Friday, June 26, 2020
Delta will warn pilots about possible furloughs, offers early retirement
Maria Ponnezhath
(Reuters) - Delta Air Lines (DAL.N) said late on Friday it will soon send warning notices to about 2,500 pilots regarding possible furloughs at the airline, as the industry takes a huge blow after the coronavirus pandemic slashed air travel demand.
“In an effort to best prepare our pilots should furloughs be needed, Delta will send required notices to approximately 2,500 pilots,” a Delta spokesperson said in a statement, adding that the so-called ‘WARN’ notices will be sent next week.
Delta also reached a tentative agreement with the Air Line Pilots Association (ALPA) labor union on a pilot-specific voluntary early retirement option.
The early-out plan is a meaningful step as the carrier is working to manage the impact of the pandemic and align staffing with expected flying demand, the statement said.
ALPA did not immediately respond a request for comment after office hours.
A day ago, Delta Chief Executive Ed Bastian had informed employees in an internal memo that the company is planning to add about 1,000 flights in August but not many more for the remainder of 2020.
“While it’s encouraging to see flights returning ... we likely remain at least two years away from a return to normal,” Bastian said in the memo.
Reporting by Maria Ponnezhath in Bengaluru; editing by Richard Pullin
Former Trump 2016 Republican rival Fiorina to back Biden
WASHINGTON (Reuters) - Carly Fiorina, a formal rival of Donald Trump for the 2016 Republican presidential nomination, plans to cast her vote for Democrat Joe Biden in November.
“I’ve been very clear that I can’t support Donald Trump,” Fiorina told The Atlantic magazine in an interview published on Thursday.
Fiorina, the former Hewlett-Packard Co chief executive, fell in line behind Trump like many Republicans in his 2016 race against Democrat Hillary Clinton. Since then, she has become increasingly critical and last year called for his impeachment.
“I am encouraged that Joe Biden is a person of humility and empathy and character. I think he’s demonstrated that through his life,” Fiorina told The Atlantic. “And I think we need humility and empathy everywhere in public life right now. And I think character counts.”
While Trump insulted a number of his 16 Republican rivals in the 2016 presidential campaign, Fiorina was the target of what was arguably one of the nastiest swipes.
“Look at that face. Would anyone vote for that?” Trump said, according to Rolling Stone magazine, of the only woman candidate in the Republican field.
Trump dismissed the news of Fiorina’s backing Biden, calling her on Twitter a “failed presidential candidate” who “lost so badly to me.”
Fiorina is the latest Republican to publicly split with the party’s president as the country faces widespread protests over police brutality against Black Americans, the coronavirus pandemic and a sharp economic downturn.
Former Secretary of State Colin Powell, a Republican who served under Republican Presidents George W. Bush and George H.W. Bush, has endorsed Biden. Trump’s former defense secretary, retired General Jim Mattis, denounced what he called Trump’s “deliberate” efforts to divide the country. [nL1N2DK04N]
Republican Senator Lisa Murkowski has said she was “struggling” with whether to support Trump’s re-election, while Republican Senator Mitt Romney praised Mattis’ words.
Reporting by Doina Chiacu; Editing by Leslie Adler
Trump Rambles Unintelligibly About Plan for Second Term
By Adam K. Raymond VISION 2020 JUNE 26, 2020
President Donald Trump thinks. Photo: Erin Schaff/The New York Times/Bloomberg via Getty Images
Sean Hannity would never intentionally ask President Trump a difficult question. But he would ask Trump an easy question that Trump found difficult to answer. It happened Thursday during a Wisconsin town hall when the Fox News host teed Trump up to rattle off a list of all the marginalized people he plans to harm in a potential second term. Instead, Trump garbled out an unintelligible answer that a very charitable interpreter would explain as: “I have experience now, so I would know better than to do things like hire John Bolton, who sucks.”
Charitable or not, no one would be able to find a second-term priority in this answer:
Trump’s words are even more striking in written form.
"Well, one of the things that will be really great, you know the word experience is still good. I always say talent is more important than experience. I’ve always said that. But the word experience is a very important word. It’s an — a very important meaning
I never did this before. I never slept over in Washington. I was in Washington, I think, 17 times. All of a sudden, I’m president of the United States. You know the story. I’m riding down Pennsylvania Avenue with our First Lady and I say, ‘This is great. But I didn’t know very many people in Washington. It wasn’t my thing. I was from Manhattan, from New York. Now I know everybody, and I have great people in the administration.”
You make some mistakes. Like, you know, an idiot like Bolton. All he wanted to do was drop bombs on everybody. You don’t have to drop bombs on everybody. You don’t have to kill people."
At another point in the sit-down with Hannity, Trump said Joe Biden “can’t speak.”
By Adam K. Raymond VISION 2020 JUNE 26, 2020
President Donald Trump thinks. Photo: Erin Schaff/The New York Times/Bloomberg via Getty Images
Sean Hannity would never intentionally ask President Trump a difficult question. But he would ask Trump an easy question that Trump found difficult to answer. It happened Thursday during a Wisconsin town hall when the Fox News host teed Trump up to rattle off a list of all the marginalized people he plans to harm in a potential second term. Instead, Trump garbled out an unintelligible answer that a very charitable interpreter would explain as: “I have experience now, so I would know better than to do things like hire John Bolton, who sucks.”
