“Whatever Happened To Antitrust?”: Ambushed By The Giant Companies It Was Designed To Contain
Last week’s settlement between the Justice Department and five giant banks reveals the appalling weakness of modern antitrust.
The banks had engaged in the biggest price-fixing conspiracy in modern history. Their self-described “cartel” used an exclusive electronic chat room and coded language to manipulate the $5.3 trillion-a-day currency exchange market. It was a “brazen display of collusion” that went on for years, said Attorney General Loretta Lynch.
But there will be no trial, no executive will go to jail, the banks can continue to gamble in the same currency markets, and the fines – although large – are a fraction of the banks’ potential gains and will be treated by the banks as costs of doing business.
America used to have antitrust laws that permanently stopped corporations from monopolizing markets, and often broke up the biggest culprits.
No longer. Now, giant corporations are taking over the economy – and they’re busily weakening antitrust enforcement.
The result has been higher prices for the many, and higher profits for the few. It’s a hidden upward redistribution from the majority of Americans to corporate executives and wealthy shareholders.
Wall Street’s five largest banks now account for 44 percent of America’s banking assets – up from about 25 percent before the crash of 2008 and 10 percent in 1990. That means higher fees and interest rates on loans, as well as a greater risk of another “too-big-to-fail” bailout.
But politicians don’t dare bust them up because Wall Street pays part of their campaign expenses.
Similar upward distributions are occurring elsewhere in the economy.
Americans spends far more on medications per person than do citizens in any other developed country, even though the typical American takes fewer prescription drugs. A big reason is the power of pharmaceutical companies to keep their patents going way beyond the twenty years they’re supposed to run.
Drug companies pay the makers of generic drugs to delay cheaper versions. Such “pay-for-delay” agreements are illegal in other advanced economies, but antitrust enforcement hasn’t laid a finger on them in America. They cost you and me an estimated $3.5 billion a year.
Or consider health insurance. Decades ago health insurers wangled from Congress an exemption to the antitrust laws that allowed them to fix prices, allocate markets, and collude over the terms of coverage, on the assumption they’d be regulated by state insurance commissioners.
But America’s giant insurers outgrew state regulation. Consolidating into a few large national firms and operating across many different states, they’ve gained considerable economic and political power.
Why does the United States have the highest broadband prices among advanced nations and the slowest speeds?
Because more than 80 percent of Americans have no choice but to rely on their local cable company for high capacity wired data connections to the Internet – usually Comcast, AT&T, Verizon, or Time-Warner. And these corporations are among the most politically potent in America (although, thankfully, not powerful enough to grease the merger of Comcast with Time-Warner).
Have you wondered why your airline ticket prices have remained so high even though the cost of jet fuel has plummeted 40 percent?
Because U.S. airlines have consolidated into a handful of giant carriers that divide up routes and collude on fares. In 2005 the U.S. had nine major airlines. Now we have just four. And all are politically well-connected.
Why does food cost so much? Because the four largest food companies control 82 percent of beef packing, 85 percent of soybean processing, 63 percent of pork packing, and 53 percent of chicken processing.
Monsanto alone owns the key genetic traits to more than 90 percent of the soybeans planted by farmers in the United States, and 80 percent of the corn.
Big Agribusiness wants to keep it this way.
Google’s search engine is so dominant “google” has become a verb. Three years ago the staff of the Federal Trade Commission recommended suing Google for “conduct [that] has resulted – and will result – in real harm to consumers and to innovation.”
The commissioners decided against the lawsuit, perhaps because Google is also the biggest lobbyist in Washington.
The list goes on, industry after industry, across the economy.
Antitrust has been ambushed by the giant companies it was designed to contain.
Congress has squeezed the budgets of the antitrust division of the Justice Department and the bureau of competition of the Federal Trade Commission. Politically-powerful interests have squelched major investigations and lawsuits. Right-wing judges have stopped or shrunk the few cases that get through.
We’re now in a new gilded age of wealth and power similar to the first gilded age when the nation’s antitrust laws were enacted. But unlike then, today’s biggest corporations have enough political clout to neuter antitrust.
