Welcome to The Corner. In this issue, we look at the new antimonopoly caucus in the House, and examine how monopoly and Wall Street power keeps Amtrak off track, denying better train service to Americans across the country.
Democrats in Congress Launch New Monopoly Busters Caucus
A group of House Democrats this week launched the Monopoly Busters Caucus to fight concentrated corporate power and promote the interests of workers, small businesses, and consumers, and to defend democracy. Speaking at the launch event at the Capitol on Wednesday, caucus co-chair Chris Deluzio (PA-17) said, “Monopolies have been rigging the system, crushing competition and small businesses, and ripping off the American people for decades. And for too long, politicians in Congress have let it happen.”
Congresswoman and caucus co-chair Pramila Jayapal (WA-07) spoke about rising prices, saying, “Something is wrong in this country when families go to the grocery store and can’t afford milk or eggs or cereal.” Congressman and co-chair Pat Ryan (NY-18) said, “It’s inherently un-American that only a select few are able to live out the American dream.”
Congresswoman Angie Craig (MN-02) is also a founding co-chair of the caucus. Joining the co-chairs in founding the Caucus are Becca Balint (VT-AL), Greg Casar (TX-35), Maggie Goodlander (NH-02), Val Hoyle (OR-04), Kristen MacDonald Rivet (MI-08), Alexandria Ocasio-Cortez (NY-14), Jan Schakowsky (IL-09), Nydia M. Velázquez (NY-07),and Jerrold Nadler (NY-12). The full livestreamed launch event can be watched here.
Monopolists and Republicans Derail Amtrak Even as Rider Demand Rises
Arnav Rao
In early March, Elon Musk called Amtrak, the U.S. intercity passenger rail service, an “embarrassment” and suggested that it should be privatized. Soon after, the Trump administration forced Stephen Gardner, Amtrak’s CEO, to resign. In his comments, Musk — America’s “efficiency” czar — made clear he believes Amtrak’s sometimes poor service proves its inherent inefficiency as a government entity.
But upon closer inspection, a more powerful explanation for Amtrak’s struggles emerges. Once again, we find a story of corporate monopoly and financialization, and in many cases, the corporate power problems are exacerbated by political sabotage.
There is little debate that Amtrak is struggling. Recently, a train originating in Chicago arrived in Fort Worth, Texas, nearly 18 hours late and was canceled the rest of the way to San Antonio. In the same vein, Amtrak’s rollout of new, higher-speed, trains to be used on the Northeast Corridor between Washington D.C. and Boston has been delayed by nearly four years. But there is also little debate that latent, unfulfilled demand exists for a good American passenger rail service, not only in the Northeast, but across America. Record ridership on Amtrak and frequently sold-out trains between cities such as Charlottesville, Virginia, and Atlanta prove this point.
To understand Amtrak’s struggles, it helps to view Amtrak as two systems: the national system, where Amtrak leases space from freight railroads, and the Northeast Corridor, where Amtrak runs trains on tracks it owns. In the national system, the problem is primarily that Amtrak runs mostly on tracks owned by private, monopolistic freight rail corporations that are now controlled by hedge funds intent on maximizing short-term profits at the expense of service standards.
Amtrak’s Crescent service, which runs daily between New York and New Orleans, provides a case in point. With more reliable, more frequent service, the passenger service along this route could easily divert far greater amounts of high-emission auto and airplane travel between cities such as Charlotte, North Carolina, and Atlanta. It could also attract far greater volumes of overnight sleeper-car service between cities like Atlanta and Washington D.C. — a form of not-so-high- speed rail service that is currently enjoying a renaissance in Europe.
Unfortunately, the Crescent is so frequently delayed that it attracts only a negligible market share. Though they are required by law to give Amtrak trains priority over their own trains, freight railroads routinely do the opposite with impunity in order boost their own profits and please their Wall Street masters. In the case of the Crescent, the host railroad is Norfolk Southern, which routinely makes the Crescent and other Amtrak trains operating on its tracks pull over on sidings and wait for hours as its freight trains pass.
Making matters worse, Norfolk Southern, like other major freight railroads, has taken huge cost-cutting measures in recent years to further boost its short-term profits, which in turn causes its freight trains to break down more frequently and otherwise block Amtrak trains. In 2023 only 24 percent of southbound Crescent trains arrived within 30 minutes of their scheduled arrival time, due in large measure to delays caused by crew shortages or overlong, broken-down, Norfolk Southern freight trains.