Charitable or not, no one would be able to find a second-term priority in this answer:
Trump’s words are even more striking in written form.
"Well, one of the things that will be really great, you know the word experience is still good. I always say talent is more important than experience. I’ve always said that. But the word experience is a very important word. It’s an — a very important meaning
I never did this before. I never slept over in Washington. I was in Washington, I think, 17 times. All of a sudden, I’m president of the United States. You know the story. I’m riding down Pennsylvania Avenue with our First Lady and I say, ‘This is great. But I didn’t know very many people in Washington. It wasn’t my thing. I was from Manhattan, from New York. Now I know everybody, and I have great people in the administration.”
You make some mistakes. Like, you know, an idiot like Bolton. All he wanted to do was drop bombs on everybody. You don’t have to drop bombs on everybody. You don’t have to kill people."
At another point in the sit-down with Hannity, Trump said Joe Biden “can’t speak.”
Trump Just Admitted to a Crime Against Humanity. No, He Wasn’t Joking.
The president said he tried to slow down COVID-19 testing to cover up America’s high rate of infection.
Jamelle Bouie/FlickrBecause among the bizarre statements and absurdist pieces of performance art Trump displayed onstage (including a 10-minute riff on his own ability to walk down a gentle ramp, and a strange demonstration that he can actually drink a glass of water–if only slowly and carefully) came one of the most shocking admissions by a president in all modern history. Trump boasted that he had asked his officials to slow down COVID-19 testing because the rising number of cases was making him look bad.
“Here’s the bad part: when you do testing to that extent, you’re going to find more people, you’re going to find more cases. So I said to my people, slow the testing down please.”
He then emphasized the point by implying that many of the positive test results didn’t really matter if they were among young people likely to recover. He spoke dismissively of a “young man, 10 years old” who “got the sniffles–he’s gonna recover in about 15 minutes.” And then he waited for applause. Of course, some young people do die of COVID-19, and many more may have lifelong health complications that we are only just now beginning to understand. Most importantly, even that healthy 10-year-old can then become a vector to transmit the disease to an aging or more vulnerable person with potentially fatal consequences. So of course it matters if he tests positive, and Trump’s dismissal of the importance of testing him speaks volumes about his lack of understanding of the pandemic and of his callousness in placing his own political interest ahead of public health.
But let’s come back to the main shocking statement: “I said to my people, slow the testing down please.” It is hard to overstate the sheer evil of it. The only way to stop a widespread pandemic is through mass, universal testing, aggressive contact tracing and isolation measures. To slow down testing for any reason virtually guarantees the deaths of thousands, to say nothing of broader damage to the social fabric and to the economy. To slow down testing for political reasons is particularly abominable.
It constitutes a criminal, negligent abuse of power so unspeakable and so unthinkable that there isn’t even a law, federal or international, to adequately cover the case. It is the sort of high crime that impeachment was explicitly designed for, because the potential for abuses of power by a chief executive potentate is so vast and variegated that it would be impossible to write laws for all the potential scenarios. But to explicitly slow walk testing in a once-in-a-century pandemic, just to reduce the number of publicized cases for purely political purposes, allowing the virus to spread unchecked just to keep the economy humming along a little longer and to make his own response appear somewhat less incompetent, is the essence of a high crime. Because the consequences are so deadly–potentially killing literally hundreds of thousands of his own fellow citizens and endangering the entire interconnected world–it constitutes nothing less than a national and global crime against humanity.
Of course, the Trump campaign and administration (is there even a difference at this point?) knew they would have to perform damage control. White House trade advisor Peter Navarro claimed that Trump was only “joking” in a “light moment.” But listen to the audio again. It is very clear that Trump wasn’t joking, and that the moment was anything but light. Trump was blithe, sarcastic and dismissive, but that’s very different from engaging in pretense. Trump clearly meant every word he said at that moment.
It’s also not the first time Trump has intimated as much. At the very beginning of the pandemic Trump insisted that the virus would not spread and did not need to be taken too seriously, saying “You have 15 people, and the 15 within a couple of days is going to be down to close to zero.” Throughout the course of the pandemic he pooh-poohed the need for mass testing because the virus was either “under control” or would “disappear like a miracle.” The United States did not seek help from the World Health Organization to acquire tests (the WHO does tend to assist developing countries), but then the CDC bungled the creation and implementation of domestic tests while Trump dithered. He repeatedly lied about the U.S. having the most stringent testing regimen in the world, while also saying that tests weren’t that helpful, and while not taking the necessary steps to ramp up testing. And Trump has repeatedly claimed that “testing is overrated” because “it makes us look bad.”
In other words, the president’s admission at his fizzled campaign rally last night that he asked his administration to slow down the testing because healthy 10-year-olds testing positive was made him look bad unfairly wasn’t a joke. It was merely the most direct confirmation of what was already obvious and what he had obliquely already mentioned before.
And yes: it is a crime against humanity. It is no joke. The resulting death toll could number in the hundreds of thousands domestically alone. And it constitutes one of the greatest criminal abuses of power in all of American history by a sitting president.
No One Is Attempting to Silence White Men
But plenty of them are freaking out as old power structures are starting to get ripped apart.
