Unsanitized: The COVID-19 Report for July 22, 2020

How the Pandemic Expands Corporate Power
And how we can fight back

 

Even the lemonade stands aren't safe from the reach of corporate power.
(Mark & Andrea Busse/Creative Commons)

First Response

It's a cute human interest story. Country Time Lemonade decided that,
during the pandemic, little boys and girls can't go out on the street
to open lemonade stands. So they would fund a bailout: $100 for a select
group of prizewinners who apply for a check
. It's just a little PR campaign
that plays off the times we live in with a dash of compassion. The Hill
wrote it up
,
so mission accomplished for the publicity team.

But I, dear reader, am cursed. I'm cursed to know that Country Time
Lemonade isn't a mom-and-pop business, but a division of KraftHeinz,
one of the more soulless giant corporations in our economic landscape.
Owned by Brazilian private equity firm 3G, KraftHeinz engages in a thing
called "zero-based budgeting," where every year, the entire budget
is wiped clean and everyone must justify their expenditures anew. This
habitually leads to everything from mass layoffs to trims to printer
paper and trash collection at corporate headquarters. "Costs are like
fingernails: they always have to be cut," 3G co-founder Carlos
Sicupira is famous for saying.

So the company that is handing out $100 bailout checks (only 1,000 of
them, and in exchange you have to give up all your family's personal
information, send pictures of your lemonade stands that can be used in
any promotion, and agree to receive advertising from Country Time) has
also immiserated tens of thousands of workers. And it's also nearly
destroyed KraftHeinz, with zero-based budgeting ruining investment in
its many venerable brands. It's also under SEC investigation

for cooking its accounting books and "modifications to its agreements
with its vendors," a nice word for ripoffs.  

But hey, cute kid bailout.

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The world I'm explaining in that above anecdote is the world of
Monopolized: Life in the Age of Corporate Power
, the
book I wrote that released this week. It's a world where our lives
have become governed, to a strong and sometimes hidden degree, by a
small group of corporations. When you recognize how this system works,
you find the influence of monopoly lurking in every corner, even the
Country Time bailout. It can sometimes be hard to talk about because
it's so expansive, so I encourage you to read this exclusive excerpt
from the book

at our site today, about how monopolies caused shortages of IVs-salt
and water in a bag.

In talking to interviewers about the book, I've been asked how the
coronavirus pandemic will affect monopoly. And like so much else, it
will accelerate it. As the business climate deteriorates, remaining
companies will grow market share either by default or by taking over
their sick rivals. The disproportionality of the bailout, assisting
large companies far more than smaller ones, plays into this. And changes
in consumer patterns in retail, as well as working from home, have been
a jackpot for the few winners in that exchange. Big Tech stocks gained
$291 billion in market value just on Monday
.

The pandemic initially stalled the merger and acquisition market, but
that was the calm before the storm. Check out the arrays of deals
announced in the past week.

Chevron is buying Noble Energy
,
the first of many dominoes to fall in the oil and gas sector, where the
big companies we have today all come out of mergers in previous moments
of financial stress. Liberty Media got the go-ahead

to increase its stake in broadcast radio giant iHeartMedia (owner of 850
stations), when it already owns a controlling interest in satellite
radio giant SiriusXM (itself the product of a merger of the only two
satellite companies), and streaming giant Pandora (a direct competitor
of streamer iHeartRadio). CHI Franciscan and Virginia Mason, two
hospital networks, have signed a joint operating agreement
,
the latest in a growing trend that saw 1,667 mergers in the sector from
1998 to 2018. One of the biggest deals of the year brings together two
semiconductor makers
.
Here's a roundup of mergers

in digital marketing, electric vehicles, convenience store operators,
health insurance software, are rare earth mineral mining. A German man
is monopolizing rare endangered parrots
.

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There are real-world effects to this activity. The coronavirus has
proven a lesser impediment to moving goods from Wuhan, China than recent
flooding
.
An astounding number of facemasks and other PPE still originate from
there, and that's driving shortages in U.S. hospitals, beyond the
surge in COVID cases. (That Uighur slave labor is being used

to make these items is just a cherry on top.) When a Facebook software
bug malfunctioned earlier this month, dozens of apps shut down
,
because Facebook is embedded in their product. This story

on the horrors that Amazon Handmade sellers go through is typical of
that company using its private law to govern and immiserate its
partners. Meatpacking plants blamed shortages for skyrocketing grocery
costs while upping exports to China

and pocketing the increase on both sides.

Workers, entrepreneurs, citizens suffer at the hands of monopoly.
Quality suffers. Reliability suffers. Choice suffers.

The good news is that there is a small but growing movement fighting
back, and building that movement is the only way to infuse the political
will to reverse the conditions that created this age of corporate power.
Also just in the last few weeks, we've seen a comprehensive guide to
fixing federal contracting

so monopolists cannot gouge the government; a comprehensive guide to
fighting monopoly power at
the state and local level; and a petition signed by 30-plus
organizations

to ban exclusive dealing, where monopolists use contracts to formally
block rivals. Groups are fighting monopoly price fixing in the prison
phone market
.
The work that the Writers Guild of America has done to reverse the
damage of monopolized talent agencies is inspiring, and bearing fruit
.

A lot of this work is featured in Monopolized. And while there's a
spark of recognition that we're living in a strange time and we can do
things differently, there's a long way to go. Next Monday, there's
this enormous hearing with the Big Four tech CEOs, and there's a huge
power struggle happening

to set the terms of the testimony. A similar turf war is happening
inside the Federal Trade Commission

as it determines whether to enforce the law against Facebook. Amazon
just announced a record amount of lobbying

in one quarter. This is going to take a fight against the most powerful
institutions in American life. But it's winnable, and it's been
winnable in the past, because people have used their collective power to
make a difference.

Anyway, hopefully this didn't come off like a large ad but I do
believe this is one of the supreme challenges of our time, and I thought
it was important enough to write a whole book about it. So if you're
interested, pick up a copy of Monopolized
or read
the excerpt today

at our site. Thanks.

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Days Without a Bailout Oversight Chair

117
.

We Can't Do This Without You

Today I Learned

* First time since late May that we're over 1,000 deaths in a day
. This
doesn't near April peaks but still a terrible tragedy. (COVID-19
Tracking Project)

* The corporate tax breaks in the CARES Act

are an undercovered story. (Orlando Sentinel)

* Moderna, one of several vaccine developers, affirmatively asserts its
right to profit from it

in Congressional testimony. (New York Times)

* If you thought we did a bang-up job handling the virus, you're going
to love how we distribute the vaccine
.
(STAT News)

* Three business days until boosted unemployment ends. Economists are in
near-universal agreement

about its importance. Where is the urgency? (Five Thirty Eight)

* Over 22 percent of people in Delhi

have had the virus. (Washington Post)

* Rick Scott: open the schools! Also Rick Scott: my grandkids won't be
going . (Fox
News)
Pompeo being denied handshakes

by foreign leaders is a real metaphor, huh? (The Week)

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