Conservatives rhapsodize about the “free market” and condemn government intrusion. Yet the market is rigged. And unless government unrigs it through bold antitrust action to restore competition, the upward distributions hidden inside the “free market” will become even larger.
By: Robert Reich, The Robert Reich Blog, May 24, 2015
“Governor Goldilocks”: Scott Walker’s Pitch, To Many Conservative Activists, Is Just Right…..For Now
There was another big GOP presidential cattle call this weekend, at the Southern Republican Leadership Conference in Oklahoma City. The ostensible star, because he won a straw poll among about a thousand or so of the attendees, was Dr. Ben Carson (achieving a tactical victory over the other candidate who made a visible effort to win the thing, Ted Cruz, handicapped by being stuck in Washington along with Rand Paul for NSA reform/Patriot Act votes).
But by most accounts the candidate who got the most from the event for the least effort was Scott Walker, who finished second in the straw poll without lifting a finger. More to the point, Walker was buzzworthy, per the Washington Examiner‘s Timothy Carney:
1) His strong second-place finish in the straw poll was impressive because he was the only candidate to post double digits without an organized straw poll effort.
2) Pacing the stage, jacketless, in a blue shirt, sleeves rolled up, Walker’s speaking style was easy and comfortable. Some attendees found him too low-key. Most saw his style as confident and assuring
3) What recommends Walker most to Republican voters is his successful battles with powerful labor unions, the media, and the Wisconsin Democratic Party. Walker made these battles — including his recall election victory — the focus of his talk.
4) Walker was able to tick off a long list of legislative accomplishments, touching on all the major conservative policy priorities: cutting spending, cutting taxes, bringing the bureaucracy to heel, defunding Planned Parenthood, expanding gun rights, passing right to work, requiring photo ID for voters and so on.
5) Walker cast his political and policy wins as populist victories over powerful insiders. He described his fight against the government unions as “taking power out of the hands the big-government special interests” and putting it in the hands of ordinary people.
Yeah, well, ordinary people like his friends the Koch Brothers. But here’s how Carney describes Walker’s clincher contrasting his record with that of his GOP rivals:
Walker closed with a pointed critique of his rivals. He said many Washington politicians are good at picking fights, but they don’t win — a clear reference to Cruz’s failed Obamacare shutdown, and Marco Rubio and Paul’s lack of a record. Alternatively, many Republicans, Walker said, are good at winning races, but they never fight for important, tough things — presumably referring to Christie and Bush.
In other words, Walker is continuing to offer an electability pitch based on overwhelming his liberal opponents–at both the ballot box and in the legislature–rather than reasoning with them or cutting deals. Cruz can rage; Paul can make outlandish outreach promises; and Bush and Rubio can offer to sweet-talk Democrats or seduce swing voters. Walker’s pitch, to many conservative activists, is just right.
By: Ed Kilgore, Contributing Writer, Political Animal Blog, The Washington Monthly, May 25, 2015
“Jeb Once Again Turns To His Apple Watch”: A Wrist Gadget As Part Of His Vision For A Replacement Healthcare System
Jeb Bush caused a bit of a stir last week, telling an audience that he intends to destroy the Affordable Care Act, replacing it with a “consumer-driven” system, part of which includes his new Apple Watch.
“On this device in five years will be applications that will allow me to manage my health care in ways that five years ago were not even possible,” he said. “I’ll have the ability, someone will, you know, because of my blood sugar, there’ll be a wireless, there’ll be, someone will send me a signal…. We’ll be able to guide our own health care decisions in a way that will make us healthy.”
Yesterday, campaigning in New Hampshire, the Florida Republican returned to the same subject:
“We’re on the verge of a revolution in this regard, where we’ll be able to know all sorts of things with, you know, devices like this. I got beat up by the left because I showed my, you know, Apple Phone – this device will have the ability to measure your sugar content, to measure your heartbeat, to measure whether you’re taking your drugs in the proper way. And you’ll be able to wirelessly send text messages to your health care provider or to your loved one, or whatever, so that you can get back on track.”
It seems the former governor isn’t entirely clear on why he “got beat up.”
