Barry Lynn of Open Markets Testifies Before the House Judiciary
Open Markets Executive Director Barry Lynn Testifies Before House Judiciary on How Extreme and Growing Market Concentration Chokes Supply Chains and Worsens Inflation.
“Most important is to always remember that a main reason to stop corporations from trying to take America, is to stop them from breaking America.”
Washington, DC - Today at 1 pm ET, Open Markets Institute Executive Director Barry Lynn testifies before the House Judiciary Committee in a hearing titled “Reviving Competition, Part 6: Rebuilding Americas Economic Leadership and Combatting Corporate Profiteering.”
Lynn will testify as to how extreme and growing concentration in our markets has choked off supply chains, driven prices higher, and revealed a range of risks like the baby formula shortage and others.
And he will remind us there are clear remedies to this crisis:
“This crisis provides a clear and stark imperative to rebuild America’s industrial systems in ways that boost both our security and our prosperity, including by fostering the sorts of competition that drive down prices, drive up wages, and jumpstart true innovation.
“Our task is, technically, simple: Enforce our antimonopoly laws as intended. Update the laws where necessary.
“Most important is to always remember that a main reason to stop corporations from trying to take America, is to stop them from breaking America.”
**Remarks As Prepared for Delivery***
Barry Lynn, Open Markets Executive Director: Over the last year, the American people have learned that extreme and growing concentration of industrial capacity and control has empowered corporations across the economy to engage in the greatest bout of price gouging in half a century.
The resulting surge in prices has severely harmed every wage earner and small business owner, indeed almost every person and family, in America.
Yes, other factors play a role in driving prices higher. But it’s the chokepointing of capacity that embeds inflation deep into the framework of the economy.
But this chokeflation or stranguflation, as we might call it, as harmful as it may be, is also merely a symptom of an even more dangerous set of threats to the security and wellbeing of America as a whole and every individual American.
That’s because the same concentration of capacity and control the masters pursue to boost their pricing power also radically increases many forms of physical risk.
This includes the risks of:
Severe shortages of food, drugs, fuel, and housing (even baby formula)
Severe shortages of the capacity to build weapons (think -Stinger missiles)
Political coercion - of individual corporations or the U.S. government itself - by antagonistic foreign powers (China and Russia foremost)
Even cascading catastrophic collapses of entire industrial and financial systems.
So my first main point is that: inflation and shortages are two sides of the same coin.
The master breaks – the factory, the machine, the skilled worker, the technology - so that he may take. More – for less.
It’s a swell way to do business – to profit from your own failure. But this breaking can go way too far.
Indeed the breaking of the last 40 years now threatens the security of every American in new and terrifying ways.
My second point. The concentration of capacity behind all these threats is the direct result of anti-democratic competition policies designed precisely to concentrate wealth, power, and control in the hands of the few.
The process began with Ronald Reagan’s embrace of Robert Bork’s efficiency theory for antitrust. It continued with Bill Clinton’s embrace of Larry Summer’s efficiency theory for trade.
Many understood at the time that it was unwise to put all our eggs in one basket, then to put that basket inside the borders of China.
It was 20 years ago this month that I first detailed these immense political dangers, and economic dangers, in this cover story for Harper’s – titled “Unmade in America.” It was 17 years ago this summer that I published an entire book on the issue, titled “End of the Line.”
Others warned as well. In 2002 the first annual report of the US-China Security Review Commission fully embraced the warnings of supply chain fragility and coercion. In 2005 the epidemiologist Michael Osterholm warned of how concentration threated our supply of N95 face masks. In 2005!
But the warnings were ignored, dismissed, suppressed, by executives, economists, antitrust officials, and the financiers behind them. Time and again, year after year. Because if the master cannot break, the master cannot take – quite so much.
So what was kept intact was the masters right to break.
Third, the good news. This crisis provides a clear and stark imperative to rebuild America’s industrial systems in ways that boost both our security and our prosperity, including by fostering the sorts of competition that drive down prices, drive up wages, and jumpstart true innovation.
Our task is, technically, simple: Enforce our antimonopoly laws as intended. Update the laws where necessary.
Most important is to always remember that a main reason to stop corporations from trying to take America, is to stop them from breaking America.
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