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  1. #1
    dangerous floater Winehole23's Avatar
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    Warren is, of course, famous for her attacks on too-big-to-fail banks. But in her address yesterday, en led “Reigniting Compe ion in the American Economy,” she extended her critique to the entire economy, noting that, as a result of three decades of weakened federal an rust regulation, virtually every industrial sector today—from airlines to telecom to agriculture to retail to social media—is under the control of a handful of oligopolistic corporations. This widespread consolidation is “hiding in plain sight all across the American economy,” she said, and “threatens our markets, threatens our economy, and threatens our democracy.”


    As our readers know, economic consolidation is a subject the Washington Monthly has long been obsessed with—see here, here, here, here, here, here, here, here, here, and here. In our current cover story, Barry Lynn (impresario of yesterday’s event) and Phil Longman argue that an rust was the true legacy of the original American Populists and a vital, under-appreciated reason for the mass prosperity of mid-20th Century America. But this legacy, and the new Gilded Age economy that has resulted from its abandonment, is not a narrative most Americans have been told (one reason why even the “populist” candidates running president have shied away from it).
    http://washingtonmonthly.com/2016/06...-the-election/

  2. #2
    dangerous floater Winehole23's Avatar
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    Evidence of the problem is everywhere. Just look at banking. For years, banks have been in a feeding frenzy, swallowing up smaller compe ors to become more powerful and, eventually, too big to fail. The combination of their size, their risky practices, and the hands-off policies of their regulators created a perfect storm, resulting in the worst financial crisis in 80 years. We know that excessive size and interconnectedness promotes risky behavior that can take down our economy – and yet, today, eight years after that financial crisis, three out of the four biggest banks in America are even bigger than they were before the crisis and two months ago five were designated by both the Fed and the FDIC as “too big to fail.”


    The concentration problem—and particularly the idea of “too big to fail” in the financial sector—gets a lot of attention. But the problem isn’t unique to the financial sector. It’s hiding in plain sight all across the American economy.

    In the last decade, the number of major U.S. airlines has dropped from nine to four. The four that are left standing—American, Delta, United, and Southwest—control over 80% of all domestic airline seats in the country. And man, are they are hitting the jackpot now. Last year those four big airlines raked in a record $22 billion in profits.. Eighteen billion alone came from fees for baggage and legroom and pay toilets. Ok, the last one was a joke, but what have passengers received in return for their higher costs? Fewer flights and worse service. Airline complaints rose 30 percentjust from 2014 to 2015.


    The list goes on. A handful of health insurance giants—including Anthem, Blue Cross Blue Shield, United Healthcare, Aetna, and Cigna—control over 83 percent of the country’s health insurance market.


    Three drug stores—CVS, Walgreen’s, and Rite Aid—control 99% of the drug stores in the country.


    Four companies control nearly 85% of the U.S. beef market, and three produce almost half of all chicken.

  3. #3
    dangerous floater Winehole23's Avatar
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    The first problem is that less compe ion means less consumer choice. When consumers can purchase similar products from multiple compe ors, they force market players to constantly seek out new ways to reduce prices and increase the quality of goods and services to get their business. But when companies consume their rivals instead of competing with them, consumers can get stuck with few or no alternatives. Prices go up, and quality suffers.

    Consider Comcast, the nation’s largest cable and internet service provider. Comcast has consolidated its position by buying up rivals. Today, over half of all cable and internet subscribers in America are Comcast customers. And last year was Comcast’s best year in nearly a decade. But while big telecom giants have been consuming each other, consumers have been left out in the cold—facing little or no choice in service providers and paying through the nose for cable and internet service. Over a third of Americans who theoretically have access to high speed internet don’t actually subscribe because the price tag is too high. And the data are clear: Americans pay much more for cable and internet than their counterparts in other advanced countries and, in return, we get worse service.

  4. #4
    dangerous floater Winehole23's Avatar
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    The second reason the decline in compe ion should cause concern is that big guys can lock out smaller guys and newer guys. Take a look at the technology sector—specifically, the battle between large platforms and small tech companies.

    Google, Apple, and Amazon provide platforms that lots of other companies depend on for survival. But Google, Apple, and Amazon also, in many cases, compete with those same small companies, so that the platform can become a tool to snuff out compe ion.

