Posts tagged ‘Monopolies’


Antitrust: Tougher Simpler Laws Needed

The problem of banks “too big to fail” was addressed in the Republican Presidential debates, as Gov. Huntsmann argued they set the nation up for a long-term disaster. He noted six banks control 9.4 trillion dollars, or 60 to 65% of GDP, with implicit taxpayer guarantees of protection. While he suggested they be “right-sized,” or reduced to a “proper size,” no one in the Republican Party openly advocated the filing of federal antitrust actions against these institutions, to bust them up.

President Obama should direct his Antitrust Division at the Justice Department to file lawsuits against all banks “too big to fail” to break them up, since they need to be able to go under, without taxpayer bailouts, to protect our system from harm. He should simultaneously ask Congress to amend the antitrust laws so market shares of 10% or more become presumptively illegal. The antitrust exemption for insurance companies should also be ended.

“Antitrust” arose late in the 19th Century, when big corporations, managed by trusts, operated free of government regulation, and controlled prices by eliminating competition. A populist one-issue Anti-Monopoly Party first appeared in the 1884 Presidential election, and the Democrats soon co-opted their platform.

The Sherman Antitrust Act of 1890 made monopolies, contracts in restraint on trade, and attempts to monopolize, illegal. In Standard Oil (1911), the Supreme Court ordered the dissolution of Standard upon finding they unreasonably affected interstate commerce, by destroying competition and restraining trade.

Antitrust law was strengthened under the Clayton Act (1914), which in part was to stop companies from becoming monopolistic in the first place, by prohibiting mergers that “substantially lessen competition.” The Federal Trade Commission (1914) was added to investigate antitrust violations, and to seek enforcement.

Problems arose in antitrust prosecutions in terms of how to define “market share.” Are coffee and tea in competition with each other? Are banks and derivative brokers in the same market? Geographic issues also posed problems. What geographic area is involved? Do we examine just Wall Street, all U.S. institutions, or only international banks? How much control leads to a monopoly? While 90% is clearly monopolistic, what about 60%, or market shares of less than 30%?

Since the crash of 2008, it is now time for Congress to revise the antitrust laws to expand their scope, and make the breakup of companies “too big to fail” much easier. They should declare market shares of 10% or more per se illegal, so competition is enhanced, and the risk of failure is reduced.

They should also eliminate the antitrust “exemption” enjoyed by insurance companies. The bailout of the American International Group (AIG), a multi-national insurance corporation, was done because it was “too big to fail.” The nation cannot afford the risk posed by such oversized entities. There is no rational reason for their antitrust exemption and they must be busted up.

It is time to break up corporations without the need to prove anything, except a market share of 10% or more. Since the Republicans will never approve of any regulations, the Democratic Party and President Obama will have to take the lead.


Cable TV Failed To Show Football Game

One would think Charter Communications, the Cable TV monopoly in Madison, would have carried the football game on Sat. Sep. 17 between the 7th ranked University of Wisconsin Badgers and Northern Illinois, but the game was not on any of the 50 Basic Service stations, the 56 on Expanded Service, or any of the 54 on Digital View Plus, even though we subscribers give Charter plenty of money each month to provide good service.

So what was on Cable at 2:30 p.m. instead? Their lineup included seven football games, including none we wanted to watch: 1) Versus carried Texas Tech and New Mexico; 2) Fox showed Colorado St. v Colorado; 3) ESPN went with Texas and UCLA; 4) CBS broadcast Tennessee v Florida; 5) NBC had Notre Dame and Michigan St.; 6) ABC announced Nebraska and Washington; and 7) the Big Ten Network chose Minnesota and Miami of Ohio. If I had purchased cable’s Sports View package, and spent even more money, Northwestern v Army was on CBS Sport Network, and Virginia v North Carolina was on ESPNU.

Why does Cable TV do this? When will they ever learn that our interest in a local football team, does not translate into a general desire to watch whatever game they decide to give us. Like the vast majority in Wisconsin, I turned the TV off, and had to watch the Badger game on my laptop through an online stream of ESPN-3. When will advertisers learn the vast majority of people watching most games, are just fans of the two teams on the field.

Although the cable monopoly promotes itself as a wonderful carrier by advertising over 100 stations to choose from, the number of channels makes no difference, if they show only filler programming no one wants to watch. Cable TV could be so much better if the people of Wisconsin huddled up, went on offense, put Cable on defense, and pressured them to change their lineup. We should be able to stop them from calling all the plays. We should be able to move the ball in the direction we want it to go, by collectively forcing them to show us the games we want to watch.


