I wish to express concerns with the government's lack of consent for the jetBlue -w- Spirit merger. It's inconsistent government policy. Over the last four decades both Democrat and Republican administrations allowed our network carriers (AA, DL, UA) to acquire weaker players, carefully carve up the major gateway markets into protected hubs, and easily win Federal approval for trans-oceanic joint ventures that locked out meaningful competition. In my opinion, Senator, the DOJ / Biden Administration was short sighted in its objection to this latest proposed merger. Both jetBlue and Spirit are leisure airlines, they operate from hubs dominated by network carriers. They have to fight for every passenger. Both are struggling to compete versus the unassailable marketing power that comes with global frequent flyer rewards programs; lucrative credit card marketing partnerships; fractional ownership of reservations systems; and brand new tax payer bonded terminals. jetBlue successfully carved a position into the Caribbean and Latin American markets. It's merger with Spirit provided volume that would enable to further disrupt the trans-Atlantic travel market. Instead DOJ took a short sighted approach. Regulators could have taken a page from the European regulatory book by extracting value for consumers while approving the merger. They could have; turned their sights to the network carriers fixing the markets almost everywhere they operate to create true competition. Keeping these two leisure carriers apart may prevent them from being relevant (at best) or might lead to their demise (at worst). Here's how the activist policy is turning out. jetBlue just took on another $3 billion (?) in debut and suffered a credit downgrade. This is NOT government that works, Senator.
Why is it fair that two companies, both having the same income, should pay the same tax if one of them scrapes out only a 5% profit in a highly competitive market while the other, a monopoly or near-monopoly, earns a 40% profit in an noncompetitive market?
It seems to me that we could create an effective structural resistance to monopoly, or at least a disincentive to the use of monopoly power, by creating a progressive corporate income tax that was indexed to a company's profit margin in excess of some statutorily established norm, not just to their income. Such a tax, similar to the excess profits tax sometimes imposed during war time, would ensure that at least some of the unearned "economic rent" which today benefits monopolists would be returned to the people. (Note: Economists generally agree that taxing economic rent is non-distortionary and economically efficient...) As long as the tax never reached 100%, companies would remain able to benefit from higher margins but would be strongly encouraged to increase revenues by investing in productive assets and their workforce rather than in simply raising prices.
I am all for unwinding the digital advertising duopoly of Google and Meta and the anti-competitive and ill gotten gains extracted by Apple. The Cupertino electronics manufacturer publicly and without hesitation demanded 30% of Google search revenues to position the best in class engine as the "initial" default for its so called product "users". I'm curious why Google felt they needed to agree to the extortion, as one can't imagine Apple product owners voluntarily selecting Bing. Anyway, the next point I'd like to make is more important. We must recognize that both Alphabet and Meta are national tech champions. These firms draw enormous tax benefits into our treasury employing hundreds of thousands across global markets. Moreover, they power a great deal of moonshot research and development. Google's patents are powering the AI revolution that promises to pay dividends in rapid economic efficiency, leaps healthcare, clean energy, safe and autonomous transportation and beyond. The company has recently spun off an entity that will use its powerful AI models for drug discovery (are we really going to slow down the cure for cancer so Microsoft can get in on the ad search market?). We Democrats should not be penny wise and pound foolish. Yes, put these tech giants on a more competitive path yet do it mindfully. We don't win if we just tear down great American companies indiscriminately.
Set forth below is the abstract of my article, “Wall Street’s Practice of Compelling Confidentiality of Private Underwriting Fees: An Antitrust Violation?”
“A small oligopoly of commercial and investment banks dominates the arranging and underwriting of loans and bonds for publicly traded companies. The oligopoly’s dominance apparently compels nondisclosure of preliminary agreements that outline the proposed issuance terms of the loans or bonds, which non disclosure violates the securities laws.
Also, the banks do not disclose the arranging and underwriting fees to anyone outside the oligopoly and prohibit disclosure to anyone by their customers. This makes it impossible for customers to compare such fees and more difficult for non-oligopoly banks to offer competing bids. This article concludes the Antitrust Division, and Securities & Exchange Commission should investigate these practices.”
I think this article would be of interest to you. It is behind a paywall. I don't hold the copyright but here is a link to the last draft I sent to the publisher, which remains my property, and is not materially different from the printed version:
"Suddenly, the big private governments are being held accountable by antitrust regulators; and that's a good thing."
Theodore Roosevelt's corrolary to the Monroe Doctrine broke Trusts like Standard Petroleum into lesser "Corparations" like ExxonMobil Mobil and Texaco. George W. Bush and his father invoked the antitrust precedent in toppling the developing monopoly over North Arabia. The Chinese have subsequently argued before the world Court that CPEC access to these same natural resources, through eastern Persia, is justified relative to the same application of USA Antitrust law relative to the global energy substrate and its access. World petroleum powered infrastructure, vehicles, vessels and craft subsequent to 1956 Superhighway Act is heavy in the USA, and the same is true of oil consumption. Europe tends to be rail linked equine system designed pedestrian cities, comparatively, and soviet era model nuclear comunal block housing cities like chernobyl ...nuclear and not home heating oil dependent like America's studio. 1,2,3 br. Paradigm. China, subsequent to the great leap forward agronomical revolution and Kissengers detente, is racing to build localized centers where farms, industry, and dwellings are much closer than our refrigerated grate Dane and peterbuilt food and goods system for daily bread. Since Koskovka, we will not merely be sending Ramen Durham to China and Soybeans to India. All of Eurasia faces severe food shortages, famine, pestilence, and even pogrom. Let's be certain to secure US "hegemony" to CPEC persian access to arabia and to place trust in the heartland.