The White House/FlickrAndrew Sullivan characterizes the movement in journalism away from objectivity (read: bothsiderism) as a threat to civil discourse. In reference to an article about how revolts are erupting in American newsrooms, Sullivan also takes issue with the foundational beliefs being put forward as media organizations grapple with police brutality.
https://nymag.com/intelligencer/2020/06/andrew-sullivan-you-say-you-want-a-revolution.html
And what is the foundational belief of such moral clarity? That America is systemically racist, and a white-supremacist project from the start, that, as Lowery put it in The Atlantic,“the justice system — in fact, the entire American experiment — was from its inception designed to perpetuate racial inequality.”
For Sullivan, all of this is an attempt to silence the voices of dissent.
Question any significant part of this, and your moral integrity as a human being is called into question. There is little or no liberal space in this revolutionary movement for genuine, respectful disagreement, regardless of one’s identity, or even open-minded exploration. In fact, there is an increasingly ferocious campaign to quell dissent, to chill debate, to purge those who ask questions, and to ruin people for their refusal to swallow this reductionist ideology whole.
Similarly, in 2007, Glenn Greenwald suggested that there were speech rules that silenced discussions about race.
It is always preferable to have views and sentiments — even ugly ones — aired out in the open rather than forcing them into hiding through suppression. And part of the reason people intently run away from discussions of race…is because it is too easy to unwittingly run afoul of various unwritten speech rules, thereby triggering accusations of bigotry. That practice has the effect of keeping people silent, which in turn has the effect of reinforcing the appearance that nobody thinks about race (which is why nobody discusses it), which in turn prevents a constructive discussion of hidden and unwarranted premises.
Writing at the Unapologetic Mexican, Nezua didn’t attempt to spare his feelings in calling that out.
In this analysis (or this part of his post at least) the problem is the various unwritten speech rules. But guess what? There really aren’t any. There are just poor attitudes we keep about people who look different. Or who we’ve been taught to think of differently. And there is a “White” attitude of deciding for everyone else how they should live, be, self-identify, and do many other things. There are old slurs and old tropes that hurt people. These are the things that are flushed out when people speak: attitudes, thoughts, beliefs, manners of speaking that hint at lurking attitudes.People avoid talking about race because they are scared of exposing their thoughts and views on race…They are not afraid of “unwritten speech rules.” They are afraid that what they really think and feel will cause them to be ridiculed or ostracized in public, or that they may see a part of themselves they have to feel bad about. So they keep the potential to themselves.
Our country is going through a fundamental transformation—especially when it comes to both patriarchy and white supremacy. In referring to presidential politics, here is how Rebecca Traister put it.
The public spectacle of this presidential election, and the two that have preceded it, are inextricably linked to the racialized and gendered anger and violence we see around us…Whatever their flaws, their political shortcomings, their progressive dings and dents, Barack Obama and Hillary Clinton mean a lot. They represent an altered power structure and changed calculations about who in this country may lead.
The first time this country grappled with these questions it resulted in a civil war that ended slavery. In the 1960s a civil rights movement rose up to challenge Jim Crow laws, resulting in laws that both prohibited discrimination and guaranteed the right to vote. As Reverend William Barber has suggested, we are now facing the possibility of a Third Reconstruction. While laws such as those designed to rein in police brutality and hold officers accountable are currently on the table, activists like those involved in the 1619 Project at the New York Times are going deeper, attempting to expose the ways that racism and misogyny have been built into our systems and culture.
That isn’t sitting very well with a lot of folks. As the saying goes, “When you’re accustomed to privilege, equality feels like oppression.” So Andrew Sullivan isn’t the only white man who feels silenced. The editors at the Washington Examiner expressed similar thoughts.
A republic in which people are not tolerant of those who disagree, in which the mob aims to erase parts of culture that are uncomfortable, is not one that can long endure.
No one is silencing Sullivan or the editors at the Washington Examiner, as the publication of these articles proves. What has changed is that their views have to compete with others in a culture in which the power structure is being altered.
As these movements begin to delve more deeply into the systemic nature of racism and sexism in our culture, foundational beliefs are being challenged. We can see that in the way that the dominance model of organizing human relations is being challenged due to its overt embrace by both Trump and law enforcement. Here is how Riane Eisler explained the issue in her book Chalice and the Blade.
The underlying problem is not men as a sex. The root of the problem lies in a social system in which the power of the blade is idealized – in which both men and women are taught to equate true masculinity with violence and dominance and to see men who do not conform to this ideal as too soft or effeminate.
These days, even the idea of wearing a mask during a pandemic is being challenged as weak and unmanly. So we’re having these conversations that are making a lot of people uncomfortable. That does not mean that there are speech rules or that anyone is being silenced.
What activists are attempting to do is to get at some of the ways that patriarchy and racism have been cooked into the culture that aren’t as obvious as calling someone the “n” word. As the power dynamics shift, that kind of conversation is going to be inevitable and terribly threatening to those who are intent on clinging to the past.
None of this is to suggest that we all need to simply embrace the views of feminists or those involved in the Black Lives Matter movement. Here’s where I actually agree with Sullivan.
