“I’m hopeful that we can see this as beyond left and right and as a problem that affects all of us.“
David Dayen is the Executive Editor of The American Prospect magazine and the Author of Monopolized: Life in the Age of Corporate Power. He writes about the effects of power consolidation across technology, manufacturing and more.
“We have a problem when smaller collections of bigger companies control our economy.” The breaking up of monopolies has traditionally been a conservative idea, but more recently we’ve seen liberal ideology lay claim to its principles. This considered, it still remains a largely bipartisan initiative, albeit for separate reasons.
One company has no incentive to provide an exceptional product. Having one company responsible for large amounts of people and products creates severe supply chain risks and results in city abandonment. With regard to companies like Amazon, “You cannot control a platform and compete on the same platform.”
LISTEN AND SUBSCRIBE
SPEAKER
David Dayen
Executive Editor
The American Prospect
MODERATOR
Anthony Scaramucci
Founder & Managing Partner
SkyBridge
EPISODE TRANSCRIPT
John Darsie: (00:08)
Hello, everyone. Welcome back to SALT Talks. My name is John Darsie. I'm the managing director of SALT, which is a global thought leadership forum at the intersection of finance, technology and public policy. Assault talks or a digital interview series that we started during this work from home period are going to continue indefinitely even after hopefully we get back to normal here sometime soon. And what they are? Their interviews and conversations with leading investors, creators, and thinkers. And what we're really trying to do with the SALT Talk series is to provide our audience a window into the minds of subject matter experts, as well as provide a platform for what we think are big ideas that are shaping the future. And today we're very excited to welcome David Dayen to SALT Talks. David is the executive editor of The American Prospect, which is a daily online and quarterly print, American political and public policy magazine dedicated primarily to American liberalism and progressivism.
John Darsie: (01:02)
He's also an acclaimed author, and his most recent book being a Monopolized: Life in the Age of Corporate Power, which was released in July. Monopolized is a riveting account of what it means to live in this new age of monopoly and how we might resist this corporate hegemony. David's work has appeared in The Intercept, The New Republic, HuffPost, The Washington Post, The LA Times, and many more outlets. His first book called Chain of Title: How Three Ordinary Americans Uncovered Wall Street's Great Foreclosure Fraud was the winner of The Studs and Ida Terkel Prize, and it was released by the new press in 2016. If you have any questions for David during today's talk, a reminder please post them in the Q&A box at the bottom of your video screen. And conducting today's interview will be Anthony Scaramucci, who I know read David's book and was fascinated by it. Anthony is the founder and managing partner of SkyBridge Capital, a global alternative investment firm, and he's also the chairman of SALT. And with that, I'll turn it over to Anthony for the interview.
Anthony Scaramucci: (02:02)
Hey John, thank you. And David, thank you so much for agreeing to our invitation. I thought the book was fascinating. We'll get into the book in a second. I'm old enough to remember Studs Terkel and his living history stuff, so that's an amazing award for you, God bless. Before we get into the book though, tell us how you got to where you are. Why did you become a writer? When did the light bulb go off in your brain that you were going to have this sort of career?
David Dayen: (02:32)
Yeah, I kind of came in through the side door. I was working in television, doing a lot of shows up on the top of the digital tier of those networks. And I learned about a thing called political blogging. This was back in 2002, 2003. If you gotten involved in that you were part of a pretty small group and you could advance pretty quickly. And so I started a blog in 2004 I believe, and sort of advanced on the liberal side of the spectrum. And that gave me more opportunities, more opportunities. And I was still working in television, but sort of doing this on the side. And then I was sort of doing this and working in television on the side. And eventually it became clear to me that this is what I wanted to pursue. And I was really fortunate in my career to be able to write these books and become the executive editor of the Prospect. And it served me well.
Anthony Scaramucci: (03:40)
Essentially you say the liberal side. And so what I find fascinating about the busting of monopolies is that it used to be a conservative idea. I think we both know that. It generated out of the idea that there was too much power at the top and you needed to create more of a free enterprise system by shaking the power of the top and unleashing all of that innovation. So take us through why it's no longer a conservative idea. What do you think happened David?
