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<div class="WordSection1">
<p class="MsoNormal"
style="margin-bottom:7.5pt;line-height:39.0pt;background:white"><b><span
style="font-size:30.0pt;font-family:"Arial","sans-serif";color:#1A2F5A">Paul
Krugman: We're Living in a Second Robber Baron Era<o:p></o:p></span></b></p>
<p class="MsoNormal" style="line-height:24.0pt;background:white"><b><i><span
style="font-size:16.5pt;font-family:"Arial","sans-serif";color:black">Verizon's
unregulated monopolistic behavior hurts everyone.<o:p></o:p></span></i></b></p>
<p class="MsoNormal" style="line-height:24.0pt;background:white"><i><span
style="font-size:12.0pt;font-family:"Arial","sans-serif";color:black">By</span></i><span
style="font-size:12.0pt;font-family:"Arial","sans-serif";color:black"> <i><a
moz-do-not-send="true"
href="http://www.alternet.org/authors/janet-allon-0"><b><span
style="color:#F1602C;text-decoration:none">Janet
Allon</span></b></a></i> / <a moz-do-not-send="true"
href="http://alternet.org/"><b><span
style="color:#F1602C;text-decoration:none">AlterNet</span></b></a>
</span><i><span
style="font-size:13.5pt;font-family:"Arial","sans-serif";color:black">April
18, 2016<o:p></o:p></span></i></p>
<p class="MsoNormal"
style="margin-left:15.0pt;line-height:24.0pt;background:white"><i><u><span
style="font-size:13.5pt;font-family:"Arial","sans-serif";color:black">Krugman
column:</span></u></i><i><span
style="font-size:13.5pt;font-family:"Arial","sans-serif";color:black">
<a class="moz-txt-link-freetext" href="http://www.nytimes.com/2016/04/18/opinion/robber-baron-recessions.html?action=click&pgtype=Homepage&clickSource=story-heading&module=opinion-c-col-left-region®ion=opinion-c-col-left-region&WT.nav=opinion-c-col-left-region&_r=1">http://www.nytimes.com/2016/04/18/opinion/robber-baron-recessions.html?action=click&pgtype=Homepage&clickSource=story-heading&module=opinion-c-col-left-region®ion=opinion-c-col-left-region&WT.nav=opinion-c-col-left-region&_r=1</a>
<o:p></o:p></span></i></p>
<p class="MsoNormal"
style="margin-left:15.0pt;line-height:24.0pt;background:white"><span
style="font-size:13.5pt;font-family:"Arial","sans-serif";color:black"><o:p> </o:p></span></p>
<p class="MsoNormal"
style="margin-bottom:16.5pt;line-height:18.75pt;background:white"><span
style="font-size:13.5pt;font-family:"Arial","sans-serif";color:black">Paul
Krugman explains why the Verizon strike of last week points
out a much deeper problem than what goes on with one
telecommunications company in <a moz-do-not-send="true"
href="http://www.nytimes.com/2016/04/18/opinion/robber-baron-recessions.html?action=click&pgtype=Homepage&clickSource=story-heading&module=opinion-c-col-left-region®ion=opinion-c-col-left-region&WT.nav=opinion-c-col-left-region&_r=0"><span
style="color:#F1602C;text-decoration:none">Monday's
column</span></a>. We are living in a time of corporate
monopolies that rivals those of the robber baron age, and
they are harming workers, consumers and the economy itself.<o:p></o:p></span></p>
<p class="MsoNormal"
style="margin-bottom:16.5pt;line-height:18.75pt;background:white"><span
style="font-size:13.5pt;font-family:"Arial","sans-serif";color:black">The
issue, he writes, is not just wages and out sourcing; it is
the fact <b>that "Verizon has shown a remarkable lack of
interest in expanding its Fios high-speed Internet
network, despite strong demand."<o:p></o:p></b></span></p>
<p class="MsoNormal"
style="margin-bottom:16.5pt;line-height:18.75pt;background:white"><span
style="font-size:13.5pt;font-family:"Arial","sans-serif";color:black">The
reason for that peculiar bit of seemingly self-destructive
corporate behavior is that it does not have to. Verizon's
customers have nowhere else to go and are forced to put up
with shoddy service. And Verizon's case is far from alone.