Liberalism is not just a set of rules. There’s a spirit to it. A spirit that believes that there are whole spheres of human life that lie beyond ideology — friendship, art, love, sex, scholarship, family. A spirit that seeks not to impose orthodoxy but to open up the possibilities of the human mind and soul. A spirit that seeks moral clarity but understands that this is very hard, that life and history are complex, and it is this complexity that a truly liberal society seeks to understand if it wants to advance.
The issue is that our culture is evolving to a place where patriarchy and white supremacy aren’t merely differences that need to be tolerated, but represent moral challenges that need to be exposed and eliminated. That process will require listening and being able to tell the difference between the truth and something that simply makes us uncomfortable.
Nancy LeTourneau is a contributing writer for the Washington Monthly. Follow her on Twitter @Smartypants60
Can the Black Lives Matter Movement Inspire a More Inclusive Pride Month?
It’s time for an overdue conversation about how anti-Blackness has often manifested within queer spaces.
Getty Ima
Pride Month was always going to look different this year—at least, once the pandemic hit.
When the novel coronavirus arrived to America earlier this year, states and municipalities implemented physical-distancing measures to mitigate its spread; universities sent college students home; and businesses were forced to furlough or fire millions of employees due to the economic fallout. Naturally, more than 500 parades and festivals scheduled for June’s Pride Month were cancelled in major cities across the world, from New York City and Washington, D.C., to London and Paris.
Then, on May 25, police officer Derek Chauvin killed George Floyd, sparking mass protests and riots. Countless Americans decided to get out of their homes and onto the streets—furious over police brutality and widespread racial injustices.
Quickly, it became apparent that LGBTQ people were playing an outsize role at the protests, where pride flags have been common fixtures. This makes sense: Gay, lesbian, and transgender individuals have also been victims of systemic oppression. In the 1960s, for instance, it was common practice for cops to threaten and harass gay bars.
No doubt, that was part of what compelled so many in the community to speak out. On May 29, four days after Floyd’s murder, more than 100 LGBTQ organizations released a joint statement condemning racial violence. “We understand what it means to rise up and push back against a culture that tells us we are less than, that our lives don’t matter,” they said.
But while LBGTQ groups have emphatically supported the Black Lives Matter movement, some civil rights activists argue that they haven’t done enough to stamp out racism within their own community. “The statement is great for solidarity,” said Earl D. Fowlkes, Jr. “But it’s empty if there is no action behind it.”
Fowlkes is the founder of the Center for Black Equity, a nonprofit dedicated to advancing equality for Black LGBTQ people. One of the biggest obstacles they face, he told me, is not just acceptance in straight society—but in white LGBTQ society.
In 2017, for instance, Philadelphia’s Commission on Human Relations ordered 11 gay bars to take a training course on the city’s anti-discrimination laws after there were reports of them denying Black people entry for vague dress codes and bartenders giving preferential treatment to white gay men. One bar owner was caught on YouTube saying racial slurs.
Unfortunately, stories like these are all too commonplace. In 2018, an Atlanta gay bar owner posted on Facebook that “if the South had won, we would be a hell of a lot better off.” Fowlkes told me of an incident from two weeks ago when a group of Black men were seated at a different section of a D.C. gay bar than the rest of the white patrons. CBE was contacted about it as a potential discrimination case. “It happens all the time,” he told me.
Yet some queer people are more at-risk than others. According to the Human Rights Center, Black transgender women face the highest levels of fatal violence within the LGBTQ community—and are less likely to turn to the police for help for fear of revictimization by law enforcement personnel.
But with LGBTQ organizations now thrusting themselves into the national fight against racism, it’s time for them to take a hard look inward.
One of the ways they can start is by refashioning this year’s Pride Month in yet another way: by embarking on a long overdue conversation about how anti-Blackness has long manifested within queer spaces. That might mean a departure from the joyful and triumphant marches in years past—we are still in a pandemic, after all—but it may spur some much-needed progress on an issue that is too often neglected.
In the 1960s, community centers or meet ups didn’t exist for LGBTQ people as they do now. This meant that bars were one of the few, if not the only, spaces where police officers knew they could openly target gays and lesbians.
For a long time, this was simply the way things were. Police would barge into these establishments to harass and beat up the patrons. “Gay people just took it,” historian Lillian Faderman, author of The Gay Revolution, told me. “They would scurry off, people who were let go by the police would run off.”
Until, one day, they stopped taking it.
On June 28, 1969, a group of police officers showed up at the Stonewall Inn—a gay bar in Greenwich Village, New York—for what they probably thought would be yet another routine night of harassing patrons. But this night ended differently. A fight broke out between the cops and everybody else. More people resisted, others joined in the pushback. At some point, someone threw a brick through the bar’s window, igniting the famed Stonewall Riots.
Who, exactly, threw that first brick remains unknown. The two main suspects, however, shared something in common: Marsha P. Johnson, a prominent figure during this period, was a Black trans woman. Sylvia Rivera, who was present at the first fight, was a Latina trans woman. Witnesses have also described what the majority of the people at Stonewall looked like that night: drag queens or gay men of color. In other words, Black LGBTQ people were some of the first who resisted brutality and oppression on behalf of the entire LGBTQ community.
Images from that night shocked the nation—and shifted the public consciousness about the treatment of gay people. Shortly thereafter, a movement was formed. Over the next few years, more than 1,500 new LGBTQ organizations were created. Still, it took decades of sustained advocacy to gain traction. By 1999, then president Bill Clinton enacted Proclamation 7203, turning the month of June into a federally recognized holiday. Pride Month was born.
