When it Comes to INEQUALITY, Government is the Problem Stop mega mergers. Reform welfare. Preserve market forces. But no...

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Oct 17, 2016 No Comments ›› admin

By Lynn Woolley

According to the left, the two biggest threats facing the world are climate change and inequality. Of these two, climate change is a total fraud – but inequality is real.

It is undeniable that the poor get poorer and the rich get richer – at least in many cases. But why? Rush Limbaugh and Michael Dell are just two examples of people who’ve made fortunes out of what they love. But most people don’t have that kind of drive.



So government tries to help and things get worse.

Beyond that the Justice Department has pretty much stopped fighting big mega-mergers. That’s due to lobbying and big infusions of money. But mega mergers mean top dogs start making millions and the little people get laid off. If government wants to redistribute wealth fairly, then what we need is massive welfare reform – and a plan to stop the consolidation of business.

Even Slate (a far left website) gets it better than the Democrats do.

When I read Henry Grabar’s column in Slate, I had trouble believing what I was reading. He didn’t talk about welfare, but nailed the antitrust situation. He writes about the 2013 merger of American Airlines and US Airways calling it…

…a display of corporate muscle that shows all the ways antitrust fights have gone wrong for the Obama administration.

He talks about the revolving door [people moving back and forth between private business and government], the influence of corporate money when they want a merger to happen – and a government totally steamrolled by airline lawyers and lobbyists. In other words, if American Airlines and US Airways wanted to merge, they were going to. There was no Justice Department standing in their way as a protection for the people.  time-merger

According to Grabar, Chicago Mayor Rahm Emanuel was “shameful” in publishing a letter of support that was actually written by lobbyists. Note here that our laws are written by lobbyists as well – both in Austin and in Washington. Also note that Emanuel got his payoff – a $53,000 (total) campaign contribution from executives of American Airlines. So all’s well that ends well for American and for Mayor Emanuel.

The American people lost a bit of “equality” in that deal.

When large companies merge, they do it for “economies of scale.”

The top three goals are always to:

1. Eliminate a competitor
2. Eliminate jobs
3. Raise prices

That’s what economies of scale amounts to. It’s a way to shrink the availability of product or service so that it is worth more, while being easier to produce. This is, frankly, predatory and the Justice Department is supposed to protect the people. However, the DOJ seems to buckle more than it wins.

The more we eliminate companies, the more we pay and the less equal we are.

In our generation, many segments of the economy have merged. They include pharmaceuticals, healthcare, radio, television, publishing, cellular communications, oil, insurance, cable TV, and scores of others.

In the case of healthcare, hospitals are merging in order to have a seat at the table under Obamacare. The Affordable Care Act was a government power play – at a time when hospitals were already unhappy with payments from existing government programs like Medicare and Medicaid. The changing landscape said this to hospital executives: Get real big, real fast – or you will not survive.

But hospital mergers, like all others, means fewer jobs and higher costs for consumers – and that means more inequality.

As of 2016, we have consolidated a number industries almost to the endgame – total monopoly.

• There are now 4 major airlines.
• There are now 4 major cellphone companies.
• There are about seven major national media companies.
• There are about eight major owners of radio stations.
• The top 10 pharmaceutical companies are giants raking in billions.

All this means that market forces cannot work as well as they should. They only work when there is competition. And so we get more inequality while the CEOs of these companies rake in billions.

The failure of Obamacare.

The headline screams:

“More than 1 million to lose insurance plans”

Obamacare has gotten more people insured, but the coverage is awful and it is not affordable. Many plans are set to disappear next year because insurance companies are dropping out. The government issues Obamacare to redistribute wealth, but it isn’t working.

Obamacare was supposed to make us more equal, but like college tuition, when the government pumps in money, costs skyrocket.

time_warner_cable_charter-communicationsFix inequality by getting government out of our lives except to preserve market forces.

Market forces are magic. By preserving competition, quality goes up and costs come down. The cause of equality is served by creating more jobs with better pay and keeping huge salaries for CEOs at least somewhat reasonable.

There are some things government should do. In this discussion, it should butt out of most things, while making sure that antitrust provisions are strictly enforced. And it should reform welfare so that people get back into the job market.

I should have 50 choices for Cable TV, but I have one – Spectrum – and two satellite providers – DirecTV and Dish. Spectrum was Time Warner until it merged with Charter Communications. DirectTV just merged with AT&T. It never stops.

If we want equality, it needs to stop.


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