerful do.
12
This story should be expanded to fully expose the rigged system we live in. This is a bi-partisan issue and is a good way to cut through the polarization Americans are experiencing today. We have a common enemy to unite us: monopolies.
192
@Irene Brophy And near monopolies. In most of the industry cases discussed in the article, there isn't one single identifiable national monopoly, but rather a small number of encumbent suppliers who pretend to compete while in reality, their main concern is to fend of new entrants and continue to reap super profits.
9
@Irene Brophy
It's not the monopolies themselves. Although most should be broken up.
It's Wall Street brokerage houses that underwrite these mergers and acquisitions that create monopolies. And why do they do it? Because the brokers make billions and billions of dollars.
And it's Congress and the White House, cabinet, and agencies who are not stopping them e.g. SEC, FTC, FCC, DOJ...... Why aren't they? I suspect there are many elected officials making big bucks off insider trading. Not to mention the lobbying of politicians by the likes of Goldman Sachs.
Thanks to Trump's SCOTUS, it's too late to get Citizens United changed. But we can vote.
7
I worked in Europe for many years in corporate development and worked on several multinational corporate mergers between 2001-2010. The local country and EU Competition Commissions were for real and had teeth. They could squash mergers if the parties could not prove that the merger would not kill competition. The process for getting merger approval was a serious pain in the booty, but knowing now what I didn't know then, I think the EU competition regulators had the right idea.
124
@sstarkey
Thanks for this: "....the EU competition regulators had the right idea."
This is why "the CITY" in London-- equivalent of our Wall St-- does not want Brexit.
All the more reason for Britain to Remain, as far as I can see.
3
Out here in the hustings
I pay about $85 a month for
combined internet and land-line telephone service
delivered via buried fiber optic cable.
Does not include cell phone service.
For that I use prepaid Tracfone for about $7/month.
4
@Zetelmo I am just west of you, and I pay $170 for phone/WiFi/cable. So I think you are getting a better price.
So glad to see this article! What's amazing to me is that the myth just won't die -- that the US is the incubator of new ideas and free market principles. Try starting a new business, and using the web to get clients...and you'll learn that the big companies pay the fees necessary to Google to get all the relevant searches directed to them. If you're small, you'll never be able to pay those kinds of fees. So, the web is yet just another way that the big corporate players can pay to stifle innovation and competition. Welcome to America!
133
@Maureen I have often wondered why a corporation that, for example, has a business in financial services, is also handling their employees health insurance. Then I realized that this is one way the big companies keep out the competition. To start up anything bigger than a one or two person operation requires supplying people with insurance before a single dollar in profit is made. With polices now costing more than $20000 for a family policy even in a group plan it is cost prohibitive. It's just another way that the conglomerates stifle competition.
8
Back in their early stages of panic at the prospect of Elizabeth Warren ascending to the presidency, Jamie Dimon of J.P. Morgan began floating the idea that large institutions should focus on stakeholder, rather than simply shareholder, value We heard them give lip service to paying more attention to the needs of their customers, employees and the communities in which they "served".
As of late the more traditional (read corporatist) Democrats like Buttigieg have gained a bit more purchase and Warren, while still the betting favorite to win the nomination seems slightly less inevitable those bleatings have gone silent.
But make no mistake,if and when those big donors fail to elevate Biden or Buttigieg to the nomination we will hear these tall tales again from mouths in which butter would not melt as my mother used to say. When even "philanthropist" Bill Gates muses that he might have to vote for Trump over Warren, well, you know which track to be on. If one can tell the quality of a person by the nature of their enemies it's clear just who the typical American should rooting and voting for in 2020.
52
This is exactly why we need the progressive policies of Warren or Sanders, both have promised to more vigorously enforce our antitrust laws to possibly break up these monopolies and make our economy more competitive. What American would be against that?
47
Finally, I’ve been trying to engage anyone who would listen for years now. Why did we give the internet to corporations and demand nothing in return? Why do people get giddy over tax cuts that amount to a few dollars while they/we blow $200 to 300.00/month on cable and mobile phones? Why aren’t the presidential candidates addressing this issue? Don’t get me wrong healthcare and climate issues will ultimately cost us way more if the planet survives but this pocketbook issue is a simple way to engage voters and it’s just simply a corporate ripoff.
