Democrats...the Party of Monopoly and Corruption

[kalm]

AKA a brief economic history of everything and how we arrived at today. I mean all of this deregulation and wealth consolidation creates freer markets right? I don't know how we possibly survived before the 1980's and all that commie control. Thank god for the democrats!

Clinton administration officials were proud of Walmart, and this new generation of American trading monopolies, dubbing them part of a wondrous "New Economy" underpinned by information technology. "And if you think about what this new economy means," said Clinton deputy treasury secretary Larry Summers in 1998 at a conference for investment bankers focusing on high-tech, "whether it is AIG in insurance, McDonald's in fast-food, Walmart in retailing, Microsoft in software, Harvard University in education, CNN in television news—the leading enterprises are American."

It was also under Clinton that the last bastion of the New Deal coalition—a congressional majority held by the Democrats since the late 1940s—fell apart as the last few holdout southern Democrats were finally driven from office or switched to the Republican Party. And it was under Clinton that the language of politics shifted from that of equity, justice, and potholes to the finance-speak of redistribution, growth and investment, and infrastructure decay.

The Democratic Party embraced not just the tactics, but the ideology of the Chicago School. As one memo from Clinton’s Council of Economic Advisors put it, "Large size is not the same as monopoly power. For example, an ice cream vendor at the beach on a hot day probably has more market power than many multi-billion-dollar companies in competitive industries."


During the 12 years of the Reagan and Bush administrations, there were 85,064 mergers valued at $3.5 trillion. Under just seven years of Clinton, there were 166,310 deals valued at $9.8 trillion. This merger wave was larger than that of the Reagan era, and larger even than any since the turn of the twentieth century, when the original trusts were created. Hotels, hospitals, banks, investment banks, defense contractors, technology, oil—everything was merging.

The Clinton administration organized this new concentrated American economy through regulatory appointments and through non-enforcement of antitrust laws. Sometimes it even seemed they had put antitrust enforcement itself up for sale. In 1996, Thomson Corporation bought West Publishing, creating a monopoly in digital access to court opinions and legal publishing; the owner of West had given a half a million dollars to the Democratic Party and personally lobbied Clinton to allow the deal. The DOJ even approved the $81 billion Exxon and Mobil merger, restoring a chunk of the Rockefeller empire.

https://www.vice.com/en_us/article/evjk ... corruption

[Ivytalk]

I took antitrust law from Donald Turner, a Democrat and former head of the Antitrust Division. As I recall, Turner scoffed at the notion that “bigness per se” was a bad thing. Rather, he applied economic precepts to antitrust law, focusing on the conduct of the parties to determine when market power was based on competition and efficiency rather than on predatory actions. If the former, Turner taught that there should be no legal consequence. If the latter, Turner said that enforcement of antitrust laws was appropriate. That seems to be the right approach.

Certainly, there is no room for government favoritism of certain economic actors, corporate or otherwise. That is anticompetitive behavior that distorts markets. However, you have to apply a rule of reasonableness. Patents, for example, are monopolistic in a sense, but on balance they are a good thing, because they protect innovation for a period of time. On the other hand, antitrust review of mergers is probably too perfunctory these days, lacking the careful economic analysis that Turner advocated.

[Pwns]

War isn't war when a Democrat is a president.
Budget deficits aren't budget deficits when a Republican is president.
Corporate consolidation and deregulation isn't consolidation and deregulation when a Democrat is a president.

And on and on and on.

[kalm]

I took antitrust law from Donald Turner, a Democrat and former head of the Antitrust Division. As I recall, Turner scoffed at the notion that “bigness per se” was a bad thing. Rather, he applied economic precepts to antitrust law, focusing on the conduct of the parties to determine when market power was based on competition and efficiency rather than on predatory actions. If the former, Turner taught that there should be no legal consequence. If the latter, Turner said that enforcement of antitrust laws was appropriate. That seems to be the right approach.

Certainly, there is no room for government favoritism of certain economic actors, corporate or otherwise. That is anticompetitive behavior that distorts markets. However, you have to apply a rule of reasonableness. Patents, for example, are monopolistic in a sense, but on balance they are a good thing, because they protect innovation for a period of time. On the other hand, antitrust review of mergers is probably too perfunctory these days, lacking the careful economic analysis that Turner advocated.

