THESE ARE REPUBLICAN ECONOMIC POLICIES DESIGNED TO MAXIMIZE WEALTH AND POWER TO CORPORATIONS......PERIOD.
When I read on a campaign page of a local Baltimore Democratic politician-----I am for small government----and the commenter says----I thought Democrats were against small government----THAT COMMENTER IS RIGHT. This is the struggle Baltimore has with a Democratic Party that pushes the most Republican policies.
The American people are now forced to listen to national Clinton neo-liberals and Republicans pretending that today's economy has anything to do with free market----while the entire world publishes research explaining why none of what has happened since Reagan/Clinton is free market. Now, under Obama we have the mantra of small government and global free markets sounding more loudly than under Bush---and Wall Street is telling us the Democratic Party is now the party of global corporations along with Republicans leaving WE THE PEOPLE with absolutely no voice. This has been the case in Republican states for decades---and these two decades under Clinton neo-liberal control the Democratic Party leadership makes these same issues.
MEANWHILE REPUBLICAN AND DEMOCRATIC VOTERS KNOW NOTHING FREE MARKET IS HAPPENING AND SMALL GOVERNMENT IS BEHIND ALL THE FRAUD, CORRUPTION, PROFITEERING, AND PAY-TO-PLAY.
Reagan started all this global neo-liberalism running as a Republican openly lying about the goals of these policies----Republicans work for wealth and corporate power so Reagan's goal from the start was global empire-building and extreme wealth inequity. His policies accomplished this with Clinton taking the Democratic Party to the same goals.
WHICH BY THE WAY IS NOT FREE MARKET.
“We who live in free market societies believe that growth, prosperity and ultimately human fulfillment, are created from the bottom up, not the government down. Only when the human spirit is allowed to invent and create, only when individuals are given a personal stake in deciding economic policies and benefiting from their success -- only then can societies remain economically alive, dynamic, progressive, and free. Trust the people. This is the one irrefutable lesson of the entire postwar period contradicting the notion that rigid government controls are essential to economic development.”
'What’s most important to understand about the radical reframing of antimonopoly law by the Reagan people in cahoots with the Progressives is just how massive a political shift it set into motion in America'.
The article below is too long to post but it shows the collusion of what media still calls progressives instead of Clinton neo-liberals ------changing the monopoly laws----please glance through.
AND WE THE PEOPLE KNOW THE US CONSTITUTION DOES NOT ALLOW FOR GLOBAL CORPORATIONS BECAUSE THE FOUNDING FATHERS WROTE THE CONSTITUTION TO KEEP THIS BUSINESS INFLUENCE AWAY.
Sunday, Jun 29, 2014 07:00 AM EDT
Free markets killed capitalism: Ayn Rand, Ronald Reagan, Wal-Mart, Amazon and the 1 percent’s sick triumph over us all
Monopoly is back: Barry Lynn on the concentration of American economic power -- and how we can restore fairness Thomas Frank(Credit: AP/Reed Saxon/Salon)
Barry C. Lynn is a senior fellow at the New America Foundation and the author of two important books, “End of the Line” and “Cornered,” the latter of which describes the dramatic return of monopoly to the American landscape. Both books had a big effect on me when they appeared, as did Lynn’s periodic articles in Harper’s Magazine describing the concentration of economic power in all sorts of different industries. One of the reasons his books startled me is the weird silence of virtually all our other popular economic writers on the subject. Monopoly is back, in a massive way, and yet it seems as though even liberals often have trouble talking about it. If we’re really going to do something about inequality, however, it’s time we looked this thing in the face.
Barry Lynn and I sat down and talked it over last week. What follows is an edited transcript of our conversation.
Monopoly: It sounds like a very old-fashioned problem. It sounds like an economic issue from the 19th century. Is it still a problem today?
Yes, absolutely, a huge problem. The American economy is more concentrated today than it’s been in more than a century, since the days of the plutocrats. Pretty much every sector of the economy is dominated by a few Goliaths, sometimes a single dominant corporation. And this poses immense economic and political dangers, to growth and the quality of our jobs, and to our democracy itself.
But to really understand what this means, let’s start at the very beginning. It was a huge problem a century ago. That was the plutocratic era. You had a guy named JP Morgan who pretty much ran Wall Street and pretty much determined who did what in this country and where they did it, who made steel and who didn’t make steel.
How’d he do that? If he controls Wall Street, how does he …
Because he determined who got credit and who didn’t. There was a cartel of bankers, and it was under JP Morgan’s control, and that’s one of the things they found out in the 1907 crash. It wasn’t anyone in the government that saved the world from that crash, it was JP Morgan sittin’ there in the middle of things and …
So he’s a hero then.
Well, at the time, he was the central banker of the country. Then along came Teddy Roosevelt. The first company he went after with an antitrust case was Northern Securities, and his aim was precisely to take on JP Morgan.
Northern Securities? What is that?
Northern Securities was a trust that ran railroads in the west and northwest. A lot of people saw it as a predatory monopoly, and JP Morgan was at the center of the company. Teddy Roosevelt, who had recently taken office, wanted to show who was boss. So he kinda reached out and knocked that crown off of JP Morgan.
But the law goes back farther, right? The Sherman Antitrust Act was when?
The Sherman Antitrust Act was 1890. I’ve actually been reading the speech that Senator John Sherman gave in support of that act. And it is very clear that the fear that drove Sherman had nothing to do with higher prices, very little to do with the interest of consumers. The fear of monopoly, back in 1890, was mainly a fear that someone else would block me from doing my business. Say I wanted to be a farmer, and someone with a lot of money and a big corporation came along and said, well, I actually happen to control farming in this county or this state, so therefore, you only get to farm if I give you approval and you pay me tribute.
So it’s a fear of power rather than a worry about consumer prices.
Yeah, in American history the fear of monopoly is a fear of concentrated power. Citizens believed they had a right, a liberty, to engage in whatever industry they wanted, whatever business, whatever job, and they didn’t want anyone stopping them.
Which means, if I’m a carpenter, I have a right to use my skills as a carpenter. If I make beer, I have a right to use my skills making beer as I alone see fit. I don’t have a right to force anyone to buy my beer. I merely have a right to go out and compete in an open market against other people making beer, without interference by any giant corporation that had captured control over the market for beer. Senator Sherman spoke a lot about what he called “industrial liberty.” Louis Brandeis, the activist lawyer who was named to Supreme Court, used that same language of industrial liberty. What industrial liberty meant is the right to engage in whatever industrial activity that you wanted to engage in freely, without someone coming along and using a giant corporation to prevent you from doing so.
OK. So what are some famous examples of monopolies back then and what happened to them?
The most famous monopolies of that era were John D. Rockefeller’s Standard Oil and Andrew Carnegie’s steel company. Both of which, like most of the early monopolies, were leveraged off railroads, which were the great new technology of that era. Railways were sort of the Internet of the 19th century, and like the Internet they allowed people to concentrate power in entirely new ways.
And railroads were a natural monopoly too, right?
