The concentration of market power in a handful of companies lies behind several disturbing trends in the U.S. economy, like the deepening of inequality and financial instability, two Federal Reserve Board economists say in a new paper.
Isabel Cairo and Jae Sim identify a decline in competition, with large firms controlling more of their markets, as a common cause in a series of important shifts over the last four decades.
Those include a fall in labor share, or the chunk of output that goes to workers, even as corporate profits increased; and a surge in wealth and income inequality, as the net worth of the top 5% of households almost tripled between 1983 and 2016. This fueled financial risks and higher leverage, the economists say, as poorer households borrowed to make ends meet while richer ones shoveled their wealth into bonds — feeding the demand for debt instruments.
“The rise of market power of the firms may have been the driving force” in all of these trends, Cairo and Sim write in the paper. Published this month by the non-partisan Fed Board staff, which doesn’t reflect the views of governors, it’s the latest in a series examining the risks that weaker competition poses to a market economy.
That issue is increasingly prominent on the agenda of both America’s main political parties. Democrats said in a recent summary of policy priorities that they’re “concerned about the increase in mega-mergers and corporate concentration across a wide range of industries.” The Department of Justice under President Donald Trump is probing large technology platforms.
Madison’s taxpayer supported K-12 system has long resisted student and parent choice.
Let’s compare: Middleton and Madison Property taxes
Madison property taxes are 22% more than Middleton’s for a comparable home, based on this comparison of 2017 sales.
Fall 2020 Administration Referendum slides.
(Note: “Madison spends just 1% of its budget on maintenance while Milwaukee, with far more students, spends 2%” – Madison’s CFO at a fall 2019 referendum presentation.)
MMSD Budget Facts: from 2014-15 to 2020-21 [July, 2020]
Property taxes up 37% from 2012 – 2021.
– via a kind reader (July 9, 2020 update).
2017: West High Reading Interventionist Teacher’s Remarks to the School Board on Madison’s Disastrous Reading Results
Madison’s taxpayer supported K-12 school district, despite spending far more than most, has long tolerated disastrous reading results.
My Question to Wisconsin Governor Tony Evers on Teacher Mulligans and our Disastrous Reading Results
“An emphasis on adult employment”
Wisconsin Public Policy Forum Madison School District Report[PDF]
Booked, but can’t read (Madison): functional literacy, National citizenship and the new face of Dred Scott in the age of mass incarceration