I took Aquatic Facilities Management and Legal Issues in Rec from Brent Wooten who scored a touchdown for The UW in a 50's Rose Bowl and who was an EWU head coach in the late 60's. He didn't have a PhD but was the most demanding teacher in the Rec Dept. He'd come into class on a warm spring morning, lecture for about 5 minutes and then literally say 'fuck it...I'm going golfing. See you guys tomorrow.'. But he expected a lot out of his students.

My point? You and I are not all that different, really.

I want to agree with Turner and what you said, but even if a monopoly is created through fair competition it still kills competition and freedom of markets in the end. How do you address that?

[kalm]

War isn't war when a Democrat is a president.
Budget deficits aren't budget deficits when a Republican is president.
Corporate consolidation and deregulation isn't consolidation and deregulation when a Democrat is a president.

And on and on and on.

[Ivytalk]

I took antitrust law from Donald Turner, a Democrat and former head of the Antitrust Division. As I recall, Turner scoffed at the notion that “bigness per se” was a bad thing. Rather, he applied economic precepts to antitrust law, focusing on the conduct of the parties to determine when market power was based on competition and efficiency rather than on predatory actions. If the former, Turner taught that there should be no legal consequence. If the latter, Turner said that enforcement of antitrust laws was appropriate. That seems to be the right approach.

Certainly, there is no room for government favoritism of certain economic actors, corporate or otherwise. That is anticompetitive behavior that distorts markets. However, you have to apply a rule of reasonableness. Patents, for example, are monopolistic in a sense, but on balance they are a good thing, because they protect innovation for a period of time. On the other hand, antitrust review of mergers is probably too perfunctory these days, lacking the careful economic analysis that Turner advocated.

I took Aquatic Facilities Management and Legal Issues in Rec from Brent Wooten who scored a touchdown for The UW in a 50's Rose Bowl and who was an EWU head coach in the late 60's. He didn't have a PhD but was the most demanding teacher in the Rec Dept. He'd come into class on a warm spring morning, lecture for about 5 minutes and then literally say 'fuck it...I'm going golfing. See you guys tomorrow.'. But he expected a lot out of his students.

My point? You and I are not all that different, really.

I want to agree with Turner and what you said, but even if a monopoly is created through fair competition it still kills competition and freedom of markets in the end. How do you address that?

Your question really answers itself. Let me pose a simple hypothetical. Suppose there are two golf courses in Greater Sasquatch Valley: one owned by you, the other by me. In an unregulated market, we compete: different golf course architecture, membership options, price, management, and clubhouse perks. A fully informed group of golf consumers decides that, for their own good reasons, they prefer the Klam course, and the Ivytalk course goes out of business. Do you really prefer a system that punishes your success and rewards my failure by breaking up your course or propping up my business? A system that artificially creates competition where the markets have spoken? I thought not. Market capitalism has winners and losers. That’s why I’m not a kalmunist: I recognize that. The trick is to eliminate “unfair competition,” whether practiced by corporations or by governments.

[kalm]

I took Aquatic Facilities Management and Legal Issues in Rec from Brent Wooten who scored a touchdown for The UW in a 50's Rose Bowl and who was an EWU head coach in the late 60's. He didn't have a PhD but was the most demanding teacher in the Rec Dept. He'd come into class on a warm spring morning, lecture for about 5 minutes and then literally say 'fuck it...I'm going golfing. See you guys tomorrow.'. But he expected a lot out of his students.

My point? You and I are not all that different, really.

I want to agree with Turner and what you said, but even if a monopoly is created through fair competition it still kills competition and freedom of markets in the end. How do you address that?

Your question really answers itself. Let me pose a simple hypothetical. Suppose there are two golf courses in Greater Sasquatch Valley: one owned by you, the other by me. In an unregulated market, we compete: different golf course architecture, membership options, price, management, and clubhouse perks. A fully informed group of golf consumers decides that, for their own good reasons, they prefer the Klam course, and the Ivytalk course goes out of business. Do you really prefer a system that punishes your success and rewards my failure by breaking up your course or propping up my business? A system that artificially creates competition where the markets have spoken? I thought not. Market capitalism has winners and losers. That’s why I’m not a kalmunist: I recognize that. The trick is to eliminate “unfair competition,” whether practiced by corporations or by governments.