David Dayen: (04:10)
I don't know that it's not at the ground level. I talked to people in this book who are libertarians, I talked to people who were Trump Republicans, who see this problem of concentrated corporate power very directly. I talked to one woman who is a big Trump supporter, and she was in a home that was purchased by Blackstone and I said, "Well you know, that Stephen Schwarzman is also a big Trump supporter. You're saying that Blackstone is the source of your problems. She said, "Yeah, I know. I'm trying to write to him, and I'm trying to figure that out." But I explained to her that Teddy Roosevelt was really the initial trust Buster and she said, "Well, I guess I'm a Roosevelt Republican then."
David Dayen: (04:50)
So I think there is a consensus left, right, center, whatever. If you talk to people about their daily lives, that's something is wrong, that the economy is rigged in some way, that these large interests are having a major effect on their lives in ways that maybe they can't talk about it as monopolies or antitrust. But they know that there's this level of corporate power that is influencing what they do, what they say and what they are able to do in major ways.
David Dayen: (05:24)
At the top, that's an interesting question. Why monopoly has moved sort of and shifted from the left to the right in the political sphere, in the halls of power. There still is a little bit of residual bipartisanship there. We had a hearing in the house antitrust subcommittee with CEOs of Amazon and Google and Apple and Facebook, and there were piercing questions from both sides of the aisle on the level of power that these large tech companies have. So I'm hopeful and it's one of the reasons I wrote the book and that we can see this beyond left and right. And we can see this as a problem that affects all of us.
Anthony Scaramucci: (06:08)
So explain to the lay people, and some of the younger people that listened to these SALT Talks, why it would be important the concept from an economic perspective of breaking up a large corporation, what are the benefits to that? And why would we do that? And there are some people out there that would say, "Well, the person was able to get the corporation to where it is. Isn't it unfair that we're breaking it up?" How do you respond to those?
David Dayen: (06:34)
Well, I mean, we've had laws on the books for over a hundred years that say that competition is something we want out of the U.S. economy. And if we don't have it, we get a lot of residual problems. So my view and what I write about in the book is that it goes beyond just sort of, "Oh, I only have one cable company. And so they charge me more." It goes well beyond that. Concentration is equality problem because if you have nowhere else but one service provider, they have no incentive to give you a quality product.
David Dayen: (07:13)
Concentration creates hidden risk in the economy where disruptions in supply chain for example magnify when there's only one supplier, we've seen this during the pandemic with respect to supplies for medical use like PPE. Concentration creates not only personal inequality, but regional inequality, where you see these regions that have been left behind, and these winner-take-all cities that have popped up and really created this abandonment of parts of middle America. And the wealth that was in these communities has been sucked out and is moving to these large corporations rather than staying within with small businesses and small enterprises. So on a variety of levels, I feel like we have a problem when we have smaller and smaller collections of smaller and smaller or bigger and bigger companies controlling too much of our economy. And innovations is another one, we see this in the tech sector where they have what is called a kill zone. Where if you get too prominent, that your product is either copied by the big guys, or you're bought out by the big guys, and then they take your innovation and they throw it away.
David Dayen: (08:35)
So that has a direct effect on the economy more generally. We've seen startup business formation cut in half since the 1970s. So I think it goes beyond just sort of the consumer welfare concept that largely is talked about in terms of price, which is way that we sort of judge mergers today. It really goes into more and more larger issues around the economy that we're seeing right now. And then in the book, I bring up a whole bunch of other issues that this touches on.
Anthony Scaramucci: (09:11)
So one of the great ironies which you point out which I love is the breakup of AT&T, unfortunately I'm old enough David, you don't look old enough, but I'm old enough to remember that breakup. I was 20 years old and we busted AT&T which is hard to believe now controlled all of the wire, telecommunications and was at the early onset of cellular communications. And it controlled everything. We broke it up into seven companies. It unleashed this massive amount of innovation in the society and allowed for international cable to be run and satellites to be launched. And lo and behold, the companies that we're about to talk about are really the product of the breakup of that very big monopoly, AT&T. Where now you have Google and Apple and Microsoft, and all of these people have benefited from that innovation. So these large corporations are now dominating daily life. What would be your prescription? If you were the monopolists in the United States, what would be your prescription to make things better? And what do you think would happen from an innovation perspective if we followed your prescription?
