“Starting your own medical practice is hard. In some states, it’s almost impossible due to the monopoly power of politically connected hospital associations. Independent doctors and patients tried for 10 years in South Carolina before finally scoring a victory last month.
On May 16, South Carolina Gov. Henry McMaster signed legislation to repeal most of the state’s medical certificate of need (CON) laws. A CON is a government permission slip that health care providers must obtain before they can launch or expand services. Spending money to provide safe, affordable care is illegal without this piece of paper.
Big hospitals love the red tape. Instead of competing with would-be rivals on a level playing field, they can claim their turf and defend it using government interference on their behalf. Many states even allow established providers to object to rival CON applications, giving them something like veto power.
If McDonald’s had the same authority, local franchisees could block mom-and-pop burger joints from opening nearby. The Home Depot could block family hardware stores. And LA Fitness could block independent gyms.”
“The thing about excuseflation is it’s sort of grounded in truth. It’s the idea that companies are using these once-in-a-lifetime disruptions. Think about the supply chain hiccups that we’ve had. Think about the Ukraine-Russia war. And they’re using those one-off disruptions as an excuse to raise prices. And that sounds fair enough. You know, companies, they have expenses. If their input costs go up, maybe it makes sense for them to pass some of those on to customers. But where it starts to become insidious is when they’re raising prices so much that they’re seeing their profits go up quite substantially as well.”
“Sure. So one of my favorite examples, because, you know, I love these personally, but chicken wings. Let’s talk about chicken wings and Wingstop. Wingstop is a very large purveyor of very delicious chicken wings. And what they’ve been saying on their earnings calls is that they have been raising their prices for their delicious chicken wings. And the reason they’ve been doing that is because the wholesale cost of your basic chicken wing went up quite a lot during the pandemic. We had a lot of disruptions at various farms, chicken farms with labor shortages and things like that. So it made sense that chicken wing prices went up and the company started passing those on to consumers.
The issue now, though, is that we have seen a substantial drop in chicken wing prices. And yet the company isn’t saying that it’s going to start dropping its prices. What it’s discovered, much like a lot of other businesses at the moment, is that actually this strategy of making up what you lose in sales volume with higher prices, so you’re selling fewer products, but you’re selling them at higher prices, [is] a viable strategy in the current environment, and it’s working for a lot of companies because profit margins are up.”
“baker in Chicago kind of laid it out for us. He said: “Whether it’s rye flour or bird flu, that impacts eggs when it makes national news just running a business, it’s an opportunity to increase the prices without getting a whole bunch of complaining from the customers. It’s not that we’re out there price gouging, but, you know, timing can be everything.””
“think about the reason that we tend not to like monopolies as consumers. We want, you know, a vibrant landscape of lots of smaller businesses that are all competing with each other so that we get a better value for our money. What happens when you have an industry-wide event that gives a group of businesses an excuse to raise prices: They are all effectively, not officially, but effectively acting as a monopoly. They can all say, well, you know, it’s bird flu, so we’re all going to raise the prices of our eggs.”
“You don’t have to believe that the market produces perfect outcomes to understand that government can rarely outperform private enterprise. Political decisions aren’t driven by any market signals, profit motive, or consumer preferences. These decisions are inherently political, suffer from a serious knowledge problem and are mostly untied to any accountability regimes when they fail. Government often proves to be biased against large, successful companies that provide new technology that legislators often don’t understand well but consumers love. This is why government so often fails, and this policy is no exception.”
“Facebook is still a behemoth, and it has a long way to fall before that will cease to be true (if it ever is). I’m not suggesting we start writing eulogies yet. But the U.S. (and European Union) antitrust push against Facebook and other big tech companies assumes—and often explicitly argues—that Facebook’s power is permanent and its market share irreversible. Recent developments and ancient history show that’s very obviously not the case.”
“Note, however, the bill stipulates that it only covers firms that are over the $600 billion line “as of the date of enactment.” In other words, if a company has a market cap under $600 billion on the day the bill becomes law, then that company is permanently exempt—even if it later crosses the threshold.
Two companies that are currently under the $600 billion line and thus exempt from the bill are mega-retailers Target and Walmart. These companies are both worth hundreds of billions of dollars, and their e-commerce platforms are growing at a faster rate than Amazon’s. But under the Klobuchar/Cotton law, it wouldn’t matter if Target and Walmart overtake Amazon—they would be immune from this new antitrust action, as long as they are small enough on the day the bill is signed.
Readers may be interested to note that Target is headquartered in Minneapolis, Minnesota. Walmart is headquartered in Bentonville, Arkansas. Isn’t that interesting? It’s probably just a coincidence that the $600-billion-at-date-of-enactment provision would shield the two most important companies in Klobuchar and Cotton’s home states.”
“the US Federal Trade Commission and 48 US state attorneys general filed major lawsuits against Facebook that argue the social media giant is a monopoly whose anti-competitive practices harm Americans.
The two lawsuits, which follow more than a year of investigations, are the biggest antitrust challenge Facebook has faced. They both essentially call for Facebook to be broken up by forcing it to undo its acquisitions of Instagram and WhatsApp, which together have billions of users.
The lawsuits allege that such action may be necessary because Facebook has crushed its competitors and achieved dominance by buying potential rivals, and that this limits American consumers’ choices and reduces their access to privacy protections.
“They stifled innovation, and they degraded privacy protections for millions of Americans,” New York Attorney General Letitia James, who led the states’ lawsuit (which includes 46 states plus Washington, DC, and Guam), told reporters on Wednesday. “No company should have this much unchecked power over our personal information and our social interactions.”
Facebook did not immediately respond to a request for comment. But a blog post published by the company on Wednesday called the lawsuits “revisionist history.” The company emphasized that its acquisitions of WhatsApp and Instagram were approved by the FTC years ago, and said allowing a “do-over” would raise a concerning precedent that “no sale will ever be final.””