Trick down?


#21

More complex than that. In order to break up a company you have to show a market dominance and that breaking up will increase competition and IMO key would be leaving them in place would/could result in catastrophic results if they were to fail.

Looking back at the Trillion $ bail out started by Bush and jumped on by Obama who took it to $10 T LARGE we can now look back and see the results…by ANY standard and measure EPIC FAIL by the Govt.

Had the Govt taken the initial $1 T and simply spread it around to the taxpayers we would have lifted the country out of the recession IMO. Instead we spent $11T and never got anything but bigger companies and made a HELLVA lot of people on Wall Street UBER RICH. In fact the only people that benefited was the uber rich.

Some things are big, but big may not mean bad. Lets take oil companies. Deep offshore rig in the N Sea runs into the $100’s of Millions and you have not even pumped a bbl of oil at that time. Airlines at the global level have to be big. Bottom line is when you ticket to ride costs in the $100’s of millions and into the Billions then you need to wear big boy pants. Then it comes down to competition. If you are the only company playing offshore rigs or the only company flying planes outside the US then its time for a HARD LOOK. Are you keeping other companies out of the game??? If so the time to break you up.

Also there is the VERTICAL company. I own a BIG ranch, I own cows, I own a slaughter house, I own a meat trucking company and I own a chain of grocery stores and as a result I OWN the beef market and control the price of beef…WRONG! You can be a rancher and SELL those cows but not to yourself and up the chain.


#22

Wow, 100% agree.


#23

That’s because the NONcapitalist government regulation makes it somewhere between difficult and impossible for new entrepreneurs to enter the market. That’s cronyism, not capitalism.


#24

Markets are already handling the eyeglass maker, we have media giants because of how Government regulates media licenses.

No, we do not have just “4” airlines. Airlines haven’t been this competitive in decades.. Oligopolies don’t see downward ticket prices like this:

And cable companies have their oligopolies, because of how metropolitan authorities manage fees for right-of-way in public access points. It’s when cities waive those fees, that you get things like Google Fiber in Kansas city.

Breaking up companies is a solution in search of a problem. Always has been.


#25

‘cept when there was only AT&T the phones worked clearly all the time, if you dropped them they still worked, half the population wasn’t walking around like mind numbed robots, and bees were busy pollinating our non-genetically enhanced crops. Just sayn’.


#26

You mean it broke up a monopoly created by the government? The government shouldn’t keep corps from getting too large to fail. It should stop helping corporations become too big to fail – and stop worrying about the result. It’s none of the government’s business. It wouldn’t need to break up its own handiwork if it stopped colluding with businesses to create monopolies. Every monopoly has somewhere in its DNA a protective regulation, a subsidy or some other advantage over competitors.

Once AT&T’s initial patents expired in 1893, dozens of competitors sprung up. "By the end of 1894 over 80 new independent competitors had already grabbed 5 percent of total market share … after the turn of the century, over 3,000 competitors existed.55 In some states there were over 200 telephone companies operating simultaneously. By 1907, AT&T’s competitors had captured 51 percent of the telephone market and prices were being driven sharply down by the competition. Moreover, there was no evidence of economies of scale, and entry barriers were obviously almost nonexistent, contrary to the standard account of the theory of natural monopoly as applied to the telephone industry.56

The eventual creation of the telephone monopoly was the result of a conspiracy between AT&T and politicians who wanted to offer “universal telephone service” as a pork-barrel entitlement to their constituents. Politicians began denouncing competition as “duplicative,” “destructive,” and “wasteful,” and various economists were paid to attend congressional hearings in which they somberly declared telephony a natural monopoly. “There is nothing to be gained by competition in the local telephone business,” one congressional hearing concluded.57

The crusade to create a monopolistic telephone industry by government fiat finally succeeded when the federal government used World War I as an excuse to nationalize the industry in 1918. AT&T still operated its phone system, but it was controlled by a government commission headed by the postmaster general. Like so many other instances of government regulation, AT&T quickly “captured” the regulators and used the regulatory apparatus to eliminate its competitors. "By 1925 not only had virtually every state established strict rate regulation guidelines, but local telephone competition was either discouraged or explicitly prohibited within many of those jurisdictions."58


#27

And AT&T along with Motorola and the FCC ensured that cell phone technology wouldn’t be widely used until the late 1990s.


#28

Thank for bringing that up.

AT&T became a monopoly and that was not all bad, in fact it was good. But what should have happened was that it should have been sunseted. It served a purpose and then should have gone away…

We have lots of monopolies or Quasi Mono’s around. They can serve a useful purpose. Typically in the early stages a nations development like AT&T. Taking on the challenge of creating a nation wide phone network and a set of standards is not easy and cost prohibitive for most companies. Same goes for electric and gas companies. But after a nation wide footprint gets established then its time for the mono to go away and open up to other companies. The other option is the govt takes on the cause. Only you would have a govt run and owned fone system, utility grid etc. I will you imagine how that would work out.

Govts need to be in the results business and little else.


#29

I don’t think government-created monopolies are useful at any point. I also think that government intervention is required to create them – in most cases. I don’t reject out of hand the concept of a “natural monopoly,” but I question it.That said, the electrics, gas and telephone industries were highly competitive early on – that lasted until exclusive franchise agreements and regulation.The first link goes into a lot of detail about them.


#30

One thing nobody considers in all this is that AT&T spent billions creating their infrastructure and then the government stepped in and ORDERED AT&T to “allow” other, start-up companies to USE that infrastructure paying only a small “user fee” to AT&T for doing so. THAT’S why many cell phone companies can offer cheap fees. They never had to PAY for establishing their own infrastructure–certainly not when they are allowed to attach to EXISTING lines/towers/etc. built by someone else.


#31

And it wouldn’t have “had to be broken up” if government hadn’t interfered in the first place. AT&T profited on those billions because the government ensured that AT&T would get those billions. Hard to say what’s fair and what’s not after that. After all, it’s economics by central planning committee, something we all keep saying has never worked anywhere in the world.


#32

You realize today that AT&T is bigger than it was back when, but there is a difference…its a competitive market place today with lots of companies in the space and that is the POINT!

Insure capitalism thru competition with companies large and small where the consumer has a plethora of choices…


#33

Which happens naturally.

This is not a 3rd rail to economics; true monopolies only occur as the result of Government intervention.

Using Gov’t intervention to fix the effects of yet other intervention is a cluster****.

The solution to Airline Oligarchy of the 1970s was not to break up American or United; it was to simply deregulate, and let nature run its course.

Resulting in every single legacy carrier going bankrupt at least once, and Pan Am and Eastern being swept away into the dust bin of history.


#34

“Trickle Down” is merely a pejorative term coined by the Democrats to disparage President Reagan’s RATIONAL idea that a “rising tide lifts ALL boats.” If private citizen Donald Trump treats 20 of his friends to an extravagant dinner at an up-scale NYC restaurant, WHO “benefits” besides those on his guest list? The waiters, the sommelier, the maître di, the owner of the restaurant, the bus boys, dishwashers, green grocers, butchers, delivery truck drivers, vintners, EVEN the farmers and ranchers who grew what was consumed! Congress once passed a stupid “luxury tax”, imposing a 10% tax on certain goods such as expensive cars, furs, jewelry, yachts, etc. What happened? The yacht-building industry on our East Coast nearly cratered. Why would someone who wanted to buy a $10 million yacht spend $11 million for the “privilege” of buying one made in the U.S. when they can go to Europe and buy one for the original $10 million–especially knowing that the additional $1 million adds NOTHING to the value of the yacht? THAT’S liberal “group-think” at its worst.