Both Parties Failing on Economic Inequality Thus Far in 2020
Newsletter 45: From Wall Street to Silicon Valley, Democratic “pushback” on economic inequality is more like a gentle “nudge”
With the Democratic National Convention less than a month away, time is running out for Joe Biden to make his pick for Vice President. On Monday, he told MSNBC’s Joy Reid that vetting was ongoing but that he would be narrowing his list and making a final decision soon.
2020 (and potentially 2021):
Picking a vice president is a consequential choice in all circumstances - while constitutionally weak, vice presidents have come to take on an ever wider array of responsibilities. The choice before Biden, however, is even weightier than usual. Biden and his pick will inherit a public health crisis, a devastated economy, and a federal government infrastructure that has been pushed to the breaking point under Trump. And that’s leaving aside that many assume this VP will be the natural successor to the self-coined, “transition” president. In short, Biden’s eventual choice is likely to be “the most powerful [VP] in history.”
Alongside the immediate demands to get the public health and economic crises under control, the next vice president will face an imperative to advance structural changes that address the weaknesses this calamity has revealed. Chief among those are the frightening effects of decades of virtually unchecked market consolidation. Concentrated supply chains in everything from agriculture to medical supplies have struggled to adapt to changing circumstances, resulting in both waste and acute shortages. A “killer” merger in the market for ventilators undermined pandemic preparedness and contributed to avoidable fatalities. As small businesses drown, Amazon is expanding its already vast control even further. And, in a time when public trust and clear communication is more important than ever, tech platforms are amplifying lies and hateful content like never before.
But, even as public opposition to monopolization grows, there is reason to doubt that the next Vice President will be adequately motivated to help advance efforts to take it on. As Zach Carter laid out in HuffPost last week, Kamala Harris - one of the widely recognized frontrunners for VP - was reticent to take on Big Tech as California Attorney General. In fact, as companies like Facebook and Google rapidly consolidated power, Harris was downright accommodating. As our Max Moran highlights for Sludge, Harris’ coziness with Big Tech never really ended. According to RDP’s analysis, Harris drew a higher share of her high dollar support from Big Tech than any other serious Democratic primary candidate. And, whether in the Senate or on the campaign trail, she has been notably muted in her calls to rein these behemoths in.
Biden’s long-awaited announcement will come at a moment when public scrutiny of Big Tech is at an all-time high, likely just days or weeks after the Big Four’s CEOs face the House Judiciary’s Antitrust subcommittee. Simply put, if he taps Harris, he cannot afford to ignore her record on these issues. To alleviate well-founded concerns, both would do well to immediately articulate a strong commitment to beating back the accelerating forces of monopolization.
Such commitments should include concrete proposals to remake antitrust agencies so that they work in the public interest. The story of corporate concentration over the last several decades is not just one of bad ideas, but of poor structural incentives within the antitrust enforcers. As Andrea Beaty, Max Moran, and Jeff Hauser explained in Washington Monthly, practices at these agencies incentivize rather than discourage trips through the revolving door. Efforts to change antitrust policy are unlikely to succeed unless these structural factors are addressed.
As a first step, a Biden-Harris administration could make clear that it is committed to a conflict of interest-free antitrust apparatus through its choice of appointees. As anti-monopoly politics have become more popular, many new voices are joining the chorus to oppose concentration. Some, however, have espoused these new positions without leaving the old, corrupting apparatus of paid advising and revolving door jobs behind. It turns out, for example, that one of “big tech’s most vocal critics,” Yale Law professor Fiona Scott Morton, consults for Amazon and Apple. This arrangement makes it all the more notable that Scott Morton has called for the break-up of Facebook and Google but not the giants that are writing her a check.
Fiona Scott Morton is a Democrat -- and as we’ve long noted, Trump’s “competition policy” appointees are even more captured by corporate interests. For too long both political parties have coddled the pro-corporate revolving door. After decades of bipartisan servitude to corporate interests, remaking the antitrust agencies to advance the public interest will be no small task. As such, the next administration must appoint leadership that is not just committed to fighting corporate concentration on paper but in reality.
Congressional Oversight
Congress is back this week to hammer out another round of stimulus measures - likely the last before this November. With the public health situation rapidly deteriorating in many places across the country, there is renewed pressure to get something done (although, not as much urgency as you might think given that the $600/week unemployment benefit expires for many this weekend).
Democrats laid out their starting position in May when they passed the HEROES Act. While there was a lot to praise in the bill, it included almost nothing in the way of accountability measures. From that point forward, it was clear that Democratic leadership was not going to prioritize oversight provisions in this round of negotiations.
And, thanks to leadership’s procrastination in past rounds of negotiation, there frankly isn’t much space to prioritize oversight in this go around. With Trump and his cronies leaning into their most authoritarian tendencies, it is more important than ever that Congress ensure the integrity of this fall’s elections. And to avoid even more severe economic devastation, lawmakers will need to come to states and localities’ rescue. Achieving both in the face of Majority Leader Mitch McConnell’s callous opposition will be no small feat. Adding accountability mechanisms into the mix increasingly looks like an impossibility.
Needless to say, none of this was preordained. Countless groups were calling on Democratic leadership to prioritize everything from vote-by-mail to oversight from the very beginning when they had the most leverage. In failing to do so, they made way for these troubling trade-offs.
(Why do we think leverage was greater in the spring? Before the CARES Act “money cannon” was granted to the Federal Reserve, stock prices were in the toilet, meaning rich people were desperate for assistance.)
That oversight will not be a pillar of the next package, however, does not mean that House Democrats cannot be pressing ahead using the ordinary tools at their disposal. Indeed, it remains more important than ever that Democrats oppose Trump’s increasingly fascistic moves. (We’re using “fascistic” fully cognizant of how carefully the term should be wielded.) If Democrats don’t draw the line at Customs and Border Patrol officials abducting people in unmarked vans, where exactly do they?
There’s also a great deal of oversight left to be done of basic aspects of this administration’s pandemic response. The Ways and Means committee, in particular, has been slow to take up the pandemic oversight within its jurisdiction. Widely considered to be the most powerful House committee, Ways and Means is primarily responsible for overseeing everything from taxation (i.e. the stimulus payment fiasco), unemployment insurance (see this story about Oklahomans camping out in their cars to access UI benefits almost four months after the CARES Act’s passage), and nursing home regulations (among other things). Read our blog post for a full picture of the oversight they should be doing now.
Want more?Check out some of the pieces that we have published or contributed research or thoughts to in the last week:
Better Policy Ideas Alone Won’t Stop Monopolies
Kamala Harris’ Deep History Of Letting Facebook Off The Hook
The Oversight Options Available to the House Ways & Means Committee