222
@David
Why do people get giddy over tax cuts when what they really need is higher wages? I'll never understand that. Do they not understand the basic mathematical concept of percents?
18
Wonderful article, no surprises here at all. Proves once again the US free market is a myth in the same bucket as the tooth fairy. I dropped cable and sat dish, now 100% streaming over fiber from a regional ISP.
27
@Tibby Elgato Me too! Boycotts could. work.
...yet the govt. insists that inflation is extremely low and the CPI adjustment for those on Social Security will be a paltry 1.6% for the coming year. The "potential" good news is that these "eras" generally run for 40 years or so, and going back to the Reagan election in 1980 and the beginning of the end of antitrust enforcement, we're on the precipice of (hopefully) a new era. Yes, it's wishful thinking, but people are fed up and maybe, just maybe, we'll see some semblance of change in the near future.
16
What are we supposed to do? We don't have choices. There are people who have health insurance who don't get medical help because they can't afford the large copays or the deductible. I lose my internet service for hours every time there is a storm or high wind, and since this is Oklahoma, high wind is standard fare. People keep moving out of town, so the only electrical provider keeps charging more to make up for loss of population. Many of us have no money left over to help the economy by shopping. It all goes to utilities and medical care.
137
@Linda Vote for Warren. She has good plans to challenge these companies and protect regular folks. She is not in the pocket of corporations like our current president.
25
@Linda Vote for change, big change not nibbles.
4
@Linda
So why do Oklahomans keep voting red?
7
It may be too late. Businesses have much more political power than people do. That may sound impossible, but the easily duped electorate have allowed it to happen. The Citizens United decision was a key element in the corporate takeover, but it's really voter ignorance that allows this to continue. At this point, the corporations now own Congress and the Supreme Court. How do you reverse that? Not with a MAGA hat, that's for sure.
588
@Jim Dennis How to reverse it is to change our "slave mentality." That's not easy, of course. Americans have become so dependent on paycheck jobs that we are easily scared into silence when the corporate and finance class warns us not to mess with them. And it doesn't help that we live beyond our means by virtue of credit cards, car loans, mortgages and college debt. Most of us have been through recession layoffs and corporate downsizing, even if the ax did not fall on us personally. It will take personal courage to support the necessary reforms to our economy and loosen the hold of big corporations on our lives and our pocketbooks.
27
It’s not that the populace has been duped it’s that most people know that they just don’t matter to the politicians and corporate overlords. That’s a big reason why most people don’t even bother to vote.
14
@Aaron Hart - They've been duped into thinking their vote doesn't matter. I've seen it too. "Why should I vote? X is going to win anyway." Well, yes, X is going to win because people like you don't vote.
Everyone needs to vote! There should be a $100 tax levied on everyone at $25 per year, but if you vote, you get it back. Watch that idea go nowhere by those who don't want people to vote.
14
In the few areas that our "free" "markets" are not captured by proud monopolies, the few companies within it are "competing" to see who can get away with the HIGHEST price. Our internet and phone "markets" are firmly so captured; our housing and apartment "markets", absurdly so.
There is no far left—especially against that well-funded power.
13
If Comcast has some monopoly power, that should be seen in their financial results.
But it is not % profit to look at, though that is interesting, too.
More important is to look at return on investment.
Also dividends to share holders.
2
I bake my own bread and make my own beer. I can’t make my own broadband unfortunately but I’d gladly support a start up. The only way to drive down prices is competition. How about an auto insurance policy that charges $25 a month and only insures cars worth $6,000 or less? That’s about have the auto owner population in the US right?
20
@Charles Dennis
Excellent idea. I have a perfect driving record and a 14 yr old Camry. My insurance with USAA -- one of the better insurers -- is around $600 a year, and I've been a member for four decades. Instead of spreading the risk among high risk and low risk drivers, insurers should offer rate tiers such as you suggested for those whose cars are old and driving records are unblemished.
3
If you don’t carry collision, the value of your car doesn’t affect your auto insurance rates. Liability is the big issue, both personal injury and property damage.