  5. #5
    dangerous floater Winehole23's Avatar
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    The third problem created by less compe ion is that when compe ion declines, small businesses can be wiped out – and our whole economy can suffer. Look at what is often referred to as the Wal-Mart effect. Wal-Mart is big, and it’s powerful. It delivers anywhere from 30 to 50 percent of the products Americans consume, and it controls over half of all groceries sold in some major cities.


    Wal-Mart’s gigantic size gives it a compe ive advantage over small businesses. And often, when Wal-Mart moves into town, small businesses collapse because they can’t compete with the price leverage Wal-Mart has built with its suppliers.


    Wal-Mart is notorious for the low wages and poor working conditions it offers, and the Wal- Mart effect has an impact on suppliers as well—forcing them to cut their own workers’ wages and benefits to keep Wal-Mart’s business. Workers who cannot survive on those wages turn to public assistance, including housing, health care and food stamps, that is subsidized by other taxpayers. Wal-Mart workers alone are estimated to collect about $6 billion a year in federal taxpayer subsidies just to survive. That means the low, low prices that Wal-Mart advertises are paid for, in part, by high, high tax subsidies that every other American pays for. In the meantime, Wal-Mart’s investors pocket the high, high profits.

  6. #6
    dangerous floater Winehole23's Avatar
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    The fourth problem is that concentrated markets create concentrated political power. The larger and more economically powerful these companies get, the more resources they can bring to bear on lobbying government to change the rules to benefit exactly the companies that are doing the lobbying. Over time, this means a closed, self-perpetuating, rigged system – a playing field that lavishes favors on the big guys, hammers the small guys, and fuels even more concentration.


    This is a big one – and it should terrify every conservative who hates government intervention. Compe ive markets generate so many benefits on their own that the government’s only role in those markets should be simple and structural – prevent cheating, protect taxpayers, and maintain compe ion. Concentrated markets dominated by a handful of powerful players, on the other hand, don’t produce the consumer benefits that flow from robust compe ion. Instead, the benefits are sucked up by a handful of executives and large investors, and their lobbying remains focused on protecting the giant corporations. Government intervention in concentrated markets inevitably becomes more and more complex and technocratic, as it attempts to impose complicated regulations in an effort to recreate the benefits of compe ive markets.


    It’s costly, it’s inefficient, and it plays right into the hands of the big guys, who can afford to throw armies of lawyers at the regulatory process. Small players end up having to shoulder regulatory compliance costs that make it even harder for them to compete, while big players use their resources and political clout to win loopholes, carveouts, and rollbacks that favor themselves and make it even harder for new compe ors to survive. Over time, the result is a trifecta: more intrusive government, more concentration, and less compe ion.

  7. #7
    License to Lillard tlongII's Avatar
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    tl;dr

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    And she doesn't think that government with its myriad of rules and regulations is partly responsible for putting burden on small business where only the large corps can afford to hire the lawyers and accountants just to comply with them?

  9. #9
    United Autodidact Society Shastafarian's Avatar
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    Scary times truly. I'm sure people have seen evidence of this shift when dealing with their ISP or airlines etc.

    And she doesn't think that government with its myriad of rules and regulations is partly responsible for putting burden on small business where only the large corps can afford to hire the lawyers and accountants just to comply with them?
    Which specific rules and regulations that weren't put into place by republicans make it difficult to own small businesses?

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    Scary times truly. I'm sure people have seen evidence of this shift when dealing with their ISP or airlines etc.

    Which specific rules and regulations that weren't put into place by republicans make it difficult to own small businesses?
    How about Obama's EPA rules and regulations and the coal industry. How about the Democrats' Obamacare and business in general? Please explain why my dd and every other intern there could only work 28 hours/week last year?

  11. #11
    United Autodidact Society Shastafarian's Avatar
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    How about Obama's EPA rules and regulations and the coal industry.
    You live in Florida but have no clue what's going on near the water.
    How about the Democrats' Obamacare and business in general?
    How about it? What specifically has made it hard for small businesses?
    Please explain why my dd and every other intern there could only work 28 hours/week last year?
    Because the business manager is bad at their job? That's one likely possibility. Or the high ups are taking more than they need/deserve. Pick one or come up with specific regulations that hurt small business.