But as the LGBTQ community continued to make progress—through increased representation in politics and media, through legislative actions, executive orders, and court rulings to protect gays and lesbians from discrimination—its non-white members have often been left behind.
A 2013 study found that while LGBTQ youth are more likely than their straight counterparts to be homeless, and that the bulk of homeless youth are LGBTQ people of color. Other studies have shown that Black LGBTQ people are more likely to commit suicide. At the same time, Black queer people have amassed far less political capital. A recent study from the Victory Institute found that 77.4 percent of all openly LGBTQ people in elected office are white.
The increased acceptance of white LGBTQ Americans in mainstream society is at least partly due to the fact that the vast majority of media depictions of queer life—which have helped change the culture—have historically been white-centric.
Groundbreaking films that found mass audiences have tended to focus on white gay men, such as The Times of Harvey Milk (1984), My Own Private Idaho (1991), Brokeback Mountain (2005), and Call Me by Your Name (2017). The few films about queer people of color—such as Tongues Untied (1989) or The Watermelon Woman (1996)—have generally not been as widely seen. In essence, Black LGBTQ people have always been left out of the aesthetic representations that have helped to normalize the white LGBTQ experience.
For this reason, Cleo Manago coined the term “same-gender loving” for Black gay men and lesbians in the 1990s as a separate identity, due to how isolated many felt in traditional LGBTQ spaces.
Pride Month festivities have been no exception. Even after the 2015 landmark Supreme Court ruling declaring same-sex marriage a constitutional right, and Pride marches became an established mark of the beginning of the summer in major cosmopolitan cities, many noticed that they seemed awfully white.
Non-white queer people have complained they aren’t always as welcomed at Pride events by their white counterparts. Moreover Pride celebrations have often whitewashed the fact that the early leaders of this movement were people of color, such as Johnson and Rivera.
Black LGBTQ people felt even more alienated in 2017, when a proposed addition to the pride flag of brown and Black stripes to represent racial diversity received immediate backlash from white, gay members of the community.
Of course, queer people of color don’t just face racism from inside the LGBTQ community. They have to face it from the rest of the world, too. Indeed, Black queer people are more susceptible to assault and discrimination and the very forms of bigotry and police brutality that the Black Lives Matter movement is fighting against.
Just two days after George Floyd’s death, a Black trans man named Tony McDade became the third victim of a fatal officer-involved shooting in Florida in the past two months. That’s why Black LGBTQ activists argue that the anti-racism and queer-rights movements are deeply intertwined.
“We know that queer liberation also means Black liberation,” Tyrone Hanley, senior policy council for the National Center for Lesbian rights and a black queer man, told me. “There is a desperate need to look inside and re-examine how LGBTQ communities reinforce white supremacy and anti-blackness.”
That means reimagining Pride Month. It means placing Black and brown issues at the forefront of the agenda. It means no longer allowing LGBTQ spaces or marches where queer people of color are invisible, nor ignoring the plight of this vulnerable population.
There are already signs of progress. Roughly 30,000 people rallied in West Hollywood on Sunday to protest police brutality and systemic racism, with a specific focus on Black LGBTQ people.
The COVID-19 pandemic made this year’s Pride Month look different. But the entire LGBTQ community’s commitment to tangible anti-racist action should be what does the trick next year—and every year after that.
Giulia Heyward
Giulia Heyward is an editorial intern at the Washington Monthly.
Can COVID-19 Get Congress to Finally Strengthen U.S. Antitrust Law?
A new bill from Elizabeth Warren and Alexandria Ocasio-Cortez strikes at the myths behind mergers.
by Robert H. Lande and Sandeep Vaheesan
May 21, 2020
A new bill from Elizabeth Warren and Alexandria Ocasio-Cortez strikes at the myths behind mergers.
by Robert H. Lande and Sandeep Vaheesan
May 21, 2020
Elizabeth Warren/Flickr
If it wasn’t clear that corporate consolidation was a problem before the COVID-19 pandemic, there should be absolutely no doubt now. Mergers have severely subverted the U.S. economy’s resilience and undercut the national response to the coronavirus outbreak.
Mergers contributed to the loss of 600,000 hospital beds between 1975 and 2017 (from 1.5 million to around 900,000 beds nationwide) and likely deprived the government of an emergency stockpile of ventilators. And now, with millions of businesses on the ropes due to the crisis but with many of the very largest corporations flush with cash, another wave of mergers and acquisitions may be imminent. Facebook has purchased GIF-creating site Giphy. Amazon and Uber are reported to be near acquiring the movie theater chain AMC and food delivery service GrubHub, respectively.
To stem this tide, New York Congresswoman Alexandria Ocasio-Cortez and Massachusetts Senator Elizabeth Warren have proposed the Pandemic Anti-Monopoly Act, which would halt mergers and acquisitions by large corporations and private equity funds for the duration of the COVID-19 crisis and its aftermath. Other Congressional progressives, including Washington Congresswoman Pramila Jayapal and House Antitrust Subcommittee Chairman David Cicilline, have called on House leadership to include a merger moratorium in the next rescue package. The sponsors understand that the principal lifeline for distressed small and medium-sized businesses and workers should be federal aid, not acquisitions by large corporations and powerful financiers.