4
@Charles Dennis. I drive a 13-year-old Honda Civic, so its value is certainly less than $6000. But as I drive down the interstate, virtually every car is newer than mine, and most are expensive SUVs. Odds are that if I hit one of them, my insurance company’s liability for the damage I do to the other car will exceed my loss (and I don’t even cover my own loss). And then of course there is personal injury, which bears no relation to the value of the car I drive.
2
I think you're comparing apples and oranges on cell phone prices. Unlimited plans in France and Australia are much less common. With the mobile phone provider Orange in France, their 150 GB plan costs 80 euros per month or $88 per month. Verizon charges $90 per month for their most expensive unlimited plan.
3
True, but not everyone needs an unlimited plan. In Italy I pay €10/month on my unlocked phone for enough data to communicate (email, messaging), look at social media and news sites, look stuff up, and very limited use of maps. (Mostly I download maps ahead of time). I never look at videos using data. If you have access to Wi-Fi for much of the day, who needs unlimited data?
2
My cable company, ATT, increased my costs by almost $50 and when I complained, said my “special” had run out. I didn’t know I was even on a special so I told them they needed to reduce the new charges.,.they did, but they removed a significant number of channels I had taken for granted...it’s a scam and we are being fleeced.
265
Optimum did the exact same thing to me here in CT.
28
@Ardyth RCN was charging me almost $200/month in NYC but ever since I cut the cord they've been sending me a weekly offer to resubscribe for $45/month. Too bad for them I learned I can get over 60 channels absolutely free and that's about as much TV as I can stand. Now I just pay $70/month for a cell phone data plan that lets me use my phone as a wi-fi hotspot.
13
@Irene Brophy The cost of an antenna on the roof like grandpa had, and a state of the art Tivo is less than two months of the average Cable Bill....
10
Other entities wielding huge market power are everywhere: Greyhound bus service in many places (it might wield more than market power), Lockheed Martin and other prime defense contractors, Boeing and Airbus, FedEx and UPS, and on and on. Of course, Amtrak and USPS have monopolies of a sort as does public transit, and the quality of service from these entities often reflects this.
That US auto companies bailed on their sedans is a sign the market was highly competitive. This is the rub - a big company capable of investing in several areas will not often choose the ones with a highly competitive market because there is only minimal profit to be made at the cost of tying up capital, attention and appetite for risk that might go elsewhere. This does not always result in significant harm to consumers. In this example, we can still buy very nice sedans from several companies.
In other words, pure competition may not be a stable equilibrium in many industries, and that is ok. Monopolies are bad, but if companies are making some extra money from a novel product or from establishing a stable place as one of a few firms in a mature market that may not be so bad.
A lot of readers will note that prices for many consumer goods/items are much more expensive in Europe and disagree. But often those higher prices are due to much higher taxes (especially on cars and petrol). But of course those taxes buy things like free college and health care. Canada is a fairer comparison group than much of Europe because population densities are fairly similar. Europe has much higher density which makes infrastructure costs much lower which certainly is part of the reason for lower prices for telecom.
15
@Dan G
It is not just density. The telecom carriers in the U.S. have consistently resisted upgrades of infrastructure as a financial policy driven by U.S. tax write offs. Leaving old central office equipment or aging copper/fiber as long as possible (20-30 years was in their management spread sheets for many years) provides a tax write off that increase profits. With little competition there is less option of consumers/businesses having another option. The high speed private fiber of the financial sector is an end run around this lagging infrastructure. Consumers have no advocate here given who heads the FCC, basically a big telco advocate.
This resistance to fiber upgrades also inhibits national security because old regeneration stations and aging fiber will not allow quantum security that prohibits intrusion and information theft. There is discussion of segmenting allowing quantum but it is not a total solution as I understand it.
1
Not to mention the monopoly on other services like utilities. We need radical change...
25
Americans often confuse capitalism with free-markets.
Free markets means absolute knowledge by buyers and absolute competition between suppliers.
Capitalism is return on investment. And if they can have a monopoly and raise prices, they are happy.
This is what this article shows has been happening over the years.
So many Republican voters are defending free markets not knowing they are being duped by capitalism.
231
@Independent Thank you for saying this. If we could just get those who attack capitalism to make the distinction. Free enterprise holds the world together. Capital gambles on production to siphon off as much as possible. Let's tax the siphon.
