Saturday, May 30, 2015

Weekend econ reads: Mark Thoma on Robert Reich on antitrust

Mark Thoma - Robert Reich on antitrust. Quote of his quote:

Last week’s settlement between the Justice Department and five giant banks reveals the appalling weakness of modern antitrust.

The banks had engaged in the biggest price-fixing conspiracy in modern history. Their self-described “cartel” used an exclusive electronic chat room and coded language to manipulate the $5.3 trillion-a-day currency exchange market. It was a “brazen display of collusion” that went on for years, said Attorney General Loretta Lynch.

But there will be no trial, no executive will go to jail, the banks can continue to gamble in the same currency markets, and the fines – although large – are a fraction of the banks’ potential gains and will be treated by the banks as costs of doing business.

America used to have antitrust laws that permanently stopped corporations from monopolizing markets, and often broke up the biggest culprits.

No longer. Now, giant corporations are taking over the economy – and they’re busily weakening antitrust enforcement.

The result has been higher prices for the many, and higher profits for the few. It’s a hidden upward redistribution from the majority of Americans to corporate executives and wealthy shareholders. ...

That bolded bit there is "rent seeking", isn't it, Mark and Bob?

So why aren't you two calling it what it is? In fact, let's ditch the technical term "rent seeking", and just call it "the corruption of the political-economic framework of the US by a cabal of kleptocrats"?

Congress has squeezed the budgets of the antitrust division of the Justice Department and the bureau of competition of the Federal Trade Commission. Politically-powerful interests have squelched major investigations and lawsuits. Right-wing judges have stopped or shrunk the few cases that get through.

That sounds like corruption in the political-economic framework, no?

How about if all you economists grew a pair of balls and started talking about this stuff out in the open?

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