It’s that time again: The Neoliberal Darwin Awards

It’s that time again: The Neoliberal Darwin Awards 

 

Lawmakers are charged with the arduous task of rewriting the U.S. antitrust laws — something that hasn’t been done in earnest in decades. The country’s two major antitrust statutes, the Sherman Act (monopoly law) and the Clayton Act (merger law) were passed in 1890 and 1914, respectively. The Federal Trade Commission Act, which established the FTC and gave it powers to regulate competition, was also passed in 1914.

 

Congress just finished its Big Tech antitrust report — now it’s time to rewrite the laws, CNBC

 

JM Hamilton (11-28-2020)

 

Last year, we kicked off the Neoliberal Darwin awards…  acknowledging & identifying companies - and their management & ownership - that were run in a highly egregious manner.  Behavior, corruption, & profit taking so glaringly bad, that these companies are a threat to capitalism, the US economy, and society at large. 

 

In 2020, neoliberalism didn’t fail to provide, yet again, corporate and multinational examples worth writing about.  If anything, the pandemic revealed entire industries, such as private equity, to be completely incompetent and self-serving: not masters of the universe, but rather, vampires.  Volumes could be filled, case studies written, and textbooks created, but for sake of energy and time, let’s focus in on two key industries.  

 

This year’s recipients of the Neoliberal Darwin Awards: Big Tech and American for-profit Healthcare. 

 

Big Tech (often referred to as FAANG stocks) was in the spotlight this year and received long overdue attention from congress…  for destroying competition, monopoly creation, and causing great harm to the US economy.  Studies were conducted, hearings held, and Silicon Valley royalty made less than impressive appearances before congress.  Further complicating matters, America’s captured & owned regulatory authorities are little more than toadies and lackies, all too often run by industry insiders.  Pro-corporate American courts, too, have made a perfidious hash of US antitrust laws, that date back to the early 20^th century.  Aided further by owned academic institutions and think tanks, US antitrust laws – over time - have been limited to ideas surrounding “consumer welfare.” 

 

And since consumers appear to be doing well by these tech leviathans – so the thought process goes – then these monopolies remain, largely, untouchable.  The conventional wisdom further goes that congress will have to rewrite the antitrust laws but given the divided nature of congress and its penchant for obstruction & sabotage – good luck with that.  And even if a law was passed, it would then, more than likely, be beaten down in right-wing courts, over the span of years.  

 

Instead Dem staffers, who compiled the study, argue (per CNBC) that US antitrust laws should – as originally written – not only protect consumers, but “workers, entrepreneurs, independent businesses, open markets, a fair economy and democratic ideals.”

 

Excellent.  Hard to disagree with any of that, and of course, the aforementioned utilities – or FAANGs – have: crushed labor; entrepreneurs; destroyed capitalism - often well beyond their own economic sector; and indeed, harmed the US economy.  Throw Uber & Lyft into the mix -- along w/ the labor, regulatory, & tax arbitrage seen throughout the tech industry -- and the well documented stagnation of wages and wealth -- and it seems like an open and shut case.  That is, this isn’t creative destruction, but instead, wholesale economic genocide. 

 

Except…  lawyers being lawyers, and judges being politicians, they are likely to stick to precedent, which means any arguments & efforts to break up the tech utilities are likely to fall back upon arguments concerning the consumer. 

 

But that may not necessarily be a bad thing.  For whom is the American consumer but US labor?  Unless one is lucky and born into wealth and privilege, and the vast majority of us are not, the only way for one to be a consumer is to earn wages.  And labor has been absolutely crushed, over the last four decades, by M&A, monopoly, and monopsony power… especially by the tech industry.  Therefore, if labor has been crushed, the US consumer has been crushed, as has America’s purchasing power.  This is not conjecture, but rather, well documented fact. 

 

Basically, unless a right-wing judge is entirely corrupt, arguably, they can quickly see the argument's merit. Add in the originalists & textualists on the Supreme Court -- and unless they throw out century old antitrust laws, in part or in whole -- it would appear that the laws, as originally written, are straight forward enough. Especially, if they conclude, that there is no consumer, w/out labor’s ability to earn a wage, first.  (That's Econ 101.) And if labor is harmed by these multinational monstrosities, then the consumer is harmed.  In the US today, forty percent of Americans can’t meet a $400 emergency payment, and the pandemic and tech utilities have surely, driven that number up.  That one in five US children live in poverty is further testament to this fact. 

 

In short, it’s long past time to break up the tech utilities. Not so ironically - given the industry’s donations to the Democratic party - the biggest obstruction to proceeding w/ antitrust enforcement, may not come from republicans, but establishment democrats. After all, it is America, which means: Count on the political duopoly and right-wing judges to side w/ economy crushing billionaires and monopolists.  