Oh I get that and I’m living that scenario in several ways right now. We had a near by competitor close last year which increased our business. There are times where we are the only open course in the market due to frost and snow. I like having no competition.

But we also have to compete with municipally owned courses that subsidize their operations keeping rates artificially low. Hence government is the biggest monopoly.

Golf is an easy example but when it comes to telecom, healthcare, banking and other key industries that people can’t do without its a different story.

[Ivytalk]

Your question really answers itself. Let me pose a simple hypothetical. Suppose there are two golf courses in Greater Sasquatch Valley: one owned by you, the other by me. In an unregulated market, we compete: different golf course architecture, membership options, price, management, and clubhouse perks. A fully informed group of golf consumers decides that, for their own good reasons, they prefer the Klam course, and the Ivytalk course goes out of business. Do you really prefer a system that punishes your success and rewards my failure by breaking up your course or propping up my business? A system that artificially creates competition where the markets have spoken? I thought not. Market capitalism has winners and losers. That’s why I’m not a kalmunist: I recognize that. The trick is to eliminate “unfair competition,” whether practiced by corporations or by governments.

Oh I get that and I’m living that scenario in several ways right now. We had a near by competitor close last year which increased our business. There are times where we are the only open course in the market due to frost and snow. I like having no competition.

But we also have to compete with municipally owned courses that subsidize their operations keeping rates artificially low. Hence government is the biggest monopoly.

Golf is an easy example but when it comes to telecom, healthcare, banking and other key industries that people can’t do without its a different story.

It’s hard to create exceptions for “key industries that people can’t do without.” The first issue is definitional: people can’t live without supermarkets, but competition is fierce, and although there has been consolidation, profit margins are razor-thin. The second issue is regulatory. For each industry that you identified — telecom, healthcare and banking— we have a thicket of federal and state regulations that constitute barriers to entry for new competitors. Without wholesale repeal of those regulations (and I suggest that it be done with a legislative scalpel rather than a chainsaw), it’s difficult to see how market capitalism might work in those industries. Theoretically, I see no problem with consumers picking winners and losers in those industries. Practically, it’s a tough slog.

[CAA Flagship]

I want to agree with Turner and what you said, but even if a monopoly is created through fair competition it still kills competition and freedom of markets in the end. How do you address that?

There is no easy answer. There are many great examples in business history to tell you that a "one size fits all" regulatory approach won't work.

Take A-B. In the late 70's, A-B had a US market share in the low 20's percent. By 1995 it had a 50% US market share without any M&A activity. They earned their market share gains. And it's not like beer was a new industry like software in the 90's where there was a lot of jockeying for position and where one bad week could be the difference of shuttering or a multi-billion dollar market cap trajectory. But then the consumer starting switching to wine and spirits and beer sales slowed. Then came the craft brewing industry..... There were losers along the way like Schlitz, Pabst, Strohs, etc. But they have been replaced with new wineries, distillers, and the flannel wearing, big bearded, garage scientists of the craft beer industry.

But sticking to beer, craft brewers were not held to the same rules that the big brewers were held to. Big brewers could not sell direct to retail or consumers. They had to go through independent wholesalers for the most part. Craft brewers were not only able to sell direct to local retailers, but could also open up their own bar. This was an interesting way that new businesses were created. Essentially, deregulation.

There are other examples of where antitrust regulators have a difficult choice to make. Two health insurers looking to merge with the rationale that synergies would help reduce costs and lower premiums on their customers would be one example. Of course, it is extremely hard to prove that it actually did lower premiums since premiums are very volatile.

Also, pee in the butt.

[Ibanez]

I want to agree with Turner and what you said, but even if a monopoly is created through fair competition it still kills competition and freedom of markets in the end. How do you address that?

There is no easy answer. There are many great examples in business history to tell you that a "one size fits all" regulatory approach won't work.

