AMERICA: NO LEGAL NEED APPLY
REPORT: The assault to finish off
the American
middle-class is NOT over
middle-class is NOT over
The report noted that many illegals don't have jobs or have
difficulty in landing good jobs because of local laws. However, it
identified several states that have begun easing employment laws so that illegals can get a
job.
Trump names billionaire corporate raider Icahn to slash regulations on business
Trump names billionaire corporate raider Icahn to slash regulations on business
By Patrick Martin
23 December 2016
23 December 2016
In appointing billionaire corporate raider Carl
Icahn to a high-profile advisory role—in charge of slashing government
regulations on Wall Street, the oil monopolies and other giant
corporations—Donald Trump has once again underscored the radically right-wing
character of his administration’s domestic economic and social policy.
Icahn will not assume a formal role and will not
become a government employee, allowing him to avoid a Senate confirmation
hearing and the disclosure of his vast assets, including those which stand to
benefit directly from the policies he advises Trump to adopt.
These include two oil refineries about
which
Icahn has had repeated conflicts
with the Environmental Protection
Agency.
According to press reports, Icahn played a major role in selecting Oklahoma
Attorney General Scott Pruitt, a bitter opponent of regulations on the fossil
fuel industry, to head the EPA under Trump. Share prices for Icahn’s CVR Energy
have risen by 67 percent since the election, netting him an additional $600 million.
The Wall Street
Journal reported that Icahn would have effective veto power over the
naming of a successor to Mary Jo White as chair of the Securities and Exchange
Commission, the principal regulator of Wall Street. “He is playing a central
role in selecting the next chairman,” the newspaper wrote. “Interested
candidates have reached out to him, and he is interviewing others at the
request of Mr. Trump...”
Icahn is a longtime business crony of Trump,
having lent him money when he was in financial difficulties. Last February, he
purchased the assets of Trump Entertainment Resorts when it emerged from
bankruptcy reorganization. Trump did not profit greatly from the sale, since
his role with the company has been limited to licensing the use of his name.
Icahn then smashed a strike by casino workers at the Trump Taj Mahal in
Atlantic City, closing the facility in September.
The appointment signals a commitment to
across-the-board deregulation of corporate America, not just Wall Street and
the energy monopolies. A statement from Icahn issued by the Trump transition
team declared, “Under President Obama, America’s business owners have been
crippled by over $1 trillion in new regulations and over 750 billion hours
dealing with paperwork… It’s time to break free of excessive regulation and let
our entrepreneurs do what they do best: create jobs and support communities.”
What Icahn does best, however, is destroy jobs
and devastate communities, demonstrated most recently in Atlantic City.
The 80-year-old billionaire began his career as
a corporate raider in the late 1970s. He used junk bonds, newly pioneered by
Michael Millken (later a convicted swindler), and other financial innovations
to develop the technique of seizing control of companies using borrowed money
and then selling off the company’s assets to pay the resulting debts, leaving
himself with any profits. In the course of this asset stripping, tens of
thousands of workers lost their jobs, health benefits and pensions.
Icahn became a household name in 1985 with his
takeover of Trans World Airlines (TWA), which was the target of two separate
takeover bids, one by Frank Lorenzo, notorious as a union-buster at Continental
Airlines, the other by Icahn. The Air Line Pilots Association and the mechanics
union (International Association of Machinists—IAM) supported the bid by Icahn,
deeming his 26 percent pay cut for pilots and 15 percent cut for mechanics
“superior” to Lorenzo’s demand for a 50 percent cut.
While Lorenzo offered a
higher price, the TWA board chose Icahn’s bid because, as the New York
Times wrote at the time, “the union agreements were worth much more to
the board of directors since they would strengthen the airlines’ profitability
and ensure labor peace for three years.”
Icahn’s asset stripping and the deepening crisis
of the airline industry led TWA to bankruptcy and liquidation in 1992, with the
loss of all the workers’ jobs. Icahn, however, became a billionaire. He used
his reputation as an absolutely ruthless opponent to practice what became known
as “greenmail.” Once he had targeted a corporation by buying up a sizeable
block of stock, the company would pay him a premium to go away.
Icahn went on to take—and sometimes
dump—sizeable stakes in companies ranging from tech giants Apple, eBay and Dell;
to auto suppliers such as Lear and Federal-Mogul; pharmaceutical and biotech
firms; minimum-wage retailers like Family Dollar; and entertainment properties
such as Netflix and casinos in Las Vegas and Atlantic City. He bought a
sizeable piece of American International Group, the huge insurer, after it was
bailed out by the US Treasury in the 2008 crash.