The merger moratorium represents a major rethinking of federal merger policy. Although Congress enacted a strong anti-merger law. in 1950, the Department of Justice (DOJ) and the Federal Trade Commission (FTC) have maintained a lax posture toward consolidation since the early 1980s. They have permitted nearly all mergers to proceed and blocked them under only extremely limited circumstances. For instance, out of the 78 mergers proposed between 2015 and 2019 that involved two firms worth more than $10 billion each, the DOJ and the FTC successfully stopped only three of them. The result of permissive merger policy has been a dramatic increase in concentration across industries and markets. This tolerant attitude toward consolidation is built on a series of myths and has been deeply damaging to the public.
Myth 1: Mergers Eliminate Wasteful Redundancies and Produce More Efficient Businesses
Mergers are often justified on the grounds of eliminating redundancies and improving the productive efficiency of firms. In their 2010 Horizontal Merger Guidelines, the DOJ and the FTC said “a primary benefit of mergers to the economy is their potential to generate significant efficiencies.” This story rests on false assumptions and little or no evidence.
In fact, by eliminating redundancy in the name of efficiency, mergers can leave the economic and social system unprepared for natural disasters, pandemics, and other systemic shocks.
The current crisis has shown how health care mergers have eliminated essential excess capacity. But the problem overall is not limited to this moment in time. Consolidation in the seed industry has left the United States and the world more vulnerable to the ongoing crisis of climate change. As Monsanto (now part of Bayer) rolled up the industry, it focused on selling the most profitable seeds and discontinuedmany less popular seed lines—food sources that may be essential as farmers try to adapt to climate change.
Equally disconcerting, corporations themselves do not become more productive following mergers. A reputable body of findings shows that mergers often result in a loss in productivity. As then-Judge Richard Posner said in a 2015 interview: “I wish someone would give me some examples of mergers that have improved efficiency. There must be some.”
Myth 2: Current Merger Enforcement Protects Consumers
The DOJ and the FTC state that protecting consumers is the principal purpose of merger enforcement. Former FTC commissioner Joshua Wright asserted that mergers “often generate significant benefits for consumers—lower prices and higher quality” and that the two agencies successfully identify and address the small fraction that would hurt consumers.
A closer look at the record, however, does not warrant applause for the DOJ and the FTC’s efforts against mergers. The best study on the effect of mergers on consumer prices is Professor John Kwoka’s meta-analysis of post-merger evaluation studies. He evaluated the impact on prices from mergers that were not successfully challenged. Of the 42 mergers subject to credible post-merger evaluation, thirty-four resulted in price increases. His review also found that there were adverse quality effects from many of the mergers.
Kwoka’s research is consistent with what other scholars have concluded. For instance, hospital consolidation has consistently led to higher prices and been a key driver of rising health care costs.
Myth 3: Merger Remedies Preserve Competition
Even on the rare occasion that the DOJ and FTC do “challenge” mergers through legal action, they generally settle the matter and do not stop the consolidation outright. To address the loss of head-to-head rivalry, as well as other antitrust concerns, the agencies often agree to resolve the lawsuit on the condition that the merging corporations sell a line of business or other business assets to a third party or observe rules of fair dealing. They confidently predict these remedies will “preserve competition.”
In reality, these attempts to “remedy” illegal mergers have a poor track record. The FTC itself has recognized that its remedies too often fail, and Professor Kwoka has found they typically lead to significantly higher prices.
One of the most spectacular remedy failures involves the 2015 merger between the grocery chains Albertsons and Safeway. In exchange for not suing to block the merger, the FTC required the two corporations to sell stores in more than 100 local markets. These stores were sold to a small regional chain Haggen, which became nine times larger due to the acquisition. Haggen experienced major operational problems following this huge overnight expansion and soon went bankrupt. In the bankruptcy process, Safeway/Albertsons reacquired many of the stores it had sold to Haggen.
Myth 4: The Current Merger Review System Offers Transparency and Guidance to Businesses and the Public
DOJ antitrust chief Makan Delrahim and FTC commissioner Christine Wilson have stressed that they aspire for transparency and predictability in their decision-making.
But the current merger review system is a model of opacity and subjectivity. One leading antitrust attorney said “there are few government functions outside the CIA that are so secretive as the merger review process.”
The agencies rely on an “effects based”approach in which they attempt to predict how a proposed merger likely will affect consumers going forward. This open-ended, speculative exercise invites aggressive lobbying from corporations and encourages them to assemble an army of economists and lawyers to make the case for their mergers behind closed doors, as ProPublica reported in a 2016 story.
Despite being the nation’s top antitrust enforcer, Delrahim used this system of secrecy to help shepherd T-Mobile’s acquisition of Sprint through to completion in April. Behind the scenes, he effectively served as federal matchmaker for the two wireless carriers and Dish, which purchased some assets from the merging parties with the aim of becoming a telecom company.
The 2013 merger between American Airlines and US Airways painfully illustrates this system in action. The DOJ initially sued to stop this merger that would reduce the number of national airlines from five to four. After a flurry of lobbying activity by the two airlines and their political allies, the DOJ abruptly permitted the merger in exchange for the two airlines selling landing and takeoff rights at seven major airports.
