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America is not the land of the free but one of monopolies so predatory they imperil the nation
Its growing economic crisis is in contrast to a thriving and newly innovative Europe Tomorrow, President Trump arrives in London for the annual Nato summit. Despite the boasting and the trappings of superpower status, he is an emissary from a country whose economy and society are in increasing difficulty, and whose global leadership is under challenge not just from the usual suspect, China, but from Europe. With the unerring capacity to be wrong that defines the Brexit right, Britain is about to decouple itself from a continental economy beginning to get things right, and hook up with one that is palpably beginning to fail.
... Except the latest research demonstrates the reverse is true. Britain is about to make a vast mistake. In the recently published The Great Reversal, leading economist Thomas Philippon of New York University and member of the advisory panel of the New York Federal Reserve, mounts a devastating attack on the conventional wisdom, so perfectly embodied by the witless Boris Johnson. The news is that over the last 20 years per capita EU incomes have grown by 25% while the US’s have grown 21%, with the US growth rate decelerating while Europe’s has held steady – indeed accelerating in parts of Europe. What is going on?
Philippon’s answer is simple. The US economy is becoming increasingly harmed by ever less competition, with fewer and fewer companies dominating sector after sector – from airlines to mobile phones. Market power is the most important concept in economics, he says. When firms dominate a sector, they invest and innovate less, they peg or raise prices, and they make super-normal profits by just existing (what economists call “economic rent”). So it is that mobile phone bills in the US are on average $100 a month, twice that of France and Germany, with the same story in broadband. Profits per passenger airline mile in the US are twice those in Europe. US healthcare is impossibly expensive, with drug companies fixing prices twice as high or even higher than those in Europe; health spending is 18% of GDP. Google, Amazon and Facebook have been allowed to become supermonopolies, buying up smaller challengers with no obstruction.
This monopolising process gums up everything. Investment in the US has been falling for 20 years. Because prices stay high, wages buy less, so workers’ lifestyles, unless they borrow, get squeezed in real terms while those at the top get paid ever more with impunity. Inequality escalates to unsupportable levels. Even life expectancy is now falling across the US. But why has this happened now? Philippon has a deadly answer. A US political campaign costs 50 times more than one in Europe in terms of money spent for every vote cast. But this doesn’t just distort the political process. It is the chief cause of the US economic crisis. Corporations want a return on their money, and the payback is protection from any kind of regulation, investigation or anti-monopoly policy that might strike at their ever-growing market power...
https://www.theguardian.com/commentisfree/2019/dec/01/america-is-not-the-land-of-the-free-but-one-of-monopolies-so-predatory-they-imperil-the-nation?CMP=Share_iOSApp_Other
... Except the latest research demonstrates the reverse is true. Britain is about to make a vast mistake. In the recently published The Great Reversal, leading economist Thomas Philippon of New York University and member of the advisory panel of the New York Federal Reserve, mounts a devastating attack on the conventional wisdom, so perfectly embodied by the witless Boris Johnson. The news is that over the last 20 years per capita EU incomes have grown by 25% while the US’s have grown 21%, with the US growth rate decelerating while Europe’s has held steady – indeed accelerating in parts of Europe. What is going on?
Philippon’s answer is simple. The US economy is becoming increasingly harmed by ever less competition, with fewer and fewer companies dominating sector after sector – from airlines to mobile phones. Market power is the most important concept in economics, he says. When firms dominate a sector, they invest and innovate less, they peg or raise prices, and they make super-normal profits by just existing (what economists call “economic rent”). So it is that mobile phone bills in the US are on average $100 a month, twice that of France and Germany, with the same story in broadband. Profits per passenger airline mile in the US are twice those in Europe. US healthcare is impossibly expensive, with drug companies fixing prices twice as high or even higher than those in Europe; health spending is 18% of GDP. Google, Amazon and Facebook have been allowed to become supermonopolies, buying up smaller challengers with no obstruction.
This monopolising process gums up everything. Investment in the US has been falling for 20 years. Because prices stay high, wages buy less, so workers’ lifestyles, unless they borrow, get squeezed in real terms while those at the top get paid ever more with impunity. Inequality escalates to unsupportable levels. Even life expectancy is now falling across the US. But why has this happened now? Philippon has a deadly answer. A US political campaign costs 50 times more than one in Europe in terms of money spent for every vote cast. But this doesn’t just distort the political process. It is the chief cause of the US economic crisis. Corporations want a return on their money, and the payback is protection from any kind of regulation, investigation or anti-monopoly policy that might strike at their ever-growing market power...
https://www.theguardian.com/commentisfree/2019/dec/01/america-is-not-the-land-of-the-free-but-one-of-monopolies-so-predatory-they-imperil-the-nation?CMP=Share_iOSApp_Other
18 replies
= new reply since forum marked as read
= new reply since forum marked as read
the very idea is OBSCENE 
