The AT&T judgment shows how how far US antitrust law has drifted

In today’s FT, the paper’s US Editor trumpets the Circuit Court’s approval of the AT&T-Time-Warner merger as evidence of the resilience of the judicial system in the face of Trump’s aggression. (He has regularly spouted his opposition to the deal.) But Tim Wu sees it more of a confirmation of how far antitrust law and judicial interpretation has drifted from the original determination of Congress to prevent corporate agglomeration.

When Congress enacted the Anti-Merger Act of 1950, the law by which American courts still adjudge corporate mergers, it did so with the repeatedly stated goal of fighting excessive economic concentration. The “dominant” concern, as the Supreme Court wrote in a 1962 merger case that analyzed the law, was about “a rising tide of economic concentration in the American economy.” At the time, the court explained, a wave of corporate consolidation posed the threat of an “accelerated concentration of economic power” and also a “threat to other values,” like the independence of smaller businesses and local control of industry. In particular Congress had said it intended the new law to stop a wave of mergers in its “incipiency.”

That’s why, for the 1950 Congress, the law would surely have allowed the Justice Department to block the recent AT&T-Time Warner merger. The merger, which a federal judge approved on Tuesday, combines AT&T, the nation’s largest wireless provider and a major seller of pay TV, with Time Warner, one of the most powerful media companies, in an $85 billion deal. No one can deny that the new AT&T will have more economic power and also more political power than before, even as it now carries more debt ($181 billion) than many industrialized nations. The ruling, by Judge Richard J. Leon of United States District Court in Washington, implicitly encourages the rest of the industry to integrate as well, and AT&T’s comrades have taken the hint: Comcast has already announced its intent to acquire much of 20th Century Fox, while other deals are said to be imminent.

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Judge Leon’s decision shows just how far the law has wandered from congressional intent. The law has become a license for near-uncontrolled consolidation and concentration in almost every sector of economy. Whether involving airlines, hospitals, the pharmaceutical industry, cable television or the major tech platforms, mergers leading to oligopolies or monopolies have become commonplace…

Yep.

George Soros on the European crisis

Standfirst from his essay:

There is no longer any point in ignoring the reality that a number of European Union member countries have explicitly rejected the EU’s goal of “ever closer union.” Instead of a “multi-speed Europe,” where all members are still heading toward the same destination, the goal should be a “multi-track Europe” that offers member states a wider variety of choices.

Ireland springs another surprise

I’m stunned by the outcome of the referendum on abortion in my native land. I expected it to be close, and watched with distaste the attempts by the American fanatical anti-choice movement to influence the campaign. I thought the Yes campaign would win, but suspected that it would be by a narrow margin (as in the Brexit referendum in the UK). And I expected that the result would reflect the growing urban/rural divide in Ireland.

I was wrong about all this. Two thirds of my fellow-citizens voted to repeal a previous amendment to the Constitution that effectively banned abortions in the Republic. And as for my idea about the urban/rural divide — well, only a single constituency (Donegal) voted against repeal — and then only by a narrow margin (51.9% to 48.1%).

The Irish Times columnist, Una Mullally, summed it up nicely:

We were told this was a divisive campaign. It was a unifying campaign. We were told this was a difficult issue for people, yet for many it was straightforward. We were told it was the third rail of Irish politics, so instead, the people led, from the activists and protestors to the canvassers and ordinary women and men who rolled up their sleeves, to the Citizen’s Assembly, to the women who shared their abortion stories. We were told about Middle Ireland. There is no Middle Ireland. Just Ireland. Its islands, villages, cities, towns, coasts, midlands, mountains, estates, flats, and fields. This campaign was intergenerational. Younger activists stood on the shoulders of those gone before them, and brought an energy, fearlessness, creativity and sense of unrelenting determination and optimism that inspired people across the board. The brilliantly eclectic make-up of the campaign brought in doctors, mothers, lawyers, students, trade unionists, the LGBT community, feminists, and everyone in between.

Who did the No campaign really have in the end, apart from a cabal of fringe fundamentalists whom no one can really understand how or why they have gained such a platform and unfettered access to the media? The No campaign drove recklessly and ended in a car crash. They alienated undecided voters at every juncture with extreme messaging. In the final weeks, the No campaign acted as an asset to the Yes campaign, with spokesman John McGuirk, who revelled in bizarre statements, and campaigners such as Ronan Mullen getting short shrift, particularly when he disrespected a woman who shared her abortion story in a television debate. No amount of media training could connect No campaigners with the public.

This is now the second referendum that my fellow-citizens have surprised the world. In 2015 they voted 62.1% to 37.9% to legalise same-sex marriage. And again only one constituency in the entire country voted against.

This is getting to be a habit. Long may it continue.

How democracy ends

David Runciman’s book is out. It’s a terrific, thought-provoking read IMHO, not least because it makes a refreshing contrast to the current feeding-frenzy of shocked liberals bewailing Trump and Orban.

I’m doing a public conversation with David at the Cambridge Union on Tuesday May 22nd. Tickets available here

The problem with welfare states

Interesting WashPo essay by Megan McArdle

Notably, almost all the foreign programs that American social democrats envy were enacted during Europe’s long post-war economic and demographic boom. That meant that the initial cost of these systems was fairly low — young people don’t need much in the way of health care or pensions, and economies at full employment don’t spend a lot on unemployment insurance or job retraining. As incomes soared, it was comparatively easy for government to skim some of the surplus for their new social insurance schemes, because even as their taxes went up, workers still got to take more money home every week. Governments ran into problems when the boom stopped, of course, but by then, political sentiment had cemented those programs in place.