Even in the Northeast Corridor, where Amtrak owns its tracks and runs a profitable and substantially more reliable service, efforts to bring the service on par with peer nations worldwide has been repeatedly stymied by corporate monopolies and hostility from Republican lawmakers.
Take for example Amtrak’s efforts to improve its highly popular, money-making Acela service between Washington and Boston. When seeking next-generation trainsets to recapitalize an aging fleet, bring higher-speed service to the corridor, and improve the service, Amtrak had only a handful of suppliers to choose from. In 2016, Amtrak chose Alstom, a French giant in locomotive manufacturing that controls nearly 50 percent of the global market share of high speed trains.
When Alstom failed to develop a computer model that could meet safety testing requirements, it strong-armed Amtrak into letting it begin serial production of the trainsets anyway. Though Amtrak promises to at last put the trainsets into service sometime this summer, as of this writing, they are still idled in a yard in Philadelphia due to unresolved design defects that could have been avoided if Alstom did not flex its market power.
Republican lawmakers have compounded the problems for Amtrak by repeatedly blocking efforts to improve infrastructure, especially on the aging Northeast Corridor. For example, in 2010, New Jersey Governor Chris Christie killed efforts to construct a new tunnel to alleviate congestion at a critical chokepoint on the Northeast Corridor. The result has been crumbling infrastructure and unnecessary, avoidable delays.
President Trump has also been similarly hostile to Amtrak. In 2017, Trump proposed ending all federal support for long distance Amtrak routes, which serve as critical transportation links for rural communities. In his first term, Trump also held up funding for the construction of new tunnels under the Hudson River to fix the critical chokepoint on the Northeast Corridor. The ouster of Amtrak’s CEO signals that Trump is poised to take a familiar, hostile stance toward Amtrak.
Can Amtrak survive such challenges? Last summer the U.S. Department of Justice charged Norfolk Southern with violating federal law by routinely delaying the Crescent. If the DOJ continues to prosecute the case under the Trump Administration, and if it prevails in court, that could bring serious relief for passengers throughout the Amtrak network. This assumes, however, of course, that the Trump administration doesn’t first defund the system on the grounds that rail passenger service in the United States is inherently “inefficient.”
Open Markets’ Economist Callaci Testifies on Algorithmic Price-Fixing at Portland City Council
Open Markets chief economist Brian Callaci was invited to Oregon by the Portland City Council to testify in support of a proposed ban on algorithmic price-fixing in the city’s housing market. Drawing on OMI’s past work on algorithmic pricing, Callaci emphasized that collusion between competitive rivals is illegal under the antitrust laws, whether it happens in a smoke-filled room or on the internet. Callaci presented evidence showing that price-fixing algorithms in real estate markets add an estimated $25 per month to renters’ costs. Oregon’s Daily Journal of Commerce covered Callaci’s testimony, which you can read here.
📝 WHAT WE'VE BEEN UP TO:
- Open Markets Institute’s food systems program manager Claire Kelloway published an analysis of rising egg prices in the Washington Monthly, noting that eggs from industrial farms now often cost as much — or more — than eggs from small local farms. While the bird flu outbreak plays a role, she points to corporate collusion and "greedflation" as significant contributors, saying, “If large egg sellers wanted to use bird flu as a cover for pushing
prices up beyond competitive levels, all they would need to do is feed inflated price data” into a widely used price index.
- Open Markets legal director Sandeep Vaheesan wrote an article for Project Syndicate questioning claims by backers of the “abundance” agenda that has recently gained traction in the media. Vaheesan described the project — which claims the best way promote affordable housing and clean energy is through deregulation — as a “flawed approach that ignores the benefits of government intervention.” Vaheesan argues that the ultimate goal of the abundance agenda is simply to replace public
institutions with private corporations governed by short-term profit motives in key regulatory decisions. Instead, he said, Americans should relearn how to use government to deliver real prosperity for the many, not just the few.
- Open Markets senior legal analyst Daniel Hanley wrote an op-ed for The Sling calling on state governments to shore up democratic principles by stepping into the breach left by the current federal government under President Trump. “WithTrump and the world’s richest man gutting critical parts of the federal government, either states take up the challenge to be one of the last defenses against oligarchy,” Hanley writes.