Yeah, if you were laying rail between say, New York and Chicago, it was very expensive. So to have two different competing lines running between New York and Chicago didn’t necessarily make sense from a social point of view, certainly not initially, when there was very little steel rail in the country. So, railroading was widely viewed as a “natural” monopoly. The problems arose when the powers in that monopoly were left unregulated, and powerful people like Rockefeller and Carnegie used those natural monopolies to capture control of other businesses that had to ride the railway to get to the market.
And that was legal?
Until Sherman’s antimonopoly law in 1890, it was not illegal at the federal level. It was generally illegal at the state level, but the states lacked the power to control the biggest of the corporations, the ones that operated in multiple states. But anti-monopoly action in America really goes all the back to the Tea Party.
What? Oh, you mean the Boston Tea Party.
Yeah, the Boston Tea Party. Everyone nowadays says it was a rebellion against taxation. But if you go back and read the actual writings of that moment, it was a very clearly a rebellion against the British East India company. Americans were terrified of the British East India Company.
Because it was a monopoly. They controlled the tea traffic.
And people were afraid that they would leverage that monopoly to take over all kinds of other commerce here in America.
I wrote about that in the Wall Street Journal when our modern-day Tea Party movement was getting going, and pointed this out. But the response I would hear was that the British East India Company was a government monopoly, that it had been granted by the state—which is true enough. And so the argument then is that, since monopolies are created by government, so we don’t have to worry about the private sector, if we just hack down government, then we won’t have a problem.
Yeah, if you hack down government, then you’ll have government re-emerge, only the new government will be privately run.
What do you mean?
Well, let’s look at the corporation Amazon. Amazon now essentially governs business within the book industry. Amazon has so much power that it virtually gets to tell really big companies like Hachette, the French publisher, what to do. You’re gonna sell this book at this price. You’re gonna sell that book at that price. That means Amazon pretty much has the power to determine how many copies of a book a publisher might sell. That’s not citizens trading with one another in an open market setting those prices, that’s a giant corporation setting those prices. Which means what we are witnessing in the U.S. book industry, I think, is a form of top-down government.
. . . Then a corporation becomes government.
Yeah. Think about the word “corporation.” Harvard is a corporation. The city of Miami is a corporation. Alcoa is a corporation. All three of these institutions are designed to govern people and property. Each of these institutions has an internal constitution that determines how it is governed. All three of these institutions are also, to some extent, governed externally, such as by the need to compete. Miami has to compete with other cities. Harvard has to compete with other universities. But what happens when Alcoa captures complete control over, say, the manufacture of aluminum, as was actually the case until 1945? It then, in essence, has captured the power to govern that entire human activity, and all the people who work in that activity. It decides how much aluminum will be manufactured each year. It decides what aluminum engineers will earn each year. It decides how many aluminum engineers will have jobs. That’s private government.
Go back. Are you telling me that you can have monopolies even if the Federal government doesn’t grant monopolies?
Yeah. Monopolies can easily be created by the actions of capitalists – who can capitalize a particular corporation then use that corporation to buy up or bankrupt most or all of its competitors. And to be clear, I am using the term ‘monopoly’ in the same way Milton Friedman used it – which is that if a company consolidates sufficient power to “determine significantly the terms on which” a particular business is done, then it’s a monopoly.
And you’re saying it happens all the time.
It happens all the time. Today, we have all sorts of monopolies and near monopolies in the United States. Many are created simply by one company purchasing all their competitors. Some years back a company named Tyco decided to take over the business of making plastic clothes hangers. It went out and bought at least four companies, and that gave it the power to jack up prices to clothing retailers. That’s the pattern in pretty much every industrial activity in America.,
Wow. Going back to the history thing. So at some point, Americans said, ‘No more.’ And reacted against this.
Yeah, Americans have done this a few times. Americans did it in 1773. America was born out of a rebellion against monopoly. The next great fight was during the presidency of Andrew Jackson, who led the fight against an effort to create a private central bank in America.
This was the Second Bank of the United States, right? So there’s that and then there’s the late nineteenth century, when it all happened again.
Americans did a pretty good job of protecting themselves against concentrated corporate power, corporate governance through the first half of the 19th century. But what then happened was that the railroads and the telegraph came along. And these technologies destroyed the traditional distance that had always separated one regional market from another. Up to that point, one of the main factors that had helped to protect people against monopoly was that you couldn’t send information or goods very far, very fast. This meant you could only control the supply of something within the local community. Which in turn meant that our state laws were usually sufficient to protect us against monopoly. But the railroad and the telegraph allowed the capitalists to escape the control of our state governments and to project power over great distances. For a little while, the railroad corporations themselves became the most powerful enterprises in America. But then a few people figured out how to leverage the railroad monopolies to make something even bigger, like Standard Oil. Rockefeller’s greatest skill was in leveraging the railroad monopolies to make his company more powerful.
The other day, I got off the shelf a book called “Wealth Against Commonwealth,” which is about that very chapter where Rockefeller convinced the railroads to give him favorable rates and basically put everybody else in the oil industry out of business.
Yeah, and that’s exactly when Americans began to federalize our antimonopoly laws. The Interstate Commerce Act of 1887 was the first effort to federalize anti-monopoly law. It was designed specifically to regulate the power that comes from controlling a monopoly. The Act is all about creating open and transparent and fair pricing, so that everyone who rides the railway gets the same treatment. The basic goal was that everyone gets to ride the railroad on equal terms – no matter how poor you are, no matter what party you belong to.
So it’s the common carrier idea?
The common carrier idea, that’s right.
Ayn Rand talks a little about that in “Atlas Shrugged.”
What does she say?
She doesn’t like it.
She doesn’t like it!
Yeah. It’s one of the weakling liberal ideas that her bad guys believe in, they think they have a right to transportation.
I’d never heard that before.
Everybody talks about “Atlas Shrugged,” nobody pays close attention to it. But what happened in our monopoly story?
So the plutocrats came back. The lords came back. We had escaped the lords in 1776. And then for most of the next 85 years we had ourselves a nice, little democracy—or at least, the white men in America had a nice, little democracy. But after the Civil War, the lords came back. Capitalists used the railroads in ways that empowered them to reconstitute their power. The big difference is that the new lords were not so much lords of the landed estates as they were lords of industry. A man named Barber was the lord of wooden matches in this country. A man named Havemeyer was the lord of refined sugar. John D. Rockefeller was the lord of kerosene and oil. And we would pay tribute to these men who had captured control over these industries.
But it wasn’t merely a matter of higher prices. These men also had direct control over all the people who worked in these industries. If your special skill was knowing how to refine sugar, Havemeyer’s monopoly really limited your career opportunities. There was no open market for your labor. So I don’t use the word “lord” just for effect. In the plutocratic era, Americans really found themselves back in a semi-feudal society. It was a very direct kind of personal control that was often exercised. If there was a lord of that industry, you really could not challenge that person because your career could be crushed in a moment. It’s a little like that in Silicon Valley today, as we saw when the Feds discovered the labor agreement Steve Jobs created to control the salaries and futures of all the little tech dudes. And yet, the American people did rise up. We saw a whole series of rebellions. You had the Grangers, the Populists. And then anti-monopolism sort of became institutionalized in the Democratic Party during the days of William Jennings Bryan. But the culminating moment was the election of 1912.