Krugman:<o:p></o:p></span></p>
<p class="MsoNormal"
style="margin-bottom:16.5pt;line-height:18.75pt;background:white"><span
style="font-size:13.5pt;font-family:"Arial","sans-serif";color:black">In
recent years many economists, including people like Larry
Summers and <a moz-do-not-send="true"
href="http://bruegel.org/2014/02/blogs-review-profits-without-investment-in-the-recovery/"><span
style="color:#F1602C;text-decoration:none">yours truly</span></a>,
have come to the conclusion that growing monopoly power is a
big problem for the U.S. economy — and not just because it
raises profits at the expense of wages. Verizon-type
stories, in which lack of competition reduces the incentive
to invest, may contribute to persistent economic weakness.<o:p></o:p></span></p>
<p class="MsoNormal"
style="margin-bottom:16.5pt;line-height:18.75pt;background:white"><span
style="font-size:13.5pt;font-family:"Arial","sans-serif";color:black">The
argument begins with a seeming paradox about overall
corporate behavior. You see, profits are at near-record
highs, thanks to a substantial decline in the percentage of
G.D.P. going to workers. You might think that these high
profits imply high rates of return to investment. But
corporations themselves clearly don’t see it that way: their
investment in plant, equipment, and technology (as opposed
to mergers and acquisitions) hasn’t taken off, even though
they can raise money, whether by issuing bonds or by selling
stocks, more cheaply than ever before.<o:p></o:p></span></p>
<p class="MsoNormal"
style="margin-bottom:16.5pt;line-height:18.75pt;background:white"><span
style="font-size:13.5pt;font-family:"Arial","sans-serif";color:black">How
can this paradox be resolved? Well, suppose that those high
corporate profits don’t represent returns on investment, but
instead mainly reflect growing monopoly power. In that case
many corporations would be in the position I just described:
able to milk their businesses for cash, but with little
reason to spend money on expanding capacity or improving
service. The result would be what we see: an economy with
high profits but low investment, even in the face of very
low interest rates and high stock prices.<o:p></o:p></span></p>
<p class="MsoNormal"
style="margin-bottom:16.5pt;line-height:18.75pt;background:white"><span
style="font-size:13.5pt;font-family:"Arial","sans-serif";color:black">And
such an economy wouldn’t just be one in which workers don’t
share the benefits of rising productivity; it would also
tend to have trouble achieving or sustaining full
employment. Why? Because when investment is weak despite low
interest rates, the Federal Reserve will too often find its
efforts to fight recessions coming up short. So lack of
competition can contribute to <a moz-do-not-send="true"
href="http://krugman.blogs.nytimes.com/2013/11/16/secular-stagnation-coalmines-bubbles-and-larry-summers/"><span
style="color:#F1602C;text-decoration:none">“secular
stagnation”</span></a> — that awkwardly-named but
serious condition in which an economy tends to be depressed
much or even most of the time, feeling prosperous only when
spending is boosted by unsustainable asset or credit
bubbles. If that sounds to you like the story of the U.S.
economy since the 1990s, join the club.<o:p></o:p></span></p>
<p class="MsoNormal"
style="margin-bottom:16.5pt;line-height:18.75pt;background:white"><span
style="font-size:13.5pt;font-family:"Arial","sans-serif";color:black">Increased
monopolies, and decreased competition are bad for the
economy. And Ronald Reagan is the man we have to thank for
that. Known best for lowering taxes and deregulating banks,
he also weakened enforcement of anti-trust regulations. He
was assisted in this effort by George W. Bush, and Obama has
been too distracted to deal with it, though Krugman suggests
he is finally giving the problem some attention.<o:p></o:p></span></p>
<p class="MsoNormal"
style="margin-bottom:16.5pt;line-height:18.75pt;background:white"><span
style="font-size:13.5pt;font-family:"Arial","sans-serif";color:black">Better
late than never.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:black"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:black"><o:p> </o:p></span></p>
<p class="MsoNormal"><span
style="font-size:8.0pt;font-family:"Arial","sans-serif";color:black">============================================<o:p></o:p></span></p>
<p class="MsoNormal"><span
style="font-size:8.0pt;font-family:"Arial","sans-serif";color:black">No
electrons were destroyed to send this email. <o:p></o:p></span></p>
<p class="MsoNormal"><o:p> </o:p></p>
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