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Almost Every Sector of the US Economy Is a Monopoly or an Oligopoly

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Editor’s Note: This is manifestly true in telecommunications as amply demonstrated in Thursday’s article: Russia: $10/Month for Superfast Broadband, in US $70 for Slower Speeds – Survey of 195 Countries. At America’s tech leader and having the biggest economy, cellular and internet access should be the cheapest in the world, instead it is the most expensive, and it doesn’t work as well. Another article the same day addresses the problem from a different perspective – Conservatives have swallowed the (((free trade))) ideology hook, line, and sinker: Conservatives’ Obsession With Free Markets Is Foolish, and Not at all Conservative.


Vibrant competition is absolutely essential in order for a capitalist economic system to function effectively.  Unfortunately, in the United States today we are witnessing the death of competition in industry after industry as the biggest corporations increasingly gobble up all of their competitors. 

John D. Rockefeller famously once said that “competition is a sin”, and he was one of America’s very first oligopolists.  According to Google, an oligopoly is “a state of limited competition, in which a market is shared by a small number of producers or sellers”, and that is a perfect description of the current state of affairs in many major industries.  In early America, corporations were greatly limited in scope, and in most instances they were only supposed to exist temporarily.  But today the largest corporations have become so huge that they literally dominate our entire society, and that is not good for any of us.

Just look at what is happening in the airline industry.  When I was growing up, there were literally dozens of airlines, but now four major corporations control everything and they have been making gigantic profits

AMERICA’S airlines used to be famous for two things: terrible service and worse finances. Today flyers still endure hidden fees, late flights, bruised knees, clapped-out fittings and sub-par food. Yet airlines now make juicy profits. Scheduled passenger airlines reported an after-tax net profit of $15.5bn in 2017, up from $14bn in 2016.

What is true of the airline industry is increasingly true of America’s economy. Profits have risen in most rich countries over the past ten years but the increase has been biggest for American firms. Coupled with an increasing concentration of ownership, this means the fruits of economic growth are being monopolised.

If you don’t like how an airline is treating you, in some cases you can choose to fly with someone else next time.

But as a recent Bloomberg article pointed out, that is becoming increasingly difficult to do…

United, for example, dominates many of the country’s largest airports. In Houston, United has around a 60 percent market share, in Newark 51 percent, in Washington Dulles 43 percent, in San Francisco 38 percent and in Chicago 31 percent. This situation is even more skewed for other airlines. For example, Delta has an 80 percent market share in Atlanta. For many routes, you simply have no choice.

And of course the airline industry is far from alone.  In sector after sector, economic power is becoming concentrated in just a few hands.

For a moment, I would like you to consider these numbers

  • Two corporations control 90 percent of the beer Americans drink.

  • Five banks control about half of the nation’s banking assets.

  • Many states have health insurance markets where the top two insurers have an 80 percent to 90 percent market share. For example, in Alabama one company, Blue Cross Blue Shield, has an 84 percent market share and in Hawaii it has 65 percent market share.

  • When it comes to high-speed Internet access, almost all markets are local monopolies; over 75 percent of households have no choice with only one provider.

  • Four players control the entire U.S. beef market and have carved up the country.

  • After two mergers this year, three companies will control 70 percent of the world’s pesticide market and 80 percent of the U.S. corn-seed market.

I knew that things were bad, but I didn’t know that they were that bad.

Capitalism works best when competition is maximized.  In socialist systems, the government itself becomes a major player in the game, and that is never a desirable outcome.  Instead, what we want is for the government to serve as a “referee” that enforces rules that encourage free and fair competition.  Jonathan Tepper, the author of “The Myth of Capitalism: Monopolies and the Death of Competition”, made this point very well in an excerpt from his new book

Capitalism is a game where competitors play by rules on which everyone agrees. The government is the referee, and just as you need a referee and a set of agreed rules for a good basketball game, you need rules to promote competition in the economy.

Left to their own devices, firms will use any available means to crush their rivals. Today, the state, as referee, has not enforced rules that would increase competition, and through regulatory capture has created rules that limit competition.

Our founders were very suspicious of large concentrations of power.  That is why they wanted a very limited federal government, and that is also why they put substantial restrictions on corporate entities.

When power is greatly concentrated, most of the rewards tend to flow to the very top of the pyramid, and that is precisely what we have been witnessing.  The following comes from the New York Times

Even when economic growth has been decent, as it is now, most of the bounty has flowed to the top. Median weekly earnings have grown a miserly 0.1 percent a year since 1979. The typical American family today has a lower net worththan the typical family did 20 years ago. Life expectancy, shockingly, has fallen this decade.

So what is the solution?

Well, one of the big things that we need to do is to stop crushing small business.

In America today, the rate of small business creation has been hovering near all-time lows and the percentage of Americans that are working for themselves has been hovering near all-time lows.

In order for more competition to exist, we need more competitors to enter the marketplace, but instead we have been crushing “the little guy” with mountains of regulations and deeply oppressive taxes.