That’s Teddy Roosevelt, Woodrow Wilson, and William Howard Taft, right? There was a little Debs on the side.
Right. There was a little Debs on the side. A dab of Debs. If you want to understand political economics in America, study that one election. Because that’s the point where you clearly see the three main ideas that still sort of dominate how we think about political economics in America today.
Yeah, tell us what they are.
Well first was the idea that private feudalism is okay.
Who said that, Taft?
That would be Taft. The Republican Party’s message was pretty straightforward. It was, to paraphrase, “Just let us take care of business for you. We’re wise, we’re expert in it—“
We’re efficient in it.
We’re efficient, exactly. Their basic message was, don’t sweat it, don’t worry your little heads about these complex things. We’ll take care of you because we’re good lords who will protect you from foreign threats, like the Germans, you know. So that was one approach. The second idea was that of the Progressives. That idea was put forth by former president Teddy Roosevelt with his Bull Moose Party. Teddy Roosevelt’s basic stance in 1912 was to acknowledge that the capitalists had concentrated control over entire industries, they had created a feudal system to govern the production of oil, or the production of matches, or the production of sugar. What we needed to do, he thought, was make sure that system works for the public benefit, and to do that we had to impose our public government on top of their private government. So we will hire a bunch of experts, a bunch of engineers and scientists to run this new system so that it always works for the public benefit. Rather than let the feudal lords determine how much oil and sugar is produced, and what they cost, and how much the workers get paid, we’ll have government experts do all that instead.
So the idea was not to dismantle the monopolies but to take them over.
Take them over and manage them directly. Regulate them.
We did that to a great degree—the railroads, right? We have regulated systems all over the place. The airlines were regulated.
I mean, railroads like you said, were a natural monopoly. But Teddy Roosevelt was promoting this sort of government regulation for all sorts of products that were not a natural monopoly, like steel. There’s no reason that a country our size should have only one steel company, like U.S. Steel. But the basic idea of Teddy Roosevelt and the other high progressives was that having one steel company is much more efficient. That the big political challenge was simply to make sure the gains from that efficiency were fairly shared with the public.
The third idea in 1912 was the old Jeffersonian approach, the old Madisonian approach, which was given voice by Woodrow Wilson. And at Wilson’s right hand was a guy named Louis Brandeis, the future Supreme Court justice, who helped Wilson write many of the speeches he gave in 1912. And the basic take of Wilson and Brandeis, like Jefferson a century before, was that all concentrated power is dangerous. Power overly concentrated in public government is dangerous. And power concentrated in private corporate government is even more dangerous. So we should reject the ideas both of Taft and of Teddy Roosevelt. What we want to do, to the best of our ability, is use our public government mainly to ensure the safe distribution of private power. The basic idea was that if you distribute private corporate power widely enough, then people will compete among themselves in ways that are good for both our democracy and our economy.
Did Wilson proceed to do this?
One of the first things his administration did was fix the many flaws of the original Sherman Antitrust Act by passing the Clayton Act. The second thing they did was put the public fully in control of the money supply. A lot of people have problems with the Federal Reserve, and there’s a lot of reasons to have problems with the Federal Reserve. But the Federal Reserve we have today is better than having JP Morgan run the money supply, or Jamie Dimon.
Wilson also acted to ensure that farms were not taken over by giant combines, that small businesses, small stores were not taken over by giant chains like Woolworths.
Wilson and Brandeis, like the New Dealers twenty years later, took three basic approaches to antimonopoly policy, which were: If you had a natural monopoly, railroads, telephony, your business would be regulated for the public good. If you ran a big industrial firm like U.S. Steel, the goal was to provide you with as much competition as possible, but not break up your business into inefficient bits. The goal was not to create a whole bunch of backyard steel furnaces, but to create some kind of real competition for U.S. Steel. Third, there are areas where you don’t need efficiency, or where efficiency is much harder to measure. This includes activities like farming and retail. The idea here was to try to keep the market as open as possible, and ownership as local as possible. Practically, this meant using the law to protect against the use by capital of the chain store and the combine to roll over the small business person and the small farmer.
But then, this revolution, this second American revolution against concentrated power, was stopped in its tracks about 16 months in by the outbreak of the First World War in Europe. The First World War was a shock of the first magnitude. I mean, they had to shut Wall Street for more than a year.
They did? In 1914?
Yeah. So the Wilson administration’s ability to enact major domestic reforms was pretty much put on hold.
When Franklin Roosevelt was president, they went both directions. At first they tried forming gigantic coalitions of companies and controlling them, in the National Recovery Administration period. And that was ruled Yeah, by the Supreme Court, which by then included Brandeis. At first FDR’s team was dominated by people who basically wanted to follow the old Teddy Roosevelt idea, of using the public government to regulate private monopolies. But in practice that didn’t work very well. And then the Court said this is not the way America works; we distribute power rather than concentrate it. So after a short period of confusion FDR reversed course and said, lets try the anti-monopoly route. Let’s do the exact opposite thing.
So they went back to what Wilson had started in 1913 and picked up that antimonopoly revolution right where it’d been cut short by World War I. And one of the key guys they hired was a lawyer named Thurmond Arnold, who was put in charge of applying antitrust law to big industry. But they also used other forms of antimonopoly law to go against the chain stores and to take on the banking system and the power concentrated in Wall Street. One of the main goals of the New Dealers was to ensure that most banks were located in the state where they did business, even the community where they did business.
Oh yes, that was an interesting chapter. In fact, that was also their bailout strategy. Instead of bailing out the banking system from the top down, like we just finished doing, they built a new system, almost, from the bottom up.
This period of the New Deal saw the completion of the second American Revolution, which had been started by Wilson and Brandeis in 1912 and 1913. The torch was then carried on by Truman, and carried on by Eisenhower, who, though he may have been a Republican was also a small-town boy, a populist . . .
I wouldn’t call JFK necessarily part of the populist American tradition, but certainly Lyndon Johnson was. And Nixon didn’t stop it…
So were they still vigorously enforcing antitrust when Nixon was president?
Right through Nixon.
But you also had these enormous conglomerate companies then. You remember ITT.
Yes, what happened is there was this loophole in antitrust. The basic rule was that we’re going to limit you to running no more than, say, a third of the aluminum business, but no more.
So they had a cutoff?
Yeah, they generally aimed to have at least three or four companies sharing any important industrial activity. But the loophole was that they did not stop these same companies from investing in unrelated businesses. So when a big industrial corporation made extra profits, they were allowed to invest those profits pretty much as they saw fit. So you ended up with a company like RCA, which made televisions, also in the frozen food business for a while, and the rental car business for a while. These conglomerates weren’t necessarily that efficient, but they weren’t monopolies either.
