One of Senator Elizabeth Warren’s many gifts is that she can discuss important issues in plain language. Bill Clinton had the same ability. But her views are more progressive than Clinton’s. She will make a great president.
Below is an interview with Warren conducted by David Dayen of “The American Prospect”. It was published yesterday under the title “Monopolistâs Worst Nightmare: The Elizabeth Warren Interview”:
David Dayen: Weâre doing this issue about economic concentration. And one thing Iâve noticed is that, probably since 1912 there hasnât been this much talk about monopoly in a presidential context, in a presidential race. To what do you attribute that? I mean, why do you think this issue has inspired this interest at this time?
Elizabeth Warren: I believe the central question in America today is who government works for. Yeah, itâs got a lot of different directions, but thatâs the fundamental one. Is it just going to work for the rich and the powerful, or is it going to work for everyone else? Antitrust cuts right to the heart of that. Weâve had a government that has kissed up to every giant corporation for decades. It has weakened antitrust enforcement, looked the other way on mergers, passed on deals that everyone knew were anti-competitive and would be bad for the economy and bad for competition but good for the bottom line of the companies that wanted it. And no one so much as fluttered an eyelash over it. And thatâs started to change. And I thinkâSo hereâs my thinking: itâs because weâre focusing more on whatâs wrong in this country. Itâs not like somebody woke up and just said âantitrustââweâre not that nerdyâbut itâs about whatâs wrong in this country. And as people increasingly see that the problem is not an overreaching government, the problem is a government that wonât get in the fight on the side of the people. Antitrust becomes one of the clearest places to see that.
DD: Now you did a speech at the end of 2017, you talked about this issue, and at the beginning of the speech you said something like, you know, people donât have to know the Herfindahl-Hirschman Index to know that thereâs something wrong.
EW: Exactly.
DD: But how do you talk about it on the trail? How do you talk about it to really drive that home so that it doesnât get bogged down in numbers and economic theory and stuff like that?
EW: Itâs important to give examples of how it touches peopleâs lives. So when I talk about Amazon, for example, I talk about the platform where everybody goes to buy coffee makers and pet cookies, and that the platform works great. But that Amazon does something extra. Itâs not just an ordinary marketplace. Itâs a marketplace where Amazon, the owner of the platform, sucks up information from every transaction and every near-transaction, the fact that a shopper looked at the item, right, searched for the item, spent a little time hovering, itâs been in your cart.
And I talk about that. And then they use that information to go into competition with the businesses that are trying to sell you coffee makers or pet cookies. And the consequence of that is that the guy who busted his tail, figured out the pet cookie business, got out there and marketed itâAmazon looks over the edge and says, hmm, profit to be made there, letâs do pet cookies, donât even identify it as an Amazon business, and move the guy who built this business back to page seven in the search. Routine, and now Amazon has sucked up one more business.
DD: The other issue with Amazon is, that pet cookie business, they take a cut out of every transaction he makes anyway.
EW: Exactly, exactly.
DD: And they can raise that price, they can change and say, âOh, weâre charging more for shipping now, weâre charging more for storage now.â
EW: Every part of it. So, in other words, the way I describe that particular point is, itâs like baseball. You can run the platformâthat is, you can be an umpireâor, you can have a team in the gameâthat is, you can run competition against others who are trying to sell the items. But you donât get to do both at the same time. And people in the room all say, âRight.â That makes sense to me.
DD: You just break it down and it makes sense.
EW: Thatâs right.
DD: So weâve seen, very recently, these hearings in the House on the digital platforms.
EW: Yay.
DD: And, you know, Iâm wondering about your thoughts on the role of Congress in this policy. These are policies that Congress wrote, that they have oversight function on. You know, in the â40s we saw something called the Temporary National Economic Committee, which was a series of investigations into all sorts of sectors over the economy. Do you think, is that something we need now? How can Congress get involved in this?
EW: Okay, Iâm glad to see Congress doing this. I think itâs great. I want them to call witnesses, to let people tell their stories, I want them to expose the data. I want to see the books and records of some of these companies. Remember, Congress has got a lot of muscle if it decides to use it. But I want to make two other points. The first is current law gives the Justice Department and the FTC and the banking regulators a lot of power to move now. Even without Congress, a president who put a strong team in place could change antitrust enforcement in this country, without a single change in the laws from Congress.
DD: And itâs interesting you say the banking regulators, because people donât realize how much power is in, you know, other agencies, not just the FTC and the Justice Department.