This remedy, however, failed to address the colossal harms from losing national airline, as laid out in the original DOJ complaint. The merger, which the DOJ earlier said would result in “presumptively illegal” levels of concentration on more than a thousand routes, was allowed to go through and subsequently led to higher airfares and fees.
Myth 5: Corporations Need Mergers to Grow
Mergers—even the very largest—are often justified on the basis that they permit corporations to expand their operations and enter new markets. Antitrust enforcers and scholars assert that mergers are a critical way for businesses to grow.
Yet mergers are not the only, nor even the best, way for corporations to grow. Instead, they could hire more workers and invest in plant and equipment and new technologies. Unlike buying and swapping existing business assets, investing in new facilities expands the capital stock of the economy and creates new jobs. Allowing companies to grow through the easy game of buying existing firms actually spurs businesses to strategize toward consolidation and awayfrom investments in production capacity and the latest technology.
A good case in point came after the Obama administration forced AT&T to abandon its takeover of T-Mobile in 2011. Neither wireless carrier stagnated. As a matter of fact, both firms improved their service and invested in their networks, and an independent T-Mobile instigated vigorous competition among the four national carriers.
All of this is important because the federal antitrust agencies, relying on false assumptions, have for too long not enforced anti-merger law. Their tolerance of consolidation has produced an economy that is fragile and now struggling to respond effectively to the current crisis.
The merger moratorium proposed by the progressive powerhouse of Ocasio-Cortez and Warren, alongside other Congressional Democrats, is a chance to change the existing pro-merger policy regime and abandon the associated fictions. It is high time Congress restores a strong anti-consolidation norm in federal antitrust law. The Pandemic Anti-Monopoly Act is the perfect place to start.
Robert H. Lande
Robert H. Lande Venable Professor of Law at the University of Baltimore School of Law.
Sandeep Vaheesan
Sandeep Vaheesan, legal director at the Open Markets Institute, has published widely on the political economy of antitrust law, including its misapplication to workers.
If it wasn’t clear that corporate consolidation was a problem before the COVID-19 pandemic, there should be absolutely no doubt now. Mergers have severely subverted the U.S. economy’s resilience and undercut the national response to the coronavirus outbreak.
Mergers contributed to the loss of 600,000 hospital beds between 1975 and 2017 (from 1.5 million to around 900,000 beds nationwide) and likely deprived the government of an emergency stockpile of ventilators. And now, with millions of businesses on the ropes due to the crisis but with many of the very largest corporations flush with cash, another wave of mergers and acquisitions may be imminent. Facebook has purchased GIF-creating site Giphy. Amazon and Uber are reported to be near acquiring the movie theater chain AMC and food delivery service GrubHub, respectively.
To stem this tide, New York Congresswoman Alexandria Ocasio-Cortez and Massachusetts Senator Elizabeth Warren have proposed the Pandemic Anti-Monopoly Act, which would halt mergers and acquisitions by large corporations and private equity funds for the duration of the COVID-19 crisis and its aftermath. Other Congressional progressives, including Washington Congresswoman Pramila Jayapal and House Antitrust Subcommittee Chairman David Cicilline, have called on House leadership to include a merger moratorium in the next rescue package. The sponsors understand that the principal lifeline for distressed small and medium-sized businesses and workers should be federal aid, not acquisitions by large corporations and powerful financiers.
The merger moratorium represents a major rethinking of federal merger policy. Although Congress enacted a strong anti-merger law. in 1950, the Department of Justice (DOJ) and the Federal Trade Commission (FTC) have maintained a lax posture toward consolidation since the early 1980s. They have permitted nearly all mergers to proceed and blocked them under only extremely limited circumstances. For instance, out of the 78 mergers proposed between 2015 and 2019 that involved two firms worth more than $10 billion each, the DOJ and the FTC successfully stopped only three of them. The result of permissive merger policy has been a dramatic increase in concentration across industries and markets. This tolerant attitude toward consolidation is built on a series of myths and has been deeply damaging to the public.
Myth 1: Mergers Eliminate Wasteful Redundancies and Produce More Efficient Businesses
Mergers are often justified on the grounds of eliminating redundancies and improving the productive efficiency of firms. In their 2010 Horizontal Merger Guidelines, the DOJ and the FTC said “a primary benefit of mergers to the economy is their potential to generate significant efficiencies.” This story rests on false assumptions and little or no evidence.
In fact, by eliminating redundancy in the name of efficiency, mergers can leave the economic and social system unprepared for natural disasters, pandemics, and other systemic shocks.
The current crisis has shown how health care mergers have eliminated essential excess capacity. But the problem overall is not limited to this moment in time. Consolidation in the seed industry has left the United States and the world more vulnerable to the ongoing crisis of climate change. As Monsanto (now part of Bayer) rolled up the industry, it focused on selling the most profitable seeds and discontinuedmany less popular seed lines—food sources that may be essential as farmers try to adapt to climate change.
Equally disconcerting, corporations themselves do not become more productive following mergers. A reputable body of findings shows that mergers often result in a loss in productivity. As then-Judge Richard Posner said in a 2015 interview: “I wish someone would give me some examples of mergers that have improved efficiency. There must be some.”
