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“Squeezing Out Any Would-Be Competitors”: Building Monopolies, One Merger After Another

Corporate World is experiencing a surge in the urge to merge.

Control of market after market — from cable TV to chickens, banking to washing machines — has been seized by less than a handful of enormous corporations. Rather than compete, they collude to set prices, cut quality, shrink service and squeeze out any would-be competitors.

There was a time, not that long ago, when monopolies, duopolies and oligopolies were not only frowned upon by our public officials and watchdog agencies but also aggressively challenged and busted up. In recent years, however, corporate giants feel free to get ever-gianter by gobbling up their competitors, knowing that the watchdogs will barely bark, much less bite. In fact, now that the Supreme Court has turned corporate campaign donations into legalized bribes, our so-called “public” officials — including congress critters, governors, judges and even presidents — have become tail-wagging accomplices to the amalgamation of corporate power.

The Bush-Cheney regime was infamous for cheerleading this consolidation, including allowing the merger of AT&T and Verizon to capture 70 percent of all wireless phone subscribers. But this is not just a Republican phenomenon. Obama’s Justice Department, Federal Trade Commission and Federal Aviation Administration genially waved through American Airline’s takeover of US Airways and United’s consumption of Continental, effectively leaving air travelers to the brutish mercy of one or two bullies in every major airport — and no service at all in smaller cities.

Now come dominant health-care giants Aetna, Humana, Anthem and Cigna, as well as Walgreens and Rite Aid, demanding to merge into behemoths that would control the availability of health insurance and essential medicines to millions of Americans. Ironically, the very lawmakers, corporate lobbyists and pundits who push and praise each of these mergers are also the noisiest preachers of the virtue of competitive markets, small business and consumer choice.

Oh, they also claim to be champions of the people’s will — even though the clear will of the vast majority of Americans is to stop the merger-mania and anti-consumer monopolization that corporate America and its political servants are hanging around our necks. That’s not just ironic. It’s cynical, hypocritical… and disgusting.

Even our brewskis are falling to monopolists. Belgian conglomerate Anheuser-Busch InBev is set to swallow South American-owned conglomerate SABMiller. The merger, they gloat, will be the first “truly global brewer.” Indeed, it will control a third of all beer sales in the world and a whopping 70 percent of all U.S. sales.

The monopolizers assert there’s no anti-trust problem because hundreds of small breweries are popping up like dandelions all over America and the world, thus creating wide-open competition. The winner, says the Anheuser-Busch behemoth with a wink and a crooked smile, will be the one that gets the most customers.

How free-enterprise-y! And fallacious. The “winner” will be the one with the key to the marketplace gate. To get customers, you first have to be able to get your beers in the bars and on store shelves, which is mostly controlled in the U.S. by beer wholesalers who distribute beers from various breweries to the retailers. These wholesalers can simply refuse to distribute the brews of smaller “competitors.” Now, guess which big honking beer-maker has been aggressively buying up wholesale distributors in recent years in order to fill the shelves with their brands and lock out the new independents?

If Anheuser-Busch InBev is allowed to become the first global brewery, it won’t be because it makes the best beer but because it’s rigging the marketplace to slam the door on its “free enterprise” competitors. The word “free” in “free enterprise” is not an adjective, it’s a verb; i.e., let’s “free up” the enterprise of small business people by stopping giant monopolists from locking them out of the marketplace.

 

By: Jim Hightower, The National Memo, December 2, 2015

December 2, 2015 Posted by | Corporate Mergers, Monopolies, Small Businesses | , , , , , , | 2 Comments

“They Get You Coming And Going”: In America, Being Poor Can Be An Expensive Proposition

Today I came across this very interesting, albeit depressing, bit of data. It’s an analysis by a travel site called Hopper that shows that it costs more to fly in states that have the lowest median incomes.

For example, the study found that in Mississippi, the poorest state, a “good deal” round-trip flight costs about $400, while in Maryland, the state with the highest income, an equivalent ticket costs around $300. The researchers also found that “typical round-trip airfare declines by $2.30 for every additional $1000 in median household income.” The reasons for the increased prices in the poorer states include “average distance traveled, demand density, and airline competition.” Presumably, there’s less demand and less airline competition in poor areas of the country because people there have less money for leisure travel, and also because those locales have less economic development and thus less business travel.

The higher price of air travel for low-income folks is yet another data point that paints a bigger picture: in America, being poor can be an expensive proposition. There are countless, painful examples of this. Food and other basic items tend to cost more in poor neighborhoods. The poor lack access to credit and so are easy prey for payday lenders charging exorbitant interest rates. Poor people are more apt to bounce checks; hello, fees for insufficient funds! There are also late fees for credit card payments — you know, the kind of thing listed in print so fine you need a magnifying glass to be capable of reading about it. But my personal favorites are those extra charges they tack on for restoring utilities they shut off because you couldn’t pay your bill on time in the first place. “They get you coming and going,” as my old man used to say.

In her classic book, Nickel and Dimed, Barbara Ehrenreich described a host of other expensive indignities that plague the working poor. For example, many of her low-wage co-workers were living in hotel rooms, which actually were far costlier, on a monthly basis, than local apartments. But the workers couldn’t move into the apartments because they lacked the month’s rent plus security deposit the landlord required. Many low-wage jobs also require uniforms, the cost of which comes out of the worker’s paycheck, or cars, which the workers are expected to maintain themselves.

There are even darker examples. I wonder how many Americans have put off going to the doctor because they lacked health insurance, sought treatment only when their symptoms were advanced, and ended up being bankrupted by medical bills as a result.

Many of the examples I’ve cited in this post could be greatly improved by some well-targeted regulatory fixes. The rights of workers and consumers against employers, the banks, and the credit card companies need to be vigorously championed, and in some cases, re-invented for our new digital era. There’s no earthly justification other than greed for the $35 bank overdraft ripoff, or the cell phone company gouging you to restore your service because your payment is late. It’s also long past time we bring re-regulation to the airlines. A more regulated airline industry might help bring down fares in certain overpriced markets. Our 30-year old experiment with airline deregulation has hardly been a rousing success — read the excellent 2012 Washington Monthly magazine article by Phillip Longman and Lina Khan for more information on this score.

In addition to more consumer regulation, we also need a much higher minimum wage and a far more generous safety net for poor people in this country. If poor people had more economic resources to begin with — if they simply had enough money to pay their bills on time, and to save a little money for a rainy day — they would never be forced to pay such an outrageously high price for being poor.

 

By: Kathleen Geier, Washington Monthly Political Animal, May 3, 2014

May 4, 2014 Posted by | Economic Inequality, Poor and Low Income, Poverty | , , , , , , , | 1 Comment

   

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