America's problem is monopolies, the causes are politicians and "enabler" economists, and the effects include wealth disparity. 

The primary problem with the U.S. economy is preferential government policies favoring moneyed special interests and especially monopolies. Other problems like corporate greed, the U.S. Federal Reserve Bank (Fed), government spending, immigration and global trade are secondary, and likely wouldn’t be a problem if not for government-created monopolies.

Americans are told the economy is mostly free market capitalism (i.e., an economic system that is regulated by markets and not the government). But economists ignore government policies favoring monopolies (i.e., the legal definition of a monopoly is the long-term ability to exclude competitors and raise prices above competitive levels). Monopolies block contributions and innovation from others, while charging higher prices and offering lower quality to government, business and household consumers.

Monopolies, which control the major U.S. industries and even many of the smaller markets, are created by government and most often by policies that allow politicians, bureaucrats and other policymakers to restrict or discourage potential competitors from entering and competing in markets (please see examples below).

Because economists have ignored government policies favoring monopolies, they have also ignored the effects of government-created monopolies on the overall economy, including inflation, slower economic growth and the boom-bust cycle (please see explanation below examples).

Wealth disparity is created by: (1) government policies favoring monopolies that allow the wealthy to increase prices charged to consumers, (2) government stimulation of the economy through the lowering of interest rates and the increasing of deficit spending that causes more price inflation and the asset prices of the wealthy to go even higher, and (3) government controls on inflation through the raising of interest rates and the lowering of deficit spending that causes market crashes that allows wealthy insiders to sell high before the crash and buy low later.

Although many prominent politicians and economists have recognized that monopolies are a problem and some have even admitted that government creates them, virtually all of them have refused to challenge them and support equal opportunity for everyone. Thus YOU are needed to join Americans against Monopolies (AAM).

Monopolies are created by preferential government policies imposed by politicians:

• Banking – The Federal Reserve banking monopoly has provided its large regulated banks (e.g., J.P. Morgan, Wells Fargo) with low-interest loans and taxpayer-financed bailouts, while competition is restricted by federal and state charters that limit the number and types of financial institutions.

• Housing – The Federal Housing Administration (FHA), Fannie and Freddie mortgage duopoly and the Fed’s big banks, receive government support for providing easy and lower-cost home financing. Landlords (e.g., BlackRock) and homeowners increase rents and home prices by supporting local government regulations, such as zoning and permitting, that limit the supply of new construction. Favored landowners also receive preferential infrastructure improvements such as roads. Construction firms (e.g., D.R. Horton, Lennar) receive preferential government treatment including zoning. International wood products corporations (e.g., Weyerhaeuser, Boise Cascade) preferentially buy the rights to take trees on mismanaged government forest lands at subsidized prices. Government policies, such as grandfather exemptions from environmental regulations, favor monopolies providing building materials made from limited resources.

• Health Care – Medicare and Medicaid have been granted government buyer monopolies. Doctors, nurses, hospitals and insurance companies (e.g., UnitedHealth, Cigna), restrict supply through state medical school accreditation, occupational licensing, certificate-of-need, and insurance regulation. Pharmaceutical companies (e.g., Pfizer) lack competition because the supply of medicines is limited through the preferential granting of government research grants, approval by the Food and Drug Administration, and patents with long lifetimes.

• Food – Agricultural farmers, junk food processors, international traders and other providers (e.g., Monsanto) that use traditional crops, especially corn, soybeans and wheat, are favored with government policies like production quotas, subsidies, price supports, import tariffs, levies and quotas, and export subsidies.  Biofuel mandates favor expensive ethanol fuel made from corn and cellulose, which also receives subsidies.

• Energy - The OPEC + Russia oil cartel trades freely in global oil markets with immunity from antitrust laws granted by the U.S. government. Domestic oil and natural gas companies (e.g., Exxon, Chevron) are favored with preferential environmental exemptions, low-cost land leases, laws allowing the pumping of oil from under others’ land, tax subsidies and the use of eminent domain for oil and gas pipelines (that shifts land costs onto landowners). Electricity companies (e.g., Xcel) are granted vertically-integrated public utility monopolies for generation, transmission and distribution, or at least distribution monopolies. Natural gas companies are granted distribution monopolies. Laws prevent potential electricity and natural gas companies from building competing distribution networks like microgrids. Utilities are allowed to use eminent domain to force landowners to accept unnecessary high-voltage transmission lines and natural gas pipelines. The monopolies are allowed to determine who can sell electricity and natural gas. The political left favors a national electricity grid powered by utility-scale wind, solar and batteries for electricity, transportation and heating with mandates, grants and subsidies. Tax credit subsidies are targeted for wealthy investors, especially the banks.

• Auto and transportation – The Big Three Automakers (e.g., GM, Ford) have been favored by the Securities and Exchange Commission, import tariffs and quotas, and bailouts. Electric vehicle companies (e.g., Tesla) receive mandates and massive subsidies. The Big Four Airlines (e.g., United Airlines) are favored by airline terminals. The Big Four Railroads (e.g. Burlington Northern) were favored with land grants and are now under tight federal and state regulation. Mega trucking carriers (e.g., J.B. Hunt) dominate because independent truck drivers are burdened by the industry regulations. Taxis are limited by restrictive licensing, while tech companies (e.g., Uber) are not.

