For longer than they would like to admit, national Democrats have had difficulty answering the question “What are you for?”
Hillary Clinton had a platform full of ideas but an advertising campaign almost devoid of content, and she hasn’t been alone. The recent Democratic “Have you seen the other guys?” bumper sticker generated so much derision because it so perfectly summed up the strategy of a rootless party.
Now, Democrats say they’re putting down roots. They say they have ideas. They rolled out their “Better Deal” agenda on Monday, and a shockingly large portion of the platform is dedicated to breaking corporate power, and in particular monopoly concentration. It’s a credit to the emerging New Brandeis movement that these ideas have been embraced at the highest levels of a political party. But will Democrats have the credibility to get a hearing from the public on a problem even they acknowledge they helped create?
If you read the four white papers attached to the Better Deal agenda, the section on monopolies is clearly the most sophisticated and detailed. This is a reflection of how much thought has gone into the problem, particularly from Barry Lynn and the Open Markets Program at the New America Foundation, who deserve a lot of plaudits for years of work on how concentration impacts every facet of our lives.
We’re in a monopoly moment. Just in the last week, researchers from New York University explained how doubling corporate consolidation over the past 30 years has sapped the incentive to invest, because big firms have no competition forcing them to keep pace.
Reduced investment has kept the economy stuck in low gear, with massive swathes of the country abandoned. Goldman Sachs research cited monopolization as a major factor in expanding corporate profit margins, and subsequently a lower share for workers from economic growth. And the Washington Center for Equitable Growth detailed the telecommunications oligopoly, showing how consumers pay an extra $60 billion a year for cable, mobile and broadband services because of the lack of choice.
People intuitively understand this. In a research note related to the Better Deal agenda, pollster Geoff Garin writes that “86 percent of voters agree that ‘our economy is increasingly dominated by a small number of very large corporations.’” And the Democratic pitch frames this as a problem for democracy and liberty, rather than solely economics. Excessive concentration hurts workers as much as consumers, small businesses as much as shoppers, rural farmers as much as web coders, political institutions as much as economic institutions. Nobody is safe from harm.
The Better Deal plan proposes changing merger guidelines used by the Justice Department and Federal Trade Commission. Right now, mergers are mostly held to a “consumer welfare” standard — as long as prices go down, everything’s fine. Democrats want jobs and wages, quality and access, and the ability for competition and innovation as part of the equation. The new guidelines would even presumptively block large mergers unless the parties could justify the benefits.
The plan also calls for post-merger review, where regulators would be empowered to break up companies if the merger led to abusive conduct or the conditions tied to the deal haven’t been met. And the plan proposes a “consumer competition” advocate that would refer anti-competitive conduct to the Justice Department and FTC. The agencies should probably do this themselves, but it does highlight the importance of confronting abusive monopolies and the need to put resources toward the problem.
The other white papers lack the same punch. A brief on combating high prescription drug prices supports price negotiation through Medicare, which is good, but otherwise opts for disclosure and a “price gouging” enforcement office, when the government already has the power to handle such outrages. The jobs piece doesn’t offer much beyond apprenticeships and hiring tax credits, although Democrats previously introduced a suite of policies, including a $1 trillion infrastructure investment and a $15-an-hour minimum wage.
The monopoly piece, however, is bolder. Even attacking drug prices reflects a fight against monopolies, ones the government grants through patents (which could be abandoned for a system of centrally financed research and development and generic distribution). And not only have Democrats taken up this fight, they’re apologizing for past indiscretions. “How the heck did we let Exxon and Mobil merge?” asked Chuck Schumer on ABC’s This Week, referring to the 1998 deal. “And that was Democrats.”
The apologies are warranted. Democrats have resorted to populism as a marketing slogan in campaign after campaign while taking corporate money and showing indifference at best in an era of rising inequality, Wall Street dominance and runaway concentration. In 1992, Bill Clinton said that if you work hard and play by the rules you should be rewarded. In 2000, Al Gore stood with the people versus the powerful. In 2004, John Kerry incorporated his running mate’s Two Americas theme, and lamented “opening firehouses in Baghdad and shutting them in the United States of America.” Barack Obama attacked his opponent, Mitt Romney, in 2012 as a private equity pirate.
Populism has been the salve to heal a divide between Democrats and the public, but after Election Day it typically gets tossed aside. Under Clinton, merger policy followed the Reagan standard. Under Obama, corporate wrongdoers went unpunished. Under Democrats, more corporations grew more powerful, with many Americans left behind.
Even in this agenda, with its newfound focus on trust-busting, the biggest threats to dominate the economy — massive internet platforms like Google, Facebook and Amazon — are scarcely mentioned. There’s a reference to how mergers must consider how “control of consumer data can be used to stifle competition,” a reference to the tech giants. And Democrats have been speaking out on this topic more: Rep. Keith Ellison endorsed breaking up Internet monopolies, and even Sen. Cory Booker targeted Amazon and Google for scrutiny.
But Google didn’t spend $6 million in lobbying last quarter for nothing. As long as Democrats continue to take money from corporate America, particularly Silicon Valley, a hotbed of party fundraising, the question of whether they’re paying lip service to the monopoly problem will linger.
So Democrats need to rebuild trust among the public. They may thrive in the midterms simply because of Donald Trump’s unpopularity and Republican’s lack of legislative success. But a political party needs principles, and the credibility to follow through on them. It will take time to cut through the skepticism, and populist reformers need to hold Democrats accountable to their promises. But the first step is focusing on the right problem; Democrats have hit that target.