Opinion | The Neoliberal Looting of America – By Mehrsa Baradaran – The New York Times

By 

Ms. Baradaran is the author of “The Color of Money: Black Banks and the Racial Wealth Gap.”

Credit…George Etheredge for The New York Times

““It’s hard to separate what’s good for the United States and what’s good for Bank of America,” said its former chief executive, Ken Lewis, in 2009. That was hardly true at the time, but the current crisis has revealed that the health of the finance industry and stock market are completely disconnected from the actual financial health of the American people. As inequality, unemployment and evictions climb, the Dow Jones surges right alongside them — one line compounding suffering, the other compounding returns for investors.

One reason is that an ideological coup quietly transformed our society over the last 50 years, raising the fortunes of the financial economy — and its agents like private equity firms — at the expense of the real economy experienced by most Americans.

The roots of this intellectual takeover can be traced to a backlash against socialism in Cold War Europe. Austrian School economist Friedrich A. Hayek was perhaps the most influential leader of that movement, decrying governments who chased “the mirage of social justice.” Only free markets can allocate resources fairly and reward individuals based on what they deserve, reasoned Hayek. The ideology — known as neoliberalism — was especially potent because it disguised itself as a neutral statement of economics rather than just another theory. Only unfettered markets, the theory argued, could ensure justice and freedom because only the profit motive could dispassionately pick winners and losers based on their contribution to the economy.

Neoliberalism leapt from economics departments into American politics in the 1960s, where it fused with conservative anti-communist ideas and then quickly spread throughout universities, law schools, legislatures and courts. By the 1980s, neoliberalism was triumphant in policy, leading to tax cuts, deregulation and privatization of public functions including schools, pensions and infrastructure. The governing logic held that corporations could do just about everything better than the government could. The result, as President Ronald Reagan said, was to unleash “the magic of the marketplace.” “

Opinion | The Life and Death of the Local Hardware Store – by Tim Wu – The New York Times

“On Ninth Avenue in Manhattan, not far from where I live, there’s a small neighborhood hardware store called Chelsea Convenience Hardware, which is distinguished by its unlikely display of dozens of Russian nesting dolls in the storefront window. Inside, tools and supplies are piled to the ceiling, and when you enter, the owner, Naum Feygin, an immigrant from Boris Yeltsin’s Russia, looks up to ask you what you need.

The “convenience” in the store’s name is no misnomer, for the place is extraordinarily efficient. It is cheaper and faster than ordering from Amazon and offers expert advice that reduces the risk of buying the wrong thing. It is all too easy on Amazon, for example, to buy halogen bulbs that don’t fit your lamp base; Mr. Feygin has spared me many such headaches. And the store’s small size is a virtue: Unlike at Home Depot, you can be in and out in 10 minutes.

Nonetheless, Chelsea Convenience is set to close at the end of November, another casualty of rising commercial rents and competition from e-commerce. The closing is of no great economic significance, other than to Mr. Feygin. But it is a microcosm of the forces reshaping the United States economy, often paradoxically and for the worse. Why is a less efficient, less personalized and more wasteful way of buying screws and plungers — ordering online — displacing the local hardware store?”

Opinion | It’s Time to Break Up Facebook – by Chris Hughes – The New York Times

“Over a decade later, Facebook has earned the prize of domination. It is worth half a trillion dollars and commands, by my estimate,more than 80 percent of the world’s social networking revenue. It is a powerful monopoly, eclipsing all of its rivals and erasing competition from the social networking category. This explains why, even during the annus horribilis of 2018, Facebook’s earnings per share increased by an astounding 40 percent compared with the year before. (I liquidated my Facebook shares in 2012, and I don’t invest directly in any social media companies.)”