 

 

 

 

 

 

 

 

 

Of course, some industries don’t require the elementary - legal - leap from labor harm to consumer harm, in order to enforce antitrust. American healthcare, pre-pandemic, made up nearly twenty percent of US GDP.  During the pandemic – w/ shrinking GDP and higher healthcare usage – the percentage of GDP healthcare monopolies (insurers, Big Pharma, hospitals, pharmacies, private equity, & pharmacy benefit managers) consume…  will, more than likely, grow well beyond twenty percent. 

 

And yet, all of our Western peers and allies have some form of universal care, and portability of care – consistently, at half the per capita price tag.  Not to put too fine a point on it, but imagine going through the physical stress of undergoing Corona-care, w/in the failing American healthcare system, accompanied by the added psychological stress of knowing, you are likely to go bankrupt?   Add in incompetent congressional & executive branch leadership, at the federal & state level, and no wonder the United States leads the world in Corona-deaths. 

 

For regular readers, JM Hamilton spent a good amount of time outlining the horrors of the American healthcare system, over the last year:

 

Did Trump embrace … Socialized Medicine?  

 

In this piece, JMH asks why Trump turned to Canada and Medicare For All, as a solution to America’s Big Pharma problem. 

 

Storm Clouds Over US Healthcare…

 

Here, we eviscerate the “choice argument” that monopolists, w/in the US healthcare industry, often put up.  The reality, there is no choice in American healthcare, except for many to go bankrupt.  JMH also asks: Why is the US government – siding w/ healthcare monopolists – and working against the interests of the US economy & Americans?

 

Another Black Hole in the US Healthcare Model: Workers' Compensation Insurance  

 

In this piece, we point out the fraud & waste, that is the Affordable Care Act, isn’t limited to personal healthcare, but carries over into duplicative, Workers’ Compensation insurance.  (i.e. American healthcare for injured workers)

 

Death Panels

 

Irony of ironies… as the pandemic heats up, America’s failed for-profit healthcare system is rationing care and deciding who lives and who dies.  Conservatives, and shills for the healthcare industry, used to worry about socialized medicine and death panels…now their worst fears are happening w/in American for-profit healthcare. 

 

COBRA

 

How do employers ensure American workers remain compliant, grateful, and docile (w/ zero entrepreneurial ambitions) … by tying healthcare coverage to employment.  COBRA is outrageously priced healthcare insurance, post- employment. 

 

Social Costs & American Healthcare 

 

Here, we visit how billionaires & multinationals have shifted nearly the entire cost of healthcare – and the extraordinary profits of same – onto the backs of America’s disenfranchised:  The American worker & taxpayer.  Hence, Corporate America’s collective willingness to sacrifice labor and open up the economy, in the middle of a pandemic. The oligarchy has absolutely nothing to lose & near zero financial skin in America’s ever escalating healthcare costs.  That's called moral hazard. 

 

Medicare For All 

 

JMH reviews the grim outcome & economic malaise surrounding America’s failed for-profit healthcare system, versus our Northern neighbor and Canada’s highly successful, Medicare For All. 

 

Trump Loves Socialized Medicine 

 

When the chips were down, and the president was suffering with Corona … where did he flee to?   It wasn’t for-profit healthcare, but rather, the finest socialized medicine American taxpayers could buy. 

 

 

Roll these pieces together and we have one hell of an indictment against neoliberalism but also against America’s worthless two-party political system, essentially a duopoly. 

 

A duopoly where Dems & GOP – despite some modest show of bickering – always vote in lockstep against the interests of the American people, and in favor of their donor masters. 

 

US for-profit healthcare, with its ever-growing body count, defines systemic racism, just as much as it fosters and protects raging inequality.  US for-profit healthcare is the paragon of injustice, waste, and fraud.  Via monopolistic taxation, American healthcare kills jobs, opportunity, innovation, and the economy itself. 

 

And there you have it…  the Big Tech and US Healthcare winners.

 

Copyright JM Hamilton Publishing 2020

 

 

Santa Growth is not coming to town…

Santa Growth is not coming to town… 

 

By JM Hamilton (11-15-2020)

 

We can all rejoice that vaccines appear to be on the way.  Vaccines that Western governments will, likely, overpay Big Pharma for, and will, probably, save countless lives. The plague is certainly nothing to celebrate, but we should pause a moment and tip our collective hat to COVID.  Namely, for all the truths the disease has revealed, about the state of the American economy and the political process.  Without COVID, the United States might have traveled on down the neoliberal path…  never questioning, semi-comatose, somnolent, morbidly obese, sleepwalking, and narcotized on American exceptionalism, consumerism, & social media.

