You're Probably Getting Screwed by Barons

Welcome to You’re Probably Getting Screwed, a weekly newsletter and video series from J.D. Scholten and Justin Stofferahn about the Second Gilded Age and the ways economic concentration is putting politics and profits over working people.

Hey everyone. We’re going to do things a little differently this week. We want to start by further highlighting Austin Frerick’s new book, Barons: Money, Power, and the Corruption of America’s Food Industry. I had a blast hosting Austin at Moon Palace Books in Minneapolis last night to discuss Barons and JD will be leading a discussion with him this Sunday, April 7 in the Gleeson Room at the Downtown Library at 529 Pierce St. in Sioux City, Iowa. You can find other events Austin is doing here and you can buy the book here (or at your local bookstore). Below is a summary of Barons that Austin provided.

Grocery prices are at a record high, farm workers can’t afford  the food they harvest, and local markets and coffee shops across the country are closing their  doors—all while a few tycoons grow richer and richer by the day. Why does our food system benefit so few at the expense of so many? How did it get that way, and what can we do to change it? 

In Barons: Money, Power, and the Corruption of America's Food Industry agricultural and antitrust expert Frerick tells the stories of seven corporate titans, their rise to power, and the consequences for everyone else. Take Mike McCloskey, Chairman of Fair Oaks Farms. In a few short decades, he went from managing a modest dairy herd to running the Disneyland of agriculture, where school children ride trams through mechanized warehouses filled with tens of thousands of cows that never see the light of day.  

Along with McCloskey, readers will meet a secretive German family that took over the global coffee industry in less than a decade, relying on wealth traced back to the Nazis to gobble up countless  independent roasters. They will discover how a small grain business transformed itself into an empire bigger than Koch Industries with ample help from taxpayer dollars. And they will learn that in the food business, crime really does pay—especially when you can bribe and then double-cross the  president of Brazil. 

These and other stories in Barons are examples of the monopolies and ubiquitous corruption that define American food. The tycoons profiled in the book’s pages are hardly unique: many other companies have manipulated lax laws and failed policies for their own benefit. The food barons are the result of the deregulation of the American food industry, a phenomenon that has brought about the consolidation of wealth into the hands of few to the detriment of our neighborhoods, livelihoods, and democracy itself. 

With Barons, Frerick paints a stark portrait of the consequences of corporate consolidation, but also shows that we can choose a different path. The book deftly illustrates how a fair, healthy, and prosperous food industry is possible if we take back power from the barons who have robbed us of it. I hope you will consider reviewing the book or speaking with Frerick.  

Austin Frerick is an expert on agricultural and antitrust policy. He worked at the Open Markets Institute, the U.S. Department of Treasury, and the Congressional Research Service before becoming a Fellow at Yale University. He is a 7th generation Iowan and 1st generation college graduate, with degrees from Grinnell College and the University of Wisconsin, Madison.  

Antimonopoly Goes Mainstream: Did you see Jon Stewart’s interview with FTC Chair Lina Khan on the Daily Show? The part that really caught people’s attention was Jon Stewart admitting that Apple had blocked him from interviewing her while he was at Apple.

A different take on rural rage: Finally, JD took issue with the book “Rural White Rage.” So he wrote a rebuttal OpEd that was published in The Hill this week. 

YOU’RE PROBABLY (ALSO) GETTING SCREWED BY:

Private Equity

Steward Healthcare has not been paying its bills, sold off it’s physician network to Optum (owned by monopolist UnitedHealthcare) and is trying to sell off its Massachusetts hospital network. Meanwhile, Steward’s private equity owner, Cerberus, revealed this week that it has made $800 million on its purchase a decade ago of the Massachusetts hospital network that became Steward. 

Railroad Monopolists

Two of the largest freight railroad companies, BNSF and CPKC (CPKC is the result of a mega-merger last year between Canadian Pacific and Kansas City Southern) are refusing to pay nearly $1 million they owe the state of Minnesota under a law passed last year to fund various rail safety needs. Must be nice to have the power to tell the government, “I don’t feel like paying my taxes.”

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Oil and Gas Mergers

A group of 37 Republican US Senators sent a letter to FTC Chair Khan urging more oil and gas mergers using one common pro-monopoly argument, which is that US companies have to get even bigger to compete with foreign rivals. Khan spoke recently about the shortcomings of this “National Champions” strategy, which was used with Boeing and we’ve all seen how that is working out. 

Corporate Tax Breaks

Georgia legislators failed to come to an agreement that would have put a cap on the state’s BILLION DOLLAR film tax incentive, which is about what Georgia spends on its entire human services budget! Also in depressing corporate welfare news, Minnesota legislators are considering an expansion of its tax break for Big Tech data centers. 

SOME GOOD NEWS

Voters tell billionaires to pound sand

Tuesday was election day in cities across Missouri and voters in Jackson County rejected a ballot measure that would have extended a stadium sales tax to subsidize a new $2 billion ballpark district including a new stadium for the Kansas City Royals (baseball) and renovations to Arrowhead Stadium, the home of the Chiefs (football).

Congressional Democrats tell FTC to protect small businesses

In a letter spearheaded by Massachusetts Senator Elizabeth Warren, a group of Congressional Democrats urged the FTC to reinvigorate enforcement of the Robinson Patman Act, a law meant to protect small businesses from the anticompetitive conduct of giants like Walmart, Amazon and dollar stores. It has not been enforced in decades but when it was, the law was considered the “Magna Carta of Small Business.”  

Another State Passes Right to Repair

Oregon now has one of the strongest right to repair laws in the country. One of its key strengths is it addresses parts pairing, a technique that Big Tech is using to maintain control of our stuff and get around right to repair laws. Unfortunately, like many of the right to repair laws passed across the country (Colorado being the key exception) the new law does not cover farm equipment.

BEFORE YOU GO

Before you go, I need two things from you: 1) if you like something, please share it on social media or the next time you have coffee with a friend. 2) Ideas, if you have any ideas for future newsletter content please comment below. Thank you. 

Break Em Up, 

Justin Stofferahn