Please, spread this distinction.
Thanks again
13
@Independent I agree, but that's not exactly where I'd draw the line.
A free market, in my mind, is one where competitors are free to price their goods and services as they see fit and consumers are free to purchase whatever goods and services they choose. The theory is that competitors will survive, and thrive, by creating those goods and services that consumers want at prices they are willing to pay.
I don't think "absolute" knowledge exists, but we muddle by somehow.
"Capitalism" in my mind refers to ownership of the means of production. Through ownership, capitalists, as you observe, are able to extract rents from labor--i.e. take a cut from everything produced. And by creating artificial shortages, including especially monopolization, they extract rents from consumers--i.e. taking a cut from everything you spend.
Capitalism may have been necessary in the day when huge capital expenditures were need for such things as building railroads and factories. But now, especially in the information age, most of those things can be atomized--produced on small local scale bases.
So corporations continue to exist mostly for purposes of creating local and/or market-wide monopolies and artificial shortages.
2
@Michael T
And double thanks!
Just read an article from AAA. The average cost of owning a car is now $9,000 a year. That means two cars and you are out $18,000. And that is just transportation. If you want to things like housing, health care, and education, then for most people all the money is gone. Nothing left over for anything else. Americans are getting desperate. We need a real change. We need Warren. Warren 2020
304
@sjs average is the key word there, it's driven up by all the Porsches and Bentleys. A subcompact will cost much less than that.
10
@sjs
Unfortunately, economists (including liberals at the Urban Institute)
tell us that Warren's numbers on the cost of things like "Medicare For All" are not true.
Warren is an extremely smart academic, very ambitious, and totally focused on winning.
But until about the late 80s, she was making hundreds of thousands of dollars defending Big Corprorations-- including one that was denying health benefits to retired coal
miners.
She did this while also earning $300,00 as a professor at Harvard law.
Some professors thought that such
"moonlighting" was unethical.
It may also be worth remembering that until she was 47 years old, Warren was a registered Republican, and a conservative Republican at that.
I am not at all sure that we can trust what Warren says today.
Between now & 2020, we may all want to do more research, read more
about her, and consider who she really is.
5
The average monthly payment on a new car was $523 in the first quarter of 2018 (let's say the median is $500)
$80 for gas
$100 maintenance
$100 insurance
$50 to put away for repairs
That's a median $830 per month.
That's $9960 per year. Even if you take out maintenance, that's still almost $9000 per year.
32
A worthwhile read but we didn't need Philippon’s research to tell us this. Often bad customer services go along with the higher costs and limited competition. As in the case of the two giant internet providers, you go from bad customer service to worst. Democrats and a few Republicans can talk about getting back to real competition, but nothing will change until the big donors' donations are removed from the equation. It is astonishing that so many voters believe that a few tweaks and pre-Trump policies will solve this. Way too much of the media like to label it as far left policies. It has never been about open markets but always about the Money.
111
Decent internet with the erstwhile Baby Bells is now over $210/month. We'd be better off with AT&T, which back in the day (not now) used to have a conscience and act for the public good and increase of knowledge.
Reagan gave it away to his "friends" and they made a lot of money.
75
@Susan Anderson
Yes, I, too, remember AT&T.
It was a monoply that provided great
service, at what was then a reasonable price, not to mention
AT&T's "Bell Lab"s that did great research, making great contributions to the nation's knowledge.
Today "Big" as in "big corporations"
has become a knee-jerk pejorative
term, used by both the Right & he Left--Trump, Bernie & Warren.
But sometimes "Big" means that a business enjoys Economies of Scale
that lets it offers customers better prices & better service, while
also paying its employees more.
Today, Amazon is an excellent example.
It offers even its warehouse workers $15 /hr miniumum wage, exc. health benefits, & help with tuition if they
want to go to college.
Do you know of any small companies that have done what
what Amazon is doing?
Yes, I know, Amazon no longer offers its "Whole Foods" Part-time employees health benefits.
This is because most part-time workers can get better
subsidized healthcare under Obamacare.
If mainstream media reportrs had the time to do a little more research, they would tell you that.
Finally, as for hospitals, more hospitals and supposedly more competition does not lead to lower prices or bettter care.