• Tech – Big Tech (e.g., Facebook, Amazon, Google, Apple, Microsoft) is favored with intellectual property (IP) monopoly protections from competition, especially copyright and patents over extremely long lifetimes, even though the government often funds much of the technological development. Companies providing telephone (e.g., AT&T), cable (e.g., Time Warner), and internet (e.g., Comcast) are granted public utility monopolies. Moreover, TV and radio channels are awarded preferential use of the airwaves. Laws prevent potential telephone, cable and internet companies from building competing distribution networks including using existing rights of way and utility poles.

• Other & All Private Industry – Manufacturing firms within the U.S. (e.g., GE) are favored with monopoly patent protections from competition over excessively long lifetimes, and often also subsidies. State monopolies and American partnerships in China (e.g., Foxconn) dominates global manufacturing and trade with help from government export subsidies, low-cost and even slave labor, and lax environmental laws. Superstores (e.g., Walmart, Sears) are favored by local zoning, eminent domain laws, tax breaks and other subsidies, internet sales companies are favored by tax laws, and sports leagues (e.g., NFL) are favored with antitrust exemptions. Unions (e.g., Teamsters) are protected by laws that prevent other workers from competing against them to earn a living.

• All Public Industry - Education, defense, infrastructure, police, prison and postal are monopolized by government. Education offered by local non-profit public and private schools for K-12 and higher education are favored over for-profit private schools through taxpayer financing, mainly appropriations and tax breaks, respectively. Public-school teachers have limited supply with occupational licensing laws. The “military-industrial complex” (e.g., Lockheed Martin) receives preferential government purchasing and politically-created demand for defense and even wars.

Monopolies may be the primary cause of inflation, slow growth and cycling through booms and busts in so-called market economies: 

During boom times (i.e., periods of increasing consumer demand, industrial supply and economic growth), monopolies in some industries, especially those providing basic necessities, restrict supply and charge inflating prices. (Note: The Institute for New Economic Thinking has studied the economies of 47 countries since 1960 and found the cause of inflation is largely imbalances between supply and demand, and not rapid money supply growth.) As the budgets of those not benefiting from monopolies are squeezed by inflation, consumer demand falls and this leads to a slowing economy or bust (e.g., recession, depression, etc.). 

Economists on the political left (e.g., Keynesians) respond to busts by advocating for stimulating the economy through the "printing of money." The government lowers interest rates charged to borrowers by the banks through the Federal Reserve, which incentivizes consumers and businesses to borrow and spend more, while increasing their debt levels. The government also spends more than it collects in taxes (i.e., deficit spending), which increases its debt. When monopolies do not increase supply to meet the increasing demand, they tend to contribute to the price inflation of consumer goods and services and/or assets (homes, stocks, etc.). The government controls inflation by raising interest rates and decreasing deficit spending, which can cause another bust. Regardless, the growing debt will eventually lead to financial collapse, unless the government takes over of the economy (i.e., socialism).

Economists on the political right (e.g., Austrians and Monetarists) would limit the manipulation of interest rates and deficit spending. Without the stimulation of the monopolized economy, the result would likely be continual deterioration and depression. However, the government would eventually need to lower interest rates and increase deficit spending for an emergency like waging war (e.g., World Wars I and II).

Currently, the conditions have aligned for a repeat of the five major stock market crashes that have occurred since the founding of the Fed in 1913. The major crashes, which started in 1915, 1929, 1965, 2000 and 2007, have always resulted when, and only when, the Fed seeks to halt consumer and/or asset price inflation by raising interest rates by three percentage points or more, while the government reduces deficit spending. 

Appeal to You to Join Us

YOU are needed to join Americans against Monopolies (AAM) and receive updates. Then, you can help methodically solve the nation’s economic problems by commenting or contacting AAM with recommendations for additions and/or corrections to the above working data base (see also links) that documents past and present political cronyism favoring monopolies. And/or you can donate funds used to hire and commission the help needed to correlate, expose and analyze the data.

First, YOU will join famous Americans who recognized the problems caused by monopolies. Today, most politicians and economists ignore the problem. But monopolies were opposed by Presidents Thomas Jefferson, Theodore Roosevelt and John F. Kennedy. The domination of the economy by monopolies has troubled famous economists spanning U.S. history from "the father of capitalism" Adam Smith to Karl Marx to Thorstein Veblen to John Kenneth Galbraith to George Stigler and Joseph Stiglitz today. Monopolies are leading to basically every economic problem as recently found by University economists Jan De Loecker and Jan Eeckhout.

Second, YOU will join those few Americans who have recognized enduring monopolies are created by regulations imposed by government officials. Today, virtually all politicians, judges and other government officials won't see it, because they support and are supported by monopolies. Most economists (e.g., socialists) benefit professionally from formulating regulations, so they blame market imperfections for monopolies. However, monopolies rest on privileges granted by government, according to famous deceased capitalist economists like Adam Smith, Ludwig von Mises and Nobel Prize winners Friedrich Hayek, Milton Friedman and George Stigler.

Third, YOU will be among the rare Americans actually trying to solve the nation's economic problems. Capitalist economists have failed to even systematically correlate the historical relationships between market imperfection analysis, preferential policies, monopolies and economic problems; let alone sufficiently analyze causation. AAM will raise awareness about the political causes of monopolies to convince the public to demand that politicians abolish or reform policies favoring the monopolies that are causing the major economic problems. The think tank will be guided by its unique vision (see "About" link), definition of the problem, and solution  formulated for success.

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