Opinion | The Roots of Big Tech Run Disturbingly Deep – The New York Times

” “Big tech” companies like Google and Facebook are, in reality, the products of hundreds of mergers. Each root below represents a company acquired by a tech giant at a particular moment in its history. A vast majority of these acquisitions, funded by public markets, have received minimal media coverage and limited regulatory scrutiny. But that is changing, given new concerns about consolidation in the tech industries.

Google
(Alphabet)270 Total Acquisitions171 Competitive 55 Conglomerate 44 Others

David Lindsay:  Yes, yes, yes. We should break up Amazon, Facebook, Google, and California.

Seriously, Amazon should be forced to sell every company it forced to sell to itself, like Diapers.com, as reported in Bloomberg Businessweek.

It appears that the other two giants are also guilty of throwing their weight around.

BUARLH!   Break Up And Regulate Like Hell!

Opinion | Why Your Phone Service Is So Expensive – by David Leonhardt – NYT

Quote

Many Americans pay close to $100 a month for smartphone service. And this pricetag isn’t some natural reflection of the service’s value. In many other countries, smartphone plans cost much less.

The economists Luigi Zingales of the University of Chicago and Mara Faccio of Purdue estimate that Americans pay $50 billion per year more than they would if they instead were paying European prices — for the same quality service. That translates into about an additional $30 per month for every American household.

Zingales discusses this research in a Times op-ed and argues — correctly, I believe — that it highlights the problem with antitrust policy in the United States. We have allowed companies to grow too large, to the point that many of them have outsize power. They can raise prices, as they are doing in the cellphone market, as well as hold down wages and unduly influence government policy.

via Opinion | Why Your Phone Service Is So Expensive – The New York Times

Google Fined $5.1 Billion by E.U. in Android Antitrust Ruling – By Adam Satariano – NYT

Quote

European officials said Google, which makes the Android mobile operating system used in smartphones, broke antitrust laws by striking deals with handset manufacturers such as HTC, Huawei and Samsung. The agreements required Google’s services, such as its search bar and Chrome browser, to be favored over rival offerings. European authorities said those moves unfairly boxed out competitors.

“Google has used Android as a vehicle to cement the dominance of its search engine,” said Margrethe Vestager, Europe’s antitrust chief. “These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere. This is illegal under E.U. antitrust rules.”

via Google Fined $5.1 Billion by E.U. in Android Antitrust Ruling – The New York Times

The Case Against Google – By CHARLES DUHIGG – NYT

Soon the Raffs began daydreaming about turning their idea into a moneymaker. They didn’t have the funds to compete with huge dating sites like Match.com, so they applied for a couple of patents and began brainstorming. They believed that their vertical-search technology was good — better, in fact, than almost anything they had seen online. Best of all, it was built to work well on almost any kind of data set. With just a bit of tinkering, it could search for cheap airline tickets, or great apartments, or high-paying jobs. It could handle questions with hard-to-compare variables, like what’s the cheapest flight between London and Las Vegas if I’m trying to choose between business class or leaving after 3 p.m.?

As far as they could tell, their search technology performed better on such problems than Google did, which Adam discovered when he tried to buy an iPod online. “I spent half an hour searching Google for the lowest price, and it drove me completely mad,” he told me. It was impossible for him to figure out which sites were selling iPods and which were selling accessories, like headphones or charging cords. Or Google would show Adam one price, but then the actual price was completely different. Or there was an extra charge for shipping. It seemed to Adam his technology would do a much better job.

Google executives, had they known of Adam’s frustrations, probably wouldn’t have been surprised. For years, Google had been trying to build a tool for comparing online prices. “The idea was you should be able to input any item, and we’d show you the best place to buy it,” says Brian Larson, a technical lead for what was then named Froogle and today is called Google Shopping. Larson’s team was small — just himself and one other programmer at first, and roughly a dozen people at its height — and Larson would regularly test how Froogle compared with other online price-comparison services. “Sometimes we were neck and neck; sometimes, not so much,” Larson said. “We had a hundred million product listings, which was better than competitors.” But they were often outperformed by sites like PriceGrabber.com, which had many more employees devoted to price comparisons.