In the markets where there are the most hospitals (L.A., NYC, Boston, etc.) prices are highest, and medical journal researach shows that care is often no better.
This has nothing to do with monopolies.
.
@Maggie Mahar - I am 81. I remember AT&T. I remember party lines. I remember being forced to use their phones which were years behind the available technology. I remember ridiculous prices for long distance.
I would prefer to forget.
7
@Maggie Mahar
I am 75 and well remember when hospitals were owned by each city that had them. Most were Non-Profit and had to prove it every year. Then came the Corporations as owners. Doctors were no longer the president (rotating between local doctors) but were Business people with Profit as their motive. Adding hospitals to their systems to increase the market share. Now the Detroit area has three major hospital groups, each have boughten out all the local hospitals and put money into the buildings to serve more people. Many wards are now empty and Nurses are on Call depending upon census. I'm sure the same goes for here in Florida and every other state of the union.
"Corporations, What are they good for, absolutely Nothing." Taken from a song about war.
Vote blue no matter who
1
I'll retreat to one of my very favorite quotes: "Money doesn't talk, it swears" (Bob Dylan, but if you needed me to tell you that you probably also need me to tell you who Bob Dylan is and I will just encourage you to look him up on YouTube and listen closely.)
But not only does money swear, it started swearing into a monopolistic microphone when Citizens United got by the Supreme Court.
93
@Mark
Citizens United did not “get by” the Supreme Court...it was created by the Supreme Court. Nothing that happens to us is someone else’s fault. We are not victims...we are volunteers. Until the electorate votes for representatives of the people instead of the wealthy it will never change. Out right bribery is how our legislators work...that’s why they lie, cheat and steal to hold office.
3
@Mark
Great comment. Bob is like (well sorta a little) Shakespeare in that you can always find a pithy relevant quote in his lyrics - even if he didn’t say it first!
2
@Mark You sir have the watchtower covered.
1
The anti-trust actions in past decades now in retrospect seems quaint. Concentrations in the past in Telcom, Media, etc. often had enforcement actions, break ups or very limited exceptions carved out, while now some of the same firms have ventured into new industries and have even more market control and less competition than they ever had. New players in tech may even have more market power. So can anyone remind me what was previously accomplished, because like cockroaches after a nuclear winter, the infestation is back regardless of what party is in power.
17
Excellent article. Everything today that we purchase is overpriced.
The stockholders are the ones that are happy.
Big Business has forgotten the people that used them when they first started.
Everything today on the market is a rip-off.
I would love to see a cost comparison of products from cost to profit. It would make me a better shopper but also it would make me able to say don't buy that product.
65
@Kev
Everything today is overpriced?
If you are raising a family , you would know that children's clothing, toys,
women's clothing, many groceries, and a great many other consumer items that Families need are now cheaper than they were 10 years ago.
Granted, big-ticket items like heatlhcare, a college
education and homes are far more expensive.
But this is not because of mergers or monopolization.
Healthcare is more expensive largely because we have made no effort to regulate what hospitals, specialists & drug-makers can charge. (Every country in Europe does regulate what they can charge, which makes healthcare much less expensive.)
Meanwhile govt has failed to fund the public universities that once provided a very affordable (and often
high-quality) alternative to private
universties.
Instead, we have spent
taxpayers' money on wars.
Meanwhile, as demand for housing has increased--and older Americans have chosen to stay in their homes longer--supply has fallen. That supply/demand equation has pushed home prices higher.
If upper-middle-class taxpayers were
willing to contribute more to affordable housing, many more Americans would be able to afford homes.
Again, none of this has to do with
mergers or monopolization.
Normally, I greatly admire Leonhardt's columns, but this one seems oddly off-track.
2
@Kev Now that 401ks are the norm, we are all the co-opted shareholders to some extent. If corporations don't succeed, neither do we. I really regret/resent this reality.
1
You can’t just focus on lower prices, because the case falls apart against Google and Facebook as most of their services are free. In fact, focusing on prices actually argues against breaking up Facebook, since WhatsApp would probably have to charge for its services if an independent company.
Rather the scope of harms from a monopoly needs to be expanded beyond just prices, such as the selling of personal information.
