NEW YORK, New York -- After an eventful day of political and economic policy (see here if you've just emerged from a cave), it's time for us to finish off the special recession-related series "Three-fers." We initially billed the series as picking up marketing hints from dime stores ("dollar stores," as I believe the youngsters call them today), so we'll hope that, after this grand finale, our batches of "three-fers" don't fall apart on you like the last SuperSoaker I bought at a dime store did.
THREE TO FINISH 'ER OFF
1. Allow gay marriage. No, "finish 'er off" here does not refer to the "institution of marriage as we know it." I don't know what that's supposed to mean, anyway; the only water that nonsensical phrase holds is as potable as St. Petersburg's tap water. Granting gay couples the right to marry may not fix the economy (or would it?), but extending the rights of some to all has historically and without exception made America a better, freer place for all.
2. Overturn the stem-cell ban. This appears to be in the works, but until it's a done deal, any rational person should be demanding it. The positive economic gain from this, by the way, would extend well beyond wedding cakes and plastic, tuxedoed figurines.
3. Bust the trusts. Whatever happened to the trust-busting ethos of the man whose name became synonymous with political courage and reform among both parties this election cycle?
I'm referring, of course, to T.R. himself, Theodore Roosevelt. It was pretty bully when Teddy broke the stranglehold of the quasi-monopolies that had wrapped around the US economy during the Robber Baron era -- a time of great consolidation of power among a few tycoons; plutocratic neutering of government; gaping wealth disparities; and rising angst and social instability among the working classes.
Sound familiar? It's not without reason that the suddenly distant-seeming Bush years were dubbed by many as a second "Gilded Age." But while the period from 1865-1910 laid the groundwork for much of industrial America (e.g., railroads, steel smelters, etc.), it was actually not a particularly economically robust time. The Long Depression of 1873 to 1897 kept growth low to the turn of the century; and a quick look at the original Dow Jones Industrials Average belwether companies in 1896 betrays a fairly top-heavy, monopolistic and nearly Soviet economic structure, dominated by regional monopolies. Take the first 5 companies (by alphabet) in the original DJIA: American Cotton Oil; American Sugar; American Tobacco; Chicago Gas; Distilling & Cattle Feeding. You could substitute in "Romania" for "America" and you'd have some nice Ceausescu bluechips.
But where are we today? The government is eagerly consolidating the financial sector, herding the tottering small -- and not so small *cough, cough, Wacoughia* -- banks into a small number of big, supposedly safe banks. The effect, naturally, is to create a class of banks that are systemically "too big to fail" ... and may not be so safe, after all.
The financial industry is not alone, however. The chemicals industry, whose products are in nearly everything we use and consume, saw great consolidation in recent years. After the industry was ravaged by high input costs during the peak of the oil boom last summer, its road to recovery appears to be through ... more mega-mergers and a folding up of players with the prodding of the state-owned Gulf majors like Saudi Arabia's SABIC and the Kuwaiti government that are increasingly powerful (and as closely held and opaque as ever) in the industry -- and cognizant of that new power.
In pharmaceuticals: Consolidation. Here, it's Pfizer potentially starting a trend of major pharma players buying one another (as opposed to picking off biotechs, as had been the trend).
How about retail? The extinction of Circuit City means that in many markets Americans will buy almost all of their electronics at Best Buy -- if they can afford not to shop at that monopolist of monopolists, Wal-Mart.
And the struggling auto industry is also likely to see consolidation, a surprise to few at this point.
But while governments and big corporations are eager to shepherd weaker companies into bigger ones to keep tottering industries alive, is anyone, anywhere asking questions about the longer-term repercussions of increasingly monopolist industries? You don't have to be a WTO protester ... or a US Army lackey sent to a future where one massive corporation controls production and distribution of everything that an unthinking, debased human species uses ... or a decidedly 20th-century robot in the year 2700, to realize the ill effects of monopolization.
The genius of capitalism, especially in the US, is the diversified and vibrant private sector it brings about, where "regular folk" own their businesses, giving them greater incentive to do a good job at what they do. And when there are lots of businesses out there, each one competes to offer customers better products, services and prices. But once you have a few quasi-monopolies in a sector, there's a fine line between private corporations and government-run "state champion" industries with little need to compete against anyone in quality, service or price. Going back to our buddy Nicolae, Soviet-era Romania may have had a few things in common with, say, the US electronics retail industry in the coming months.
If you have a creeping feeling that the products we buy and the service involved in their distribution and maintenance is getting worse and worse, this consolidation may be why. While that's all a speculative theory, it does stand to reason: When pharmacies or retail outlets are staffed by low-paid zombies who work for store managers who don't really care about the store ... and themselves work for mid-level corporate managers who don't really care about a company they'll only be at for a short time ... all of whom sell products sent by multinationals made in town-size factories in a country they've never been to ... at what stage can you expect anyone to care about the product they're making, or service they're offering?
For all the scorn the likes of Flaubert and other ... ehm, French people ... hurled at the petit bourgeois in past centuries, the independent shopkeeper or small manufacturer's ownership in his trade, his work ethic and, ultimately, his quality of life outshine those of the vast majority of Americans (or anyone else, for that matter) today.
George W. Bush actually seemed to have a sense of this when he spoke of his "ownership society" -- and the germ of his idea wasn't so off, I think. Unfortunately, though, for him "ownership" meant: You own a home, and a handful of massive banks owns your mortgage. A pretty stunted ownership society for our 7th-worst president. Perhaps if No. 44 wants to do better, he should realize that when the banking sector is dominated by companies called Bank of America and CitiBank, the parallels to the era known as the Long Depression are, at least semantically, fully in place. That would be change you can say "bully" to.
1823: John Newton, wife-beater
1 day ago