Democracy:

Antitrust

The merger wave of the last decade has reshaped the U.S. and world economies and led to the greatest concentration of corporate power in history, doing serious damage to our democracy, and serious economic damage to many.

Concentrated economic power leads to a variety of abuses: gigantic mergers and acquisitions are suppressing innovation, driving up consumer prices, facilitating mass layoffs and undermining customer service. Phone company mergers have slowed the introduction of local phone-service competition and ensured that if competition ever comes, it will be between fewer competitors. Consolidation in the banking industry has led to branch closures and more expensive customer service. Corporate combinations in everything from supermarkets to oil companies to office-supply stores have driven up consumer prices.

The merger-driven creation of megafirms often creates "too-big-to-fail" enterprises that are positioned to receive various sorts of bailouts from the federal government. Thus the unfettered capitalist drive to accumulate and consolidate gives rise to socialized insurance at taxpayer expense -- a burgeoning state capitalism or corporate socialism.

Concentrated economic power also translates into concentrated political power -- the marriages of corporate giants are enabling them to tighten their grip on the political process. Media mergers have left a handful of companies with unprecedented, national (and international) power over political reporting, and politicians. Microsoft has sought to use its political muscle to slash funding for the Justice Department's Antitrust Division -- the very agency that successfully sued to break up the software monopolist. Citibank and Travelers merged into Citigroup, using a temporary exemption to a law that prohibited such mergers, on the assumption that they would be able to force through a change in the law to legalize their marriage. Unfortunately, they succeeded in 1999 via the bank concentration bill.

Of course, monopoly abuses may result from market power gained largely apart from mergers, as has been the case with Microsoft. Bill Gates' firm has conspired to destroy competitors and block internet and software innovations.

The United States needs an antitrust policy that protects consumers and workers, assures the operation of a fair marketplace and prevents Goliath corporations from running roughshod over our political democracy. We need: