Sunday, August 3, 2014

The unholy alliance of concentrated power

Concentrated political and economic power in the federal government and very large corporations is a threat to liberty and opportunity.  Further, political leaders have formed a relationship with corporate and other special interests whereby support flows from one to the other resulting in distorted access, policy, law, and regulation.

Political leaders of both parties seek financial support for election and personal enrichment.  It is about them – not the American people.   The combination of concentrated power in government and corporations, and the alignment of interests between the two are a significant danger.

The expanding mass of government in its physical bureaucracies and the body of laws and regulations it propagates, increasing centralization to the federal level,  and growing power within the executive are clear threats to liberty.  Corporate consolidation through mergers and acquisitions has created behemoths of economic power and political and social influence that also threaten liberty in a manner that often goes unnoticed by the public.

Following the Great Recession of 2008 there was an outcry about banks that were “too big to fail.”   It was expected that the issue would be addressed through legislation commonly called Dodd-Frank, but today more assets are held by fewer banks.  The too big to fail banks are in fact bigger today.  The five largest U.S. banks (JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, and Goldman Sachs) have assets in excess of $11 trillion.   Five banks hold 56% of all banking assets in the United States.

Consolidation and concentration of market share is not confined to banking. Media companies continue to consolidate through mergers and acquisitions.  Comcast recently announced its intention to buy Time-Warner for $45 billion.  The merger would leave Comcast with over 30% of the market.  An industry that already has territorial near monopolies is further consolidating.   This merger is but one of many occurring in the media sector.

Internet based companies are also highly concentrated.  The recent debate about the National Security Agency’s activities captured great interest and concern.  Yet, there seems little concern that Apple, Google, Facebook, and Amazon own all manner of personal data about where one goes, what one reads, who one socializes with, and what one buys?  All of this data is owned by these giant corporations and they can do with it as they please.

The United States has in the past recognized the threat of consolidation of economic power.  Senator John Sherman, author of the Sherman Antitrust Act of 1890 said, "If we will not endure a king as a political power we should not endure a king over the production, transportation, and sale of any of the necessaries of life."

Supreme Court Justice William O. Douglas once said in a court opinion that the Sherman Act, “is founded on a theory of hostility to the concentration in private hands of power so great that only a government of the people should have it."

Disrupting the distorted relationship corporations and special interests have with government is focused on campaign finance reform.  This effort has failed and often caused unintended negative consequences.  A better approach may be:
  1. An educated, engaged, informed, and inquisitive voter is the best defense against the selling of candidates as consumer products in advertising.  
  2. Reject the strategy of division that the advertising advances. Commit to accepting the common person as well-intentioned and reject the pointing of fingers and name calling of today's political and social discourse.
  3. Simplify and decentralize government.  The consolidation of government power and the complexity of law and regulation enable manipulation by the few to the detriment of the many.   


  1. George Washington’s statement that political parties will, “in the course of time and things, become potent engines, by which cunning, ambitious, and unprincipled men will be enabled to subvert the power of the people and to usurp for themselves the reins of government” seems prescient.

    Spending on the 2012 congressional and presidential elections reached nearly $7 billion with over $2.5 billion spent on the presidential race alone. Small individual donations of less than $200 made up less than 15% of the contributions to congressional races. Large individual contributions and PACs are the sources of real financial support.

    Employees at Goldman Sachs contributed about $1 million to the Obama campaign in 2008 and abruptly switched allegiance in 2012 to provide Mitt Romney with a similar amount of donations. For 2016, they appear to be supporting Hillary Clinton. She gave two speeches at Goldman reportedly for $400,000. The Clinton Foundation has reportedly received up to $500,000 in donations from Goldman Sachs through 2013.

    Goldman Sachs’ changing alliances are possible because its only concern is advancing its interests. It makes no difference if candidates are Republican or Democrat. The money will flow to the candidate they believe will win and aid their interests. Hillary Clinton will be challenged to explain a proclaimed populist agenda yet be beholden to Wall Street.

    Comcast’s political contributions are balanced to both Republican and Democrat candidates. The objective is to retain influence within both parties. This is a common theme among corporations and PACs.

    New online business leaders also follow the traditional cover all bases method, but some follow social agendas in their personal giving while their PACs share the wealth and play both sides of the street.

    The Sherman Antitrust Act of 1890 is the foundation of antitrust policy in the U.S. Its purpose is to stop the restraint of trade, anti-competitive behavior, or the creation of monopolies. In 1982 the Reagan administration broke AT&T into the regional baby Bells using the Sherman Act. In 2000, Microsoft settled a suit with the government under the Sherman Act for strong arming companies to not use Netscape. In 2013, Apple Inc. was found guilty of violating the Sherman Act in a conspiracy to eliminate completion for e-books.

  2. I agree that the three-pronged approach outlined in the article is better. Unfortunately, it’s also a utopian approach that can’t possibly be achieved.
    1) The average voter is “educated” mostly through well funded propaganda, and is motivated by short term self interest. To be properly and fully educated on all the government/political issues affecting the average voter (and the many nonvoters) would be a full time job. People just don’t have the time.
    2) The strategy of division is driving our political process, and I see no possibility of that strategy changing outside of maybe a catastrophic event.
    3) There is no political will, or interest in decentralizing government. It doesn’t matter anyway because corporate tentacles now reach into all aspects of government from the three branches of the U.S. government to state and county government and municipalities across the nation. However you distribute the government, corporations will control it.
    There is no workable approach, there is no hope.

    1. I agree that the proposed solutions are somewhat idealistic, but they are achievable - with effort. The alternative is the search for a silver bullet that does not exist or do nothing and allow things to go to hell in a hand basket.
      1) "People just don't have time." I disagree.. They have time - they are just not prioritizing it. People who had to clear fields and chop 18 chord of wood for the winter didn't have time. In our time we are distracted by nonsense not busy. On an average day the employed person with no children spent 4.5 hours in leisure activity (TV etc) and the person with children 3.5. See Only 63% of working age Americans so the remaining 37% have even more time. The name of this blog was chosen because our Liberty was difficult to obtain and will take effort to retain. The fact that you and 2000 others have read this blog, and that you took the time to respond gives me hope.
      2) The strategy of division is going to be overcome one person at a time. The strategy is division. It will take people recognizing it and taking action in their lives to change it. If you are conservative and watch Fox News make sure you also watch some MSNBC. If you are liberal and listen to NPR take some time to listen to Rush Limbaugh. If you read the NYT or Globe, also read the Wall Street Journal and Herald. Then filter it all to find a balanced view. Again, it will take effort.
      3) Decentralizing government is tough, but it can be achieved. If the federal government is limited more power will flow to state and local governments. My preferred method is to limit the federal government to a percent of GDP (18%), a balanced budget amendment, and no off books activities (e.g. if you have a war the American people are going to be taxed to pay for it or suffer a loss of services). Any long term debt (there can be a need for this in capital investment) must be approved by a 2/3 majority of the Congress. Mechanisms such as these will force power downward. The one thing we have going in our favor is technology. We have never had the opportunity for transparency like we do today.
      Thanks for the thoughtful reply.

  3. One of the most cogent and articulate articles on the twisting of our government (by large corporations and greed) that I have read. I would be interested in hearing how you think we could achieve point #1 though.
    In such a apathetic population, where many believe that their vote doesn't count, or that the decision has already been made - how do we empower voters (and previous non-voters) to make their voices heard?
    As a (relatively) younger voter, living in Alaska, it seems that the Electoral College could be somewhat to blame. While I understand the original intent, it seems to only further diminish the power of the individual voter - especially in today's 'connected' world.
    Those of us that are active in the voting process watch the tally boards on the networks - but if states are being called for a certain party/official, what is the benefit to getting out to making votes later in the day?
    The other issue I see is being mostly limited to a two-party system. When there are only two choices, and neither offers solutions unfettered by prejudice and corporate money - the choice seems to be two sides of the same coin.
    I agree with your response to point #1. It is a matter of prioritizing. There is no excuse for the vast number of the voting populace. In fact, the harder someone is working to 'just make ends meet', the harder that same person should be working to make sure their voice is heard. Because it is the policies of the elected officials that could have the largest impact on their lives.
    So the simple question is this: how do we affect change? How do we educate and motivate the people of the U.S. to act in their own best interests?
    In a country so blessed by technological advancements, we should have much higher voter turnout & education, but the reality is so depressing.

    1. David, thank you for your comment. I selected the name of this blog to make the point that "effort" is required of the citizenry to make our civic life vibrant. It is going to change one person at a time. That is why I started the blog. My little bit to bring about change. Your comment indicates you too are a concerned citizen, thinking seriously, and desirous of change. Just having the conversation is contributing to the needed body of effort. We need to look at all opportunities to increase serious engagement.


Comments to blog postings are encouraged, but all comments will be reviewed by the moderator before posting to ensure that they are relevant and respectful. Hence, there will be a delay in the appearance of your comment. Thank you