I recently read a news article that said trillions of cicadas are ready to appear after a 17-year absence. Whenever I see the word "trillions," I think of current budget deficits. So, I thought to myself, what was the budget deficit 17 years ago when this brood went into the ground? It was $400 billion. The budget deficit projected for this year is $3.4 trillion. Those buggers are going to be shocked. Quite frankly, I’m shocked that multi-trillion deficits don’t alarm more people. Have our elected officials become so numb that these deficits don’t matter? The deficit and debt still matters to the Taxpayers Protection Alliance (TPA). And, needless to say, we have a lot of work to do.

Big Tech Reality Check

Verizon recently announced its plan to sell Yahoo and America Online (AOL) to a private equity group for $5 billion. Some find the news quaint, even humorous as Yahoo and AOL used to be synonymous with being “Big Tech” in the early days of the internet. Who we really ought to be laughing at are the modern day antitrust hysterics who seek to do everything from banning firms like Verizon from acquiring such properties to breaking-up today’s equivalents of Yahoo and AOL. Many of us clearly remember that Yahoo and AOL were the titans of their time. In fact, in 1998, Fortune magazine published an article ([link removed]) , “How Yahoo! Won The Search Wars.” The article even proclaimed that "some say it’s the next America Online." AOL was similarly dominant. An article ([link removed]) from August 2000 in Computer Weekly said AOL was "on its way to
world domination” and that AOL's “monopolistic tendencies are fouling the Net.” That same year, AOL closed the largest merger up to that point in US history, acquiring Time Warner for $165 billion. Many objected to the merger. An article ([link removed]) from The Guardian that year discussed how Disney executives pressured the US government to stop the merger, fearing “an internet stranglehold.” My how things have changed.

Antitrust fever is sweeping both Washington and state capitals, with Federal Trade Commission and Department of Justice (DOJ) investigations occurring simultaneously with the efforts of state attorneys general and state legislatures considering sweeping restrictions. Everyone is looking for a bite of the Apple…and Google, etc. The range of proposed reforms stretches from the reasonable, such as streamlining antitrust enforcement on the federal level, to the ridiculous, such as a wholesale ban on firms above arbitrary market caps making new acquisitions. The latter would have prevented Verizon from acquiring both Yahoo and AOL, deals on which the telecommunications giant has taken an absolute bath. Current antitrust efforts are fueled by different fears. Some think these firms are doing too much to control markets while others think they aren’t doing enough to constrain the products and speech found on their services. The incoherence is staggering, but all seem to think that this time is
different and surely these firms are definitely too big and definitely not going anywhere. Many claim Google has an insurmountable monopoly in search. There are a number of problems with this argument, the primary one being that Google is an advertising company and most searches don’t lead to transactions. There’s nothing to sell when resolving trivial disputes around the dinner table. Google makes its money through product and service searches. Most product searches start at Amazon. Apple, Google, Facebook, and Amazon all have rivalrous product and service search services, increasingly dominated by voice search devices. This is why Google is losing advertising market share.

AOL and Yahoo were once worth a combined half-a-trillion at their inflation-adjusted peaks, more than any internet service provider today and enough to put each of them in the current global Fortune 50. In 2001, AOL was the ninth most valuable company in America. Mark Zuckerberg was still in high school. Without rooting for the demise of companies that are currently producing enormous value for Americans and indeed the world, especially during a pandemic, the tech giants of tomorrow are already on their way. We won’t know who they are until it’s obvious, but history tends to rhyme, if not repeat itself. We don’t know who will acquire the titans of today for pennies on the dollar or if we will even let them. And, that’s the folly of applying heavy-handed antitrust regulation to an industry as dynamic as technology.

The PRO Act Helps Unions, Not Workers

Unions have certainly been in the news this past year. They played an outsized role in the closure of businesses who could not afford to pay the wages unions demanded amidst the pandemic. It appears Congress will once again make them the focus of national attention with its consideration of the Protecting the Right to Organize (PRO) Act. And if President Biden’s first joint address to Congress is any indication, the Biden administration will push hard for this flawed piece of legislation. Introduced by Rep. Bobby Scott (D-Va.), the PRO Act is essentially a legislative giveaway for major unions across the country. While a nearly identical version was taken up by Congress last year, it was unable to pass with a Republican-controlled Senate and White House. However, with control of leadership in both chambers of Congress and the presidency, Democrats are hoping they can usher the PRO Act into law in 2021. This would spell disaster for the nation and the economy.

