What is a smoke screen? It's a cover to hide what's really going on behind it. We can likely label every government economic activity a smoke screen, as the true intentions are never what is sold to the taxpayer, and antitrust actions are simply the latest angle, reborn. So, let's attempt to understand the truth, not the politics, and be able to understand the intentions behind the smoke screen.
In more recent years, antitrust initiatives attempted to breakup Microsoft in 2000 when a federal judge ordered it split in two. Bill Gates fought back aggressively, George W. Bush was elected, and the case was reversed on appeal with Microsoft paying a juicy settlement to the government. Now with market forces, Microsoft's name is never mentioned as a monopolistic threat.
In the '70's and '80's the government attempted for thirteen years to break up IBM. IBM is now irrelevant in the big picture and recently spent a third of its market value to acquire Red Hat, praying that cloud services will save its future. See a trend here? See how markets take care of themselves if governments stay out? And, Microsoft would have given us tremendously more innovation if Bill gates hadn't said, "Okay, if that's what you want, screw it. I'll be over here trying to save the world with Melinda." [One day read about how the Gates Foundation's world impact, however remarkable, is a mere fraction of the poverty-killing, medicine-creating, economic growth his technology produced, and would have produced].
Antitrust is the current tool used by liberals to work the masses into a froth to overthrow the King and redistribute the wealth. Vive la France! And, it's the tool for conservatives to attack Google's news algorithms and Twitter's bans on political speech. It is simply the tool, one with, again, little economic credibility.
The theme should be: Don't spend all of this money, energy, and political will rallying the public against successful companies. Instead, spend all of this power helping the thousands of small businesses become big also. Focus on abundance, instead of scarcity.
Economically, antitrust activity has simply caused more harm than good. Fortunately, since Robert Bork authored "The Antitrust Paradox" in 1978, most Administrations have focused not on the size of the company, but whether its actions harm consumers. Antitrust scholar Joshua Wright wrote in 2016, "Economic analysis has more often than not trumped ideological politics for the past 35 years. Let's keep it that way." Barak Orbach, University of Arizona law professor and member of the American Antitrust Institute, states, "The energy for antitrust reforms is not in science and facts, but in accounts that can move public emotions."
So, remember that when Elizabeth Warren publishes her 1,700-word blog post titled "Here's How We Can Break Up Big Tech," and Attorney General William Barr opens Department probes of Google and Apple while handing over Facebook and Amazon to Chairman Joe Simons of the Federal trade Commission (FTC), none of this has anything to do with protecting U.S. consumers and taxpayers.
These are simply narratives to grab votes and extort huge sums of money from Main Street and Wall Street to give to Washington. Congress and the Administrative State are deeply troubled that the European Union blackmails Google for $5 billion using the antitrust smoke screen of "unfair searches." Google pays the $5 billion to keep playing the game. U.S. politicians scream, "You can't do that to America's successful companies - at least until we get our slice/vig/taste/tax!" The Federal Reserve and U.S. Treasury props up Wall street with $4 trillion printed out of thin air, and then fines Bank America $17 billion for fraudulent mortgages. It's all nonsense. All a scam. And our job is to, if we choose to keep playing the video game, at least not believe the narratives.
The latest proposals call for Facebook to spinoff its previous Instagram and WhatsApp acquisitions, and Amazon to spinoff Whole Foods and Zappos. The FTC claims they have the power to review old mergers and have formed an antitrust task force for this purpose. What happened to ex post facto? How is this legal? Does that matter?
State attorney generals love a great blackmail - tobacco, opioids, vaping, big tech. Why don't all of these extorted dollars get returned to taxpayers, whose money it is in the first place? How can government agencies grab "forfeited" assets and fines and keep them for their own operations and kingdom building? Are they appropriated the constitutional power to tax?
In the Swamp, did you know that Attorney General Barr was previously General Counsel at Verizon Communications where he clashed with tech companies over net neutrality which prevented Verizon from charging users higher fees? Barr also played a key role in reconsolidating the telecomm industry after the court-ordered breakup of AT&T, "thus protecting the Bell companies from the competition Congress intended," according to FCC lawyer Chris Wright. Later Barr testified against the "grossly anticompetitive" tactics of cable companies who were shutting out the telecoms. Life is really a James Bond 007 movie in which you truly never know who is working for whom - unless, of course, you follow the money. Senator Elizabeth Warren, House Antitrust Subcommittee Chair David Cicilline, FTC Chair Joe Simons, New York Attorney General Letitia James, and U.S. Attorney General Barr will play whatever role you need, whatever angle fills your emotions, as long as you keep the dollars flowing. Vive la France!
Over 50 people in the Justice Department alone are working on tech antitrust cases. Instead, give that tremendous amount of money to startup incubators and accelerators. Makan Delrahim, Head of the Justice Department's Antitrust Division, says more than a third of his current 100-plus open criminal investigations involve the government as the victim who gets the extortion money. Take the budget for 100 investigations, and instead give it to Chambers of Commerces in Nebraska, Arkansas, and Ohio. Do good, not harm.
In 2016, 433,000 businesses were born in the U.S., but 400,000 died. Help them. In 2017, .26% of female adults created new businesses, .30% of African-Americans, and .50% of Latinos. Spend the bulging budget not on fighting dragons, but on helping real people like these entrepreneurs.
As a JAM VIEWS reader, you of course know the educated answer: Keep your own tax dollars, unleash laissez faire free-market capitalism, and spend your own money for your own self-interests. Maybe Microsoft and IBM will thrive, or maybe they won't. Thousands of other innovations and miracles will be created and thrive. Half the studies show the bulk of innovation is created inside large companies, while the other half always claim most new technology and services come from small companies. Pure capitalism gives both. Put on your face mask, and see through the smoke screens [A shout out to our courageous capitalist brothers in Hong Kong!]
p.s. A grateful thank you this Veterans Day to our incredible men and women who serve and protect this great republic. In honor of these heroes, JAM VIEWS asks that we all do everything we can to support our deployed troops and families, fix the Veterans Administration, and stop civilian U.S. attorneys prosecuting soldiers in war zones under constant threat from terrorists - it's a national disgrace.
"He who permits himself to tell a lie once finds it much easier to do it a second and third time, till at length it becomes habitual; he tells a lie without attending to it, and truths without the world believing it." - President Thomas Jefferson
** Thank you to the WSJ, Forbes, Fortune and Bloomberg for the above statistics and quotations.
** For more information on Jeff's Books, Blog, and Legal Challenge, please visit www.jeffmartinovich.com.
** To access JAM Views directly please visit jeffreyamartinovich.blogspot.com
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