The Competition on Competition
Clinton’s new policy paper on inclusive economic growth
Hillary Clinton’s speech this week on competition and entrepreneurism highlighted a growing trend in politics and academia – linking competition (or lack thereof) to economic inequality. Rising tides do not lift all boats and wealth does not trickle down. The speech and its accompanying fact sheet show that Clinton is committed to solving problems with our economy, rather than throw aphorisms around and hope the economics work out.
Clinton’s four-part plan accomplishes a number of important things. The introduction links concentration to market power, market power to bad business conduct, and bad business conduct to inequity of opportunity. Several specific entities are called out: Mylan, Wells Fargo, and Donald Trump. The Clinton campaign is clearly trying to say that Trump cannot fix problems of market power because he himself is a perpetrator. His track record of aggression toward small businesses is in fact a perfect example of how market power hurts entrepreneurs who simply want to play by the rules.
Eliminate Tax Breaks that Allow Corporations and the Wealthy to Avoid Paying their Fair Share
There are two tax systems in this country: one for the very rich and one for the rest of us chumps. According to experts, if corporations paid their fair share instead of using havens, loopholes, and the like, the federal government would receive an additional $717.8 billion. That would erase the budget deficit with about $130 billion left over. That’s more money for programs which improve opportunities for the middle class and small businesses, who are already paying their fair share.
Nobody likes paying taxes. But the fabric and order of our society breaks down if the wealthy can buy their way out of the social contract.
Protect Consumers from Unfair and Deceptive Practices
The Clinton plan takes existing institutions like Dodd-Frank and the Consumer Financial Protection Bureau and strengthens them through both policy and funding expansions. Over the past several years, we have asked our regulators to do more, often with fewer resources. A frenzy of mergers has put stress on those tasked with merger review while technological change has opened up a new era of consumer fraud. We need to have laws on the books and proper enforcement together in order for the system to work.
Leveling the playing field is a common theme in the plan. Often, big companies put together long, complicated contracts, forcing smaller businesses and individuals with limited resources to “bite the bullet” and sign on the dotted line without really knowing what is in the contract. Think about all the times you hit “accept” on terms and conditions without actually reading what you were digitally signing. The Clinton plan addresses “arbitration clauses” that gag consumers and employees from suing a company for wrongdoing.
As President, Clinton will create a “new consumer response team of enforcement agencies” that will respond to unjustified price increases for long-standing pharmaceutical treatments. Tools at their disposal will include emergency drug re-importation, direct purchasing, and penalties for unjustified price hikes.
Promote Free and Fair Competition and Stopping Big Businesses from Hurting Small Business
Again in this section, Clinton draws comparisons between commonly known bad business behavior and what Donald Trump’s record looks like. She would give small businesses the power to take on businesses that take advantage of the justice system and use it to intimidate.
Antirust and competition enforcement have found champions on both sides of the political aisle. But this time around, it would seem that Clinton is in the best position to enforce laws that promote fair competition and innovation. She says, “being pro-business doesn’t mean hanging consumers out to dry.”
In this section, Clinton really shows that she “gets it.” The plan for promoting competition is nuanced and focuses not only on merger enforcement but also on anticompetitive conduct, research, retroactive monitoring, and interagency action.
Rewrite the Rules So Workers Share in the Profits They Create
The last segment of Clinton’s plan ensures that gains in the new economy will be shared, unlike gains during the recovery since 2008, which largely went to the 1%. She wants companies to be rewarded for profit sharing. She wants to restore power to unions. She believes in worker training and apprenticeships. She knows we need a living wage. And she understands the importance of paid family leave and quality, affordable childcare.
This last piece is of critical importance. Donald Trump promises the US will return to the economy of yesteryear, during which is supporters felt more stability and certainty. But the bait-and-switch of Trump is that his plans would go in the opposite direction of the stable economy of the past, benefitting only himself and people like him. The plan Clinton has laid forth would help bring back some of the things which made the 20th century era of prosperity possible: competition, properly funded education, unions, and strong small businesses.