1. A short thread on how ideas travel, with a case study on the problem of monopoly, now being studied by central bankers at Jackson Hole. How did this idea break into modern discourse? It started in the late 1990s, with a journalist named Barry Lynn (now my boss).
2. Lynn noticed that an earthquake in Taiwan took down a whole bunch of seemingly unrelated factories halfway across the world, toys, cars, etc. He asked, what happened? The answer is that essential components had been sole sourced in Taiwan.
3. This caused what he called an industrial supply shock, like a bank run, but in the industrial world. These are happening more and more. He wrote a book on this in the early 2000s called End of the Line. amazon.com/End-Line-Comin…
4. This was a moment where everyone was reading about the global corporate utopia described in The World is Flat by Thomas Friedman. They were not interested in vaguely dystopian musings of an iconoclastic think tank academic trained in business journalism.
5. Lynn realized that the problem of supply chain redundancy was new. Because of a breakdown of anti-monopoly policy in the 1970s, companies had socialized their supply chains into subcontractors. Then because of globalization, these now monopoly supply chains were offshored.
6. No one knew that Dell, HP, Compaq, etc, personal computers were all actually being made by the same sub-sub-contractor, that there was a hidden monopolist. Not even the executives knew that about their own products!
7. Lynn wrote another book, Cornered, published in 2009 on anti-monopoly policy directly. Now the financial crisis was in full swing. His book was ignored by the popular press, but had a massive impact. amazon.com/dp/B00DNKYGO0/…
8. Lynn got allies. Over the course of several years, Lynn, as well as @glastris and @LongmanPhil at the Washington Monthly, and @linamkhan, traced this out. Low productivity growth, low wage growth, small business declines, regional inequality, and so forth. All with one cause.
9. In 2012, @paulkrugman broke this out into the open, citing Lynn and Longman in discussing secular stagnation. Meanwhile historians like @RrjohnR were now researching 19th century anti-monopoly movements. krugman.blogs.nytimes.com/2012/12/09/tec…
10. The Obama admin started putting out papers, and an executive order on monopolies. In 2016, @SenWarren gave a key speech on monopolies, including tech monopolies, at a @NewAmerica event put on by Lynn. More reporting started coming out.
11. The WSJ cited @linamkhan's work on low entrepreneurship rates. Foundations began to realize there's a serious problem. Clinton added an antitrust plan in her campaign, both the Republicans and Democrats added anti-monopoly to their platforms. Trump talked antitrust.
12. When Trump won, elites understood something is really wrong with our political economy. Then Google kicked Lynn out of New America, and he set up independent shop @openmarkets. That's when elites recognized that political corruption and monopoly are the same problem.
13. Economists began researching the problem of monopoly, tracing out labor share of income, investment patterns and concentration, superstar firms, and so forth. Janet Yellen mentioned size of corporations and the monetary transmission mechanism in 2016.
14. Department of Justice Antitrust chief Makan Delrahim cited @linamkhan and Barry Lynn in speeches. The FTC is now holding hearings on the last forty years of anti-monopoly policy. Orrin Hatch gave two speeches on the Senate floor on antitrust and cited @openmarkets.
15. The EU fined Google. The German SDP leader called for breaking up Google. This Jackson Hole event where central bankers of the world are trying to understand why concentration happened is a result of this 20 year path trod by a business journalist and writer.
16. There is an intellectual revolution going on. I got my start in politics thinking that graft and structural corruption and electoral tactics and strategy were the how changed happens. They are not. Ideas matter.
17. John Adams in 1815: The war "was no part of the Revolution. It was only an Effect and Consequence of it. The Revolution was in the Minds of the People, and this was effected, from 1760 to 1775, in the course of fifteen Years before a drop of blood was drawn at Lexington."
18. The problem was *known* by millions, of course. They just didn't see the whole picture, while Lynn traced this back to anti-monopoly policy choices in the late 1970s. More importantly, those millions were not fancy people so their voices didn't matter.
19. Economists should not be trusted. They do not see problems for decades, and then study problems when they become fashionable. They are often paid without disclosing clients. Economists are not empirically driven, they are arrogant bureaucrats with charts.
20. Last point. Economics is fine. The current economics profession is not. They missed the financial crisis, the concentration crisis, the flaws in globalization, the EU crisis. They suck at their jobs. They have to regain credibility. That is on them.
