Market concentration is hurting us economy business standard column electricity electricity schoolhouse rock

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Many factors are contributing to the US economy’s low-growth/high-inequality problem. Trump and the Republicans’ poorly designed tax “reform electricity 1 7 pdf” has exacerbated existing deficiencies in the tax code, funneling even more income to the highest earners. At the same time, globalisation continues to be poorly managed, and financial markets continue to be geared toward extracting profits (rent-seeking, in economists’ parlance), rather than gas prices providing useful services.

But an even deeper and more fundamental problem is the growing concentration of market power, which allows dominant firms to exploit their customers and squeeze their nyc electricity consumption employees, whose own bargaining power and legal protections are being weakened. CEOs and senior executives are increasingly extracting higher pay for themselves at the expense of workers and investment. For example, US corporate executives made sure that the vast majority of the benefits from the tax cut went into dividends and stock buybacks, which electricity and magnetism equations exceeded a record-breaking $1.1 trillion in 2018. Buybacks raised share prices and boosted the earnings-per-share ratio, on which many executives’ compensation is based. Meanwhile, at 13.7 per cent of GDP, annual investment remained weak, while many corporate pensions went underfunded.

Evidence of rising market power can be found almost anywhere one looks. Large markups are contributing to high corporate profits. In sector after sector, from little specjalizacja z gastroenterologii things like cat food to big things like telecoms, cable providers gas stoichiometry worksheet answers, airlines, and technology platforms, a few firms now dominate 75-90 per cent of the market, if not more; and the problem is even more pronounced at the level of local markets.

As corporate behemoths’ market power has increased, so, too, has their ability to influence America’s money-driven politics. And as the system has become electricity questions for class 10 more rigged in business’s favour, it has become much harder for ordinary citizens to seek redress for mistreatment or abuse. A perfect example of this is the spread of arbitration clauses in labour contracts and user agreements, which allow corporations to settle disputes with employees and customers through a sympathetic mediator, rather than in court.

Multiple forces are driving the increase in market power. One is the growth of sectors with gas zeta costa rica large network effects, where a single firm — like Google or Facebook — can easily dominate. Another is the prevailing attitude among business youtube gas laws leaders, who have come to assume that market power is the only way to ensure durable profits. As the venture capitalist Peter Thiel famously put it, “competition is for losers.”

None of this bodes well for the US economy. Rising inequality implies falling aggregate demand gas and water socialism, because those at the top of the wealth distribution tend to consume a smaller share of their income than those of more modest means. Moreover, on the supply side, market power weakens incentives to invest and hp gas online innovate. Firms know that if they produce more, they will have to lower their prices. This is why investment remains weak, despite corporate America’s record profits and trillions of dollars of cash reserves. And besides, why bother producing anything of value when you can use your political power to extract more rents through market exploitation? Political investments in getting lower taxes yield far higher returns than electricity powerpoint template real investments in plant and equipment.

The policies for combating economically damaging power imbalances are straightforward. Over the past half-century, Chicago School economists, acting on the assumption gas monkey bar and grill that markets are generally competitive, narrowed the focus of competition policy solely to economic efficiency, rather than broader concerns about power and inequality. The irony is that this assumption became z gas cd juarez dominant in policymaking circles just when economists were beginning to reveal its flaws. The development of game theory and new models of imperfect and asymmetric information laid bare the profound limitations of the competition model.

The challenge, as always, is political. But with US corporations having amassed so much power, there is reason to doubt that the American political system is up to the gas city indiana zip code task of reform. Add to that the globalisation of corporate power and the orgy of deregulation and crony capitalism under Trump, and it is clear that Europe will have to take the lead.