Monday, February 22, 2010

Stuck on 'Zero'

"If any single number captures the state of the American economy over the last decade, it is zero. That was the net gain in jobs between 1999 and 2009—nada, nil, zip. By painful contrast, from the 1940s through the 1990s, recessions came and went, but no decade ended without at least a 20 percent increase in the number of jobs."
-- Who Broke America's Job Machine? by Barry C. Lynn and Phillip Longman
We've been railing about this for decades to our friends. (Maybe that's why they keep hinting someone needs to know how to start a dinner table conversation.) There is no meaningful anti-trust law enforcement in the United States, anymore.

The laws are all there, still, but no one enforces them! Ronald Reagan stabbed antitrust enforcement in the heart. Clinton, indifferent, left it to die on the table. And, George W. Bush buried the corpse. Now, we're seeing the consequences in the state of the American economy.

Barry Lynn, author of the new book "Cornered: The New Monopoly Capitalism and the Economics of Destruction" is co-author of an important article making just this point in the latest edition of Washington Monthly. The title is "Who Broke America's Job Machine?"

The death of antitrust enforcement is a major part of the answer to why the nation has not been able to create a net gain of jobs in well over a decade. Here's an excerpt from the article:
[W]hile the mystery of what killed the great American jobs machine has yielded no shortage of debatable answers, one of the more compelling potential explanations has been conspicuously absent from the national conversation: monopolization. * * * In nearly every sector of our economy, far fewer firms control far greater shares of their markets than they did a generation ago.

Indeed, in the years after officials in the Reagan administration radically altered how our government enforces our anti-monopoly laws, the American economy underwent a truly revolutionary restructuring. Four great waves of mergers and acquisitions—in the mid-1980s, early ’90s, late ’90s, and between 2003 and 2007—transformed America’s industrial landscape at least as much as globalization. Over the same two decades, meanwhile, the spread of mega-retailers like Wal-Mart and Home Depot and agricultural behemoths like Smithfield and Tyson’s resulted in a more piecemeal approach to consolidation, through the destruction or displacement of countless independent family-owned businesses.
* * *
Evidence is growing, however, that the radical, wide-ranging consolidation of recent years has reduced job creation at both big and small firms simultaneously. At one extreme, ever more dominant Goliaths increasingly lack any real incentive to create new jobs; after all, many can increase their earnings merely by using their power to charge customers more or pay suppliers less. At the other extreme, the people who run our small enterprises enjoy fewer opportunities than in the past to grow their businesses. The Goliaths of today are so big and so adept at protecting their turf that they leave few niches open to exploit.

If you care about where the American economy is headed, and are looking for ways to improve the picture, read the rest here. And then buy the book, preferably from a small, independent bookseller.

1 comment:

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