From Robert Whitcomb's "Digital Diary,'' in GoLocal24.com:
Eduardo Porter, a New York Times columnist, in a column headlined “Where are the Start-Ups? Loss of Dynamism Is Impeding Growth,’’ suggests that the slow growth in the U.S. economy in recent years has a lot to do with the rise of huge, market-controlling companies that suppress the creation of the small new business that drive new-job creation and that boost productivity. Mr. Porter notes that the rate of company creation is about half what it was 40 years ago.
A big problem is the failure, by Republican and Democratic administrations, to enforce antitrust laws against such enterprises as Google, Facebook and other huge companies, including big banks, that have vast marketing, pricing and other power. They enthusiastically engage in legally dubious anti-competitive activities. Washington has become increasingly in the thrall of lobbyists working for these giants. It recalls the heyday of the Standard Oil Trust and other monopolies at the turn of the 20th Century.
Mr. Porter cites a study by the Hamilton Project, at the Brookings Institution, by Jay Shambaugh, Ryan Nunn and Patrick Liu, in which they explore possible causes of the American economy’s inertia.
To read the report, please hit this link.
Mr. Porter writes:
“The evidence paints a distinct picture of decline: Fewer start-ups mean fewer new ideas and fewer young, productive businesses to replace older, less productive ones.’’
There’s little indication that this will change as long as Washington favors the biggest lobbyists and campaign contributors. Of course, we have always had a few monopolies, such as the old American Telephone & Telegraph, that were regulated in varying degrees.
To read his article, please hit this link.