The Misery of Monopoly: Unveiling the True Economic Challenges Confronting the Nation
Introduction
In recent years, economic commentators have been puzzled by the public’s dour mood regarding the economy, despite positive indicators such as low unemployment, steady job growth, and easing inflation. Pundits have attributed this sentiment to social media, partisanship, and negative media headlines. However, a deeper examination reveals that the economic challenges facing the country are more profound than mere misinformation or negative perceptions. This article delves into the misery of monopoly as a primary factor contributing to the public’s economic discontent.
Inflation: A Symptom of Corporate Price-Gouging
Inflation remains a significant economic concern, despite its recent moderation. Prices have seen a substantial 19% increase since the pandemic, outpacing wage growth. This has resulted in a decline in spending power for most individuals, rendering employment alone insufficient to alleviate economic distress. Moreover, inflation calculations fail to account for interest rate hikes, which further burden consumers with higher monthly payments for car loans, home loans, and credit cards.
The anger and frustration generated by inflation are exacerbated by the unfairness driving price increases. Consumers, government economists, think tanks, and private sector experts alike point to powerful corporations as the culprits. Legal actions have uncovered an economy rife with monopoly price-gouging. A recent jury verdict found major egg producers guilty of price-fixing, and other lawsuits allege that the cost of various goods, from meat to housing, is inflated due to illegal coordination among companies.
Beyond Inflation: The Existential Threat of Corporate Behemoths
Inflation is just one aspect of the economic misery confronting the nation. The other, more existential concern is the sense of powerlessness against corporate behemoths. Gallup surveys conducted since 2001 have shown a steady increase in Americans’ dissatisfaction with the “size and influence” of big business. This dissatisfaction has grown from 17% to 44% in the past two decades, indicating a significant shift in attitude.
This change in attitude likely stems from the way the pandemic brought long-standing structural issues, including monopolization, to the forefront. Monopolists have long suppressed wages, but the past few years have witnessed a surge in labor activism as workers fight back against rising prices and record corporate profits. Companies like Amazon, a symbol of our monopolized economy, have faced unionization efforts, while the writers and actors strike last year highlighted the issue of consolidation in the entertainment industry.
The Public’s Demand for Change
The Federal Trade Commission (FTC) and the Department of Justice (DOJ) recently updated their merger guidelines, which direct the agencies’ enforcement of business combinations. This typically obscure process generated an unprecedented 35,000 comments from Americans across the country, reflecting their weariness of monopolists’ dominance.
In October, Assistant Attorney General Jonathan Kanter held a roundtable discussion in Minnesota with farmers, workers, and small business owners. The focus was not on job growth numbers or the stock market, but on how monopolies are adversely affecting their lives, professions, and communities. Farmers are earning less, nurses are leaving the bedside, and small businesses like rural pharmacies are disappearing.
Connecticut Senator Chris Murphy aptly observed that “the most important economic and social interactions in your life are being dictated by…massively powerful private companies.” However, public discourse often fails to reflect this reality.
Conclusion: Addressing the Root of Economic Malaise
Attempts to dismiss the public’s dissatisfaction with the economy as manufactured or unfounded are both insulting and counterproductive. They divert attention from the actual problems that make life challenging for many Americans.
The misery of monopoly power is a policy choice that can be reversed. Identifying the source of this misery is the first step towards creating a fairer, more equitable economy.