Myth 2: Current Merger Enforcement Protects Consumers
The DOJ and the FTC state that protecting consumers is the principal purpose of merger enforcement. Former FTC commissioner Joshua Wright asserted that mergers “often generate significant benefits for consumers—lower prices and higher quality” and that the two agencies successfully identify and address the small fraction that would hurt consumers.
A closer look at the record, however, does not warrant applause for the DOJ and the FTC’s efforts against mergers. The best study on the effect of mergers on consumer prices is Professor John Kwoka’s meta-analysis of post-merger evaluation studies. He evaluated the impact on prices from mergers that were not successfully challenged. Of the 42 mergers subject to credible post-merger evaluation, thirty-four resulted in price increases. His review also found that there were adverse quality effects from many of the mergers.
Kwoka’s research is consistent with what other scholars have concluded. For instance, hospital consolidation has consistently led to higher prices and been a key driver of rising health care costs.
Myth 3: Merger Remedies Preserve Competition
Even on the rare occasion that the DOJ and FTC do “challenge” mergers through legal action, they generally settle the matter and do not stop the consolidation outright. To address the loss of head-to-head rivalry, as well as other antitrust concerns, the agencies often agree to resolve the lawsuit on the condition that the merging corporations sell a line of business or other business assets to a third party or observe rules of fair dealing. They confidently predict these remedies will “preserve competition.”
In reality, these attempts to “remedy” illegal mergers have a poor track record. The FTC itself has recognized that its remedies too often fail, and Professor Kwoka has found they typically lead to significantly higher prices.
One of the most spectacular remedy failures involves the 2015 merger between the grocery chains Albertsons and Safeway. In exchange for not suing to block the merger, the FTC required the two corporations to sell stores in more than 100 local markets. These stores were sold to a small regional chain Haggen, which became nine times larger due to the acquisition. Haggen experienced major operational problems following this huge overnight expansion and soon went bankrupt. In the bankruptcy process, Safeway/Albertsons reacquired many of the stores it had sold to Haggen.
Myth 4: The Current Merger Review System Offers Transparency and Guidance to Businesses and the Public
DOJ antitrust chief Makan Delrahim and FTC commissioner Christine Wilson have stressed that they aspire for transparency and predictability in their decision-making.
But the current merger review system is a model of opacity and subjectivity. One leading antitrust attorney said “there are few government functions outside the CIA that are so secretive as the merger review process.”
The agencies rely on an “effects based”approach in which they attempt to predict how a proposed merger likely will affect consumers going forward. This open-ended, speculative exercise invites aggressive lobbying from corporations and encourages them to assemble an army of economists and lawyers to make the case for their mergers behind closed doors, as ProPublica reported in a 2016 story.
Despite being the nation’s top antitrust enforcer, Delrahim used this system of secrecy to help shepherd T-Mobile’s acquisition of Sprint through to completion in April. Behind the scenes, he effectively served as federal matchmaker for the two wireless carriers and Dish, which purchased some assets from the merging parties with the aim of becoming a telecom company.
The 2013 merger between American Airlines and US Airways painfully illustrates this system in action. The DOJ initially sued to stop this merger that would reduce the number of national airlines from five to four. After a flurry of lobbying activity by the two airlines and their political allies, the DOJ abruptly permitted the merger in exchange for the two airlines selling landing and takeoff rights at seven major airports.
This remedy, however, failed to address the colossal harms from losing national airline, as laid out in the original DOJ complaint. The merger, which the DOJ earlier said would result in “presumptively illegal” levels of concentration on more than a thousand routes, was allowed to go through and subsequently led to higher airfares and fees.
Myth 5: Corporations Need Mergers to Grow
Mergers—even the very largest—are often justified on the basis that they permit corporations to expand their operations and enter new markets. Antitrust enforcers and scholars assert that mergers are a critical way for businesses to grow.
Yet mergers are not the only, nor even the best, way for corporations to grow. Instead, they could hire more workers and invest in plant and equipment and new technologies. Unlike buying and swapping existing business assets, investing in new facilities expands the capital stock of the economy and creates new jobs. Allowing companies to grow through the easy game of buying existing firms actually spurs businesses to strategize toward consolidation and awayfrom investments in production capacity and the latest technology.
A good case in point came after the Obama administration forced AT&T to abandon its takeover of T-Mobile in 2011. Neither wireless carrier stagnated. As a matter of fact, both firms improved their service and invested in their networks, and an independent T-Mobile instigated vigorous competition among the four national carriers.
All of this is important because the federal antitrust agencies, relying on false assumptions, have for too long not enforced anti-merger law. Their tolerance of consolidation has produced an economy that is fragile and now struggling to respond effectively to the current crisis.
The merger moratorium proposed by the progressive powerhouse of Ocasio-Cortez and Warren, alongside other Congressional Democrats, is a chance to change the existing pro-merger policy regime and abandon the associated fictions. It is high time Congress restores a strong anti-consolidation norm in federal antitrust law. The Pandemic Anti-Monopoly Act is the perfect place to start.
Robert H. Lande
Robert H. Lande Venable Professor of Law at the University of Baltimore School of Law.
Sandeep Vaheesan
Sandeep Vaheesan, legal director at the Open Markets Institute, has published widely on the political economy of antitrust law, including its misapplication to workers.