The stories that most interested us this week.
- David Sirota and Josh Keefe of International Business Times reveal that Senator Pat Roberts (R-KS) pushed to add language to the GOP tax bill that would create a special tax break for billionaires who donate their wealth to “dark money” groups. As it happens, Kansas, the state Roberts represents as the top-ranking Republican senator, is also the home state of the Koch brothers.
- An IBT reveal (Also by Sirota and Keefe) that Consumer Financial Protection Bureau head Mick Mulvaney received large campaign contributions from payday lenders, days before he pressured the agency to relax payday lending rules, has prompted calls for his resignation.
- In other tax bill news, The Washington Post reports on the intense lobbying around its proposed 20 percent corporate tax rate. The Trump administration, for now, is not ruling out a 22 percent tax rate, reports Politico. The Post and Mother Jones also report on how the tax bill will be funded: by cutting entitlements, in particular school funding.
- In a keynote address at the Open Market Institute conference on antimonopoly this week, senator Elizabeth Warren (D-MA) called on government agencies to push back against mergers, particularly vertical mergers like AT&T-Time Warner and CVS-Aetna, crack down on anti-competitive behavior, and prioritize competition and reduction of monopoly power across the board. Huff Post’s Paul Blumenthal offers a great summary of Warren’s three-step plan to tackle rising corporate power. The New York Times also summarizes Warren’s speech, suggesting that the senator might be able to find some common ground with the Trump administration on antitrust.
- Apple is buying music recognition app Shazam, according to a TechCrunch report
- A new bill introduced by representative Keith Ellison (D-MN) takes aim at mergers and would, if passed, require the Federal Trade Commission and DoJ to conduct annual retrospective studies of how mergers impact things like prices, wages, and local economies. New York reports on Congress’s new antitrust caucus.
- CVS and Aetna’s $69-billion merger will create a “price-setting behemoth for medications,” writes David Dayen in The American Prospect. “Leftists have long desired a single-payer health-care system. The way concentration is going in the health-care industry, they may just get it, in the worst possible manner,” he writes. In the Law and Political Economy blog, Lina Khan of the Open Markets Institute also writes about the CVS-Aetna merger, asking whether DOJ might oppose it out of growing concern about vertical mergers, it as it did with the AT&T-Time Warner deal.
- Former Federal Communications Commission chairman Tom Wheeler took aim at his successor Ajit Pai’s plan to repeal net neutrality, accusing Pai of prioritizing the interests of major Internet service providers over those of consumers, Ars Technica reports.
Also, don’t miss Harold Feld’s ProMarket piece on how repeal of net neutrality would likely lead to an “arms race” of vertical integration.
- In The Guardian, Susana Ferreira writes about Portugal’s radical but successful drug decriminalization program and asks: Why haven’t other countries copied it?
- With a wave of corruption scandals sweeping out Latin American governments, Foreign Policy wonders if Mexico’s is the next to fall.
Stigler Center Goings-on
Bruno Pellegrino’s and Luigi Zingales’s paper “Diagnosing the Italian Disease” is now featured on the NBER home page. You can read our coverage of the same paper here.
Disclaimer: The ProMarket blog is dedicated to discussing how competition tends to be subverted by special interests. The posts represent the opinions of their writers, not those of the University of Chicago, the Booth School of Business, or its faculty. For more information, please visit ProMarket Blog Policy.