The point isn’t that wearable tech is irrelevant (he said “phone” yesterday, but I assume he meant “watch”). It’s easy to imagine devices that can help people manage chronic conditions like diabetes. Indeed, the Florida Republican makes it sound as if these advancements are on the horizon, but in many instances, the technology already exists.
That’s not the problem. Rather, the area of concern is that Bush intends to scrap the Affordable Care Act, which would eliminate health security for millions of families, and he included a wrist gadget as part of his vision for a replacement system. Sarah Kliff added last week:
Bush endorses the idea of “someone” sending him a signal on his Apple Watch when his blood sugar is low. I like that idea, too! It would help diabetic patients, like Bush, better manage their care.
But here’s the challenge: there is not some army of benevolent people out there monitoring blood sugar. There are health-care providers who do this, and to get signed up for their blood sugar monitoring programs, you typically need health insurance. In this way, the type of consumer-powered health market that Bush describes is one that relies on Americans having access to health services – and using that access to make better decisions about their health care.
Jeb Bush didn’t get “beat up” because he pointed to his fancy gizmo; he got “beat up” because he pointed to his fancy gizmo while making the case against the existing U.S. health care system.
By: Steve Benen, The Maddow Blog, May 22, 2015
“Patterns Or Practice Of Unnecessary Force”: Justice Department Reaches Settlement With Cleveland Over Police Conduct
The Justice Department has reached a settlement with the city of Cleveland over the conduct of its police officers, the latest case in which the Obama administration has investigated excessive use of force and the violation of constitutional rights by a local department, according to an agency official.
The settlement, amid the growing national debate about American policing, is expected to be announced early this week, the official said. It comes just days after a judge acquitted a Cleveland police officer for his role in the fatal shooting of two unarmed people in a car in 2012 when officers thought the sound of the car backfiring was gunshots.
The Justice Department in December issued a scathing report that accused the Cleveland Police Department of illegally using sometimes deadly force against citizens. The Justice Department civil rights division found that the Cleveland police engaged in a “pattern or practice” of unnecessary force — including shooting residents, striking them in the head and spraying them with chemicals.
In one incident, an officer used a stun gun on “a suicidal, deaf man who committed no crime, posed minimal risk to officers and may not have understood officers’ commands.” The police were also accused of repeatedly punching in the face a handcuffed 13-year-old boy who had been arrested for shoplifting.
The Cleveland report was released the month after a 12-year-old African American boy, Tamir Rice, was fatally shot by a white Cleveland police officer. Cleveland officers had responded to a 911 call that reported a person pointing a gun. It turned out to be a toy pistol.
A Justice Department spokeswoman would not comment on the settlement, which was first reported on the Web site of the New York Times.
When last year’s report about Cleveland was released, then-Attorney General Eric H. Holder Jr. traveled to the city to announce the findings and said the Justice Department and the city had agreed to establish an independent monitor who would oversee police reforms. The changes will include better training and better supervision of officers, Holder said.
In the past five years, the Justice Department’s civil rights division has opened more than 20 investigations of police departments across the country, more than twice as many as were opened in the previous five. The department has entered into 15 agreements with law enforcement agencies, including consent decrees with nine of them. They include the New Orleans and Albuquerque police departments.
The Cleveland settlement will be the first under the new attorney general, Loretta E. Lynch.
Justice Department officials would not provide any details of the Cleveland settlement. But other cases have required an independent monitor and significant changes in training and policies.
Since April 27, when Lynch was sworn in as the first African American woman to serve as the nation’s top law enforcement official, she has been immersed in the debate on policing tactics. Her first meeting with President Obama was to discuss the violence in Baltimore after the funeral of 25-year-old Freddie Gray, who suffered a fatal spinal injury while in police custody. Six Baltimore police officers have been indicted in connection with Gray’s death.
Lynch’s first official trip was to Baltimore to meet with the mayor, law enforcement officials and community leaders. She also met with Gray’s family and spoke with an officer who was injured in the violence.
At her first news conference, on May 8, Lynch announced that the Justice Department had opened a broad “pattern or practice” investigation into the Baltimore Police Department to determine whether officers have committed systemic constitutional violations.
The investigation is separate from the Justice Department’s criminal civil rights probe into the death of Gray.
