Who's hurt when monopolies crash and burn?
You!
Friends,
I’m not going to talk about Twitter today. I want to focus on two other outrages.
Over the past week, both Ticketmaster and FTX crashed.
This is what unregulated monopolies do, eventually – taking lots of angry consumers with them.
Which is why we need to either regulate or to bust up corporations that corner markets. But to do so, we need to stop big money.
Taylor Swift is the most popular artist in America; she hadn’t done live shows for four years. Ticketmaster was her ticketing agent. But because Ticketmaster had under-invested in its platform, its site and app couldn’t handle the demand (not before scalpers managed to get plenty of tickets and put them on sale for multiples of the original list price).
As Matt Stoller tells us, Ticketmaster’s monopoly started in 1991 when it acquired its main rival in computerized ticketing, Ticketron – putting 90 percent of the ticketing business in the hands of one firm, and giving it the power to tack on an ever-rising assortment of fees (now as much a part of concert experience as sticky floors and shoving).
A few years later, Ticketmaster merged with Live Nation, the world’s largest concert promotion company, so the combined entity could keep all the fees - and more - to itself. The combined firm was chaired by Irving Azoff (who in a New York Times profile - confessed himself a serial liar and talked about how he put pictures of himself giving the middle finger on his own stationery).
Monopolies exert power in several ways – and not just in high prices. They also exert power through failing to invest in their products and services. Either way, they make extra money by shafting consumers.
They also exert political power that shafts everyone. Why in hell did the Obama administration ultimately approve the Ticketmaster Live Nation merger? Perhaps because both firms were major political players?
Immediately after the Justice Department consented to the merger, the combo began violating the consent agreement—- charging outrageous fees, allowing the sale of tickets to bots, and suppressing competitors who had developed ways of blocking scalpers, like Songkick. It acted so badly even the Trump Administration had to rework the merger agreement. But not by much.
And since then, Swifties and other consumers of live entertainment have been paying through the nose.
Now, the Justice Department’s antitrust division has launched an investigation. Talk about closing barn doors after the cattle have been rustled away.
Meanwhile, FTX and more than 100 affiliated crypto companies are filing for bankruptcy. Reportedly, a million or more creditors could line up. The situation is so dire that FTX has already said it doesn’t know who its top creditors are or where many assets can be found.
Ex-billionaire Sam Bankman-Fried turns out to be another Bernie Madoff -- a big-time Ponzi schemer. His FTX exchange also depended on monopoly power. Giant Ponzi schemes don’t thrive in competitive markets; they need to be the only big game in town.
Here again, it’s when monopoly power (which FTX exercised) is combined with political clout that the public gets taken for a ride.
Bankman-Fried contributed around $37 million to Democratic candidates in the last election cycle. His co-chief executive, Ryan Salame, gave more than $20 million to Republicans. In all, FTX executives contributed nearly $72 million to both parties, and the company was strategically bipartisan in its lobbying and government affairs hiring.
Where were the federal regulators? Nowhere to be seen.
It's the same vicious cycle: Corporations achieve monopolies that shaft consumers while pulling in big money, a portion of which is used to bribe politicians to look the other way.
This is not solely a Republican problem. The Ticketmaster Live Nation merger was approved by the Obama administration. FTX and Bankman-Fried were major contributors to Democrats. Republicans are more dependent than Democrats on big money, but far too often both parties are drinking from the same trough.
And of course, let's remember that every time some unregulated or insufficiently regulated sector forces their way into our lives, economies, pensions, etc., at no point do elected officials talk about how the people will be protected when things crash and burn or poison us.
Fracking, casinos and cryptomining will bring jobs!
Ok, but what about the destruction to our land, the increase in gambling addiction, the loss of disposable income, the health risks from contaminated water, or the fallout when the prices or the industries themselves crumble?
HEY! Just shut up with all those questions!! There will be some jobs and I will get the money I need to get elected this cycle and by the time you're all suffering, I'll either be so entrenched in this position I won't have to care what you think or you'll be so powerless I won't even have to hear it. But you're right, if something happens and the company or investors suffer, we will need to take more of your tax dollars to bail out the most important donors, but that is a price I'm willing to let you pay.
And that ladies and gentlemen....is what we call "capitalism."
Thank you, thank you, thank you. I had several co-workers advise me to get in on crypto-currency Thank goodness I listened politely and ignored. Yes the government is largely to blame, but so are the idiotic, pie-in-the-sky. let's all get rich, gamers. As my Daddy always said "If it sounds to good to be true, it is". As to the ticket racket, the entertainment industry shares some of the blame. Why can't you buy tickets to a show from the theater where the entertainment is appearing. "Hey, Billy Bob, let us sell your tickets and you can fire most of your staff and keep the profits for yourself". My husband got bilked of $300,000 by his stock broker. We both sat in the office and I kept saying this doesn't sound legal and the broker kept assuring Jack it was. So then I changed to even if it is legal it doesn't sound ethical or moral. It's what the broker called selling short or some such thing. it amounted to using someone else's money to take a chance on buying stocks that were going to fail using only 10% of your own money and then selling at exactly the right second to score a win, Yes the planners and schemers should have all their assets taken from them, but why are people so damned gullible. So I won't die the richest old bitch in the cemetery, I'll still be dead, and I haven't stolen, conned or tricked anyone either.