18
@Scott Yes, by shifting the focus to prices, companies were able to justify consolidation that would not have been possible to justify otherwise.
What the focus shifted away from is what share of the revenues went to whom. In the tax code, we should shift to a VAT with the goal of preventing the masking of value. In the labor market, we should allow organization. Why may corporations organize and reorganize, while labor may not?
9
@Scott
Google and Facebook are not "free" to the companies that rely on and must pay the cost for using their advertising service. Those costs, ultimately, are passed on to the consumer.
10
@Scott Google's services are extremely expensive to small businesses - $4 per click. Our small business had to close because of these costs.
7
Interesting but something we all knew the power of capitalism Wall Street, hedge Funds, Milken, like Facebook doesnt work for the majority of the American people. They actively work against regular people, laughing all the way to the bank.
Regular people look at there paychecks and make adjustments to stretch their money to get to the end of the month.
So even though marketing tells you that you need this, that and the other thing as adults we all make a decision what to buy and what not to buy, Since the majority of us dont have complete health care coverage we have to spend our little dimes to pay the outstanding medical bills.
Capitalism is a wonderful financial vehicle for shareholders and Wall Street. Its all about the rich getting richer and producing inferior products. ie Johnsons& Johnsons ,Boeing, baby food, mazing how much money you can have if you dont buy into the American marketing ploy.
16
Where I live, in northeastern Massachusetts, we have two drugstore chains, one consolidated hospital system, and one internet service provider. They all have the gall to ask me, after pretty much every interaction I have with them, whether I would recommend them to a friend. Right. As if I, or my friend, had a choice.
This is called "net promoter score." It all comes from a decade old business book called The Ultimate Question. The book is a case study about a rental car company. A decade ago that business was actually competitive. But it's obvious that weak-minded business school professors and gullible MBA students are treating this as a way to project the illusion that they're actually competing for our business. They are not.
By the way, that question is also used by companies to torture their workers. Twice I got unsolicited sales calls from Comcast, the local monopoly internet provider. Twice I declined what they were selling. Twice I got a survey asking whether I would recommend Comcast to a friend. Twice I answered "maybe" (with a score of 5 out of 10, and a remark about the silliness of the question from a monopoly. And, twice I got panicked calls from the sales people begging me to change my score to 10.
Hey, biz school professors! How about teaching your students to measure real customer satisfaction? Hey politicians! How about encouraging honest competition? Hey executives! How about selling stuff that delights your customers?
620
@Oliver Jones
...and I live not far from you and have the "benefit" of two ISP/cable providers which gives me the upper hand. I've used it to my advantage over the past dozen years or so and have been able to negotiate acceptable triple-play packages that are easily more affordable with greater scope than if there had only been one ISP in our town. So goes the old concept of "competition"...
12
@Oliver Jones
I bought a car and got a survey from the dealership about my experience. I gave them a good reply and offered some feedback. Got an email from the sales guy telling me that I cost him some commission check because I didn't give a perfect rating.
What the heck is the point of asking for feedback if you don't want it?
26
@Oliver Jones
I get questionnaires from software companies asking how much easier their software has made my job, when in fact it has made it easier for everybody to do my job, thereby increasing competition and driving my wages down to below what they were fifteen years ago. I’m never sure if they are clueless about the real impact, or if they are simply gauging their success at driving down wages - they never include the pertinent questions about customer dissatisfaction.
6
Brillinant. Finally, someone is speaking out loud about this. For us who travel and work in different places, this has been obvious for the last 10 years or so. Now, add to this the low level of the quality of service (bad cell phone reception, pathetic Internet speeds; airlines with their total lack of customer care, 6 months' appointments waits to see a medical specialist as a new patient), college costs, etc., and you get the picture. I cannot quite understand many of my friends who would not pay $50 extra per year in road/licence plate taxes but are OK with replacing shocks broken in a pothole at $750 a pop..
789
@JR
But isn't this "free enterprise". Just as the nation's wealth becomes more and more concentrated in fewer and fewer individual's hands, the same is happening in the commercial marketplace.
If we extrapolate this "free enterprise" schema to its logical extreme, 100% of the economy will be held by just one company. And 100% of the individual wealth will be held by just one individual. Who says this can't happen in our lauded capitalistic system? Isn't this simply a reversion to the days of Kings and Queens and peasants?