 

Without COVID, would Trump have won a second term?

 

As you chew on that, please note, the pandemic highlights and presents an opportunity to question the false narratives Americans are fed every day.  Among the aforementioned revelations: tax cuts for the rich lead to economic stagnation and catastrophic national debt, just as exorbitant corporate debt crushes companies & industries; the trickledown myth (fiscal & monetary) is just that, a fable that nobody credible believes in anymore; and it doesn’t matter how many tens of thousands of Main Street businesses fail, if you pump enough taxpayer money into debt and stock markets, the markets will completely divorce themselves from reality. 

 

But perhaps the greatest fiction to be laid out for burial, by COVID, is the story that the economic growth fairy - for today’s purposes, Santa Growth - will slide down the nation’s chimney and save the United States, laissez faire economics, and eradicate nearly $30 trillion in national debt. 

 

 

 

 

 

 

 

The financial news media - and the fresh and saltwater schools of economics – are all in agreement, growth is the path forward, in: eliminating inequality, addressing stagnant wages, as a solution for economic malaise, and in addressing catastrophic national debt. 

 

Even before the plague came along, the US had enjoyed economic growth in, nearly, every year, from Reagan forward.  (Albeit, growth – from 2000 forward, arguably - was significantly mitigated by colossal national debt, endless austerity, budget draining wars w/out end, Wall Street bailouts, & rent seeking utilities that have come to dominate the US economy.)  And yet, during the last forty years of economic growth, wages stagnated, the number of millionaires & billionaires soared, the national debt shot to the moon, and social mobility has been all but eliminated.  Most detrimentally, the economy has become financialized… thanks largely, to Federal Reserve policy. 

 

Moreover, the insistence upon growth - as an economic panacea for what ails America, indeed, The West - holds out false hope and doubles down on the failure that led us to a divided and impoverished nation.  Relying on economic growth, to solve the nation’s ills, is little more than an avoidance strategy, relied upon by the privileged … essentially, kicking the can down the road.  Lancing & removing growth dogma that infects America’s economy, academia, and C-suites is the key to moving beyond late-stage neoliberalism and adopting an economy that works for everyone. 

 

For in the ultimate twist of economic fate, it is Wall Street’s & Corporate C-Suites’ myopic view of growth – quarter to quarter – that leads to greatly diminished aggregate growth for the nation.  Specifically, what happens when an industry doesn’t see growth?  Well, the elites would have us believe that’s cause for industry consolidation.  And while M&A may take care of management and ownership concerns, in the short run… when this behavior is engaged in across the entire economy, the ultimate outcome is clearly antigrowth & anti-jobs. (Not unlike multinationals exporting jobs offshore, in favor of cheaper labor, and then dumping foreign manufactured goods on US soil… a single company can get away with it, but when everybody does it, aggregate demand and the economy takes a hit.). 

 

To be clear, M&A, monopoly & monopsony, leads to layoffs, lost jobs, stagnating wages, a significant loss of innovation & opportunity (and diseconomies of scale) … in short, significantly less growth.  Moreover, cartel & monopolies extract taxes or rents from the consumer, that a normally functioning mixed economy – or rational government - would never permit. 

 

This too, crushes growth and opportunity. 

 

The FED enables all this by suppressing interest rates, keeping investors desperate, and making money - for the connected & powerful - nearly free to borrow. All this feeds consolidation, M&A, and paradoxically, an anti-growth outcome (aka a doom loop).  Hence, reinforcing the obvious… that those who sing loudest w/in the cult of growth – the business community, academics, & the neoliberal elites w/in government – are often the very same people, who destroy growth, opportunity, jobs and the economy.  Meanwhile, the national debt soars, commercial debt soars, and entire segments of the economy – see American retail – are all but eliminated. Let’s hear it for GDP, one more time.  No thanks.  

 

Moreover, if possible, is unlimited growth even desirable?  

 

Think about what the cult of growth requires: an ever-growing population, increasingly impoverished by failed neoliberal dogma & the lack of well-paying jobs; an overburdened planet, which – given plague, famine, disease, endless war, and climate change – appears to have reached its limits with humanity; and finally, a captured & subservient US government, perfectly willing to sacrifice half the population, in favor of a handful of oligarchs. In short, unrestrained growth is not only unachievable, but it is also undesirable.

 

So you better not pout, you better not cry… Santa Growth is not coming to town, to save us from our failure to ask hard questions, like why has neoliberalism – and the cult of growth - been such a catastrophic failure for nearly half of all Americans?

 

That alone, should cause Americans to withdraw the cookies, milk, and kick our Santa Growth habit, once and for all.  

 

Copyright JM Hamilton Publishing 2020