Let me give you an interesting example from that era. Do you remember André Schiffrin?
He was a famous book editor, he was at Pantheon and later the New Press. He wrote several books about the publishing industry, and in one of them, he tells the story of the merger of Random House and Alfred A. Knopf in 1960. The day after the merger is announced the attorney general called, very concerned about it. But those two companies combined were only 1 percent of the market. And you look today, the entire publishing industry is basically controlled by a handful of companies, and no attorney general gives a damn.
Again , this article is too long to post but people should take a look at the rules Reagan attacked all dealing with anti-trust----and was busting anti-trust. Now, if you are a free market Republican you are fighting against monopolies that kill competition----AND IT DID---KILLED SMALL AND REGIONAL BUSINESSES.
Bush neo-cons simply became these Reagan neo-liberals bringing the conservative military complex with them.
So, as today----these global pols use stagnant economies and regulations as the reason for small business and regional businesses dying when it is all tied to global corporations and markets. Then Clinton -----the best Republican ever----joined in that refrain after taking the Democratic Party. They feverishly dismantled all of the rules and laws regarding anti-trust and monopoly EVEN AS THE US CONSTITUTION AND MARYLAND CONSTITUTION MAKES MONOPOLIES ILLEGAL AND THE OPPOSITE OF FREE MARKET.
The point is this-----the US Constitution does not allow REagan/Clinton/Bush/Obama to ignore anti-trust and monopoly laws----THEY JUST DO ----ILLEGALLY.
The Democrats in Congress at the time of Clinton-----today's neo-liberals still in Congress----knew their jobs were to fight this---and challenging the US Constitutionality of all this WAS THERE DUTY AS DEMOCRATS AS IT IS TODAY.
Every time I hear a Republican or Democratic neo-liberal in Congress pretend that what they are doing is not a violation of anti-trust and monopoly---
IT MAKES ME WANT TO RUN FOR POLITICAL OFFICE AS A SOCIAL DEMOCRAT IN EVERY DEMOCRATIC PRIMARY ELECTION!
The Reagan Assault on Antitrust
by Eddie Correia
The Reagan administration has recommended to Congress legislation to revise fundamentally the nation's antitrust laws. The intellectual underpinning of the proposal is the idea that antitrust laws are the real villain behind our dismal showing in international competition. Critics of antitrust, particularly the secretary of commerce, Malcolm Baldridge, argue that the current law is too tough on business conduct, particularly proposed mergers between competitors.
If the Fortune 500 are allowed to merge, antitrust critics argue, the United States will once again be armed for international combat.
For a self-described conservative administration, attacking the antitrust laws as the cause of record trade deficits is radical indeed. The original trustbuster, Republican Teddy Roosevelt, would be shocked, not to mention Republican John Sherman, who authored the first major antitrust law in 1890. Republicans and Democrats alike, historically have supported antitrust enforcement as a way to promote efficiency and vigorous competition. Until recently, blaming antitrust for Japanese imports, much like blaming criminal laws for the high crime rate, was not a popular notion.
Five years ago, however, the U.S. Attorney General made a point of telling the American public, big is not bad. Now, Baldridge has taken that message even one step further: Bigness is positively good.
This notion that U.S. firms can become more competitive internationally if the big get bigger is the rationale behind a proposed new antitrust exemption from the basic prohibition of mergers that may harm competition. Under the bill, the president would be authorized to order an exemption for industries determined to be hurt by foreign competition. For a temporary period, perhaps five years, the president could make it easy for firms to merge in electronics, automobiles, textiles, shoes, steel and other high-import industries. The handful of companies that would be left, argues Baldridge, would then be strong enough to take on the Europeans, the Japanese and other foreign competitors.
The administration is banking on the fact that a Congress, desperate to do something about the disastrous U.S. trade deficits, will agree that a wave of massive mergers is a solution.
Unfortunately, there are few facts to back up such arguments. Trade deficits have soared in the last five years despite the fact that antitrust enforcement has declined radically in that same period. And, although the United States has the largest manufacturing firms in the world in automobiles, electrical equipment, steel and textiles, the size of the companies has not made them better equipped to deal with foreign competition. Antitrust enforcement it appears, has little to do with trade deficits. Lack of antitrust enforcement, however, can certainly harm international competitiveness.
American steel and autos developed in a domestic market that did not force consistent capital investment and improvement to keep up with state of the art technology. Oligopolies grown sluggish by a lack of vigorous competition were suddenly faced with cheap imported steel and cars from technologically advanced Japanese plants. The result: a painful loss of American jobs and a push for protection from foreign competition.
The same scenario is predictable in dozens of other U.S. industries if anti-competitive mergers are allowed. Industries taking a beating from imports will come to the White House arguing their salvation is in joining up with their largest competitor. With a fanfare of promises and high expectations, the President will bless the merger. A few years down the road-with higher costs, less efficient operations and a less competitive domestic market-the same industry will come back complaining about the unfair tactics of foreign firms who want to sell their higher quality product at a lower price. Meanwhile, the American consumer will have been the big loser.
An October, 1985 study by two Federal Trade Commission economists entitled, Antitrust Policy for Declining Industries, similarly concluded:
A policy liberalizing the antitrust laws specifically for declining industries would be ill-advised. Such a move would open the way for anticompetitive mergers for which there is no efficiency justification. Some have argued that such a liberalization might be justified to save jobs in areas hard hit by declining employment and/or to improve the balance of trade. However, there is no persuasive reason to believe that the mergers that would be allowed under the liberalization in question would increase employment or improve the trade balance. Indeed, anticompetitive mergers that do not improve efficiency could reduce U.S. employment and U.S. firms' ability to compete with foreign firms as domestic prices rise and output falls. As a result, changes in merger policy that allow anticompetitive mergers are not a solution to the problem of industrial decline.Ironically, the administration is promoting a policy that will increase prices and make us less competitive in the world, not more. Allowing our major manufacturing industries to consolidate during a five-year merger spree will do permanent competitive harm to the American economy.
The element of truth in the administration's argument is that the antitrust laws should consider foreign competition when appropriate. The current law, however, is flexible enough to include such a consideration. In order to make sure the courts consider this factor, Sen. Howard Metzenbaum of Ohio has introduced legislation requiring it to be included in the legal analysis. In addition, the bill directs the antitrust agencies to consider documented claims by merging companies that the acquisition will reduce costs and make the combined firm more competitive. This approach is far better than an across the board permissive merger standard for certain industries.
Relaxing merger standards is not the only thing the administration has in mind with its new merger proposal. It also wants to make it harder to prove any merger is illegal by raising the burden of proof on government prosecutors and private plaintiffs. The law prohibits mergers if the effect "may be substantially to lessen competition, or to tend to create a monopoly." The Reagan administration wants to require proof of a"significant probability" of harmful effects. Although both phrases must be given meaning by the courts, the Reagan administration intends its standard to be much tougher to meet than the current one. Just how much tougher would depend on the nuances of legislative history and years of court decisions interpreting the new law.