Icahn is the seventh billionaire, counting Trump
himself, to take a prominent position in the new Republican administration. He
joins asset-stripper Wilbur Ross, Amway heiress Betsy DeVos, TD Ameritrade heir
Todd Ricketts, hedge fund boss Vincent Viola and World Wrestling Entertainment
CEO Linda McMahon.
This line-up is comprised of financial
speculators, wreckers of industry and
profiteers from pyramid schemes. Their
business activities are not connected, even
indirectly, to the development of
the
productive forces and creation of new
technologies and products. They are
plunderers, benefiting either from their own
semi-criminal operations or from
those
carried out by more senior members of their
immediate families, from whom
they
inherited or stand to inherit great wealth.
Icahn is the wealthiest, and certainly the most
notorious, of Trump’s assembly of billionaires. His net worth reached a high
point of some $24 billion in 2014, when he was No. 25 on the Forbes 400 list of
the world’s richest individuals. A run of bad investments has dropped him to an
estimated $17 billion, and No. 65 on this year’s list. Nonetheless, his current
net worth is equal to the wealth of all of the other Trump appointees combined,
bringing the total to more than $34 billion. This vast sum represents a greater
concentration of riches by far than in any previous government in Washington.
Over the past several days, Trump has announced
a handful of other nominations, all consistent with the ultra-right character
of his administration. He appointed Peter Navarro, a business professor at the
University of California at Irvine, to head a new National Trade Council.
Navarro is a longtime Democrat, having run
unsuccessfully for mayor of San Diego and for a congressional seat. He
advocates a virulently anti-Chinese policy on trade, similar to that of the
AFL-CIO bureaucracy. Navarro and Wilbur Ross worked together on Trump’s trade
policy during the campaign, and Trump issued a statement saying that Navarro
“has presciently documented the harms inflicted by globalism on American
workers, and laid out a path forward to restore our middle class.”
Other new appointments include a trio of right-wing
press spokespersons. Sean Spicer, the top liaison between the Trump campaign
and the Republican National Committee, will be White House press secretary.
Kellyanne Conway, Trump’s campaign manager, will be counselor to the president.
Fox News commentator Monica Crowley will be press representative for the
National Security Council.
The ultra-right character of the new
administration was underscored by a report that Representative Mick Mulvaney of
South Carolina, tapped to head the Office of Management and Budget, spoke to a
chapter of the John Birch Society during the summer, praising the group and
encouraging it to continue its work.
Another nominee, Representative Ryan Zinke of
Montana, nominated for secretary of the interior, told voters during his 2014
campaign for Congress that Hillary Clinton was “the real enemy…the Antichrist.”
A law professor's warning: we are closer to oligopoly than at any point in 100 years
http://www.vox.com/policy-and-politics/2016/12/23/14052804/oligopoly-tim-wu
http://www.vox.com/policy-and-politics/2016/12/23/14052804/oligopoly-tim-wu
Christopher Furlong / Getty Images News
In the early 1900s, the biggest monopolists of the day had virtually complete control of their markets. Standard Oil. US Steel. The American Sugar Refining Company.
Today we don’t so much have single companies dominating an entire industry as much as a handful of extremely powerful ones. Over the past few decades, the number of markets consolidated by a few mega-companies has skyrocketed, according to Columbia law professor Tim Wu.
“It’s almost like global warming: You can just look out and say, ‘The economy is way more concentrated,’ for almost any given thing,” says Wu, a former senior adviser to the Federal Trade Commission, on the latest interview of The Ezra Klein Show. Wu has written widely on the problem of America’s burgeoning oligopoly — or the control of major industries by a handful of companies. “You go industry by industry, count the numbers of players there are — and it’s just much more concentrated.”
Wu points to the beer industry as a perfect example. “People may not realize this, but domestically, there are two companies that sell 75 percent of the beer in the United States — Molson Coors and Anheuser Busch, both owned by foreign companies,” he says. “That is an industry that used to have five or six actors and now has two.”
On the one hand, it’s better that there’s at least some competition in these areas than none at all. But because antitrust laws in the middle of the 20th century were written to deal with solitary monopolies, our government is also less equipped to respond to the current threat.
“One hundred years ago you tended to have one big fat trust ... so we wrote the antitrust law to deal with that problem,” Wu says. “Today we usually have something more like the big two, the big three, or the big four. Antitrust is less good at dealing with that kind of situation.”