EW: Exactly right. I picked banking, but youâre exactly right. But itâs the reminderâThereâs a lot we could do right now. But also, and this is what I argue should come out of all this, there are places where Congress should draw a bright line in this. So I have a plan to break up the big platforms. If a platform is doing more than a billion dollars in business, the platform has to be broken off from all of the ancillary businesses. And thereâs justâWe shouldnât have to litigate it. Just make it happen. Itâs too much concentration of power. And so Iâm both ways on this: thereâs a lot we can do withoutâIâm delighted Congress is doing this. Thereâs a lot we can do, even if Congress doesnât change any law. But, there is at least one good place Congress could change the law and make this whole system work better.
DD: You mention your plan on the platforms, but youâve also made the point that if we broke up Google and Amazon and Facebook tomorrow, weâd have a terrible concentration problem in America.
EW: Oh, itâs much broader than just that. Platform is such an obvious one and weâveâ
DD: And everyone interacts with it.
EW: Thatâs exactly right ⊠the analogy from history where someoneâone businessâcould not only control the marketplace, but also be a dominant player in the marketplace simultaneously. Itâs not that you canât find them in history. Itâs that when we found similar economic concentrations in history, we broke them up.
DD: Sure, sure.
EW: Especially when they started buying everything else. And then, of course, doingâas I recall in the railroadsâdoing a discriminatory pricing map. Charge themselves a different price from [someone else’s] grain outfit.
DD: Absolutely. So, I mean, the sort of elephant in the room on this is the judiciary, which has a very particular theory and view of antitrust and even if you put in enforcers that want to take that in a different direction, you still have to argue that in court. So what do you think can be done there? I mean, obviously a new president would have judicial nominations, but you know, thatâs going to take some time, so howâIs there a way to sort of get the judiciary to realize that they need to do their part here?
EW: Use every tool in the toolbox. So part of it is get an aggressive antitrust team. Part of it is presidential leadership. Get out and talk about this issue. And explain to the American people why the laws are working for the big guys and not for them. Encourage the academics to get out and make their case. Rememberâ
DD: The ones not on the payrollâ
EW: … Thatâs exactly right. Remember, it was the academics that got this started in the wrong direction, arguably.
DD: I would argue that as well.
EW: Yes, exactly, so I think itâs all of the above. And, at the same time, move on the congressional front. I just donât want this to feel like, gee, if we canât move Congress, we canât do anything. No. Bang away without Congress, but also, bang away on Congress to make change. Just move on all the fronts.
DD: Excellent, excellent. And finally, thereâs a famousâIt was Richard Hofstadter wrote this thing in the â60s. And he saidâAnd the title of it was âWhat happened to the antitrust movement?â
EW: Yes.
DD: That there was a movement that created all these laws and then the movement sort of went away and said, âRegulators will take care of it.â It seems like a movement is what is necessary at some level, and how do you inspire that?
EW: Okay, now letâs move back up to the 10,000 feet where we started this, because I think thatâs what this is all about. When we started this conversation, I said that I think the question is who government works for. I think much of the antitrust relaxation over time in the â60s was confidence the government would handle this. Confidence that we had regulators who knew their stuff and who were technically adept and who had shown that they would be on the side of the American public. And when the big corporations started pushing back, started advancing the academic work that said, âNo, let the giant corporations do whatever they want. What could possibly go wrong?ââThat itâs taken a long time for people to see the implications of that. Look, for 40 years now, the mantra in Washington and in most of the Republican Party and a big chunk of the Democratic Party has all centered around Ronald Reaganâs âWhat are the nine worst words in the English language? Iâm from the government and Iâm here to help.â Ha ha ha. The idea that itâs government that poses the threat to all of the rest of America and must be held at armâs length, and missing the fact that itâs government that balances out the power of these giant corporations. And without an effective government to enforce antitrust lawsâand other lawsâweâre all in trouble.
DD: Well, itâs the idea that if thereâsâIf government takes away the regulation, the regulation doesnât go away, itâs just in the hands of the giant corporations.
EW: Itâs just in the hands of the giant corporations.
DD: So they get to do regulation from the boardroom.
EW: And thatâs how we keep hearing lately about self-regulation. Aircraft manufacturers that self-regulated; how did that work out? You know, itâsâBut itâs over and over. Itâs wait, what? Theyâre doing what? The oil companies that were doing the drilling offshore were self-regulating? You know, they filed some reports that nobody read. Thatâs not a government thatâs working for the public. So when you say about, is it going to take a movement? The answerâs yes. That is the movement weâre starting to build.
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