Already, many gambling casino owners are multi-billionaires (with at least $2,000,000,000 each) equivalent to 2,000 multi-millionaires (with at least $2,000,000 each). Compound this wealth year after year, with no estate taxes, and we're talking about families with real money.
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@Samm
There is misguided blame going around in these comments for the cause of the trend toward large companies gobbling up smaller ones as well as competitive companies. It's not the people being duped - people have no control over this. It's not wealthy families or individuals just out to increase their estates.
It's Wall Street brokerage houses that set up and complete these mergers and acquisitions - they make millions and millions of dollars when they underwrite these "deals."
When Facebook, for example, bought start ups that were competitive threats or bought start ups with great ideas that complemented Facebook's marketplace or bought large companies to expand their reach, guess who made billions. The Goldman Sachs of Wall Street.
How much does Goldman Sachs spend on lobbying? Why don't politicians prevent these conglomerates and monopolies? Why doesn't the DOJ Antitrust Division? My guess is there's a lot of insider trading going on. Wilbur Ross heading up the Commerce Department? Barr as the AG? SEC, FTC, FCC, DOJ, etc.?
Between Wall Street and Congress and the Executive branch corruption costs American public billions and billions of dollars. It's no wonder so many Americans live paycheck to paycheck.
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@JR
Just good old fashioned American capitalism, talk about competition while you are really just trying to corner the market. In America is all boils down to money, we don't honor people for their contributions to the betterment of society, we honor people for their wealth accumulation.
It all goes back to our myths of "rugged individualism" and "self determination". Our culture is all "me" and precious little "us". We can't have world class education, healthcare, infrastructure, or a healthy environment because we won't pay for something that does not directly benefit "me".
We are afraid we may be paying for something that only benefits the undeserving "others".
Capitalism may well be the best method to deliver goods and services but it is based on greed and needs to be regulated by societal pressures and good government. Without regulation is it just like a game of Monopoly, someone ends up with all of the money.
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That explains why when you go to France or Germany or Scandanavian countries or England, everything costs less. It’s because their governments wisely and precisely wield anti-trust policy in ways that result in lower prices than in the U.S., where everything costs more because of corporate giants that are immune to competition.
Except, as we all know, things aren’t actually cheaper in Europe. It’s a good story though. This guy was (only a little bit) clever to use telecom as a supposed example of U.S. free markets rum amok. In the U.S. economy you could barely find a worse example of free market capitalism than broadband or cell service
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@Robt Little
Yes, of course, most consumers goods are not cheaper in Europe.
Healthcare & higher education are less expensive , but this is because they are subsidized by taxpayers who pay an average of an extra10% of their incomes in taxes just to support national heatlhcare.
In the U.S.tax rates are significantly lower.
Finally, yes, using telecom , broadband and cell service as the
examples to support the article's thesis ar poor examples.
See my comment above on the cost of most consumer goods.
@Maggie Mahar and @Concerned Citizen. Sometimes comparing the tax bills in the US and Europe is misleading. While it may be true that the checks that American citizens write to their governments are smaller than their counterparts in Europe write, they pay much more for healthcare, college and a host of other public goods. These additional costs are hidden taxes that we pay, not to our governments, but to unaccountable corporations.
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@Robt Little
That is exactly his point
It is our telecom industry.
Not all industries.
There is room for improvement not just in reducing licensing requirements but also improvement within areas that do have a legitimate justification for licensing.
Requiring experience is legitimate for certain licenses that involve health and safety. However, there are other licenses that, while there might be a legitimate justification for requiring the license itself, come with onerous experience requirements that serve no other purpose than as an artificial barrier to entry to keep the competition down.
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If you watch the telecom commercials you can see that their entire business strategy consists of trying to poach customers from one another in a saturated market, though they are all basically offering the same lousy deal, and at prices that do not differ from what they've been charging for years. Where do I sign up! They are second only to the pharmaceutical industry in how much airtime they buy, which says to me they have more money than they know what to do with.
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@stan continople, I always love your comments, and wish I could give this one a thousand "recommends."
