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Son Montuno
A thread of random news articles. (this one copied from NYT)
The U.S. economy has been less dynamic in the 21st century, by many measures, than it was in the late 20th century.
Fewer new businesses are starting. Existing businesses have slowed the pace at which they hire new workers (as the chart here shows). Workers are less likely to switch jobs or move to a new city. Companies are investing in new buildings and equipment at a lower rate. And small businesses make up a shrinking share of the economy.
Together, these trends suggest that the economy suffers from a lack of fair competition, many economists believe. Large corporations are often able to increase profits not by providing better products than their rivals but instead by being so big that they exercise power over workers and consumers. The government also plays a role, through policies that protect existing companies at the expense of start-ups and new entrants into an industry.
The technical term for excess profits from a lack of competition is “monopoly rents.” Just think about how frustrated you may have been by the customer service from an airline, cable-television provider or health insurer. And then imagine how frustrating it may be to work there. Despite the problems at these companies, consumers and workers don’t always have good alternatives.
The technical term for excess profits from a lack of competition is “monopoly rents.” Just think about how frustrated you may have been by the customer service from an airline, cable-television provider or health insurer. And then imagine how frustrating it may be to work there. Despite the problems at these companies, consumers and workers don’t always have good alternatives.
The lack of competitive dynamism plays a role in many of the U.S. economy’s biggest problems: the disappointing economic growth of the past two decades; the declining share of output going to workers; and rising income inequality. It also helps explain the new concern — among both Republicans (like Josh Hawley and Ken Buck) and Democrats (like Elizabeth Warren and Amy Klobuchar) — about the power of big business.
• Make it easier for generic-drug makers and Canadian providers to compete with U.S. pharmaceutical companies.
• Allow Americans to buy hearing aids without a prescription (a 2017 law — signed by Donald Trump — called for that, but it still has not happened).
• Require hospitals to be more transparent about billing (a problem that my colleague Sarah Kliff has documented).
• Force airlines to refund money when they lose bags or when the in-flight Wi-Fi doesn’t function.
• Make sure that farmers can repair their own equipment or choose who repairs it, rather than allowing manufacturers to dictate who can.
• Increase federal scrutiny of tech companies’ mergers and their use of consumer data, as David McCabe and Cecilia Kang of The Times explain.
• Restrict “noncompete clauses,” like the ones that restaurant chains and retailers use to keep workers from accepting a job at a rival.
“Having healthy competition is vital to an effective capitalist system,” Brian Deese, Biden’s top White House economic adviser, told me. “It is a driver of higher wages, lower prices, more innovation and more business creation.”
Is the executive order sweeping enough to matter? Probably, although it’s not clear how much.
The problem of monopoly rents has grown so large that even a modest reduction in them could be significant. Thomas Philippon, an N.Y.U. economist, has estimated that the economy’s lack of fair competition costs the typical American household more than $5,000 a year, through both higher prices and lower wages.
As word began spreading this week that Biden was planning to issue an executive order on competition, analysts across the ideological spectrum praised the idea. Gary Winslett of the conservative-leaning R Street Institute called the moves “terrific.” Zephyr Teachout, the progressive legal scholar, said they were “just huge.”
The more serious question may be how impactful an executive order — as opposed to new legislation — can be. Biden administration officials made sure to write this order narrowly, targeting specific industries, to reduce the chances that business-friendly judges would overturn any federal regulations that stem from the order.
Of course, that also means the order will have only a modest effect on the biggest causes of economic sclerosis and inequality, like corporate consolidation and workers’ lack of bargaining power.
Still, Biden’s advisers argue that the order is a first step toward getting the federal government to care about competition again. “A lot of this is getting back into the American antitrust tradition that was created by the Roosevelts — T.R. and F.D.R.,” Bharat Ramamurti, a Biden adviser who previously worked for Warren, told me. “Highly concentrated industries are fundamentally in tension with American capitalism.”
