Yesterday in Toledo, Hillary Clinton gave a speech in which she linked Donald Trump’s tax manipulations to a broader critique of a “rigged” corporate system—one that allows Wells Fargo to create sham bank accounts and drug companies to raise prices unconscionably. That critique of hers isn’t new. What was new, as the New York Time’s Neil Irwin notes, was her focus on the root cause of a lot of corporate sector abuse: growing monopoly market power and the failure of the federal government to curb that power through enforcement of its antitrust authority.
Speaking of big companies like Trump’s that stiff small contractors, Clinton said:
Part of the problem is large corporations are amassing so much power in our economy. Sometimes it’s called market concentration or even old-fashioned monopolies.
But either way, it threatens business of all sizes, as well as consumers. With less competition, corporations can use their power to raise prices, limit choice for consumers, cut wages for workers, crowd out start-ups and small businesses.
I mean, look what’s happening right now. In most of the country, the three largest health insurance companies in each state control 80 percent of the market. No wonder premiums are going up.
As president, I will appoint tough, independent authorities to strengthen anti-trust enforcement and really scrutinize mergers and acquisitions, so the big don’t keep getting bigger and bigger.
Her campaign also released a fact sheet with specifics about how she’ll go about enforcing antitrust, including beefing up the authority of federal agencies and retrospectively analyzing past mergers.
This sudden focus on antitrust was, naturally, music to our ears here at the Washington Monthly. As longtime readers know, we’ve been hammering away at this issue for a decade and a half. Beginning in 2001 we started running stories by people like Karen Kornbluh, Nicholas Thompson and John Podesta about how telecom monopolies, with a major assist from the Bush administration, were crushing competition in the broadband market. In 2004, CNN founder Ted Turner explained how the broadcast and entertainment industries were also rapidly consolidating, making it impossible for a younger generation of media entrepreneurs to get a foothold.
In 2010, New America’s Barry Lynn, author of the book Cornered, and Phil Longman published a seminal Monthly cover story revealing that virtually every industry sector, from banking to beer to eyeglasses, had become similarly controlled by one or a few big corporations and that this locking up of markets is a major, under appreciated cause of the long-term slowdown in job growth. Lynn and Longman also made clear that consolidation was not some natural occurrence but the result of a deliberate strategy by the Reagan administration to all but end antitrust enforcement, a policy the next four administrations, to varying degrees, continued.
Subsequent pieces in the Washington Monthly by Lynn, Longman and others connected with New America’s Open Markets program filled out the picture. They showed how strong antitrust enforcement beginning in the latter New Deal years set the stage for four decades of strong economic growth. They explained how monopolized markets threaten unions; how growing monopoly power has warped the airline and hospital sectors; and how U.S. entrepreneurship, once thought to be America’s great competitive advantage, has in fact been in decline due to consolidation. Finally, they demonstrated how consolidation is driving the growing regional inequality of America, with half a dozen big metro areas, mostly on the coasts, gobbling up all the income growth and corporate headquarters while smaller metro areas sink into relative decline despite their best efforts to compete.
Throughout most of this time, the Monthly has been pretty much a voice in the wilderness on the consolidation issue. But in the last few years several leading economists, including Paul Krugman, Joseph Stiglitz, Jason Furman and Peter Orszag, have joined the crusade, as have other think tanks, including the Roosevelt Institute and the Washington Center for Equitable Growth. In recent months other thought-leader publications, including The Atlantic, The New Yorker, The New Republic, and Democracy, have picked up on the consolidation trend and published important pieces on its dangers.
Yet the issue has barely penetrated the mainstream press and has been virtually absent from the presidential campaign. During the primaries Bernie Sanders talked a lot about breaking up the big banks, but never expanded that idea to other sectors. Hillary Clinton wrote an interesting article last year about antitrust but never, as far as I know, talked about the issue on the stump. And of course none of the GOP contenders went near it. That includes Donald Trump, for whom, in some ways, the issue is a natural.
Then in June Elizabeth Warren gave a powerful, detailed speech on the dangers of consolidation and the need for stronger competition policies. I was at the event, put on by New America, was blown away, and predicted that her speech could “change the course of the presidential contest.” Then, crickets.
Until yesterday. I’m not sure why Hillary Clinton waited until five weeks before the election to make a big push for antitrust enforcement. Nor is there any telling whether she’ll continue talking about it. It probably depends on whether voters respond.
My fear is they won’t. Not because it isn’t a potentially powerful issue politically—I’m sure it is—but because the ground has not been plowed. Voters need to be educated on issues as complex and deep-in-the-source-code as these, and it’s been decades since political leaders and the mainstream media engaged in a real examination of monopoly and antitrust policy. It’s hard to blame voters when most journalists and elected officials are completely ignorant on the subject.
There was a stark illustration of that last night on MSNBC’S All In With Chris Hayes. Reflecting on Hillary Clinton’s Toledo speech, Hayes asked his guest, Ohio Senator Sherrod Brown, a typically insightful question about how the decline of antitrust might be behind declining wages and rising inequality. Brown responded as if he had no idea what Hayes was talking about, shifting the discussion to more the familiar ground of outsourcing and tax policy.
Still, I’m thrilled Hillary has taken the first step of injecting these issues into the center of the political discussion. At the very least, if she wins, and makes good on her promise to beef up antitrust enforcement, no one can claim they weren’t warned.