The PRO Act would undermine the “right-to-work” laws in 28 states by dictating employment terms to workers instead of allowing them freedom of choice. Right-to-work laws guarantee that employees in jobs that are subject to union contracts cannot be forced to join the union or pay dues to them. This right was upheld in the recent landmark Supreme Court case, Janus v. AFSCME. These judicially protected protections allow workers greater freedom of association and protect taxpayer dollars from being used to fund unions that employees don’t wish to be a part of. The PRO Act would nullify these laws, violating workers’ right to free association – and running roughshod over state governments’ Tenth Amendment rights to implement these laws that have been upheld at the highest levels of the judiciary. By eliminating right-to-work laws, the PRO Act would help unions form and build their membership with thousands (if not millions) of new, unwitting, dues paying members. It is no small wonder why union
bosses are making passage of the PRO Act their top priority this year. It will fill their coffers with millions of dollars in new, forced dues.

Another blow to the rights of workers and the well-being of small businesses is the way the PRO Act addresses independent contractors. The bill applies a three-pronged test to determine whether a worker is an employee or a contractor. A worker can only be considered an independent contractor if all three of the following conditions are met: 1. They are free from direct control from the hiring entity; 2. They perform work that is outside the normal course of the hiring entity’s business; and 3. They are customarily engaged in independent business of the same nature as the work they perform for their hiring entity. With these qualifications, it would be nearly impossible to qualify as an independent contractor. There’s no need to speculate either on these provisions’ ramifications. California passed similar legislation in its Assembly Bill 5 (AB 5) to the detriment of contractors across the Golden State. Companies cannot afford to hire many workers because they would have to be classified as
employees, which is far more expensive. Thus, many workers – especially students – cannot get that supplementary income or experience they might need because AB 5 has made it too prohibitive to hire them. The PRO Act exports California’s failure to every corner of the nation. Millions of small businesses across the country have struggled throughout the pandemic. Instead of trying to get out of their way to let them succeed and rebuild, Congress is working overtime to ensure they are under the thumb of unions, who have remained steadily immune from the effects of the events of the last year. The PRO Act will do nothing to help workers and businesses. Perhaps that was never the point.

BLOGS:

Monday: New Report Shows Failure of European Model Internet Regulation ([link removed])

Tuesday: PRO Act Puts Unions First, Workers Last ([link removed])

Wednesday: Consumer Watchdog: Oversight Board Proves Facebook Not a Monopoly ([link removed])

Wednesday: By Ignoring WHO, UK Could Emerge as World Leader in Tobacco Harm Reduction​ ([link removed])

Thursday: Congressional Committee Should Focus on Red Tape, Not Taxpayer Money, to Close Digital Divide ([link removed])

Friday: Watchdog Slams USPS for $82 million Net Loss ([link removed])

Media:

April 28, 2021: WSET ABC13 (Roanoke, Va.) quoted TPA in their story about universal income.

April 29, 2021: WZTV Fox17 (Nashville, Tenn.) quoted TPA in their story about universal income.

April 30, 2021: The Center Square ran TPA’s op-ed, “New report shows failure of European model (and Biden proposed) heavy-handed internet regulation.”

May 1, 2021: The Press (Millbury, Ohio) ran TPA’s op-ed, “Pilot program could steer transportation system in better direction.”

May 1, 2021: KBAK CBS29 (Bakersfield, Calif.) quoted TPA in their story about universal income.

May 3, 2021: WBFF Fox45 (Baltimore, Md.) interviewed me about President Biden’s Buy American policy.

May 3, 2021: Inside Sources ran TPA’s op-ed, “By Ignoring WHO, UK Could Emerge as World Leader in Tobacco Harm Reduction.”

May 4, 2021: Real Clear Markets ran TPA’s op-ed, “The Sale of Yahoo and AOL Wrecks All the 'Big Tech' Hysteria.”

May 4, 2021: The Prescott eNews ran TPA’s op-ed, “New Report Shows Failure of Heavy-Handed Internet Regulation.”

May 5, 2021: YourObersver.com quoted TPA in an op-ed titled, “Florida setting the example on vaping regulations.”

May 5, 2021: The Galion Inquirer (Mt. Gilead, Ohio) ran TPA’s op-ed, “Biden seeks to end costly war in Afghanistan.”

May 6, 2021: WBFF Fox45 (Baltimore, Md.) interviewed me about COVID relief spending in Maryland..

May 6, 2021: VP of Policy Patrick Hedger appeared on Good Morning Arizona on KTVK (Phoenix) to discuss the Facebook Oversight Board’s decision on Donald Trump’s ban.

May 6, 2021: I appeared on WBOB 600 AM (Jacksonville, Fla.) to talk about Facebook and Biden’s proposed taxes.

May 6, 2021: The Rutland Herald (Rutland, Vt.) ran TPA’s op-ed, “Heavy-handed internet regulation fails.”


**

Have a great weekend!

Best,

David Williams
President
Taxpayers Protection Alliance
1401 K Street, NW
Suite 502
Washington, D.C. xxxxxx
www.protectingtaxpayers.org ([link removed])
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