Cable TV Could Be So Much Better

When I was young, the TV set was known as a “black and white,” because nothing was broadcast in color, until 1964. “Rabbit ears” sat on top of it, so we could receive of one of the three VHF Milwaukee stations. We could also get one UHF channel, but the picture quality was grey and fuzzy, and frankly not very good.

The three networks, ABC, CBS, and NBC, had regular programs that allowed us to plan our TV viewing. The Green Bay Packers always kicked off their weekly game on Sunday, at Noon. The Johnny Carson Show started at 10:30 p.m. Most prime time entertainment comedies ran new episodes in their usual weekly half hour slots, the entire season from Sep. through May.

The major networks also carried a certain amount of educational programming. 60 Minutes first aired in 1968. The Sunday morning lineup included Face the Nation (CBS) and Meet the Press (NBC). In those days, networks adhered to quality standards. Facts were distinguished from opinion. People needed credentials to appear before national audiences. They behaved while on TV. No one shouted down, cut off, or interrupted other guests. The best part about TV in the day was that it was free.

Cable TV gradually replaced the old-style of broadcasting. While it made TV reception better, particularly in rural areas where there had been no broadcast signals, the quality of programming went down, despite additional stations, since most new ones carried nothing worth watching, and competition weakened the networks.

On the plus side, ABC, CBS and NBC remained on the air. Although PBS is still shown, they are routinely threatened with extinction by Congress. I like it when cable offers the BBC, because American networks are weak as to international news. The Weather Channel comes in handy in a storm. CSPAN is a plus when Congress is debating something important. The History Channel occasionally has a good story, and Discovery once in a while carries solid science. The Travel Channel is sometimes educational. MSNBC was needed to counterbalance Fox, the Republican network, and to replace CNN, which inconsistently jumped from serious news, to frivolous stuff.

But cable could be so much better, if consumers were allowed to pick a minimum basic lineup of 12 stations, for $1 per channel. I would select PBS, BBC, MSNBC, NBC, CBS, ABC, CNN, the Weather Channel, C-Span, C-Span-2, ESPN and the Big Ten Network. After purchasing a basic 12-pack, consumers could then select additional stations, again for $1 each. I would add History, Travel and Discovery, bringing my total to $15. I might also add a few movie channels, depending what they carried, for $1 sums.

We currently subsidize many stations not worth watching with our monthly payments. By allowing consumers to choose, we could remove most of the junk from cable, as several stations would find themselves without enough viewers. Why should I be forced to subsidize Fox, the Republican political network? Does anyone really watch religious programming? Degenerate entertainment like the hideous Jerry Springer Show, where people swear and throw chairs would die. How many Sci-Fi ax murderers do we need? Dumb Hollywood-types, like Paris Hilton, Ozzie Osborn, and the Kardashians, who have never done anything to deserve TV attention, would come to an end.

Viewers are smarter than cable companies assume, and most would turn to quality programs. We should let consumers choose their cable shows via their pocketbooks and improve TV viewing.


Airline Travel Changed Over The Years

I had to fly out West for a wedding this week, and it reminded me of how commercial flying has changed significantly, since 2001 when the 911 security measures were implemented, and the late 1970s, when the airline industry was deregulated.

40 years ago, only a handful of large carriers, like United and American, monopolized the air. Now, many companies make flying competitive, a change for the good.

In the past, flights were booked through local travel agents. Now, everyone buys online. No longer do we see passengers running through airports, 10 minutes before departure, scrambling around at the last second to get onboard. Those days are gone. Today, we go through the dreaded airport security. You know the drill. Take off your shoes. Empty your pockets. The laptop goes in a separate bin. Be prepared for a body scan, or maybe a pat down. So much for the friendly skies; say hello to the airport security rent-a-cops.

In the old days, bags were checked and sent into the cargo hold, as only a few stuffy businessmen carried briefcases on board. Now, everyone packs light. Almost no one pays extra to check a bag.

Before deregulation, planes would often leave half full. Today, every seat is taken, as the airlines enlist volunteers to stay behind, because they overbooked. It’s crowded, but much more efficient.

Travel seemed to be much more of a celebration 40 years ago. It seemed like there was always at least one party in flight. People drank alcohol more often, probably because airlines gave it away to create a festive atmosphere. Now, we quietly sit and watch TV.