Anti-trust Laws are necessary for well-regulated and reasonably regulated capitalism. Otherwise these oligarchies will continue with their corporate feudalism and technological totalitarianism. The international hedge funds control nearly everything through direct shares, circular ownership, shadow or shell corporations. Add Stakeholder Capitalism and it is no longer even beholden to all the shareholders, just the few.
"Stakeholder capitalism" is the euphemism coined to sell the snake oil con which co-opts and consolidates power by externalizing and then corrupting the motives that govern companies so they will be guided by incentives that are outside of those that optimize their interests and the interests of customers and individual sharehders. The rules of the new masters create rewards and punishments that force all companies to conform to the dictates and priorities of unelected 3rd parties who determine which will succeed and which fail based on politics and conformity to external dictates rather than customer and shareholder demands. The cost of this conformity is more consolidation, raising the burden to market entry by smaller players, creative/ disruptive ideas, products, practices, or companies and further insulating the larger and entrenched companies and interests. This creates and institutionalizes functional/defacto monopolies.
Other than my quibble about your support for the Biden/Harris ticket, which supported political violence, this is pretty spot on. The kids need to be kept off social media, there should be age verification. Cellphones should be banned from the classroom and confiscated when spotted. And on and on it goes.
Robert Putnam and Charles Murray, a liberal and a conservative, wrote seminal books that touched on the same theme. Social media has made this much worse. Here's a line that might work in some nerd circles:
We're not "bowling alone", we're "scrolling alone".
I wish to express concerns with the government's lack of consent for the jetBlue -w- Spirit merger. It's inconsistent government policy. Over the last four decades both Democrat and Republican administrations allowed our network carriers (AA, DL, UA) to acquire weaker players, carefully carve up the major gateway markets into protected hubs, and easily win Federal approval for trans-oceanic joint ventures that locked out meaningful competition. In my opinion, Senator, the DOJ / Biden Administration was short sighted in its objection to this latest proposed merger. Both jetBlue and Spirit are leisure airlines, they operate from hubs dominated by network carriers. They have to fight for every passenger. Both are struggling to compete versus the unassailable marketing power that comes with global frequent flyer rewards programs; lucrative credit card marketing partnerships; fractional ownership of reservations systems; and brand new tax payer bonded terminals. jetBlue successfully carved a position into the Caribbean and Latin American markets. It's merger with Spirit provided volume that would enable to further disrupt the trans-Atlantic travel market. Instead DOJ took a short sighted approach. Regulators could have taken a page from the European regulatory book by extracting value for consumers while approving the merger. They could have; turned their sights to the network carriers fixing the markets almost everywhere they operate to create true competition. Keeping these two leisure carriers apart may prevent them from being relevant (at best) or might lead to their demise (at worst). Here's how the activist policy is turning out. jetBlue just took on another $3 billion (?) in debut and suffered a credit downgrade. This is NOT government that works, Senator.
Why is it fair that two companies, both having the same income, should pay the same tax if one of them scrapes out only a 5% profit in a highly competitive market while the other, a monopoly or near-monopoly, earns a 40% profit in an noncompetitive market?
It seems to me that we could create an effective structural resistance to monopoly, or at least a disincentive to the use of monopoly power, by creating a progressive corporate income tax that was indexed to a company's profit margin in excess of some statutorily established norm, not just to their income. Such a tax, similar to the excess profits tax sometimes imposed during war time, would ensure that at least some of the unearned "economic rent" which today benefits monopolists would be returned to the people. (Note: Economists generally agree that taxing economic rent is non-distortionary and economically efficient...) As long as the tax never reached 100%, companies would remain able to benefit from higher margins but would be strongly encouraged to increase revenues by investing in productive assets and their workforce rather than in simply raising prices.
I am all for unwinding the digital advertising duopoly of Google and Meta and the anti-competitive and ill gotten gains extracted by Apple. The Cupertino electronics manufacturer publicly and without hesitation demanded 30% of Google search revenues to position the best in class engine as the "initial" default for its so called product "users". I'm curious why Google felt they needed to agree to the extortion, as one can't imagine Apple product owners voluntarily selecting Bing. Anyway, the next point I'd like to make is more important. We must recognize that both Alphabet and Meta are national tech champions. These firms draw enormous tax benefits into our treasury employing hundreds of thousands across global markets. Moreover, they power a great deal of moonshot research and development. Google's patents are powering the AI revolution that promises to pay dividends in rapid economic efficiency, leaps healthcare, clean energy, safe and autonomous transportation and beyond. The company has recently spun off an entity that will use its powerful AI models for drug discovery (are we really going to slow down the cure for cancer so Microsoft can get in on the ad search market?). We Democrats should not be penny wise and pound foolish. Yes, put these tech giants on a more competitive path yet do it mindfully. We don't win if we just tear down great American companies indiscriminately.
