Where Did Anti-Trust Laws Go?

Antitrust laws go back to the Roman Empire. Their purpose is to regulative anticompetitive practices by businesses. They place needed constraints on a free enterprise system, in order for the market to operate best.

Likely the best known of these in this country is the Sherman Antitrust Act of July 2, 1890. It was named for its creator, Senator John Sherman an Ohio Republican. It sought to stop monopolies or cartels. If I remember my econ courses well enough an example would be Rockefellers’ Standard Oil which would undercut competitors and then set their own prices when they controlled the market. Also Carnegie in Steel Operations came under the same scrutiny. More recently we may remember Ma Bell being busted into smaller regional Bells to promote competition.

My question for today is why are these laws not being used in several areas. First, banks too big to fail. Recently Senator Sherrod Brown, Ohio Democrat introduced SAFE (Safe, Accountable, Fair and Efficient Banking Act) to address issues such as the last J.P. Morgan debacle. See http://baselinescenario.com/2012/05/12/making-banks-small-enough-and-simple-enough-to-fail/

Also consider how many oil producers there are in the country? Here is one list but I’m not even sure that is accurate in terms of actual gas suppliers as they may use same sources. It’s hard to track down. I’ve heard very low numbers over the years in terms of actual suppliers which can easily get together and set prices for a particular region.

	Company	Total Production (MMcfe/day)	U.S. Nat Gas as % of Total Production
1	ExxonMobil	26,376	14.5%
2	Chesapeake Energy	3,049	84.5%
3	Anadarko	4,110	56.6%
4	Devon Energy	3,960	51.2%
5	Encana	3,395	54.9%
6	BP	20,598	8.9%
7	ConocoPhillips	9,840	16.8%
8	Southwestern Energy	1,364	98.7%
9	Chevron	16,140	8.0%

Another area is pharmaceuticals. The government doesn’t even let competition take place in terms of Medicare. What about the decreasing number of airlines that all known will increase fares. This list goes on and on.

My point is bigger is not better for competition it is worse. Mega retailer Wal-Mart can manipulate producers of products to make them sweetheart deals so they can undercut other retailers. It is like the days of the “company store” where you are almost forced to buy from one supplier. The Mom and Pop stores have all but been obliterated by mega operators who often make deals with local governments for tax advantages which give them an unfair advantage over local retailers. The sports company Cabela is known for demanding tax advantages if they condescend to put up a store in your community, and in one case, I heard this drove out a local sporting goods dealer who gave better prices. I’ve lost the source for this but here is another example you can check out: http://blogs.star-telegram.com/politex/2010/01/report-tax-break-for-local-cabela-superstore-among-perrys-worst-gambles.html

Bigger is not better also in terms of accountability. In small rural towns if a business is known for taking advantage of their customers, soon they don’t have customers. But with large companies you cannot even see the accountability as to whether they are taking advantage of you or not. Too often we just see a lower price and buy without thinking how might be victimized in the process.

Big often gives you lower prices and connivance, but who knows the real cost it brings? Gas wars are great in the short term but they end up with higher prices in the end. But we seem to have become a country of short term thinkers.

A final note on what I believe is the worst offender in the country; private profit based health care. Despite all the ideological arguments you hear to how this is good for our country and gives us the best health care, no study supports that belief. We just have the most expensive health care system in the world which gives us mediocre health care. Obamacare, as we like to call the present system which isn’t even fully implemented yet is a step in the right direction but not near as far as we should go. It is simple, you keep all the same people doing their same jobs, you just remove profit and outlandishly paid CEOs from the system and it get much much cheaper health care and I believe clearer eyes health care providers who concentrate on health care rather than profit.

But as long as we keep allowing big business to have major impact on our government needed changes will never happen. Plutocracy will reign in place of democracy and our freedoms are lost.

One last bit; check out http://billmoyers.com/2012/05/11/a-history-of-campaign-advertising/  and the related sites to get a good history of campaign advertising.

Time to wash windows now.