In the past, the basic problem facing antitrust agencies and the courts was how to predict the future effect of a complex business transaction when the understanding of how markets work is imprecise. Most economists agree that a market with a handful of competitors will be less competitively vigorous than one with dozens. But, exactly how concentrated the market must be before prices begin to rise because of reduced competition, is unknown. There is also general agreement that concentration is a much greater problem if new competitors can't get in the market easily, if the competitors tend to share information and if other factors ' make it easy to coordinate prices. Nevertheless, despite general agreement about the basic economic theory, there is enormous disagreement about the likely effect of any specific merger. Applying the law against harmful mergers means predicting the future, and a fair amount of educated guesswork is inevitable. The requirement that antitrust enforcers must be "certain" of a merger's effects before prohibiting it, is really advocating a policy that allows all mergers to proceed unimpeded.
The courts have long struggled with how to apply the very general standards against harmful mergers. By 1960, merger cases had become confused undertakings with issue upon issue presented to the courts for an analysis it was ill-prepared to make. In an influential law review article in 1960, professor Derek Bok, now president of Harvard, argued that the courts should focus primarily on the combined market shares of the merging firms and resulting competitive harm if the market shares exceeded some threshold level. This kind of approach was adopted by the Supreme Court in 1963 in the Philadelphia National bank case and reached a high water mark in 1966 in the Von's Grocery opinion. There the Court held a merger that led to a firm with 7.5 percent of the market was unlawful.
There is no doubt that the Court went too far in the Von's Grocery case and that it would not be followed today. Since then, the courts have become more sophisticated in their analysis of mergers. The clear trend in the law has been to make it more and more complex to prove a merger violates the current standard. During the 1970s, the courts and the antitrust agencies required solid economic proof that a merger was likely to harm competition before deciding it was unlawful.
Then, the Reagan administration entered the scene. Since 1981, virtually every merger has been viewed as beneficial. In 1982, the justice Department issued merger guidelines setting out its own interpretation of the requirements of an illegal merger. These included 1) raising the combined market shares that would prompt concern; 2) raising the standard for a "concentrated" market; and 3) requiring proof of other factors, including the fact that new firms could not easily enter the market. In addition, the department has tended to define the market very broadly, making it hard to show that companies have a significant market share. Further, the analysis takes account of the possibility firms can convert current production capacity to make the products of the merging firms, that foreign competition will increase, and that the merger will reduce costs.
The economic analysis for each of these questions can become enormously complex and burdensome. In 1984, the justice Department came up with yet another version of the guidelines, making proof of an illegal merger more difficult. This increasing burden of proof, combined with an administration that is biased in favor of mergers in the first place, has led to a laissez-faire merger climate and infrequent enforcement. During the last few years, the number of mergers has gone steadily upward. The number of mergers over $100 million in value has gone from 94 in 1980, 113 in 1981, 116 in 1982, 137 in 1983, to 200 in 1984. The annual rate for mergers during the first half of 1985 was the highest since 1974. The largest sixteen mergers in U.S. history have occurred during the last five years.
One of the most striking facts is that at the same time as merger activity has increased, those charged with ensuring that mergers do not harm competition have become less active-both the number of lawsuits and the number of investigations brought by antitrust enforcement agencies and officials have plummeted. The number of cases filed by the Justice Department during fiscal years 1981 through 1985 declined 25 percent from the average rate during the fiscal years 1976 through 1980. The Federal Trade Commission's pattern was similar. In addition, the antitrust agencies failed to investigate proposed mergers at the rate of the previous administration. The rate at which the agencies asked merging firms for more information about their proposed combination declined by 39 percent from 1979 to 1984.
"Over the last five years, our Nation has witnessed a misguided retreat from fundamental antitrust principles," charged Sen. Howard Metzenbaum last month. "This administration has consistently cut back on enforcement and attempted to reinterpret the law whenever possible to reduce its effectiveness.
Today, we have honest business people feel they have to lie, cheat, and steal just to stay in business because deregulation and dismantling of all oversight and accountability allowed Reagan's and Clinton's wealthy and powerful corporations steal everything that was not glued down----and you know what? That was what the Robber Baron age and the roaring 20s followed by the Great Depression was about.
THE EXACT SAME POLICIES ALLOWED TO BE PASSED BECAUSE POLS WERE ABLE TO FOOL REPUBLICAN AND DEMOCRATIC VOTERS AS TO THE GOALS OF DEREGULATION AND ANTI-TRUST BUSTING.
How can a next generation Obama Clinton neo-liberal still do this? Largely because Democratic voters leave in office the Congressional Clinton neo-liberals from 20 years ago-----Cardin, Cummings, Sarbanes, Mikulsi, Van Hollen, and Donna Edwards are all raging Clinton neo-liberals doing the same thing. Today, we have state neo-liberals and Bush neo-cons moving the same policies through our Maryland Assembly and Baltimore City Hall
Myth: Deregulation promotes competition.
Fact: Deregulated competition eventually leads to monopolies.
Deregulation only promotes competition in the early stages. In the latter stages it actually eliminates competition as rivals are driven out of business. Owners feel the need to cut every corner possible -- and both workers and consumers pay the price. And what is the result of all this perpetual elimination of business rivals? A monopoly, of course.
The many hymns to deregulation usually describe the success stories that occur immediately after deregulation. This is always a period of price-slashing and better service as companies compete to attract more customers. But there is always more to the story, which often takes years to play out. The latter stages of deregulation feature generally look like this:
- There is a perpetual elimination of the weakest companies, even when only strong ones are left.
- During the heated competition phase, the name of the game is not prosperity, but survival.
- Corporations become desperate to cut costs wherever possible to maximize profits.
- Consumer and worker safeguards are reduced or eliminated.
- Environmental safeguards are reduced or eliminated.
- Convenience and comfort are reduced or eliminated.
- Wages are reduced.
- Workers are laid off by the thousands.
- Production and workloads are pushed to the limit, often at the risk of life and limb.
- Entire markets -- for example, rural areas -- are dropped if they are deemed low-profit.
- In the final stages, a monopoly or oligopoly emerges, after which prices are raised, services dropped, quality reduced, and corruption and abuses of power become commonplace.
- Workers from failed companies continue working in their fields by either joining the few surviving giants (usually at lower wages) or working alone (always at lower wages). In other words, a monopoly or oligopoly will dominate the market, but hundreds of nickel-and-dime operations may work around the edges.