David Dayen: (10:21)
Well, I think it's absolutely true as you mentioned, and it wasn't just the breakup of AT&T, but the [inaudible 00:10:27] consent decree with AT&T which said everything from Bell Labs needed to be compulsory licensed out to electronics firms that paid a fair rate. And that created the electronics industry in the United States, which has created so much wealth for this country. And you see this recur over and over-
Anthony Scaramucci: (10:47)
Let me just stop you for one second, because you pointed ... What was happening is Bell Labs was creating and patenting all this great technology and they were sitting on it.
David Dayen: (10:55)
And doing nothing with it.
Anthony Scaramucci: (10:56)
Yes. Because they were collecting very high economic rent from their let's call it the copper wire business. So the forcing of that treasure trove of technology to be brought to the universe led to great advancement. Would that be fair to say? I mean, that's more or less correct.
David Dayen: (11:12)
Correct. Correct. Yeah. Bell Labs was one of the top R&D facilities in the United States at that point. And allowing those innovations to actually be used was great for the country and great for the economy. We see this recur over and over again. IBM forced interoperability and splitting their software from their hardware led to a software industry. The Microsoft trial, even though the remedy ended up being not completely fully set out, the trial itself forced Microsoft back from using the same tactics they used to kill the [inaudible 00:11:50] browser to kill things like Google. And that led to Google being more and more prominent. So we see the sort of eternal recurrence in tech where the government steps in to ensure that there isn't one company or a handful of companies that are too dominant, too controlling and having too many deleterious effects on the rest of the country and the economy.
David Dayen: (12:16)
And we can do that again. Now it doesn't have to be something as interventionists as a breakup. There's a distinction to be made between antitrust and anti-monopoly policy. So antitrust policy is really about mergers and breakups. Maybe you'd say there's a moratorium on mergers from Apple, which buys a company almost every week or Facebook or Amazon or something like that. Or maybe you break up those companies into component parts, maybe Amazon Web Services gets cleaved off from amazon.com or maybe Google's ad tech service gets cleaved off from Google search engine. But that's antitrust policy. You don't have to go there to necessarily come up with things that would be beneficial. So anti-monopoly policy could include things like structural separation where you say, "Okay, if you're a business, we're not going to tell you how to do this, but you cannot control a platform and also be competing with everybody else on that platform."
David Dayen: (13:19)
So Amazon controls the amazon.com marketplace, but also has its own brands that competes with companies on that marketplace and then takes all those company's data and uses it to formulate its own business model. So you can say we need to separate that structure. We can have a common carrier service and interoperability where we say, "Okay, Facebook you have to allow people in a competing service to contact their friends that might only be on Facebook. And make that interoperable, as we did with instant messaging where you can in any phone, you could do an instant message to somebody, it wasn't just AOL instant messenger you had to use. And there are more privacy laws and other regulations that you could do, there are a whole host of them, and I think this antitrust subcommittee report that's going to be coming out in the Fall is going to list a lot of these options that you could do to really create a situation where competition was allowed to flourish.
Anthony Scaramucci: (14:21)
You mentioned ... Let me not put it in your words, let me let you say it. But you talk about the middle class despair and the sawed-off ladders of processors. And so how do growing monopolies create that anxiety in our country?
David Dayen: (14:41)
Yeah, absolutely. I mean, there are several chapters I think that speak to that. And one of the biggest one is the agriculture chapter. So you have family farmers that are really struggling to survive, they're put into open competition with concentrated animal feeding operations or CAFOs which are these giant feedlots that have much more scale, tremendous scale than small family farmers. Family farmers can not find high prices for their products at processors who also own the feedlots that are competing against them. They are forced into circumstances by these middlemen, these processing companies, big packers, to grow and raise livestock to exacting specifications that might end up not panning out.