Take A-B. In the late 70's, A-B had a US market share in the low 20's percent. By 1995 it had a 50% US market share without any M&A activity. They earned their market share gains. And it's not like beer was a new industry like software in the 90's where there was a lot of jockeying for position and where one bad week could be the difference of shuttering or a multi-billion dollar market cap trajectory. But then the consumer starting switching to wine and spirits and beer sales slowed. Then came the craft brewing industry..... There were losers along the way like Schlitz, Pabst, Strohs, etc. But they have been replaced with new wineries, distillers, and the flannel wearing, big bearded, garage scientists of the craft beer industry.

But sticking to beer, craft brewers were not held to the same rules that the big brewers were held to. Big brewers could not sell direct to retail or consumers. They had to go through independent wholesalers for the most part. Craft brewers were not only able to sell direct to local retailers, but could also open up their own bar. This was an interesting way that new businesses were created. Essentially, deregulation.

There are other examples of where antitrust regulators have a difficult choice to make. Two health insurers looking to merge with the rationale that synergies would help reduce costs and lower premiums on their customers would be one example. Of course, it is extremely hard to prove that it actually did lower premiums since premiums are very volatile.

Also, pee in the butt.

In NC and SC, that's not the case. You have to go through a distributor...and they usually only distribute A-B,Coors, etc.. I know in Charleston, there was(still is but it was bought our) a 100+ yr old distributing company that only distributed A-B and then gradually local beers.

But, the market corrected itself. Someone started a distributing company that only distributes craft beer.

[CAA Flagship]

There is no easy answer. There are many great examples in business history to tell you that a "one size fits all" regulatory approach won't work.

Take A-B. In the late 70's, A-B had a US market share in the low 20's percent. By 1995 it had a 50% US market share without any M&A activity. They earned their market share gains. And it's not like beer was a new industry like software in the 90's where there was a lot of jockeying for position and where one bad week could be the difference of shuttering or a multi-billion dollar market cap trajectory. But then the consumer starting switching to wine and spirits and beer sales slowed. Then came the craft brewing industry..... There were losers along the way like Schlitz, Pabst, Strohs, etc. But they have been replaced with new wineries, distillers, and the flannel wearing, big bearded, garage scientists of the craft beer industry.

But sticking to beer, craft brewers were not held to the same rules that the big brewers were held to. Big brewers could not sell direct to retail or consumers. They had to go through independent wholesalers for the most part. Craft brewers were not only able to sell direct to local retailers, but could also open up their own bar. This was an interesting way that new businesses were created. Essentially, deregulation.

There are other examples of where antitrust regulators have a difficult choice to make. Two health insurers looking to merge with the rationale that synergies would help reduce costs and lower premiums on their customers would be one example. Of course, it is extremely hard to prove that it actually did lower premiums since premiums are very volatile.

Also, pee in the butt.

In NC and SC, that's not the case. You have to go through a distributor...and they usually only distribute A-B,Coors, etc.. I know in Charleston, there was(still is but it was bought our) a 100+ yr old distributing company that only distributed A-B and then gradually local beers.

But, the market corrected itself. Someone started a distributing company that only distributes craft beer.

I believe there is a production cap that requires certain states like NC to go through a wholesaler. Meaning, as long as you are under the cap, you don't have to go through a wholesaler.

Edit: Here you go:
https://www.wunc.org/post/craft-brewers ... ution-deal

[UNI88]

In NC and SC, that's not the case. You have to go through a distributor...and they usually only distribute A-B,Coors, etc.. I know in Charleston, there was(still is but it was bought our) a 100+ yr old distributing company that only distributed A-B and then gradually local beers.

But, the market corrected itself. Someone started a distributing company that only distributes craft beer.

I believe there is a production cap that requires certain states like NC to go through a wholesaler. Meaning, as long as you are under the cap, you don't have to go through a wholesaler.

Edit: Here you go:
https://www.wunc.org/post/craft-brewers ... ution-deal

In Illinois it used to be that once a brewer signed with a distributor, the distributor owned those rights and it was extremely difficult for the brewer to change distributors even when the contract ended. That applied to the crafts and the big boys and caused some craft brewers to just stop distributing in Illinois.