It’s not the vibes giving us a sour economic mood; it’s the monopolists

In recent months a lot of economic commentators have been flabbergasted that despite low unemployment, steady job growth and easing inflation, the public mood about the economy remains dour.

Pundits have blamed social media, partisanship and negative media headlines. But what if our headline economic data simply fails to tell a complete story? Dig a little deeper and the economic challenges confronting the country sound a lot more like the misery of monopoly than bad vibes or misinformation.

Any discussion of current economic challenges begins with inflation, and for good reason. While inflation is lower, that  just means the rate of increase has cooled. Prices are still 19% higher than before the pandemic, and wages have only recently started to keep pace, with more granular analysis revealing that most people have seen their spending power decline, meaning that simply being employed is not enough. To add insult to injury, inflation calculations do not account for interest rate hikes, increasing the monthly payments people pay for car loans, home loans and credit cards.

Inflation on its own generates more intense anger and frustration than other issues, and this is likely exacerbated by the unfairness driving price increases. People are blaming powerful corporations, and so are government economists, think tanks, and private sector experts. Legal action has uncovered an economy apparently rife with monopoly price-gouging. A jury recently found major egg producers guilty of price-fixing and further lawsuits allege the cost of everything from meat to housing is higher because of companies illegally coordinating.

Inflation is just one piece of this misery though. The other is more existential, a sense that we no longer have control over corporate behemoths. Since 2001, Gallup has asked Americans about their satisfaction with the “size and influence” of big business and the response “very dissatisfied” has grown from 17% to 44% over the past two decades, up 12 percentage points since 2020. While consolidation has been growing for decades, this recent change in attitude about corporate power is likely a reflection of the way the pandemic brought a whole host of long-running structural issues to the forefront, including monopolization.

Monopolists have been suppressing wages for decades, but the past couple years has seen a spike in labor activism, as workers fight back amidst the backdrop of rising prices and record profits. Amazon, a poster-child for our monopolized economy, finally saw one of its warehouses vote to unionize. Consolidation was front and center in the massive writers and actors strike last year, with workers not only hitting the picket line but urging antitrust authorities to investigate the industry. Meanwhile, pharmacists working for the drugstore duopoly of CVS and Walgreens have participated in walkouts, and doctors, fed up with giant health systems, are unionizing.

The Federal Trade Commission and the Department of Justice recently completed a typically obscure and wonky process of updating the merger guidelines that direct the agencies’ enforcement of business combinations. The last time they did this in 2010 just 32 public comments were submitted — solely from lawyers and academics. This time around, the year and a half process of updating the guidelines generated over 35,000 comments from Americans across the country, tired of being pushed around by monopolists.

In October, Assistant Attorney General Jonathan Kanter, who leads the antitrust division at the Department of Justice, held a roundtable in Minnesota with farmers, workers and small business owners. They did not talk about job growth numbers or the stock market. They talked about how monopolies — from tech giants to massive health systems — are making their lives and professions harder and more precarious and reshaping the very structure of the communities they live in. Farmers are earning less, nurses are leaving the bedside, and we are losing small businesses like rural pharmacies every day.

Connecticut Sen. Chris Murphy recently wrote that “the most important economic and social interactions in your life are being dictated by…massively powerful private companies.” Yet our public discourse fails to match this reality.

The effort to frame people’s dissatisfaction with the economy as manufactured and not grounded in actual experiences is insulting and distracts from solving the problems making life so challenging for so many.

The silver lining to the misery of monopoly power is that there is nothing inevitable about it. Getting screwed by powerful corporations is a policy choice that can be reversed, but that requires identifying the source.