We have already described how deregulation affected the airline industry. After a brief period in which new airlines formed to compete for customers, there was a shake-out. To cut costs, airlines began paring back their maintenance and safety crews, which outraged the flying public. Since 1978, a dozen airlines have merged or gone out of business. Some 50,000 employees lost their jobs. Now that a few majors exist, air service is being dropped to 130 smaller communities, many others are served by only one airline, and air fares are climbing faster than the planes themselves. (1)
After the trucking industry was deregulated in 1980, truckers ran their trucks without maintenance until they became road hazards. More than 100 companies have gone out of business since then, and 150,000 truckers at those companies have lost their jobs. The surviving majors hired them back, but only after cutting their wages. At least 350,000 truckers are now private owner/operators, which are not reflected in government trucking statistics; they make even less than their corporate counterparts. (2)
In 1982, Savings and Loan lobbyists bribed Congress to quietly deregulate the industry. In effect, Congress promised to cover any losses if S&Ls made bad investments with their customer's savings, but also promised not to regulate or oversee these investments. Industry experts call this arrangement "moral hazard," because it tempts investors to abandon their normally cautious, conservative investments and make high-risk, high-return gambles instead. Not surprisingly, fraud and abuse soon ran rampant in any institution that called itself an S&L. Investments turned sour; to cover their losses, the culprits committed even more sins. Charles Keating was caught attempting to bribe five U.S. Senators to bail him out of trouble. To date, about 650 S&Ls have gone under, and another 400 are threatening to. The final bill to the taxpayers: half a trillion dollars.
With amazing audacity, Congress then set out to deregulate the banking industry.
After the cable television industry was deregulated in 1984, prices soared, quality of programming plummeted, and cable systems began selling their channels in indivisible blocs that prevented subscribers from voting with their dollars. From 1986 to 1990, the cost of basic service rose 56 percent -- twice the rate of inflation. (3) The problem? Growing monopolization, at several levels. There are now 11,000 cable systems across the nation, almost all of them exercising a local monopoly over their municipal region. They in turn are controlled by a handful of national companies. By far the most dominant is the ever-expanding TCI, which is a gatekeeper over national programming. Its owner, John Malone, owns all or part of 25 national or regional cable channels, including Turner Broadcasting. (4) Because there is little or no competition, cable programmers search for the cheapest shows to produce. Quality of programming has sunk to network TV levels. It seems that each year, Congress passes yet another cable deregulation bill. Every single one has been touted to "open competition" and "benefit the consumer." But the concentration of power in the cable industry keeps getting worse, not better.
The deregulation of cable is only a small part of what is happening to the media in general. In 1983, Ben Bagdikian published The Media Monopoly, which warned that continuing deregulation of the media under Reagan's FCC was allowing the media to be bought and controlled by an ever-shrinking number of corporate owners. Once called "alarmist," the book is now considered a classic, because all its predictions have come true. By 1992, the number of corporations controlling the media had fallen from 50 to 20, and more media mergers are inevitable. ABC is controlled by Disney, NBC by General Electric, CBS by Westinghouse -- and all these parent companies are renowned for their conservative political activism. Most cities have become one-newspaper towns, with giant companies like Gannett and Knight-Ridder buying every paper in sight. Once a newspaper has been taken over by one of these giants, the same things happen: to maximize profits, editors lay off journalists, reduce local stories, rely more heavily on national news wires, publish more sex and violence, and increase their advertising. The drop in quality is so great that even Gannett's CEO admitted his papers were journalistically "embarrassing." (5) Almost every year, Congress deregulates the media still further, even as dizzying new mergers make headlines. The 1996 Telecommunications Act became notorious for censoring sexual content on the Internet, but perhaps even more insidious was its massive deregulation of the media. By the time information has become centralized in this country, we will have finally abandoned the ideal of a free press.
Deregulation in the telephone and transportation industries have brought different results to different sectors of the nation. Companies have dropped routes and services to poor communities, or only offered them by raising prices exorbitantly. Senator Byron Dorgan (D-North Dakota) said as early as 1983: "There have been some benefits from deregulation, but they have gone largely to population centers, while the costs have gone to rural areas." (6) Long distance telephone rates fell 38 percent in five years, but about three-fourths of the calls were routed through 18 major cities; for the rest of the nation, local service climbed 50 to 60 percent. (7)
Labor unions also suffered heavily from deregulation. In 1986, Alfred Kahn, an architect of deregulation under Carter, admitted that 3 million union members in airlines, telecommunications, trucking, bus transportation and other industries had taken a severe blow after deregulation. (8) On the other end of the spectrum, surveys in the late 80s showed that businessmen gave only qualified support for the era's deregulation. For example, although they enjoyed the lower air fares of their business trips, they were troubled over airline delays, loss of routes, long reservation requirements and air safety reductions. (9)
To be sure, some regulation in the past has been ham-handed and ill-conceived. But this means it should be improved, not eliminated completely. A good analogy is that of a referee who makes a few bad calls in football game. The solution is to find better referees -- not throw them out completely.
Below you see what did indeed corrupt our national union leaders-----and it is funny that reference to Conservative Republicans knowing that deregulating union rules would cause fraud and corruption.
ALL DEREGULATION OF CORPORATIONS WILL LEAD TO WIDESPREAD CORPORATE FRAUD AND GOVERNMENT CORRUPTION----WE KNOW THAT.
Clinton and Obama have pushed national labor unions rules----from making it OK for union to be credit unions----to allowing them to have their own credit cards----to allowing international labor unions to control micro-units in the US-----this is all deregulating labor union laws meant to keep unions in touch with local union members.
This is why national labor unions leaders stayed with Clinton neo-liberals in the 1990s even as it was evident Clinton was going to union-bust and kill all labor gains from a century as has happened with global market policy.
'Conservatives must loudly protest Obama’s strategy to remove accountability and transparency from union leadership because we know that without this regulation fraud and corruption will surely flourish'.
This is why Democratic and labor have watched these several years as no matter how much union-busting policy came from Clinton neo-liberals----national leaders supported them---right up to this 2016 Presidential election.
Obama’s labor initiative gives union leaders a blank check to commit fraud
Obama Deregulation Promotes Union Corruption
By Dr. Tony Magana -- Bio and Archives May 12, 2009
Obama’s labor initiative gives union leaders a blank check to commit fraud and engage in corruption by removing mandatory fiscal record keeping and reporting.
The Obama administration is embarking on a progressive deregulation of enforcement on the relationship of union leaders and their members. Although Barack Obama promised to bring accountability and transparency to government, his intent in terms of the union members and their leadership is just the opposite. The Department of Labor is revising the standard for disclosure that up to now had made mandatory reporting of potential conflicts of interest and itemized spending reports on expenses a necessary part of union practice.
Some union leaders have been quoted as saying that such detailed reporting is not necessary because there is very little corruption. Statistics from the Labor Department unfortunately still show that labor fraud and corruption remains rampant. From 2001-2008 there were 1,000 fraud-related indictments and 929 convictions. Between 2001 to 2005 there was a dramatic increase in the amount of ordered restitutions from $42.5 million to almost $200 million. Former Secretary of Labor, Elaine Chao, points out these figures represent significant evidence that ongoing and tight regulation is needed especially when one considers that union workers make up less than 8% of the total workforce and the enforcement resources of the government have been slashed since the Clinton years to very few investigators and prosecutors.
