Aug 14, 2015

August 13, 2015: Where is the Justice Department, a matter of Anti-Trust, Cabals and Cartels

In the wake of the decision handed down last month by the Supreme Court that the Federal Government has the constitutional authority to establish public insurance exchanges, thereby driving the final nail into the conservative arguments concerning the validity of the Affordable Health Care Act, the insurance industry immediately began an orgy of mergers.  Economist and former Secretary of Labor Robert Reich had this to say:

“Now that insurers know the Affordable Care Act is here to stay, they’re merging like mad. Today Aetna announced it will spend $37 billion to buy rival Humana in a deal that will create the nation's second-largest health insurer. Yesterday, Centene announced a $6.3-billion deal to acquire Health Net. Blue Cross-Blue Shield carrier Anthem just made a $47-billion offer for giant insurer Cigna.

We’re rapidly on the way to having a handful of giant health insurers. The only difference between this outcome and a government-run single payer, such as Medicare for all, is that revenues will go into executive salaries, dividends, and advertising and marketing rather than into lower premiums and health care.

When will we learn?” (1)


It is a poignant question and one that should be troubling to every Progressive Democrat in America.  When will we learn?  The answer, as it pertains to the elites in this country, is that—like the Commanding Generals on the Western Front a century ago—they will never learn.  But the question runs deeper, when will we—we the people—learn?  Not since George W. ‘Ol Two-Cows’ Bush upon assuming the presidency dropped the anti-trust suit against Microsoft, a case that the government was incidentally winning, this government has not brought a significant anti-trust action. For nearly a generation there has been a veritable orgy of mergers and acquisitions as the banks, the oil companies, the pharmaceuticals and other major players have merged and joined forces in an erstwhile effort to further concentrate economic and political power.  Now, with the ACA firmly in place the major players in the Health Insurance industry are wasting no time in going about the business of strangling competition. 
The consequences cannot be good, for the concentrations of economic power into fewer hands, and the concentrations of the political power that follows will mean that the long anticipated benefits resulting from the creation of public insurance exchanges as well as the requirement that all participate in the system will be strangled at birth by the attempts of the industry to further eliminate competition.  Whatever ‘savings’ anticipated by the Act will soon be undone as the industry morphs into a cartel with less than a handful of companies commanding the markets.

Economists have long recognized that the behavior of Capital is to concentrate itself into fewer and fewer hands.  Economist John Kenneth Galbraith once observed that however the capitalist lauds competition, the fact is that he hates competition and will do whatever it takes to rid himself of it.  The classic example of this, dating back to the nineteenth century heyday of the modern capitalist experiment, was the railroads.  Financiers like Gould and Fiske would buy up railroads, like the old Erie Railroad, not to invest in them and improve them, but to close them down and eliminate the competitor.  Similarly, General Motors famously bought the old trolley companies in Los Angeles in order to close them and render the population dependent on the automobile.  Surveying the American experience Professor Galbraith observed that when confronted with competition the Capitalist will soon scurry for cover, seeking government protections by way of tariff restrictions, favor by way of government contracts, and the manipulation of the marketplace by the elimination of competition by way of restricting or eliminating government oversight and regulations. 

Governments also have long recognized this behavior and began immediately after the Civil War, with the passage of the Sherman and Clayton Anti-Trust Acts to address these unwelcome tendencies.  But it has, historically, fallen upon the People to insist on a remedy.  In fact, by 1905 Anti-Trust laws were being applied by the courts not to Capital but Labor.  After having decided in “United States v. E.C. Knight Co… that the Sherman Act could not be applied to a virtual monopoly of the sugar industry because the manufacture of sugar was not in interstate commerce”, the court had “(f)or all practical purposes…virtually set aside the Sherman Act”.  This action by the court was soon followed in the 1905 decision in Swift and Co. v. United States in which “the Court held that a combination of meat packers (union) was an illegal monopoly under the Sherman Act on the ground that its activities were transactions in interstate commerce”(2)  By the early years of the last century Capital, ensconced in power, had co-opted government and, with the aid of an ideologically compliant Court, set about making a mockery of not only free enterprise but the will of the people.

It took a ‘revolt of the masses’ in the form of a ‘prairie fire’ of grass-roots protest in the form of the Greenback and Progressive movements to right the ship.  With the election of Teddy Roosevelt and later Woodrow Wilson the Progressives, able to influence first the Republican and then the Democratic Party would compel government to not only protect the people from the worst ravishes that Capital is prone but to empower workers to improve not only pay but working conditions as well.   Finally, with the coming of the New Deal and the passage of the Wager Act, Fair Labor Standards Act the enforcement of Anti-Trust laws and the institution of a long overdue regimen of Federal Regulation, the People, acting through government, were able to not only establish a system of relative economic justice but a large and thriving Middle Class as well.

There has been a great unravelling of this in the last 40 years, the greatest example of which is the destruction of the Labor Movement as well as the inability of this government to enforce the laws on the books, particularly Anti-Trust laws.  Trends that increasingly see no improvement with the election of Democratic Administrations, leaving one to ask: Where are you Mr. President?  Where is the Justice Department?

As Goldman-Sachs staffs the Treasury, no matter who which party assumes power; as Paul Volker advises a Democratic Administration on economic Policy; as the likes of Alan Greenspan would be found commendable by both a Jimmy Carter and a Ronald Reagan, a George Bush and a Bill Clinton; and as no administration since Carter has lifted a finger to aid and protect the workers on the shop floor; and as no recent administration has seriously enforced anti-trust, it is clear that cabal having seized the levers of power now owe their allegiance not to the people, but to the cartels they have empowered.

As the Middle Class writhes in agony, Hillary Clinton and Jeb Bush wait in the wings.  Nothing more need be said.  No matter who wins, we lose.  The Calvary isn’t coming.  When will we learn?  Good question Dr. Reich, it’s been nearly half a century now.  One thing is certain though, our ancestors were never such fools.

Meanwhile the Republicans have moved in Congress to eviscerate the Pell Grants making higher education unaffordable to much of the Middle Class.  You see they don’t want us competing with their kids in school either, they fear the competition.

(1). Robert Reich, Facebook post 7-15-15
(2). Tresolini, Rocco J. “American Constitutional Law” The Macmillan Company
                    New York, Collier-MacMillan Limited, London. Pg. 265


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