Robert Reich: America Is Bad At Stopping All Cartels

[Replay]

He means in this case not the drug cartels (though we are bad at stopping those too, particularly when there are so many better regulatory options available) but the classical definition of a cartel as any group that colludes to evade fair competition and defraud the customer - in this case, most of America's major corporations, particularly the banks. His message is essentially that antitrust - Teddy Roosevelt's legacy and the reason for America's 20th century economic prosperity in large measure - is dead.

http://www.businessinsider.com/robert-r ... ens-2015-5

[ManaMan]

The cartelized industries he mentions are:

• banking
• airlines
• drug manufacturing
• health insurance
• broadband
• food production/Agribiz
• Internet search/Google

America used to have antitrust laws that permanently stopped corporations from monopolizing markets, and often broke up the biggest culprits.

No longer. Now, giant corporations are taking over the economy — and they're busily weakening antitrust enforcement.

Obviously they didn't "permanently" stop anything

I'd posit that these industries are all heavily regulated (with the possible exception of internet search) and the cartels largely propped up by artificial government intervention: patents, copyrights, subsidies, captive regulators, etc. In the case of broadband there are many places where the government allows legal monopolies as long as they serve unprofitable areas. I don't think that many of these companies would exist in a truly "free market".

The government should follow the maxim of "first, do no harm". What government policies are creating and sustaining these cartels? Let's remove or mitigate them. Once we do that then, if we still need to right old wrongs, we can break up monopolies or otherwise take back and redistribute public wealth that was unjustly acquired by these private corporations.

I don't pretend to understand the intricacies of all of the industries but I think I understand some basic principles. I believe that the rich and powerful are mainly rent-seekers. They want to use the government to establish secure income streams at the expense of the masses. They don't want competition or insecurity. It's what the Kings and lords of the middle ages did and it's what the rich and large corporations do today. As long as there are strong central governments they will attempt to hijack them. The more I follow politics the more I lean toward a Left-Libertarian view.

[Replay]

You are unquestionably right that rent-seeking behavior is at the root of a lot of the modern economic problems in the classic economic sense, Mana.

You are also correct that the problematic use of authority to engage in rent-seeking behavior is at the root of a lot of world leadership issues.

[Oracle]

You are unquestionably right that rent-seeking behavior is at the root of a lot of the modern economic problems in the classic economic sense, Mana.

Agree completely.

[Replay]

*offers thanks and olive branch to Oracle*

I tend to describe the essential problem we're facing as "beggar-thy-customer capitalism".

When corporations seek to create new forms of "rent" - which in this sense can be just about any fee on anything that wasn't there before - and do it without regard to whether or not people are getting gouged, hurt, or even bankrupted in the process, that's when disaster is ALWAYS going to strike.

Classic example to me: the proposed debit-card fees that got shot down a few years ago.

It's a tossup whether a strict classic economist would describe that as rent-seeking behavior or x-inefficiency - but to me it's classic "rent"; if that had passed, we'd all essentially be renting our cards from the banks.