Trusting Anti-trust

Wal-Mart’s doing well [1]. Great. Listen, if we are serious about addressing our trade deficit and really want wages to rise in China to address it, one thing we can do is enforce anti-trust law here in the U.S. Trade economists know that market concentration at the retail level squeezes prices down the supply chain, especially if there is strong competition down the supply chain. What does that mean? If the only buyer is a big company who sells to 80% of the buyers of your products, they set the price at which you will sell them your goods. Timing is of essence and it is better to control monopolization while it is occurring rather than after the fact, when competition has been essentially wiped out, but incentivizing small to medium size businesses while enforcing compliance with labor and environmental laws on the giants like Wal-Mart with extreme penalties otherwise, while devising ways to break them up would be a good start.

For another strong sell, becoming truly serious about anti-trust law, taking up the mantle of another Roosevelt, (Teddy), would be advisable going forward after we rationalize our banking sector. No financial institutions should be too big to fail and incentivizing credit unions and community banks would also ensure market concentration doesn't occur on the downswing, especially after all our support of the oligopoly banks. Luckily we have laws to ensure competition exists. Let’s enforce them, shall we?