•
Thomas Willcox
The Hon. Senator Murphy
Set forth below is the abstract of my article, “Wall Street’s Practice of Compelling Confidentiality of Private Underwriting Fees: An Antitrust Violation?”
“A small oligopoly of commercial and investment banks dominates the arranging and underwriting of loans and bonds for publicly traded companies. The oligopoly’s dominance apparently compels nondisclosure of preliminary agreements that outline the proposed issuance terms of the loans or bonds, which non disclosure violates the securities laws.
Also, the banks do not disclose the arranging and underwriting fees to anyone outside the oligopoly and prohibit disclosure to anyone by their customers. This makes it impossible for customers to compare such fees and more difficult for non-oligopoly banks to offer competing bids. This article concludes the Antitrust Division, and Securities & Exchange Commission should investigate these practices.”
Here is the link to the article
https://journals.sagepub.com/doi/abs/10.1177/0003603X231180244, published July 13th, 2023 journals.sagepub.com •
I think this article would be of interest to you. It is behind a paywall. I don't hold the copyright but here is a link to the last draft I sent to the publisher, which remains my property, and is not materially different from the printed version:
https://1drv.ms/w/s!Askt12G2pS2CjLAIQ18P25EmrClnGQ?e=zCXC1u
Bloomfield here. I would like to tell you about Biltmore.com, liquifaction, and Frankie's pre partition USAAF.
"Suddenly, the big private governments are being held accountable by antitrust regulators; and that's a good thing."
Theodore Roosevelt's corrolary to the Monroe Doctrine broke Trusts like Standard Petroleum into lesser "Corparations" like ExxonMobil Mobil and Texaco. George W. Bush and his father invoked the antitrust precedent in toppling the developing monopoly over North Arabia. The Chinese have subsequently argued before the world Court that CPEC access to these same natural resources, through eastern Persia, is justified relative to the same application of USA Antitrust law relative to the global energy substrate and its access. World petroleum powered infrastructure, vehicles, vessels and craft subsequent to 1956 Superhighway Act is heavy in the USA, and the same is true of oil consumption. Europe tends to be rail linked equine system designed pedestrian cities, comparatively, and soviet era model nuclear comunal block housing cities like chernobyl ...nuclear and not home heating oil dependent like America's studio. 1,2,3 br. Paradigm. China, subsequent to the great leap forward agronomical revolution and Kissengers detente, is racing to build localized centers where farms, industry, and dwellings are much closer than our refrigerated grate Dane and peterbuilt food and goods system for daily bread. Since Koskovka, we will not merely be sending Ramen Durham to China and Soybeans to India. All of Eurasia faces severe food shortages, famine, pestilence, and even pogrom. Let's be certain to secure US "hegemony" to CPEC persian access to arabia and to place trust in the heartland.
https://www.archives.gov/milestone-documents/national-interstate-and-defense-highways-act#:~:text=This%20act%20authorized%20the%20building,system%20in%20the%20United%20States.
Anti-trust Laws are necessary for well-regulated and reasonably regulated capitalism. Otherwise these oligarchies will continue with their corporate feudalism and technological totalitarianism. The international hedge funds control nearly everything through direct shares, circular ownership, shadow or shell corporations. Add Stakeholder Capitalism and it is no longer even beholden to all the shareholders, just the few.
"Stakeholder capitalism" is the euphemism coined to sell the snake oil con which co-opts and consolidates power by externalizing and then corrupting the motives that govern companies so they will be guided by incentives that are outside of those that optimize their interests and the interests of customers and individual sharehders. The rules of the new masters create rewards and punishments that force all companies to conform to the dictates and priorities of unelected 3rd parties who determine which will succeed and which fail based on politics and conformity to external dictates rather than customer and shareholder demands. The cost of this conformity is more consolidation, raising the burden to market entry by smaller players, creative/ disruptive ideas, products, practices, or companies and further insulating the larger and entrenched companies and interests. This creates and institutionalizes functional/defacto monopolies.
And this paradigm shift has been managed by Larry Fink, going back to the 2008 crash.
100%
It amazes me how many work beside me in the senior management of the corporate world but who still don't understand this.
A little too late now! ⏰
BINGO! FINALLY someone gets it. Thank you, Senator Murphy.
Other than my quibble about your support for the Biden/Harris ticket, which supported political violence, this is pretty spot on. The kids need to be kept off social media, there should be age verification. Cellphones should be banned from the classroom and confiscated when spotted. And on and on it goes.
Robert Putnam and Charles Murray, a liberal and a conservative, wrote seminal books that touched on the same theme. Social media has made this much worse. Here's a line that might work in some nerd circles:
We're not "bowling alone", we're "scrolling alone".
Awesome.