What was easy in 1960 looks herculean as 2020 approaches. Economic growth has slowed, and populations are aging, which raises the cost of any proposed program and requires you to fund heavy losses on someone to fund it, either workers in those industries, or taxpayers. As psychologists tell us, people are “loss averse” — they care much more about losing something they have than about equivalent potential gains. Given the mammoth cost of socializing the U.S. economy now, and the huge number of people who face substantial losses, I’d argue that we should probably change “herculean” to “impossible.”

The dysfunctional republic…

…and how the US became one. This from Dana Milbank in the Washington Post:

Political scientists have observed that American politics has deteriorated into an unstable combination of weak parties and strong partisanship — dry brush for the likes of Trump and Blankenship to ignite. The 2002 McCain-Feingold campaign-finance reform restricted party fundraising, and the Citizens United Supreme Court ruling in 2010 essentially destroyed parties by giving everybody else freedom to spend unlimited sums to buy politicians. The moderating influence of parties was replaced by the radicalizing influence of dark money.

Related to this, partisanship in Washington escalated, aggravated by partisan redistricting that puts almost all House members in safe seats where the only threat comes from primaries. Primary voters tend to favor extreme candidates — who, once in Congress, turn politics into warfare.

A simplistic theory of political polarisation

From Bryan Caplan

Leftists are anti-market. On an emotional level, they’re critical of market outcomes. No matter how good market outcomes are, they can’t bear to say, “Markets have done a great job, who could ask for more?”

Rightists are anti-leftist. On an emotional level, they’re critical of leftists. No matter how much they agree with leftists on an issue, they can’t bear to say, “The left is totally right, it would be churlish to criticize them.”

Caplan explicitly calls it a simplistic theory, and it is. But it’s not bad as a first approximation — as George Hawley suggests:

If out-group hostility is more important to party identification than support for particular policies or ideologies, we may not actually place very many ideological demands on our parties. Defeating our enemies may be more important than advancing specific liberal or conservative agendas. According to Groenendyk: “If partisans’ identities are increasingly anchored to hatred of the outparty than affection for their inparty, electoral dynamics are likely much more fluid than many accounts suggest. Thus, insurgent candidates with questionable ideological credentials (e.g., Donald Trump) may be more appealing than one might expect in the age of ideologically sorted parties.”

Theresa May’s ‘hostile’ environment: straight out of Kafka

Terrific essay by William Davies in the London Review of Books. Sample:

It is difficult to imagine anything more Kafkaesque than the experience the ‘Windrush generation’ has undergone at the hands of the British state in the past few years. Cases are accumulating of individuals seeking NHS treatment, passports, jobs or housing only to find themselves having to prove their right to live in the country where they have been legally resident for more than 45 years, or risk being deported. Harrowing stories have emerged of individuals being made homeless, jobless and stateless, after they failed to produce proof they were never given in the first place. One man suffered an aneurysm which he believes was brought on by the stress the situation caused him, only to be presented with a bill for £5000 for his NHS treatment – again because his paperwork didn’t measure up – while also losing his job and his home. He was left on the street. As it turns out, the one source of evidence that might have put a stop to this torture – the landing cards that recorded arrivals from the Caribbean until the 1960s – was destroyed by the Home Office in 2010.

The Windrush generation’s immigration status should never have been in question, and the cause of their predicament is recent: the 2014 Immigration Act, which contained the flagship policies of the then home secretary, Theresa May. Foremost among them was the plan to create a ‘hostile environment’, with the aim of making it harder for illegal immigrants to work and live in the UK. By forcing landlords, employers, banks and NHS services to run immigration status checks, the policy pushed the mentality of border control into everyday social and economic life. The 2016 Immigration Act extended it further, introducing tougher penalties for employers and landlords who fail to play their part in maintaining the ‘hostile environment’, and adding to the list of privileges that can be taken away from those who cannot prove their right to live and work in the UK.

Another key feature of the 2014 Act was that it empowered the Home Office to deport people more quickly and cheaply, avoiding lengthy and repeated appeals. The ‘deport first, appeal later’ provision was eventually ruled unlawful by the Supreme Court. The Act greatly restricted the right to appeal via tribunal, replacing most appeals with an administrative review carried out by the Home Office itself. Before the Act was introduced, 50 per cent of appeals were upheld at tribunal; at administrative review, the figure is 18 per cent.

The more we learn about what has happened to these people, the worse it seems. It demonstrates above all what can happen to a society when a section of it becomes paranoid about immigration.

Michael Hayden on working for Trump

Very interesting and sobering NYT OpEd by the former head of the NSA and the CIA, Michael Hayden. I was particularly struck by this passage:

A few months after Mr. Trump’s inauguration, I got a call from a colleague who thought he might be on a very short list for a very senior position. He asked my opinion. I told him that three months earlier I would have talked to him about his duty to serve. Now I was telling him to say no. “You’re a young man,” I said. “Don’t put yourself at risk for the future. You have a lot to offer. Someday.”

When asked for counsel these days by officers who are already in government, especially more junior ones, I remind them of their duty to help the president succeed. But then I add: “Protect yourself. Take notes and save them. And above all, protect the institution. America still needs it.”