33 Comments

I think it is rather telling that GOP leadership has spent more time and effort fighting populists than they have Democrats.

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Next time someone tries to smear "populists", ask them why they don't support democracy, and what is their preferred plan for determining who is worthy of voting.

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Ya it has kind of become a party of negatives. They don’t believe in anything but will fight you tooth and nail to say they don’t believe in gay rights or abortion or whatever.

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Jan 28, 2023Liked by Matt Stoller

What's interesting about 2005 is that at Google, at least their recruiters had the story that the big competitor was Microsoft, or at least that's what I was told unofficially on a call. I flew out, but subsequently didn't get that job. So this internal transition might not have been the line given to tech workers at the time, even though it represented a complete remake of the company.

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Jan 29, 2023Liked by Matt Stoller

Great explanatory read and thanks for educating me on the Google stuff, as usual. It was curious to be covering a four-plus hour planning here in Pittsburgh over a $110 million development including a new Live Nation concert facility around the same time that Ticketmaster/Live Nation was getting raked over the coals by a bunch of senators in Washington. I now find myself wondering if all the scrutiny the company is now facing could somehow delay, disrupt financing of or otherwise jeopardize the company’s project here. I tend to doubt it. But who knows?

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author

Did you publish anything?

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Yes.....here’s the link for the paywalled story. It’s a straight local meeting coverage story for which there was too much neighborhood contention and four-hours of detail to cover for what was happening in Washington to have any immediate relevance. Live Nation hasn’t been a direct party to these discussions but just a presumed tenant of an eventual development. I’ll just be curious if what’s happening in DC becomes relevant to a plan like this. https://www.bizjournals.com/pittsburgh/news/2023/01/24/penguins-buccini-pollin-lower-hill-live-nation.html

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founding

"Wall Street is nervous at all the activity," Why is Wall Street nervous? Shouldnt Wall Street welcome an economy where there is more competition and more opportunities for clever "investment"?

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author

No, at a base level Wall Street is a rival government to our democratic one.

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founding

I still would like to understand this better. I hear a lot about the service that finance provides to the economy. With 21% https://www.statista.com/statistics/248004/percentage-added-to-the-us-gdp-by-industry/ it is the most important industry in the US. This is a very different point of view than finance being a non-democratic rival government. How can I make up my mind on this?

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author

I wrote a book on this problem.

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founding

The Goliath one? It is on my reading list ...

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Definitely read it. It makes a legit case but is also straight up a history book

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author

It's an ongoing debate, Alexander. For alt perspective from the "Pro Street" side, I would rec this page:

https://ritholtz.com/2018/11/defending-wall-street/

But note that Barry still argues there are wasteful areas that need improvement, even when arguing for the financial system status quo.

I think the essence of Matt's approach in general to antitrust is NOT "blow up The System" in any way, but a reasonable "the system has been distorted over the past 50, and very much 20 years, and here is how we can improve it."

Slicing up Big Tech in a smart way will be a win-win for almost everyone in the long run. Just look at the AT&T (Ma Bell) breakup story beginning from the 1980s. Status quo stakeholders were losing their s*** but in the end shareholders, consumers, and the economy as a whole ended up MUCH better.

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Dude, it’s never been about “being better”, it’s about “being better than everyone else, even if you make everything worse”

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Jan 28, 2023Liked by Todd Mentch

Does any society need to spend 21% of GDP on finance? Shouldn't we be trying to minimize that cost and rout out that inefficiency? That's a lot being extracted with very little real value added. The extraction depends on changing laws that encourage excess use of financial products like 401ks, IRAs, credit cards, HSA, FSA, etc and minimizing/displacing public banking, retirement, health care, etc. Essentially Matt's point.

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founding

I could imagine an argument against including finance in GDP at all. Has such an argument been made? Any references?

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Maria Mazzucato's "The Value of Everything" opens with an excellent discussion of the history of attempts to measure the value human activities and categorize them as "productive" or "unproductive", with the former being included in calculations of economic production and the latter being excluded. She describes the ways that three early economic thinkers - Adam Smith, David Ricardo, and Karl Marx - handled the problem and goes on to discuss later arguments for and and against finance's inclusion in these calculations later. It's a great book.

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Jan 30, 2023·edited Jan 30, 2023

I also recommend Nick Shaxson's book The Finance Curse. https://groveatlantic.com/book/the-finance-curse/ Obviously society needs a viable financial sector (if finance is a very small % of economic activity, that's also bad), but when it dominates the economy that leads to worse than diminishing returns-- it eventually cannibalizes the real productive capacity of the rest of the economy.

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That would make too much sense ;) Wall Street institutional investors make their money from the status quo and firms that extract monopoly profits. A competitive landscape could severely harm their current cash cows

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founding

They also make money by betting on stocks (and other assets) going up and down. Stocks going down doesnt need to be bad in such a setting, right?

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As an aggregate Wall Street does not care about this. Sure there might be some short term pain for those that have interests in Google or Ticketmaster. But long term if it benefits the economy it'll benefit Wall Street. Also, corporate split ups aren't simple, there's good money to be made by Wall Street bankers and lawyers in the split up process. M&A bankers may be fretting.. but restructuring bankers are salivating.

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Been Wall st vs Main st. Since the Carter deregulations

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And speaking of monopolies, we perhaps need to revisit the patent system as implemented:

How a Drug Company Made $114 Billion by Gaming the U.S. Patent System

https://www.nytimes.com/2023/01/28/business/humira-abbvie-monopoly.html

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I’m a fan of Thomas massie. So don’t throw the white flag yet

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Has "Bucked" been added to the urban dictionary yet?

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Most of my exercise nowadays consists of going through the multiple steps necessary to indicate that an ad I am seeing on the Internet is "irrelevant."

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The Republican party has traditionally been the party of rural America, the Democratic party, the cities. There's a lot of business done in the flyover states that no one notices but without it the country grinds to a halt. So it gets the reputation of being pro-business, at least since the 1970s.

Fact is, Progressive ideology is better suited to cities, which require a lot of planning and coordination to function, while the conservative ideology of self determination fits better in rural areas where help might be hours away, if at all.

Most large business leaders want progressive political leaders and central planning because it reduces competition for workers and heavy regulation weeds out low cost competitors. Smaller businesses want conservative leaders because they tend to maintain the status quo, so the framework underwhich business is done tends to be stable.

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It’s heartening to see widespread push back against monopolies

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Great post

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If no one has mentioned it yet (or I'm missing that you've already looked at this), I'd suggest Luxotica for a monopoly review.

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The rapid rise in inflation was no mystery. There is no one outside of the market demand for products to regulate price increases in our representative democracy.

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author

He’s not on cnbc to pick stocks.

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