Thread by @matthewstoller

1. I have some bad news for Democrats. Biden's economic policy is likely to fail because of one simple yet very large problem.

Mergers.

This failure isn't inevitable. But we're not on the right track. Follow along for an explanation and a solution. mattstoller.substack.com/p/is-biden-acc…

2. Since the early 1980s, when we weakened antitrust, we've seen waves of corporate mergers. This has consolidated power into the hands of a fewer and fewer group, in every industry. Today there are fewer than 3500 public companies, vs 8k+ in the 90s.
mattstoller.substack.com/p/is-biden-acc…

3. Problems with mergers are well-known. Corporate concentration leads to layoffs, less innovation, income and wealth inequality, supply chain fragility, and political chaos. Big mergers, as @sandeepvaheesan notes, are especially bad. theatlantic.com/ideas/archive/…

4. As @profmikecarrier noted in yesterday's Antitrust hearing, big pharma mergers are bad. They allow for unfair advantages in marketing, reimbursements, finance, and insurance. Basically bigness leads to bargaining unfairness against the little guys.

https://twitter.com/matthewstoller/status/1387842023298850823

5. This is why it's deeply distressing that @RKSlaughterFTC, Biden's acting Federal Trade Commission chair, waved through a giant $39 billion pharma merger of Astrazeneca and Alexion without doing any meaningful probing whatsoever. mattstoller.substack.com/p/is-biden-acc…

6. In March, @RKSlaughterFTC announced a new tougher approach to mergers under the guise of 'Rethink Pharma.' But then totally undercut it by letting AstraZeneca merge into yet more dominance. Wall Street got the message. It's a green light for mega-mergers under Biden.

7. The Wall Street Journal noted that tougher merger rules seem unlikely now, "as the administration has focused on other priorities." Other priorities. Ouch.

That's really bad. All the tough talk on antitrust is worse than nothing without action.
wsj.com/articles/post-…

8. That's not all. The FTC also cleared two other pharma mergers, Jazz Pharmaceutical’s $7 billion purchase of GW Pharmaceutical, and Horizon’s $3 billion buy-out of Viela.

And Biden's DOJ Antitrust chief cleared Michael Milken's roll-up of salt mining.
justice.gov/opa/pr/stone-c…

9. We are in a massive merger boom. It's crazy the amount of money dealmakers are trying to put to work consolidating power. There are roll-ups in lithium mining. Electric utilities, semiconductors, cybersecurity, pharmaceuticals, hardware stores... mattstoller.substack.com/p/is-biden-acc…

10. The enforcement problem is worldwide. As @TomValletti told @nickshaxson, European enforcers are now totally asleep, and haven't blocked a single merger in two years.

https://twitter.com/matthewstoller/status/1384581451530883082

11. It's so bad that the private equity billionaire, Orlando Bravo, whose firm Solar Winds caused the biggest hack in history, is now buying yet ANOTHER key cybersecurity firm.
techcrunch.com/2021/04/26/tho… @schneierblog

12. All is not lost. Biden appointed antitrust rock star @linamkhan to the FTC. He hasn't picked a permanent DOJ Antitrust chief, and he hasn't picked a permanent FTC Chair. So he can switch directions away from this permissiveness. mattstoller.substack.com/p/is-biden-acc…

13. Jonathan Kanter, for instance, would be a very strong Antitrust Assistant Attorney General. And he could slow the merger boom. We also need stronger anti-merger laws. protocol.com/policy/republi…

14. But ultimately, the CARES Act and low rates, combined with no merger enforcement, and no antitrust enforcement, are leading to a radical consolidation of economic power like we've never seen.

15. Without meaningful antitrust action, and some check on mergers, the Biden agenda will be drowned by monopolists choosing to subvert it. It'll be a 'boom.' But fertilizer prices will go up, killing the family farm. Workers will see higher rents, housing, and medical costs.

16. On the other hand, if we are able to send a red light signal to Wall Street, with strong enforcement and better laws, the boom will lead to a lot of new businesses and much higher wages, instead of just yachts for CEOs. mattstoller.substack.com/p/is-biden-acc…