by Karl Denninger, Market Ticker:
This is particularly evil. Let me remind you that business exists to make a profit. Lobbying is of course part and parcel of what businesses sometimes do; they make their opinions known to lawmakers, among others. Free speech is a right, not a privilege.
But lying, on purpose, isn’t free speech. It’s deception, it’s fraud, it harms real people, that is, you, and when done through a perverse attack launched under the guise of “The Press” it must be met with an unrelenting response in which the person or organization that does it is DESTROYED in every possible and legal way, including all firms and interests said entity or person holds.
Because if you don’t do that then the only other alternative will eventually be the very unlawful use of violence to stop the predation that said person and organizations have organized against you.
Recently I got into a “Twitter Debate” with Dennis Kneale. You may remember him from the time when he was on CNBS, and he and I went back and forth a number of times, including on the air, which I found amusing. We have pretty-significant differences of opinion but personally I like the guy.
The recent issue was one of monopolies. His argument was that my piece of same, and Bezos/Amazon in particular, was well-reasoned, insightful (in other words he agreed with my analysis) and yet, in his opinion, wrong. The reason he claimed it was “wrong” was that there was no evidence Amazon had caused prices for products they sell to go up, and therefore there was no monopoly problem.
Dennis’ view is common, including among politicians and Attorneys General.
The problem is that it’s both legally and ethically bankrupt.
Let me quote the entirety of 15 USC Chapter 1, Section 1 and 2:
Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $100,000,000 if a corporation, or, if any other person, $1,000,000, or by imprisonment not exceeding 10 years, or by both said punishments, in the discretion of the court.
Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $100,000,000 if a corporation, or, if any other person, $1,000,000, or by imprisonment not exceeding 10 years, or by both said punishments, in the discretion of the court.
Do you see anything, anywhere, in that section that says prices must rise in order for there to be a violation? Do you see anything that says you must succeed in driving out all of your competitors?
The mere attempt — any such contract, combination, conspiracy or similar to restrain trade or commerce is a felony. It does not matter if you succeed and it does not matter if prices go up in the areas where you are attempting to destroy competition — none of that matters.
Why did the drafters of this law write it this way?
The drafters knew that one of the most-pernicious ways to create a monopoly is to cost-shift. That is, to give the perception that the consumer is getting a better deal through size and driving out competitors instead of a worse deal. If you can take a business in which you hold a “first mover” advantage, or worse, in which you have excess capacity that would otherwise go to waste, sell it and use that unrelated service or product’s profit to sell something else below cost the consumer thinks he’s getting a great deal on said thing you sold below cost!
The problem of course is that someone is getting screwed; a competitive market will never allow this sort of cross-subsidization because the subsidizing service or product is also subject to competition, so without the monopoly effect cross-subsidization cannot work since you won’t have any excess profits to use for this purpose.
Therefore the mere existence of such a cross-subsidy channel is evidence of monopoly power.
John Stossel says that there’s nothing wrong with being a rich bastard so long as you don’t collude with government to get special deals. I agree. The problem is that as soon as cross-subsidy shows up and especially when it shows up across periods of years you have proof of said collusion — because without it there would be no excess money with which to do it.
In short there’s a very simple reason that 15 USC Chapter 1 Sections 1 and 2 don’t require prices to rise in the monopolized business as part of the predicate for those who try to do so to be guilty of a crime: It is almost always possible for those who monopolize to hide the negative impact that would otherwise show up directly in consumer price by forcing someone else to pay it, by extracting it from the government or by screwing someone, somewhere — whether it be getting screwed out of a job, getting screwed by the taxpayer funding the subsidizing service or product or something else.
Indeed this morning’s “announcement” on Amazon’s “new businesses” with Disney and others for content storage and delivery on AWS is outrageously idiotic except to leverage Amazon’s monopoly power.
The reason is simple — it is ridiculously more-expensive to store bulk data on a “cloud” than on your own infrastructure. Always. Not a little more expensive, more-so by orders of magnitude.
Video content is the very definition of “bulk data”!
And now we have this which is exactly why those laws must be enforced right damn now!
“But we really haven’t addressed… Our reporting has not taken us to a place where I would be able to say with any confidence that the result of it is going to be the president being guilty of being in cahoots with
the Russians. There’s no evidence of that that I’ve seen so far.
“We’ve seen a lot of flirtation, if you will, between them but nothing that, in my opinion, would rank as actual collusion. Now that doesn’t mean that it doesn’t exist, it just means we haven’t found it yet. Or maybe it doesn’t exist.”
Melissa McCullough, the Director of Newsroom Operations, expresses her bias against Trump, admitting “let’s just hope he doesn’t get re-elected in another three years.”
McCullough then backpedals and says, “I shouldn’t be saying these things because we don’t… We’re not supposed to really talk about that kind of stuff.”
You got this folks? This is the Washington Post’s National Security Reporter who is admitting they have exactly zero evidence of actual Trump-Russia collusion. None. They have been digging and digging since well before the election and haven’t been able to find any evidence yet they “report” a knowing lie — they claim said collusion exists in their “newspaper” and that such collusion occurred as a claimed fact.
Then you have the director of their news operations who openly wants to see a sitting President lose, and I think it’s fair to assume wanted to see him lose in the first place and essentially admits this is reflected in the job she does.
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