The law regulating unions is called the Labor Management Reporting and Disclosure Act , also known as the Landrum-Griffin Act, was enacted in 1959 after severe corruption was publicized in many prominent unions including the International Brotherhood of Teamsters, International Longshoremen’s Association, and the United Mine Workers. Unions were subsequently required to hold secret elections regularly, maintain records available for review by members and the government, to develop fixed rules for membership, grievance, election and how they generally conducted their affairs.
The Service Employees International Union (SEIU) strongly supported the Obama campaign financially and organizationally . Many on the political scene say that without their money, influence, and “volunteers” Obama would not have won the Democratic nomination. The President recently named SEIU lawyer, Craig Becker, to the National Labor Relations Board. With over 2 million members from the health care services, government employees, and property services fields the union is now the most powerful political force of organized labor.
During the 1990’s SEIU leadership began to wrestle control of the union movement from the traditional leaders of the AFL-CIO whom they criticized for being too interested in politics and not enough in building membership. Since 2005, SEIU has been the lead voice for unions when they created the Change to Win Federation which essentially replaced the role of the older and now weaker AFL-CIO.
While the President and liberal Democrats are wanting to strengthen the power of the National Labor Relations Board and labor in general with the Employee Free Choice Act it seems strange that they would want to deregulate government oversight of unions to protect union members. Several recent leaders of the SEIU were discovered to have been involved in corruption leading to their resignations. Tyrone Freeman, President of the Los Angeles local chapter was caught spending hundreds of thousands of dollars for personal use. Annelle Gradjeda, the former Executive Vice-President for the SEIU was “gifting” her boyfriend who was the former leader of another union tens of thousands of dollars. Finally when Rickman Jackson, the President of the Michigan SEIU, decided to get married in Hawaii he used union funds in addition to already using them to pay for his house. The discovery in his case also revealed he was receiving $200,000 a year for a fake job.
Critics of cutbacks in the budget of the Federal agency in charge of union oversight and prosecution of fraud say that relaxing reporting requirements will prevent future exposures of union leader malfeasance. The Center for Union Facts cites a 2004 Zogby poll that said 71% of union members want the government to do more to protect union members from corruption and supported detailed reporting.
The Republican Party Platform of 2008 affirmed the right of individuals to voluntarily participate in labor organization but also called for the protection of workers and conscientious enforcement of financial reporting and transparency by labor unions.
Union corruption and fraud played a significant role in the decline of the labor movement of the United States. One would think that labor leaders would welcome more transparency and accountability on the part of labor leaders to assure union members and entice potential members that union membership will truly benefit the worker. Unions can potentially be advocates for the lowly educated but hard working workforce of America’s working class against manipulation. But without regulation and oversight this same group can just as easily be abused by their labor bosses as their job bosses. This proposal is a glaring inconsistency of the Democratic party which usually calls for special protections for special classes of persons who are vulnerable. Without a doubt deregulation of union leadership will put the leaderships interests ahead of the membership.
The Bush administration was commonly criticized by the liberal left for failing to enforce laws or regulations that have been passed by the Congress. This balance of powers argument that the executive branch does not have to right to engage in selective enforcement now ironically, seems to have been adopted by the Obama administration. It is telling that they would rather try to accomplish this new agenda by a selective enforcement strategy rather than new legislation which could bring potentially embarrassing hearings presenting evidence of fraud and corruption.
Conservatives should be on the side of the worker in supporting his ability to rightfully organize but we should also vigorous defend that same worker’s ability to hold union leaders accountable for the expenditure of the hard earned donations they receive from workers. Conservatives must loudly protest Obama’s strategy to remove accountability and transparency from union leadership because we know that without this regulation fraud and corruption will surely flourish.
So, after 20 years of Reagan/Clinton deregulation today's Republicans are still shouting for more! As are Clinton/Obama neo-liberals because to them global corporations are simply one business offering all kinds of products so there is no monopoly happening!
Greenspan spent his entire terms as FED first under Reagan/Clinton/Bush telling the American people that corporations and Wall Street would correct themselves if their operations threatened the US economy and corporate profits......NO ONE BELIEVED THAT THEN----AND NO ONE BELIEVES THAT NOW.
So, Reagan Clinton sold the idea that we did not need regulations----that Federal agencies should allow corporations to self-regulate----and the US economy would thrive----
WE HAVE NOW HAD 5 ECONOMIC CRASHES FROM BUSH SR TO NOW ALL TIED TO THE SAME ROARING 20s AND GREAT DEPRESSION BEHAVIOR OF DEREGULATED AND FREE MARKET POLICY.
Clinton and Obama have all kinds of political organizing machines at state and local levels recruiting young people especially in cities to these very, very, very, very bad economic policies that only maximize wealth and profit/power to global corporations. The American people will be taken third world if these TPP and International Trade Zones and Pacts are allowed to be installed.
WHEN CANDIDATES FOR OFFICE RUN AS A DEMOCRAT OR REPUBLICAN THAT ONLY SEE THEMSELVES AS PLAYERS----TRYING TO SELF-PROFIT FROM THIS MESS----99% OF AMERICANS GET BURNED.
The GOP’s Deregulation Obsession
The Chamber of Commerce and its Republican allies have launched “the Contract With America on steroids.”
By Robert WeissmanOctober 12, 2011
It’s hard to imagine a worse time for big business to conduct a full-blown attack on regulatory protections. The country continues to suffer from a deep recession caused in large part by financial deregulation and underenforcement of existing rules. A string of corporate disasters—the BP oil gusher, the Massey coal mine explosion, unintended acceleration in Toyota cars, leaded toys, killer cantaloupes—all tied directly to inadequate regulatory protections, are fresh in the public mind.
For the US Chamber of Commerce, however, the facts shouldn’t get in the way of a stupendous power grab. The Chamber and its allies on Capitol Hill have launched an unprecedented antiregulation campaign, with the goal of blocking new safeguards against corporate wrongdoing and rolling back environmental, health, financial and other regulatory protections.
“The current situation might be characterized as the Contract With America on steroids,” says Gary Bass, former executive director of OMB Watch, a DC-based advocacy group, noting political factors that make this period more dangerous than the mid-1990s. “First, these antiregulatory advocates are using high unemployment as a wedge, claiming that regulations are job killers. Second, antiregulatory forces have developed a powerful message machine.” That message, which is being funded to the tune of millions of dollars, is visible across the street from the White House, where the facade of the Chamber of Commerce is covered with a giant banner that reads: JOBS. This is the overriding public rationale for its agenda: the Chamber and its allies have created an echo chamber to describe public protections as “job-killing,” imposing burdens on the “job creators” (corporations) and preventing them from undertaking new investments. The Chamber has even created an online board game, Thiswaytojobs.com.
In reality, it was insufficient controls on Wall Street that facilitated the financial crash and the Great Recession, which threw 8 million people out of work. Even when they impose modest short-term costs on businesses, health, safety and environmental protections also commonly create jobs by spurring innovation to address new standards. But opponents of public protections discard such evidence, relying instead on deceptive studies written by those committed to bolstering their deregulation crusade. One preposterous report, issued by consultants to the Small Business Administration, twists a dubious index from the World Bank to conclude that the annual US regulatory burden is $1.75 trillion. This cost estimate largely depends on opinion polls of business leaders while ignoring the benefits of regulations altogether. Even the Bush administration found regulatory benefits to be at least twice as great as costs.
