Felicia Wong is president and chief executive of the Roosevelt Institute.
We are living in a new age of monopoly power. Mega-mergers are dominating headlines. This week, CVS Health announced that it intends to buy the health insurer Aetna. Meanwhile, AT&T, the telecom behemoth, continues to battle the Justice Department in its $85 billion bid to take over the media giant Time Warner.
Small wonder that fighting monopolies has become a centerpiece of the Democratic Party’s economic agenda. On Wednesday, Sen. Elizabeth Warren (D-Mass.) gave a powerful speech warning that anti-competitive market power “also translates into concentrated political power — the kind of power that can capture our government.” The Economist — not exactly known as a bastion of socialism — catalogues dangerous levels of concentration in major industries such as airlines, banking, health care and telecommunications — a recipe that yields high profits for corporations but bad service for consumers.
Americans could be forgiven for feeling indifferent about the rise of market power. Many big companies seem benign, even beneficial. Though it might seem odd that Echo speakers are now selling in the produce aisle of Whole Foods since Amazon bought the food retailer, the price of kale, salmon and avocados has dropped. So what, exactly, is the problem?
Despite the superficial benefits of these mega-mergers, it is, in fact, our democracy that is paying the true price. Today, unchecked corporate power is the biggest threat to the American public. Our new age of untrammeled monopoly power brings many economic disadvantages: We see increasing evidence of lower wages, insecure jobs and layoffs. But the real issue is the symbiotic link between overwhelming economic power and overwhelming political power. This makes for a brutally strong chain, locking in its own dominance.
Consider the fact that corporate America spends almost $6.5 billion every political cycle lobbying federal elected officials on behalf of business interests. This is more than double the amount spent on elections, and the most concentrated industries — health care, telecom and finance — dominate. Thousands of lobbyists swarm Capitol Hill daily, writing (and rewriting) everything from financial regulations to the tax code in their own blatant self-interest.
The most egregious example of concentrated monied interests overwhelming public opinion is, of course, the Republican tax bill, rushed through Congress without public hearings. Adam Davidson compared the bill to a teaser rate on a new credit card: a few enticements for the poor and middle class early on, but with the benefits increasingly, year by year, going to the wealthy, until ultimately the poor pay more, and the greatest cuts continue only for those making more than a million dollars a year.
And all of this is to pay for a drastic cut in corporate rates, from 35 percent to 20 percent — just what the donors ordered. Sen. Lindsey O. Graham (R-S.C.) is one of many who have said that “financial contributions will stop” if Republicans don’t cut corporate taxes. Let’s be clear: The tax bill is historically unpopular, approved by fewer than a third of all voters. Its likely passage is the very definition of undemocratic. The true cost of monopoly is the hijacking of our politics by the hugely powerful few.
We must remember that this situation is not an inevitable result of natural forces. A century ago, the taming of corporate power was central not only to our organization of the economy, but to our politics. Presidents from the Republican Teddy Roosevelt to his Democratic cousin Franklin battled “the curse of bigness” in the name of political freedom. The Supreme Court leveraged the Sherman Antitrust Act to break up Standard Oil, which controlled more than 90 percent of all refined petroleum in the United States. As Nobel laureate Joseph Stiglitz notes, early 20th-century antitrust policy “was not based on a finely honed economic analysis. It was really about the nature of our society and democracy.”
But in the 1970s, our thinking about corporations shifted from a focus on democracy to a narrow focus on pricing alone, making antitrust claims very difficult to win. Since then, the number of mergers and acquisitions has skyrocketed, increasing from fewer than 2,000 in 1980 to more than 14,000 in 2000, a level that has been sustained since.
Those concerned about the end of our democracy in the age of Trump must care about the power of giant corporations. And don’t be deceived — even those selectively better deals at Whole Foods seem to have been a marketing ploy, since overall prices at the Amazon-owned stores are basically unchanged. (Jeffrey P. Bezos, founder and chief executive of Amazon, owns The Washington Post.) But the bigger reason to fight corporate power is political. No matter your political party, those who believe in basic American liberalism — the free exchange of ideas, goods and services within the context of the common good — must gather the political will and clarity to take our democracy back.