And you know what?  Many of the big corporations actually like all of the red tape because they know that they can handle it much easier than their much smaller competitors can.  That gives them a competitive advantage, and it creates a barrier to entry that is difficult to overcome.

When I was in school, I was taught that one of the reasons why the U.S. system was so much better than communist systems was because we had so many more choices.

But today our choices are very limited in industry after industry, and the gigantic corporate entities that dominate everything don’t really care if we like it or not.

We can do so much better than this, but in order to do so we must return to the values and principles that this nation was originally founded upon.

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Germany’s flood zones spared severe storms on Saturday

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In the west of the country, the fire brigade reported a quiet night in the flood areas in Rhineland-Palatinate and North Rhine Westphalia.

The situation remains tense, however, with local thunderstorms forecast in some parts of Germany from midday on Sunday — most likely south of the Danube.

Further heavy rain and hail were also possible again, according to the German Weather Service (DWD), which publishes storm warnings.

READ ALSO: WEATHER: German flood zones at risk of further storms

The latest storms came just days after parts of the country were hit by devastating floods after torrential rains that ravaged entire villages and left 180 people dead, hundreds injured and with many still missing.

The flooding also caused damage in Belgium, where 37 people died, Luxembourg, the Netherlands and Switzerland.



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Prosecutors allege R Kelly had sexual contact with under-age boy

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US prosecutors in R Kelly’s sex trafficking case say he had sexual contact with an under-age boy in addition to girls, and the government wants jurors in his upcoming sex-trafficking trial to hear those claims.

Federal prosecutors aired a wide-ranging raft of additional allegations – but not new charges – against the R&B singer in a court filing on Friday.

Jury selection is due to start August 9th in a New York federal court for Kelly, who denies ever abusing anyone.

The Grammy Award-winning singer is charged with leading what prosecutors call a criminal enterprise of managers, bodyguards and other employees who allegedly helped him to recruit women and girls for sex and pornography and to exercise control over them.

The charges involve six different women and girls, who are not named in court filings.

Now, prosecutors would also like jurors to hear about more than a dozen other people whom the government alleges that Kelly sexually or physically abused, threatened or otherwise mistreated.

Among them, the government says, was a 17-year-old boy and aspiring musician whom Kelly met at a McDonald’s in December 2006 and later invited to his Chicago studio.

According to the prosecutors’ court filing, after asking the boy what he would do to make it in the music business, Kelly propositioned and had sexual contact with him while he was still under-age.

And when Kelly was about to go on trial on child pornography charges in Chicago in 2008, the same youth told the singer he had access to a juror, and Kelly asked him to contact the juror and vouch he was a “good guy”, prosecutors wrote.

The filing does not say whether the youth did so. Kelly was acquitted in that case.

The boy also introduced Kelly to a 16- or 17-year-old male friend, with whom prosecutors say the singer began a sexual relationship several years later.

Kelly also filmed the two youths in sexual encounters with other people, including some of Kelly’s girlfriends, according to the filing.

Prosecutors wrote that the accounts of the boys and others would help show that the actual charges “were not isolated events and were part of a larger pattern”.

The multiplatinum-selling singer, born Robert Sylvester Kelly, is known for work including the 1996 hit I Believe I Can Fly and the cult classic Trapped In The Closet, a multi-part tale of sexual betrayal and intrigue.

Kelly’s private life has drawn scrutiny since the 1990s, and he currently is also facing sex-related charges in Illinois and Minnesota. He has pleaded not guilty.– AP

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Fears mount in western Germany as fresh rain falls

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For some areas, the German Weather Service has forecast heavy showers or storms, bringing between 30 and 40 litres per square metre.

Amid further rainfall on Saturday afternoon, evacuation services to emergency accommodation were offered to communities in Rheinland-Palatinate who had been particularly badly affected by the flooding, German news site Merkur reported.

“The people will have to make the decision themselves,” said Begona Hermann, head of the relief teams in the west German state, explaining that the forecast rainfall was not expected to be as severe as that which devastated parts of Germany last week.  

READ ALSO: German floods death toll hits 180, with 150 still missing

However, even lower levels of rainfall could still be a problem because sewage and drainage systems were not working properly because of the flooding.

Earlier on Saturday, police requested all volunteers working on the clean-up operation in the Ahr area to leave as quickly as possible for their own safety because of the difficult conditions.

This came after the police and the crisis management team asked the public not to travel to Rhineland-Palatinate to help out because there were too many people there.

“The population’s willingness to help continues to be undiminished and overwhelming,” read a Kassel police statement on Saturday. Due to the large number of volunteers who came to help out, however, roads in the area are now congested, it said.

Heavy machinery required for road and bridge construction, and for the restoration of the area’s water supply, was getting stuck in traffic jams, the press release said.

Vehicles for removing rubbish and construction debris, as well as emergency and rescue vehicles, were also unable to get through.



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