The U.S. economy has been less dynamic in the 21st century, by many measures, than it was in the late 20th century.
Fewer new businesses are starting. Existing businesses have slowed the pace at which they hire new workers (as the chart here shows). Workers are less likely to switch jobs or move to a new city. Companies are investing in new buildings and equipment at a lower rate. And small businesses make up a shrinking share of the economy.
Together, these trends suggest that the economy suffers from a lack of fair competition, many economists believe. Large corporations are often able to increase profits not by providing better products than their rivals but instead by being so big that they exercise power over workers and consumers. The government also plays a role, through policies that protect existing companies at the expense of start-ups and new entrants into an industry.
The technical term for excess profits from a lack of competition is “monopoly rents.” Just think about how frustrated you may have been by the customer service from an airline, cable-television provider or health insurer. And then imagine how frustrating it may be to work there. Despite the problems at these companies, consumers and workers don’t always have good alternatives.
The technical term for excess profits from a lack of competition is “monopoly rents.” Just think about how frustrated you may have been by the customer service from an airline, cable-television provider or health insurer. And then imagine how frustrating it may be to work there. Despite the problems at these companies, consumers and workers don’t always have good alternatives.
The lack of competitive dynamism plays a role in many of the U.S. economy’s biggest problems: the disappointing economic growth of the past two decades; the declining share of output going to workers; and rising income inequality. It also helps explain the new concern — among both Republicans (like Josh Hawley and Ken Buck) and Democrats (like Elizabeth Warren and Amy Klobuchar) — about the power of big business.
• Make it easier for generic-drug makers and Canadian providers to compete with U.S. pharmaceutical companies.
• Allow Americans to buy hearing aids without a prescription (a 2017 law — signed by Donald Trump — called for that, but it still has not happened).
• Require hospitals to be more transparent about billing (a problem that my colleague Sarah Kliff has documented).
• Force airlines to refund money when they lose bags or when the in-flight Wi-Fi doesn’t function.
• Make sure that farmers can repair their own equipment or choose who repairs it, rather than allowing manufacturers to dictate who can.
• Increase federal scrutiny of tech companies’ mergers and their use of consumer data, as David McCabe and Cecilia Kang of The Times explain.
• Restrict “noncompete clauses,” like the ones that restaurant chains and retailers use to keep workers from accepting a job at a rival.
“Having healthy competition is vital to an effective capitalist system,” Brian Deese, Biden’s top White House economic adviser, told me. “It is a driver of higher wages, lower prices, more innovation and more business creation.”
Is the executive order sweeping enough to matter? Probably, although it’s not clear how much.
The problem of monopoly rents has grown so large that even a modest reduction in them could be significant. Thomas Philippon, an N.Y.U. economist, has estimated that the economy’s lack of fair competition costs the typical American household more than $5,000 a year, through both higher prices and lower wages.
As word began spreading this week that Biden was planning to issue an executive order on competition, analysts across the ideological spectrum praised the idea. Gary Winslett of the conservative-leaning R Street Institute called the moves “terrific.” Zephyr Teachout, the progressive legal scholar, said they were “just huge.”
The more serious question may be how impactful an executive order — as opposed to new legislation — can be. Biden administration officials made sure to write this order narrowly, targeting specific industries, to reduce the chances that business-friendly judges would overturn any federal regulations that stem from the order.
Of course, that also means the order will have only a modest effect on the biggest causes of economic sclerosis and inequality, like corporate consolidation and workers’ lack of bargaining power.
Still, Biden’s advisers argue that the order is a first step toward getting the federal government to care about competition again. “A lot of this is getting back into the American antitrust tradition that was created by the Roosevelts — T.R. and F.D.R.,” Bharat Ramamurti, a Biden adviser who previously worked for Warren, told me. “Highly concentrated industries are fundamentally in tension with American capitalism.”
Motely crew of sour losers and the loyalists who are afraid to tell emperor that's he had no clothes cbbb but 
