Monopolization is killing Silicon Valley. It’s time to break up some of the big guys and jump start some innovation.
Strong labor unions are much needed in this country. There maybe room for improvement in them, but without them the American worker is doomed to ride the wage train to the bottom in the search for corporate profits.
One of the things that often makes it more difficult for labor to negotiate with owners is monopolies. Too often we get caught up in the definitions. There doesn’t have to be only a single competitor in the field for the Public’s interests to be harmed.
Mergers like the impending AT&T and Time Warner merger will severly limit competition and severely impact labors’ ability to negotiate fair wages and conditions.
collectively, mergers at this scale are reconfiguring the American economy in ways that seem to be tilting the scales toward the interests of ever-larger corporations, to the broad detriment of labor.
As Senator John Sherman, the principal author of the nation’s core antimonopoly law, put it more than a century ago, a monopoly “commands the price of labor without fear of strikes, for in its field it allows no competitors.”
Three years ago, the Nobel laureate economist Joseph Stiglitz proposed that increasing profits from companies managing to avoid normal competitive forces — what economists refer to as “rents” — appeared to be an important factor in the rising share of the nation’s income flowing toward corporate profits and top executive pay in recent years. He surmised that weak labor unions — which represent barely over 7 percent of workers in the private sector — did not have the clout to protect the workers’ share.
In a competitive market, companies will vie with their rivals to hire the best workers, lifting wages up to workers’ “marginal product,” the last cent where their employers could still turn a profit. As productivity grows, wages will be bid up further. Prosperity will spread. But when there are few or no rivals in a labor market, employers will pay much less.
How Waning Competition Deepens Labor’s Plight http://nyti.ms/2e9EV10
Monopolies aren’t the only threats to competition. When a large industry like cable, wireless, media, banking, or health care merges down to a few dominant players we all suffer the consequences of constrained competition.
A wave of mergers in many sectors of the economy over the last several decades has significantly reduced competition and hurt consumers. That’s why the lawsuits filed last week by the Department of Justice and state attorneys general in federal court challenging two big heath insurance mergers were so important.
Antitrust officials say Aetna’s $37 billion acquisition of Humana and Anthem’s $54 billion purchase of Cigna will reduce the number of large national health insurers to three, from five today. That would lead to fewer choices and higher premiums for individuals and employers in places like New York, Los Angeles and Kansas City, Mo. The mergers could also hurt doctors and hospitals, because they would have less bargaining power against the larger insurers when negotiating reimbursement rates.
One 2012 study published in the American Economic Review found that consolidation in the health insurance industry between 1998 and 2006 was responsible for a seven percentage point increase in premiums, or about $34 billion a year. And a study by the Robert Wood Johnson Foundation found that hospital mergers also increase costs, sometimes by more than 20 percent.
When Health Insurers Merge Consumers Often Lose http://nyti.ms/2a9swsR
The first quote below says it all. Public subsidies for sports teams are bad investments.
Is there any other industry or field of business where taxpayers are asked to hand over astronomical sums to billionaire owners and their millionaire employees?
Public economic development dollars can be put to much better use on things besides subsidizing sports teams and their wealthy owners.
In the past 15 years alone, over $12 billion of the public’s money has gone to privately owned stadiums—constituting essentially a massive transfer of wealth from everyday Americans to the super-rich owners and players involved in these billion-dollar sports franchises.
Although Minneapolis initially required a public referendum to approve funding for the stadium, a “stadium authority” was able to override the referendum and authorize the budget without taxpayers’ consent.
taxpayers have actually spent as much as $10 billion more on professional sports stadiums and arenas than is typically acknowledged after various hidden costs are taken into account.
“Cities have very little bargaining power with an NFL team. As long as there are cities without NFL teams that are willing to subsidize a stadium, cities will have to pay part of the cost of a new stadium.”
Supporting billionaire owners may look bad, but sitting idly while the local team moves to another city can also mean getting tossed out of office.
The stark reality is that cities and their leadership are mainly complicit in stadium boondoggles. Even when residents vote down these deals, they often frequently reappear under the guise of stadium development authorities and other non-democratic ways to obtain public funding. A comprehensive 2006 study of the local growth coalitions of business and politicians that foist stadium deals on taxpayers found that public officials are frequently active participants in stadium shakedowns—far from the neutral brokers they like to claim. The study concludes that “the default position of local governments (with only rare exceptions) is to believe in the wonders of publicly subsidized sports stadiums.”
The overwhelming conclusion of decades of economic research on the subject is that using public funds to subsidize wealthy sports franchises makes zero economic sense and is a giant waste of taxpayer money. A wide array of studies have shown that professional teams add virtually no income to local economies.
Cable and internet access doesn’t have to be the way it is in the US. The friction of corporate influence on politics leaves the American people wanting; again.
It is a problem that unites Americans across party lines, and those fed up with party lines, in their disdain for the companies that give them an inferior service at a ridiculous price.