On the latest episode of The Ezra Klein Show, Wu and Klein also discuss how Wu came to coin the term “net neutrality,” Wu’s time clerking for the Supreme Court, and his newest book, The Attention Merchants, which is about how new technologies were designed to zap our concentration.
A lightly edited transcript of the portion of their conversation about rising oligopoly and antitrust legislation follows. (You can listen to the episode above, or subscribe to the show on iTunes.)
America’s markets are more consolidated than any point since the early 1900s
Tim Wu.
Ezra Klein
I want to talk about how monopolists can and do interact with new technologies, particularly technologies where the boundaries of it are confusing and uncertain for some time — so it’s not clear if they’re a monopolist.
There’s always this argument that Google has a monopoly over the search market — but is Google in the search market? Or is Google in competition with Facebook, in which case they’re not a monopolist?
These questions of monopolies are becoming pretty central to a segment of the left — you see it with Sen. Elizabeth Warren, [former Labor Secretary] Robert Reich, Matt Stoller in the Atlantic. How would you urge people to think of the question of monopolies right now?
Tim Wu
I would urge them to go back to the Progressive Era, the 1910s, and realize we’re in a very similar state of affairs, where the levels of concentration are at historically high levels. And that’s married with historically high profits.
The right way to think about this is to understand that we have allowed the economy to become concentrated to a degree we haven’t seen since the early 20th century. And to understand the interest in doing something about it is a very natural reaction to economic power.
People wonder why there hasn’t been wage growth. Maybe it’s because the markets are so consolidated that they don’t feel the need to pay anybody because employers aren’t competing enough. It’s the time to be concerned about this issue.
Ezra Klein
When you say the economy hasn’t been this concentrated since 1910, what’s the measurement you’re using?
Tim Wu
Well, you would use the HHI measurement — the Herfindahl-Hirschman Index. You draw a line and say, “These are all the industries that compete in this market,” and you figure out how large they are. And then you sum the squares of their market share and compare it to this index. So we have ideas of what counts as highly concentrated and what’s medium concentrated.
A lot of industries’ HHI indexes have gotten higher and higher and higher. It’s almost like global warming; you can just look out and say, “The economy is way more concentrated,” for almost any given thing.
Let’s look at beer. People may not realize this, but domestically, there are two companies that sell 75 percent of the beer in the United States — Molson Coors and Anheuser Busch, both owned by foreign companies. That is an industry that used to have five or six actors and now has two. If you look at airlines, it’s the same story. You go industry by industry, count the numbers of players there are, and it’s just much more concentrated.
One difference between now and 100 years ago is that 100 years ago you tended to have one big fat trust. Like one steel trust, one sugar trust. One company controlling everything. So we wrote the antitrust law to deal with that problem.
Today we usually have something more like the big two, the big three, or the big four. Antitrust is less good at dealing with that kind of situation.
How should the government break up monopolies?
CEOs of AT&T and Time Warner testifying about a possible merger on Capitol Hill in December 2016. Photo by Mark Wilson/Getty Images
Ezra Klein
I think people’s intuitions about whether an anti-merger lawsuit should go forward are typically connected to their sentiments of the companies being discussed.
Comcast is pretty unpopular with the public. So when it comes up that they want do a major merger, people think, “Fuck that, no merger.” But you do have a company like Google, which people do like, which in its market is probably more powerful.
But people’s intuition is that Google is “a good company,” that they’re trying to invent cool stuff. So that’s a question for you: How much are arguments about antitrust about companies versus how much are they about ideal functionings of markets applied irrespective of how we feel about them?
Tim Wu
You have put your finger on the central question that has obsessed antitrust for the last 100 years.
It is essentially a battle between the economists and the lawyers. The economists do believe we should have no sense of right and wrong, but that it’s about economic performance. The champion of this view was [conservative legal scholar] Robert Bork, and his basic argument was that a lot of what looks like evil or malicious conduct — the so-called “bad guys” — may be very economically efficient and therefore good for the economy. So [to Bork] antitrust lawyers should get out of the business of calling good or evil.
The opposite tradition I’d associate with [Supreme Court Justice] Louis Brandeis, who took the antitrust law not as merely an economic tool — though it was that — but a promotion of certain values he thought were central to the American public, like decentralization and a certain kind of virtue in business. Brandeis believed business could be a profession and pursued in a virtuous way. He also thought that the whole goal of the American Republic was to inculcate virtue and good character in people.