- OMI chief economist Brian Callaci published an op-ed in California’s Capitol Weekly on the first anniversary of the state’s landmark $20/hour minimum wage for fast-food workers, saying it led to higher wages with no reduction in employment and only a modest rise in prices. Callaci noted, however, that the wage increase has intensified tensions between global fast-food corporations and their franchisees, who often bear the cost of higher wages while operating under strict corporate controls. “Meanwhile, nothing has been done to
address structural imbalances in the franchisor/franchisee relationship,” he writes.
- Open Markets Institute joined a coalition of organizations and individuals in submitting a short, sharply worded letter to the UK Prime Minister Keir Starmer, urging him to stand firm on the country’s Online Safety Act and the Digital Markets, Competition, and Consumers Act in trade negotiations with the U.S. government." If the home country of the most powerful tech firms in the world can negotiate away regulatory frameworks created by our sovereign Parliament, then what is left of our democracy?” the letter reads. Read the full letter here.
- The Center for Journalism & Liberty at Open Markets submitted a comment to the South African government, welcoming the country’s Competition Commission’s report on media and digital platforms. CJL, however, warned that “any attempts by dominant digital platforms to discredit the findings of these reports, especially arguing ideological bias or ‘lack of understanding’ of their business models, be met with a rapid, public-facing response by the Commission.” Read the full comment here.
- Common Dreams quoted Open Markets senior legal analyst Daniel Hanley’s sharp rebuke of Delaware’s enactment of S.B. 21, a bill that allows for a controlling shareholder of a corporation, such as Meta’s Mark Zuckerberg or Tesla’s Elon Musk, to arrange deals that cannot be legally challenged by the company’s other investors. “The Delaware lawmakers that enacted S.B. 21 are lapdogs for corporations and Musk,” Hanley said. “How this one state came to control practically all of American corporate law is a long story, but regardless, Congress can and should take
the power away."
- Tech Policy Press quoted Open Markets executive director Barry Lynn as saying of the removal of two Democratic commissioners from the Federal Trade Commission that President Trump appeared to have “chosen to put the interests of the oligarch and all-powerful corporation first, and the interests of every other American last.”
- Investigate Midwest quoted Open Markets food program manager Claire Kelloway on generic pesticide products, in which she said the cheaper alternatives for farmers in a heavily monopolized industry offer an “important way to provide more options and give consumers a way to save money.”
🔊 ANTI-MONOPOLY RISING:
- Senators Ron Wyden of Oregon and Elizabeth Warren of Massachusetts are probing Google’s relationship with AI startup Anthropic and Microsoft’s relationship with OpenAI over concerns the Big Tech giants’ deals with the AI companies threaten competition in the emerging sector. (TechRadar)
- Workers at Google are now freely allowed to discuss pending antitrust litigation against the tech giant following a settlement with the Alphabet Workers Union, which filed a complaint with the National Labor Relations Board challenging a gag order the corporation had imposed on its employees. (New York Times)
- A roofing company in Illinois sued United Rentals and other construction equipment rental companies over claims the corporations partnered with data analytics organizations to systematically fix rental prices, driving up costs for construction firms, renters, and homebuyers across the country. (Reuters)
We appreciate your readership. Please consider making a contribution to support the continued publication of this newsletter.
📈 VITAL STAT:
17
The number of state attorneys general that joined the FTC in suing Amazon in September 2023 for anticompetitive practices such as self-preferencing its own products and overcharging online sellers. This week Amazon lost its bid to dismiss the charges in federal court and will have to face antitrust claims in court sometime next year. Vermont and Puerto Rico later joined the lawsuit. (Courthouse News)
📚 WHAT WE'RE READING:
The Pacific Circuit: A Globalized Account of the Battle for the Soul of an American City — California journalist Alexis Madrigal uses the modern history of the city of Oakland to analyze the way Silicon Valley’s rise has changed the lives of everyday people. In his account, Madrigal examines the way that the industry’s growing power has upended markets, restructured politics, and fundamentally altered the DNA of communities.
Order Legal Director Sandeep Vaheesan’s new book:
Sandeep Vaheesan, the legal director at the Open Markets Institute, published his first book Democracy in Power: A History of Electrification in the United States on December 3, 2024. Vaheesan examines the history—and presents a possible future—of the people of the United States wresting control of the power sector from Wall Street, including through institutions like the Tennessee Valley Authority and rural electric cooperatives.
🔎 TIPS? COMMENTS? SUGGESTIONS?
We would love to hear from you—just reply to this e-mail and drop us a line. Give us your feedback, alert us to competition policy news, or let us know your favorite story from this issue.