Yet intellectually hollow arguments have gained traction. Darrell Issa, chair of the House Oversight and Government Reform Committee, set the stage for the GOP obsession with deregulation in December, when he wrote to 150 trade associations and business-linked think tanks requesting a wish list of regulatory safeguards they would like to see blocked or repealed. Trade associations from the American Coke and Coal Chemicals Institute to the American Meat Institute answered the call. House Republicans have introduced at least twenty-eight antiregulatory bills, according to a tally by the Center for Progressive Reform.
Blocking regulatory protections has emerged as the centerpiece of the Republicans’ purported jobs plan. In August Eric Cantor, the House majority leader, laid out their fall legislative agenda, focused on blocking “job-destroying regulation.” Cantor has House Republicans pushing ten bills to enable corporations to escape specific regulatory controls, seven related to environmental protection, two addressing workers’ rights and one dealing with the Affordable Care Act.
Republicans are also pushing two cross-cutting proposals to grind the rule-making process to a halt. The most far-reaching is the REINS (Regulations from the Executive in Need of Scrutiny) Act of 2011, which would require Congressional approval of every regulation with a major economic impact (defined as affecting more than $100 million in economic activity a year)—an absurdly impractical requirement, given the dozens of major rules adopted by regulatory agencies every year. REINS would delay product-safety rules affecting family products like toys and cribs, complicate the FDA’s regulation of food and prescription drugs, and slow delivery of Social Security and Medicare, putting seniors at risk. It would also endanger the lives of workers employed in mines, factories and other places where standards reduce on-the-job hazards.
The second bill, introduced in September, is in a way a kinder, gentler version of REINS—and therefore a more serious threat. Its devastating potential impact is buried in technical-sounding provisions—and it has bipartisan support. Introduced by Senators Rob Portman and Mark Pryor, the Regulatory Accountability Act would subject agencies to nearly boundless inquiries into the cost of new regulations and give corporations numerous opportunities to delay rule-making indefinitely. Few major rules would ever see the light of day.
* * *
A host of other proposals to undermine regulatory agencies’ authority may also get a serious hearing in the months ahead. Senator Susan Collins wants to give the Small Business Administration more power to lobby for lower penalties for corporate lawbreaking. Republicans wish to weaken the newly created Consumer Financial Protection Bureau, promising to block confirmation of Richard Cordray, nominated to head the agency, until the agency is defanged. Richard Shelby, the ranking minority member of the Senate Banking Committee, wants to force financial regulators to jump through a series of hoops before they issue rules to implement the recently passed Wall Street reform legislation. Consumer product companies are working to quash a new database (saferproducts.gov) where consumers can air grievances about the safety of everything from structurally deficient chairs to electronics that catch fire. The Consumer Product Safety Improvement Act has been amended to authorize increased lead exposure for children.
Finally, House Republicans have used the budget fights to advance the antiregulation agenda. In the debate over the “continuing resolution” that passed in April, eighty riders were proposed that would have prohibited agencies from enforcing or adopting particular rules. (Almost none passed.) Appropriations bills moving through Congress for fiscal year 2012 are laden with regulatory riders. Republicans also want to cut agency enforcement budgets, proposing, for example, slashing the already meager budget of the Commodities Futures Trading Commission, which is tasked with regulating the market for derivatives—the very financial instruments that were central to the financial collapse.
In response to such an onslaught, one might hope President Obama would offer a ringing defense of the people’s interests over those of corporations. But such hopes have been dashed. Anxious to blunt accusations of being anti-business in advance of 2012, the White House has wavered in its support for public protections. In an op-ed in the Wall Street Journal in January, the president echoed many of the Chamber of Commerce’s talking points, including warnings about “burdens that have stifled innovation and have had a chilling effect on growth and jobs.” With about a dozen disparaging comments on regulation stuffed into a 900-word column, Obama promised, “We are also making it our mission to root out regulations that conflict, that are not worth the cost, or that are just plain dumb.” Soon afterward, Cass Sunstein, who heads the Office of Information and Regulatory Affairs, which reviews federal regulations, blogged about the manifold efforts by the White House to reduce purported regulatory burdens on small businesses.
The White House has watered down or quashed a series of public health, consumer and other regulatory protections ready for implementation. Early this year, saying it wanted “greater input from small businesses,” it withdrew a proposed requirement—$4 the first year and 67 cents in subsequent years—that would have created a simple and inexpensive way for employers to track repetitive stress injuries. More recently, the White House ordered the withdrawal of smog rules that would have complied with the Clean Air Act, a craven capitulation to the Chamber of Commerce and the polluter lobby.
Obama’s regulatory record does include some steps forward. He has appointed a number of relatively strong, public interest–minded leaders to top regulatory jobs and has beefed up agency enforcement budgets—not to where they should be, but in many cases far above Bush-era levels. His administration has also moved ahead on some important rules, such as heightened fuel efficiency standards for vehicles. And even as it has too often echoed the big business framing on regulatory policy, it has opposed the House Republican legislative agenda.
The next year is unlikely to bring passage of the REINS Act or the most hostile antiregulatory proposals. But almost everything else is up for grabs. Enough centrist Senate Democrats may embrace proposals like the Regulatory Accountability Act, and other big business gifts dressed up as initiatives to protect small business, to make them legislatively viable. With its reversal on the smog rule, the Obama administration has confirmed that it is no bulwark for health, environmental, financial or other regulatory protections, and it may well back off on other important regulatory safeguards currently in the pipeline.
Although it’s true that present-day threats to public protections are even greater than they were the last time big business mobilized against regulatory protections, the good news is that it was mobilization by the public interest community that defeated the far-reaching deregulatory proposals of the Contract With America “by talking about the impacts its policy proposals would have had on real people,” as Bass recalls. For all of the corporate money spent on PR and messaging, the drive to roll back regulatory protections faces an inherent problem: the public strongly supports imposing controls on corporate wrongdoers. Polls show surprisingly solid support even for the concept of “regulation” and overwhelming support for specific protections—to ensure uncontaminated food and water, safe toys, prohibitions on bank rip-offs and much more.
Public support for strong controls on corporate wrongdoing offers some reason to hope that advocacy can push the Obama administration to a more consistent and aggressive defense of public protections. But it must be pushed. “I advocate a zero tolerance approach to the Obama administration on regulatory issues,” says Rena Steinzor, president of the Center for Progressive Reform. “Any tentative step toward triangulation and doing deals with big business should be shouted down by progressives without hesitation.”
These perilous times also afford an opportunity to do more than play defense. Just as Governor Scott Walker’s overreach in Wisconsin lit a fire under a labor-led popular movement, so the Chamber of Commerce’s attack on popular government protections provides a chance for a mobilized public to confront corporate power, insist on stronger rules to protect health and well-being, and advance an affirmative role for government in society.