In the day, flight attendants, known as stewardesses, were young pretty females, forced to adhere to weight restrictions. Now, Hugh Heffner’s playboy days are over. Gay men now serve the drinks.

Although deregulation pushed ticket prices down, it also destroyed the food service. You might get coffee now, or a soft drink, but descent food? Forget about it. On a Soviet Aeroflot flight in 1983, as I boarded in Moscow, they gave me a bag lunch, and I remember thinking that was bad. Now, I am not so sure.


Drug Companies Need To Be Regulated

The prices for prescription drugs in America are completely out-of-control to a point where the federal government must step in and regulate. Although Congressional Republicans will certainly oppose any intervention, the public needs to understand the issue, so they can elect Democrats, who may impose controls.

As a diabetic, I must inject insulin twice a day. The product I use is Novolog, manufactured by Novo Nordisk of Denmark. Its main competitor is Humalog, by Eli Lily Co. of Indianapolis, Indiana.

Because affordable health insurance is unavailable for me, I must pay cash for one of these medications. The problem is drug prices have been galloping upward, far greater than the rate of inflation, for some time now, and without reason.

When I was living in the Netherlands in 2007, a single bottle of Novolog cost 25 Euro, which translated to $33.00. In 2008, after returning to Wisconsin, the identical vile of insulin cost $91.77, almost three times the regulated Dutch price.

When I moved to St. Petersburg, Florida, in 2009, I shopped for the cheapest insulin, and started buying Novolog at a Walgreen’s, where it was $104.28 per bottle. It stayed at that price for a year.

In April 2010, the price increased to $109.99 per bottle, but that lasted only a few months. By Oct. 2010, the cost of the little insulin bottle had jumped to $121.99.

Three quarters of a year later, in July 2011, at a Walgreen’s back in Wisconsin, the price climbed once again to $132.99. I now pay $100 more per bottle than I did just five years ago.

Unfortunately, Eli Lilly and Novo Nordisk have a virtual monopoly as they control the world’s supply of insulin. Consumers have no choice, but to pay their unreasonable prices.

It’s not as if the drug companies need money. Eli Lilly grossed 23 billion in revenues in 2010, and realized over 5 billion dollars in profits.  Meanwhile, the profits at Novo Nordisk jumped 34% from 10.77 billion Kroner in 2009 to 14.4 billion Kroner in 2010.

As the greedy and selfish drug company personnel reward themselves at corporate outings with outrageously lavish paychecks and bonuses, someone should tell them their drug prices are unconscionable, and it is immoral to make billions off the backs of those who need their drugs, just to stay alive.

On the assumption the pharmaceutical companies could care less about the immorality of their abusive and obscene prices, the government needs to step in and take control by regulating them.


Regulation Of Phones Was Not Bad

When my Verizon phone bill came to a higher than usual sum this month, I had to question it, since I rarely call anyone. As I examined it, I noticed I was charged extra for going over my 500 minutes. After a couple calls to Verizon, certain overcharges were reversed, but the episode reminded me of how things used to be.

In the old days, each geographic area had just one Telephone Company, which was granted a monopoly, but was regulated by the government. The system worked fairly well, as land line reception was good, monthly bills for local calls were a set sum, and the only added charges were for itemized long distance calls.

We did not pay for each and every local call. Users made as many of them as they wanted, no matter how many minutes were consumed. Now, the meter is constantly running as to local calls.

Back then, we were billed only for the long distance calls we placed to someone else. Now, we are charged every time someone calls us, locally or from a long distance, whether or not we want to talk to the caller. Even if the call is unsolicited, we get billed.

We are also subjected to other charges. This month, my bill once again had “messaging” charges, despite previously notifying Verizon on three separate occasions not to allow any texting. Since the phone company is unregulated, these abuses continue.

In the old days, the phone company would install phones and take them back when service ended. Now, consumers are forced to buy them. As the phone company continually upgrades equipment, they convince consumers to spend hundreds on the latest gadgets (most of which are not needed), while they reap huge profits.

The rate of inflation as to phone service and equipment over the past few decades has galloped in relation to other expenses. Since there are now only a few phone companies, there is little effective competition, and there continues to be a need for regulation.

While cell phones have been a major technological advance in terms of flexibility over the traditional land lines, the decline in federal regulation over phone companies has hurt consumers. It would be refreshing to hear politicians promote regulation again.