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@stan continople what I hate the most is that when one has an older and very serviceable device (in my case a Samsung S4 in which I can change the batteries) they refuse to release it from their corporate connection saying they do not have the rights to do so when they bought it for their clients and sold it to me outright...So I can't switch it elsewhere but they are willing to charge me for service as if I am the latest iPhone! And the constant push to upgrade to a new device! You rock!
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@Franklin
Yes, upgrade mania drives me crazy. We are encouraged to dump our perfectly serviceable devices (in the landfill usually) for the latest shiny new, but barely improved version of the same. Extrapolate this behavior out over time in our consumerist society that is constantly coming up with products we are led to believe that we just can't get by without and it's not a pretty picture.
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You expect action that favors industry over the citizenry from republicans, but equal or worse has occurred under Democratic presidents as well. Thanks Obama and Clinton!
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@caljn - I think the regulating agencies have been 'captured' by the industries they are charged to regulate, resulting in impacts on the public being discounted more than considered. However, some examples would be welcome to bolster your argument. It smacks of "bothsiderism" or "whataboutism' without that evidence. Numbers of mergers and consolidations challenged or prevented by Republican and Democratic administrations would be enough to show the equal culpability... or disprove it. Evidence, always, please - to proscribe the mindless "whataboutism" that is used to excuse so much else these days.
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Evidentiary facts please? Sources?
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Die hard democrat here. Agree with you. Except that in the Clinton years there was more competition in all industries. So many of us were booming! Funny, when that changed, the middle class died.
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The M&A and investment banking fees are almost 2, maybe even 3 times compared to the charges in EU. A totally RIGGED system which few have the wherewithal to challenge.
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Here in Canada, dairy farming is vigorously protected by foreign trade protection. So it has helped our producers to survive, but the average herd size is now in the hundreds, and the owners drive shiny pickups. A litre of milk (not quite a US quart) is $2.80.
Our internet rates are even higher than American rates, and travelers who forget to arrange for roaming rates, can run up bills in the thousands of dollars. International corporations tend to buy up their competitors.
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@Karl I live in Nova Scotia and there are many family-owned dairy farms that don't have hundreds of cows nor do they drive shiny pickups. And a litre is larger than a quart, not smaller. The internet and cell rates are definitely higher though, thanks to the lack of competition.
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@Karl Canada has this right. I'm a city boy but when I drive cross country, all the local abandoned co=op grain silos tell a story, one social, and one economic.
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Is it? I thought American prices are hard to beat. In the authoritarian Russia they are way cheaper
The GOP still sells itself on the illusion of open markets. Actually, what they mean, "Are favorable markets for our donors."
This is what decades of lax anti-trust enforcement has wrought. Big bucks in politics -- especially dark funds -- work against open markets, too.
Even if an ordinary citizens or small business owner skews conservative, it would be in their best interest to wise up and realize that the GOP is not really about them.
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@PJD While I agree GOP is more for Crony capitalism than free market competition, I am not sure Biden would be any different to Trump on this issue. Only Warren is the candidate who can move back the power from corporations to individual Americans and Wall Street is terrified of her. Unfortunately the Democratic party is more focussed on who can beat Trump and Sanders, Warren and Mayor Pete are unlikely to make the cut.
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Bigger company-lower wages-more profit.
This is what Warren is talking about.
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@citizenfirst From over here in the UK, I know little about Bloomberg, but I do worry that he's been picked out and encouraged to go for the presidency by a worried establishment precisely because they're afraid that Warren could get things done working for the citizens rather than the corporations.
He looks a little like he might undo some of Trump's most egregious acts in foreign policy, on tariffs, rebuilding climate change agreements and the like, while remaining suspiciously quiet on policies that would police and control the ugly monster corporations.
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@citizenfirst Time to BREAKUP large companies. And the M&A people agains make their fees. Common -- you pays coming and going.
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@citizenfirst Warren is also talking about completely upending the healthcare system.
Those of us who saw what happened with the ACA are not so sure the risks are worth the reward.
Here in Quebec we pay a fortune in taxes and can't get a GP (not taking patients) and have to pay out of pocket for pharmaceuticals. My father has a serious heart condition and has to wait three months for tests.
Be careful of what you wish for.
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