Froogle’s limitations tended to pop up particularly when users included too many search parameters. For a while, Larson had a specific test search that Froogle kept failing, something like “white running shoes and cheap and free shipping.” Inevitably, the first result would be a Christmas elf wearing running shoes that some guy was selling online. No matter how Google’s engineers fiddled with their coding, they couldn’t stop the elf from appearing as the top link. Eventually, a manager bought the elf so it wouldn’t appear in the search results anymore. “We made elf T-shirts,” Larson told me. “It became our mascot.”

Adam and Shivaun’s technology was good enough to tell the difference between an elf wearing running shoes and an actual pair of running shoes. It was good enough, in fact, to figure out which websites charged hidden shipping fees and which offered truly good deals. So the Raffs quit their jobs, hired a few programmers, spent months perfecting their technology and, in early 2006, unveiled Foundem.com, a vertical-search engine for finding cheap online prices, to a small group of friends and associates. Each time someone used Foundem to buy something, the Raffs would receive a small payment from the website making the sale. Adam and Shivaun weren’t sure their company would succeed — there were already a couple of other big price-comparison search engines, like PriceGrabber, NexTag and, of course, Google itself — but they figured this was how the internet was supposed to work: Two people with a new idea can take on giants and, if their technology is good enough, grow into colossi themselves.

via The Case Against Google – The New York Times

Heroin- nazis- and Agent Orange: inside the $66 billion merger of the year | World | Thanh Nien Daily

 

From the archive of Thanh Nien Daily, 9/16/2016 From Bloomberg News.

“These companies used to sell heroin and Agent Orange. Now, they want to form the world’s largest supplier of seeds and pesticides.

EU seen approving weed-killer ingredient glyphosate amid cancer row Dow and DuPont to merge in deal to create $130 billion chemical giant French court confirms Monsanto guilty of chemical poisoning Trade wars: Monsanto’s return to Vietnam Monsanto weed killer can ‘probably’ cause cancer: World Health Organization

Two giants of the farming and chemical industries agreed to merge Wednesday in a $66 billion deal: the U.S.’s Monsanto and Germany’s Bayer, the original maker of aspirin. It’s the year’s biggest deal and will create the world’s largest supplier of seeds and farm chemicals, with $26 billion in combined annual revenue from agriculture. If the merger goes through, it will combine two companies with a long and storied history that shaped what we eat, the drugs we take and how we grow our food.”

Source: Heroin, nazis, and Agent Orange: inside the $66 billion merger of the year | World | Thanh Nien Daily

This is a merger of two giants, that I hope does not get approval.

Google Fined Record $2.7 Billion in E.U. Antitrust Ruling – The New York Times

“Google suffered a major blow on Tuesday after European antitrust officials fined the search giant a record $2.7 billion for unfairly favoring some of its own services over those of rivals.

The penalty, of 2.4 billion euros, highlights the aggressive stance that European officials have taken in regulating many of the world’s largest technology companies, going significantly further than their American counterparts.

By levying the fine against Google — more than double the previous largest penalty in this type of antitrust case — Margrethe Vestager, the European Union’s antitrust chief, also laid claim to being the Western world’s most active regulator of digital services, an industry still dominated by Silicon Valley.”

David Lindsay

Hamden, CT Pending Approval at NYT comments.

Good article, thank you. We need and deserve more information. Is it true, as I heard today on NPR, that some of Google’s competitors find that their offerings in a “want to buy x” search, appear on page 4, while the google owned retailer is at the top of page 1. Does Google own retailers, and ecommerce sites? Which ones.

Should it be illegal for Google to charge for top placement? This is how they get their money, instead of making us pay a fee each month to use their search engine capability. If I were one of regulators, I would think about requiring Google to identify the companies that it owns. It already identifies paid ads, which one can hardly quibble with.