CHINA CRACKS DOWN ON BILLIONAIRE POWER & TECH…
In the past few months, China has clamped down on areas from anti-monopoly practices to cybersecurity, and tightened rules on data security.
Regulators have tightened their hold on domestic tech giants for much of the past year, from the suspension of Ant Group’s $34.5 billion listing, to Alibaba’s $2.8 billion antitrust fine, and a cybersecurity probe into ride-hailing firm Didi.
“When the U.S. government wanted to crack down on monopoly, it could take years and decades simply because of the institutional checks and balances,” he said.
“China’s model is slightly different — other people think it’s a lot different,” Li said. “That model allows them to do things quickly, identify issues decisively, and then make a policy right after that, and then move on to implement that.”
- Beijing crackdown is a ‘wake up call’ for China’s corporate giants, says former chief of HKEX, CNBC
By Gregg Wall (8-7-2021)
Due to equal parts boredom w/ US financial news reporting, the mountain time zone I live within, combined with an equal measure of curiosity, I pivoted to Asian financial news reporting in the last several weeks. My timing couldn’t have been more fortunate, as China’s government has begun cracking down hard on tech monopolies and even running over a billionaire or two. China’s reevaluation of capitalism didn’t just start over the last several weeks… earlier this year, Beijing began to rein in Jack Ma and Ant Group.
China’s new regulatory regime comes at a time when the Biden administration has weighed in against the evils of monopoly, by the signing of an executive order … orders designed to promote competition and inveigh against M&A and resulting layoffs, gouging the consumer via pricing power, and anticompetitive monopsony power against business creation & small business owners. But Biden's fight appears to be an uphill battle and possibly may be little more than window dressing: with US regulatory agencies entirely captured by the industries they allegedly govern; the massive flows of money from billionaires and multinationals into political races; the gross corruption Americans see in the US congress every day; and a US stock market that thrives on monopolies’ obscene profits, crushing labor, and greater concentrated power.
In short, Biden’s orders don’t have many teeth, nor has the admin begun anything in the way of antitrust enforcement, which could take years, if not decades. And given America’s right-wing, pro-business courts as well as a possible shift to a future republican administration (which could unwind Biden’s efforts w/ the stroke of a pen), even the antitrust path is not guaranteed to succeed. Our do-nothing congress often talks a great game against US tech behemoths, but it’s taken seven months just to produce a simple bipartisan infrastructure bill in the Senate and even that is little closer to passage.
Anyone who has read the JMH blog knows I have written extensively about the evils of billionaires, monopoly, and private equity … all are devotees, or vehicles, of concentrated economic and political power. Power that is a direct threat to democracy, a healthy US economy, and the theory that the American government is a government of the people and for the people.
Since Biden has come into office, we’ve seen Wall Street drive up the price of commodities; we’ve seen powerful monopolies & utilities exercise pricing power over the consumer and labor; and we’ve seen foreign supply chains and concentration bring US auto production to a grinding halt. These actions did not happen by accident nor within a vacuum but were designed to usurp the will of the American people and drive inflation, so as to cut off debate and action on Biden’s New Deal promises. Americans are often worried about the coercive power of the state, but seem far less concerned about the corrosive, destructive, and pernicious power of the private sector.
And is it any wonder, as we read glowing write ups in the financial press about how Warren Buffet scores another profits coup, by investing in monopolies: that are on auto pilot, destroy the planet, face no competition, suffer little or no regulatory oversight, crush labor, and destroy the fabric of democracy and the American dream itself. Or perhaps the MSM can produce yet another puff piece on how Ri-Ri scored her first billion.
If Biden & congress were even remotely focused upon reining in the twin scourges to the US economy and the political process -- billionaires and monopolies -- he’d have to attack the problem on several fronts: 1) by taxing, significantly, the dividends, stock appreciation, and wealth of the billionaire class; 2) instructing the Federal Reserve to stop jacking up the stock market (why would entrepreneurs invest in business creation or go up against American monopolies, when they can earn fortunes in a rigged stock market); 3) telling the FED to raise interest rates and cut off the mother’s milk of concentration and monopoly (i.e. cheap debt); 4) using the Defense Production Act to attack monopoly concentration, especially Big Pharma, and reorganize industry, including ordering businesses and the US economy home (if a pandemic, half the US in flames, and monopoly rule doesn’t provide enough crises with which to use the DPA, what does?); and 5) removing the revolving door in regulatory agencies and have them attack the monopolies and utilities (including, but not limited to, tax audits and antitrust enforcement). Biden also needs to use the bully pulpit of the presidency to attack senators and congressmen, who stand in his way (as well as their donors).
Biden might even try a few carrots, incenting businesses to break up and unwind? Hey, Biden says he’s modeling his presidency on FDR… seven months in, it’s time to start.
If all this seems daunting or pie in the sky, coming from a president whose greatest campaign promise was to his billionaire donors, assuring them nothing would change (so far, Biden sure as hell has delivered in this regard) … perhaps we should consider the alternative, a democracy facing collapse.
From a health care system that just came in dead last, to rising poverty rates, to near zero social mobility and declining life expectancy, the US is not well. In fact, it looks down right banana republic.
To be sure, I’m not a fan of Communist China’s totalitarian leadership, gulags, or crushing oppression… but what I am a fan of are governments that get things done, highly positive things like reining in billionaires and state control over monopolies (cartels & monopolies should not exist in a healthy capitalist economy). Please notice, when the Sino stock market indexes took the inevitable hit from leadership’s recent actions, China’s communists, alleged free marketeers, didn’t even flinch. If the markets had cratered in the US, American politicians would have turned to Jell-O.
It’s easy for me to sneer about communist oppression, but what about billionaire, monopoly, and Wall St. oppression? Is a dictatorship of moneyed elite much different than a dictatorship of a single hegemonic political party?
And is America’s two-party system little more than a front for single party rule, that is to say, oligarchy aiming for complete kleptocracy?
If that’s the case, well then, mission accomplished.
Copyright JM Hamilton Publishing 2021
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