Similarly, the settlement with the city of Cleveland is separate from the Justice Department’s investigation into the conduct of Cleveland police officer Michael Brelo.
On Saturday, a judge found Brelo, a 31-year-old white officer, not guilty of two counts of felony manslaughter in the deaths of African Americans Timothy Russell, 43, and Malissa Williams, 30.
Hours of protests ensued in downtown Cleveland, and the Justice Department released a statement saying that the Cleveland U.S. attorney’s office, the FBI and the Justice Department’s civil rights division were all still investigating the case.
Russell and Williams were killed in November after they led 62 police vehicles on a chase across Cleveland. When Russell’s car finally stopped, 13 officers opened fire and shot at least 137 rounds into the vehicle. Brelo was accused of being the only one who continued to shoot after any possible threat was contained. Prosecutors said he climbed onto the hood of the car and shot 15 rounds into the windshield, striking both Russell and Williams.
“We will continue our assessment, review all available legal options and will collaboratively determine what, if any, additional steps are available and appropriate given the requirements and limitations of the applicable laws in the federal judicial system,” said the statement from several officials, including Vanita Gupta, head of the Justice Department’s civil rights division.
As with the Ferguson, Mo., civil rights investigation into the August death of Michael Brown, an unarmed black 18-year-old who was shot and killed by Officer Darren Wilson, the Justice Department faces a high bar in bringing federal civil rights charges. Prosecutors would have to prove beyond a reasonable doubt that Brelo intended to violate the constitutional rights of Russell and Williams.
When Holder released the December report about the “unreasonable and unnecessary” use of force by the Cleveland police, he said he was hopeful that “meaningful change” was possible in the police department.
“Accountability and legitimacy are essential for communities to trust their police departments and for there to be genuine collaboration between police and the citizens they serve,” Holder said.
By: Sari Horwitz, The Washington Post, May 25, 2015
“In A ‘Personal Agenda’ Giving Mood”: Koch Brothers Plan To Fund ‘Several’ GOP 2016 Presidential Hopefuls
The good news for Republican presidential candidates seeking to get a slice of Koch brothers cash is that the siblings, two of the world’s richest individuals, seem to be in a sharing mood.
In a Saturday interview on the Larry Kudlow Show, a nationally syndicated radio broadcast, David Koch let it slip that the roughly $900 million that he and his brother, Charles, plan to lavish on the 2016 presidential race could find its way into the hands of more than one GOP contender.
“We are thinking of supporting several Republicans,” David Koch said, adding, “If we’re happy with the policies that these individuals are supporting, we’ll finance their campaigns.”
Koch said the brothers would begin writing checks to individual candidates in “the primary season, winter and next spring.”
The pledge to fund multiple Republicans is consistent with what Charles Koch told USA Today in April about the candidacies of Wisconsin Governor Scott Walker, former Florida governor Jeb Bush, Texas Senator Ted Cruz, Kentucky Senator Rand Paul, and Florida Senator Marco Rubio. He indicated all six were at the top of the list in terms of who might receive funding.
“Those are the ones we have talked to the most and who seem to be the possible leaders,” Charles Koch said.
Cruz, Rubio and Paul all spoke at the Koch brothers’ event in Palm Springs, California, in January, which was dubbed the “American Recovery Policy Forum.” Walker has been a frequent recipient of Koch donations, and Bush also is considered to be still in the running for Koch backing.
“What we’ve told them all is that right now, we’re not supporting anyone,” Charles Koch said in April. “We’re telling them that if they want our support, one way to get it is articulating a good message to help Americans get a better understanding and a better appreciation of how certain policies … will benefit them and will benefit all America.”
The GOP field is still growing, and the Koch brothers seem content to let the sifting process play out before placing their chips on a single candidate.
“Only if somebody really stands out from the standpoint of their message and what they would actually do to benefit America and has a chance a decent chance of being elected, only then would we select one over the others,” Charles Koch told USA Today.
Charles and David Koch have matching fortunes of $51.3 billion dollars each, according to the Bloomberg Billionaires Index, ranking them equal at number five in the world.
By: David Knowles, Bloomberg Politics, May 24, 2015
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