  12. #12
    I play pretty, no? TeyshaBlue's Avatar
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    And she doesn't think that government with its myriad of rules and regulations is partly responsible for putting burden on small business where only the large corps can afford to hire the lawyers and accountants just to comply with them?
    Um...no.

  13. #13
    The Boognish FuzzyLumpkins's Avatar
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    And she doesn't think that government with its myriad of rules and regulations is partly responsible for putting burden on small business where only the large corps can afford to hire the lawyers and accountants just to comply with them?
    Amazon and Walmart have done more harm to small business over the last 40 years than anything else. The federal and state governments fund the predominance of our infrastructure. The oil, energy, food, communication, media, and health care industries have all been monopolized and take advantage of that. Youre missing the forest for a braindead tree.

    Mindlessly repeating 'gubmint bad' ideology and then trying to list every anecdote and factoid you can come up with to try and reach affirm said ideology is sophistry. Ideology inherently leads to sophistry. Your tendency to do so in all things makes you not credible. It's yet another example of Nietzche's slave morality. GUBMINT BAD! HAIL OUR CORPORATE ARISTOCRACY!

    An rust regulation is something designed with the intent of addressing a serious issue with modern pluralist democracies. The industrial age began over 200 years ago. What is going on now is not without precedent. Effective an rust methodology is a historical fact. Busting the food, travel, metals, bank, and energy barons 100 years ago led to an era of tremendous prosperity.

  14. #14
    Still Hates Small Ball Spurminator's Avatar
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    I remember when we had small businesses that didn't have teams of lawyers and CPA's. Those were interesting times.

  15. #15
    dangerous floater Winehole23's Avatar
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    And she doesn't think that government with its myriad of rules and regulations is partly responsible for putting burden on small business where only the large corps can afford to hire the lawyers and accountants just to comply with them?
    that point, precisely, is mentioned in the article.

    did you read it before responding?

  16. #16
    dangerous floater Winehole23's Avatar
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    Go hump a sand castle, Bonnerific. I wasn't talking to you.

  17. #17
    dangerous floater Winehole23's Avatar
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    rmt:

    the point you made converges with Eliazabeth Warren's take. what say you to that?

  18. #18
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    rmt:

    the point you made converges with Eliazabeth Warren's take. what say you to that?
    Winehole23, I'll re-read and get back to you later. What a day - KD goes to the Warriors, Federer advances, bombarded (not by you) by others on this board and braces tomorrow for the youngest - gotta prepare suitable food for him. And a Happy 4th of July to you all!

  19. #19
    dangerous floater Winehole23's Avatar
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    happy 4th, rmt!

  20. #20
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    And she doesn't think that government with its myriad of rules and regulations is partly responsible for putting burden on small business where only the large corps can afford to hire the lawyers and accountants just to comply with them?
    Small businesses are much more hurt by BigCorp forming small businesses that have the resources to steal gov contracts that government regulations say must go to small businesses.

    BigCorp s over small businesses every day. In the last couple of years, the rate of number of business failure has exceeded rate of business starups.

    Another huge impediment is small businesses that can't compete with insanely overloaded benefits that BigCorps use to consume all the best talent.

    Those benefit packages are golden chains that keep talented but unhappy employees from leaving.

    A lots small businesses can't get loans, and when they can, the rate is "sub-prime" compared to what BigCorp pays.

    Every time you put post here, you prove you don't have ing clue.
    Last edited by boutons_deux; 07-05-2016 at 09:51 AM.

  21. #21
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    I agree with much of what the article says but here are two personal examples where either government is partly responsible for burdening small business or its high tax rate is helping to cause the consolidation/merger of companies.

    My husband accepted a job offer from a small company and the office manager/HR person told us that they allowed $700 for health insurance. We could either choose to use it to pay for the health insurance they had or use it to buy health insurance elsewhere. I, you all know, hate Obamacare and knew that being allowed the freedom to buy whatever insurance I wanted with that $700 would not be allowed - and sure enough, if caught, this small company would have to pay $100 PER DAY PER EMPLOYEE. The poor HR lady was flabbergasted - this error, if caught, would shut the company down. I'm relatively sure that her next request was to ask the boss if they could afford a lawyer/CPA to check if they were violating any other rule.

