The
Trump Justice Department has approved a $69 billion merger between CVS, the nation’s largest drugstore chain, and insurance giant Aetna. It’s the largest health insurance
deal in history.
Executives say the combination will make their
companies more efficient, allowing them to gain economies of scale and squeeze
waste out of the system.
Rubbish. This is what
big companies always say when they merge.
The real purpose is
to give Aetna and CVS more bargaining power over their consumers and employees, as well as pharmaceutical companies and healthcare providers (which
have also been consolidating).
The result: Higher prices. Americans already
spend far
more on healthcare and medications per person than do citizens in any other
developed country – and our health is among the worst.
America used to
have antitrust laws that permanently stopped corporations from monopolizing
markets, and often broke up the biggest culprits.
But now, especially with Trump as president and lobbyists and CEOs running much of the government, giant corporations like Aetna and CVS are
busily weakening antitrust enforcement and taking over the economy.
They’re also keeping down wages. Workers with less choice of whom to work for have a
harder time getting a raise. So when local labor markets are dominated by a major drug chain like CVS or a big box retailer like Walmart,
these firms
essentially set wage rates for the area.
These massive
corporations also have a lot of political clout – another reason they’re
consolidating.
We see the same pattern across the economy. Wall Street’s five largest banks now account for 44
percent of America’s banking assets – up from about 10 percent thirty years ago. That means higher interest rates on loans, higher
late fees, and a greater risk of another “too-big-to-fail” bailout.
But politicians
don’t dare bust them up because Wall Street pays part of their campaign
expenses.
Oh, and why does
the United States have the highest broadband prices among advanced nations and
the slowest speeds?
Because
more than 80 percent of Americans have no choice but to rely on their local
cable company for high capacity wired data connections to the Internet –
usually Comcast, AT&T, or Verizon. And these corporations are
among the most politically powerful in America. (In a rare exception to Trump’s corporate sycophancy, the Justice Department is appealing a district court’s approval of AT&T’s merger with Time Warner.)
Have you wondered
why your airline ticket prices have remained so high even though the cost of jet
fuel has plummeted?
Because U.S.
airlines have consolidated into a handful of giant carriers that divide up routes
and collude on fares. As recently as 2005 the U.S. had nine major airlines. Now
we have just four.
And all are politically well-connected.
Why does food
cost so much? Because the four largest food companies control 82
percent of beef packing, 85
percent of soybean processing,
63 percent of pork packing, and 53
percent of chicken processing.
Monsanto alone
owns the key genetic traits to more than 90
percent of the soybeans planted by farmers in the United States, and 80
percent of the corn. Big Agribusiness wants to keep it this way.
Google’s search
engine is so dominant “google” has become a verb. A few years ago the staff of
the Federal Trade Commission recommended
suing Google for “conduct [that] has resulted – and will result – in real harm
to consumers and to innovation.” But the commissioners
decided against the lawsuit, perhaps because Google is also the biggest
lobbyist in Washington.
The list goes on,
industry after industry, across the economy. Antitrust has
been ambushed by the giant companies it was designed to contain.
Under Trump and the Republicans, Congress has
further squeezed the budgets of the antitrust division of the Justice Department and
the Bureau of Competition of the Federal Trade Commission. Politically-powerful
interests have squelched major investigations and lawsuits. Right-wing judges
have stopped or shrunk the few cases that get through.
Trump and his
Republican enablers rhapsodize about the “free market,” yet have no qualms about allowing big corporations to rig it to
boost profits at the expense of average people. As the late Robert Pitofsky, former chairman of the Federal Trade Commission, once noted, “antitrust is a deregulatory philosophy. If you’re going to let the free market work, you’d better protect the free market.”
We’re now in a
new Gilded Age of wealth and power similar to the first Gilded Age of the late nineteenth century when the nation’s
antitrust laws were enacted. But unlike then, today’s biggest corporations have
enough political clout to neuter antitrust.
Unless government
un-rigs the market through bold antitrust action to restore competition, the hidden upward
distributions from consumers and workers to corporate chieftains and major investors will grow even larger.
If Democrats ever
get back in power, one of the first things they need to do is revive antitrust.