So that is the question. And it manifests itself in a merger like AT&T with Time Warner — how do you decide that? Is it just about the numbers and what happens to customers, or is there a deeper concern about whether this company is predatory, a Standard Oil of its time, run by a ruthless monopolist?
In the law — in the doctrine — Bork has won. If you hung out at an FTC meeting or a merger review meeting, you wouldn’t have people saying, “This is an evil company that needs to be stopped.” You’d have arguments about the numbers.
In the end, it’s the lawyers that make the final call. And I think they have intuitions that shade their views. Maybe that’s why Google has gotten a pass and AT&T and Comcast have the egg thrown in their face.
Is there a Trumpian danger in giving the government discretion to punish unpopular companies?
Photo by Drew Angerer/Getty Images
Ezra Klein
But what do you think? I try to track emergent arguments in politics, and this feels like a big one. Are you saying that the central demand of this movement should be — in a completely rules-based way, that no market should have more than three players with more than X share of the market? Which one of those theories do you think is right?
Tim Wu
I’m on the side of Brandeis, and I don’t agree with Robert Bork.
My views are nuanced here. I don’t believe in a flat rule — that an industry reaches 65 percent concentration and is automatically broken up. There was a bill in Congress and a series of 1950s economists who believed in a series of automatic trip wires to break them up. It was called “no-fault” deconcentration.
I think that’s a fairly crude device. Antitrust and private power have such a big effect on our daily lives that it’s too important to be left to the economist and the raw numbers. The influence of how we are as a people and what we are as a country — particularly in sensitive sectors like the media — it’s wrong to think we can run the math and get the right answers.
The founders were concerned about concentrated power in all aspects; they didn’t have concentrated private power. You need an eye on this question, and the character of the firm should matter.
We should do more breakups. Sometimes they have incredibly salutary effects. The company doesn’t like it, but we should never forget that we’re not talking about a person here. We’re not dismembering an individual — that would be immoral!
Some of these dismemberments led to some of the most incredible economic growths and innovations int he history of the United Staes — whether AT&T, Standard Oil — there are moments where big breakups had important consequences for this country. We shouldn’t be afraid to pull the trigger. And you need a mix of economic and moral-driven, maybe political, sense of what this company is doing to us as a country.
Ezra Klein
What are some companies that if broke them up we’d have more innovation and more growth?
Tim Wu
I’ll give you my criteria. You need to look for a monopolist who has been in charge of an industry for a very long time with no signs of competition. We’re talking about stagnant industries.
I’m less excited about breaking up companies under growth that just got there and are doing things. Google in 2010, 2011, was still on the make and innovating wildly. Think of someone who has been there for a very long time — someone like Microsoft and the monopolies it’s had for some time over [Microsoft] Office. It would have been better for the company at the time. It’s a little late now to come back and break them up.
The airline industry — we might consider retroactively breaking up parts of it. We allowed American Airlines and US Airways (to merge) — the effects have been so pernicious for customers, the profits are through the roof, that it’s clearly an error. We need to say, “We blew that.”
There’s been a long story of hospital mergers. They’re not famous, but the price of care after the merger goes up, and the mortality rates also go up. More people die, and they cost more. Those mergers were a mistake.
We should not be afraid to use that power when it’s called for.
Ezra Klein
Let me ask a question about the trip wire approach versus the impressionistic/moralistic approach to company breakups.
The moralistic approach feels like an invitation to crony capitalism. If the decision is made based on the sentiments of the political class toward these companies, that’s an incentive to invest dramatically in lobbying.
Look at Trump. He wants to use anti-trust — not because he is concerned about consolidation in industry, but as a method of punishment and hurting your industries. If companies have this much to fear from the government not liking them, I could really imagine taking us further down that dangerous path.
Tim Wu
Those are arguments Bork made. But Justice (John Paul) Stevens made it a different way. He had this phrase, “Anti-trust is like the law of the Wild West. Sometimes the sheriff feels like you should go pistol-whip a few bad guys.”
I share with you a belief in the rule of law as opposed to political whims and enemies lists. The question is how far you’re erring. I’m not saying politicians should sit around and say, “My phone bill is outrageous let’s break up AT&T.”
The balance has gone too far into a purely economic driven, “what are the numbers,” kind of story. The trip-wire approach is completely insensitive to whether that would be good. It requires judgment calls and we shouldn’t be pretending that we don’t have judgements.
People look at Amazon and the anti-trust people look at it and say, “They have lowered prices.” How can we break them up if they’ve accomplished one of the main goals of this law, which is to keep prices down for customers?
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