    He also worked for the drug company Actavis. Rumor went around that Allergan was acquiring Actavis, not for any drug Actavis had, but simply because of tax reasons. Actavis had re-organized in Ireland and paid less taxes. That merger/take over took place fine. Then Pfizer tried to take over Allergan for the same reason. Unfortunately for them, the government got wind of it and put in new rules and well, in effect, stopped the merger because if there was no tax advantage, there was no reason to merge. I am in favor of lowering the corporate tax rate so that these companies have no reason to merge/run to Ireland/Canada (Burger King)/wherever (and close off the loopholes) - but just the mere mention of that gets most of you up in arms (tee hee).

    What Warren doesn't say is that government rules/regulations/policies/laws are partly responsible for creating the problem in the first place - that a Democrat law like Obamacare has DECREASED compe ion e.g. Alaska now has only one health insurance company available on the exchange and BCBS has pulled out of Minnesota.

    http://www.investors.com/politics/po...ith-obamacare/

    http://www.politico.com/story/2016/0...ollapse-224149

  22. #22
    Displaced 101A's Avatar
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    Anyone having a dog whistle negative response to this because it's coming from Warren didn't read what she said. If she could get a campaign behind this in a real way, I'd be behind that campaign (I'm sure both parties are anxiously awaiting my endorsement). I will be very surprised if Hillary goes this direction at all. Trust busting is the absolute opposite of what I would expect from her (hope I'm wrong). There's a chance Trump might, but I don't have any confidence he's paying any attention, or cares.

  23. #23
    Displaced 101A's Avatar
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    I agree with much of what the article says but here are two personal examples where either government is partly responsible for burdening small business or its high tax rate is helping to cause the consolidation/merger of companies.

    My husband accepted a job offer from a small company and the office manager/HR person told us that they allowed $700 for health insurance. We could either choose to use it to pay for the health insurance they had or use it to buy health insurance elsewhere. I, you all know, hate Obamacare and knew that being allowed the freedom to buy whatever insurance I wanted with that $700 would not be allowed - and sure enough, if caught, this small company would have to pay $100 PER DAY PER EMPLOYEE. The poor HR lady was flabbergasted - this error, if caught, would shut the company down. I'm relatively sure that her next request was to ask the boss if they could afford a lawyer/CPA to check if they were violating any other rule.

    He also worked for the drug company Actavis. Rumor went around that Allergan was acquiring Actavis, not for any drug Actavis had, but simply because of tax reasons. Actavis had re-organized in Ireland and paid less taxes. That merger/take over took place fine. Then Pfizer tried to take over Allergan for the same reason. Unfortunately for them, the government got wind of it and put in new rules and well, in effect, stopped the merger because if there was no tax advantage, there was no reason to merge. I am in favor of lowering the corporate tax rate so that these companies have no reason to merge/run to Ireland/Canada (Burger King)/wherever (and close off the loopholes) - but just the mere mention of that gets most of you up in arms (tee hee).

    What Warren doesn't say is that government rules/regulations/policies/laws are partly responsible for creating the problem in the first place - that a Democrat law like Obamacare has DECREASED compe ion e.g. Alaska now has only one health insurance company available on the exchange and BCBS has pulled out of Minnesota.

    http://www.investors.com/politics/po...ith-obamacare/

    http://www.politico.com/story/2016/0...ollapse-224149
    This is true, and that HR manager should be fired. Even without Obamacare, giving your employees money to buy other insurance has always been a bad idea.

  24. #24
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    This is true, and that HR manager should be fired. Even without Obamacare, giving your employees money to buy other insurance has always been a bad idea.
    It's a small company - she's not really an HR manager - just the office manager manning the phones, doing the miscellaneous stuff outside of programming and marketing and doubling as HR person but this is how most small businesses start out.

  25. #25
    Displaced 101A's Avatar
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    It's a small company - she's not really an HR manager - just the office manager manning the phones, doing the miscellaneous stuff outside of programming and marketing and doubling as HR person but this is how most small businesses start out.
    Good point, didn't realize the business was THAT small. Broker should be replaced, if he/she knew what was going on.

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