David Dayen: (15:36)
They only have one or two options for equipment. All the inputs have been costing more, all of their outputs have been paying less. And you have this tremendous amount of bankruptcies and closing up shop of family farms all over the country. And that has an effect on the communities that built up around those farms. So the hardware store and the grocery store in town that used to be a vibrant main street is no more because the farms are now all these sort of absentee operations where in places like Iowa, which I went to and talked to a lot of farmers. These towns are basically dead. And what do you do if that's where you come from? That's where your family is. That's where your community is. And suddenly it's dried up. And what does that create in a society? Well another set of monopolies, the pharmaceutical monopolies said, "Here's the sad for that. Why don't you take some Oxycontin and relieve your pain." And that created a whole other set of problems and challenges for those societies.
David Dayen: (16:48)
So the concept of regional inequality, this idea that as corporate America abandoned these communities, as the value and money that is used and circulated in these communities goes to monopolous rather than local businesses, that creates this trouble and despair all of its own. And its political problem too, because you end up having different parts of the country responding to different parts of politics, it creates a lot of divisions that we see.
Anthony Scaramucci: (17:28)
And you also mentioned that the farmers have twice the suicide rate of the veterans, and we know that we're losing almost 20 veterans a day. It's a very painful thing.
David Dayen: (17:37)
Dairy farmers, dairy companies are now putting in with their checks to dairy farmers information about suicide hotlines and things like that. That stark in-
Anthony Scaramucci: (17:47)
It's super devastating. Before I turn it over to John Darsie, who's dying to ask you some questions and we've got great audience participation. The chapter that struck me the hardest, it's literally like a boulder hitting me in the head was chapter seven, where you talk about our weapons systems, the defense industry, the fact that we can't do anything in our defense industry without the help of China because of the rare-earth minerals. But you also bring up General Eisenhower and then President Eisenhower, who was super concerned about the way we set up the military industrial complex. And I was wondering if you could offer some commentary on this and where do you think we're going from here? And what could the United States do if anything to improve this process of defense procurement?
David Dayen: (18:35)
Yeah, absolutely. There are two sort of separate issues going on there. Eisenhower warned against having this concentrated sector that was tied directly to the military. And in the next 20, 30 years, we proved him right by creating even more consolidation. This was largely done under the Clinton administration where they had this very famous event called The Last Supper where the heads of a lot of the major defense manufacturers were brought into a room and told that they had to team up because there's just not going to be enough money after the cold war has ended for these various manufacturers to get the money that they needed. So you saw the winnowing down to about five major defense companies that are the prime companies that service the United States.
David Dayen: (19:33)
And then of course, 9/11 happens and now these five companies control this massive amount of a budget. The peace dividend did not pan out. So there's that problem. The other problem is the fact that these companies motivated by Wall Street investors, in many ways, have sought a virtue in outsourcing their supply chains abroad. And so the manufacturing and particularly the manufacturing key elements of ... There's a lot of defense manufacturing in the United States, but the key elements like rare-earth minerals and other chemicals, a lot of them are only obtainable in China at the moment. That's not destiny. We have the ability, there's a rare-earth mine in California that has been shuttered, that's been there for years. But it's the way that this has gone.
David Dayen: (20:29)
And so now we're in a position and the defense department knows about this. They've written reports. They know that certain weapon systems and products could only be done with the assistance of China. And of course this is an economic power and we hope it doesn't become a military adversary to us as well. But if it does, this is a situation that's analogous to the Confederates and the Union. The Union was making all of the materials and at a certain point in the war when these materials were not flowing down to the Confederacy, they had the upper hand. And that's what you would see in a potential cold, or God forbid, hot war between the U.S. and China. And it's very dangerous. And the military is aware of this, but the way in which the very concentrated defense industry operates makes it hard to change that.
Anthony Scaramucci: (21:26)
I think one of the things that was fascinating about that chapter as well was I think it was John Deutch who brought the defense contractors to the Pentagon and said, "Hey, just to give you a heads up, I don't know who's winning or losing in here, but you guys are merging. We just don't have enough money to go around to feed all of you." And then it caused that flurry of mergers. So we've got a lot of interesting things going on at the same time. I'm going to turn it over to John Darsie. But before I go David, I thought the book was fascinating. This is an all-party book. This is a bipartisan book. This is really about what you need to do to reframe growth and opportunity in a society.
Anthony Scaramucci: (22:06)
And you do point out, you lead the book with I think from the ancient world, let me go back to the front of the book. I guess it was Emperor Zeno, 483 AD that was breaking up monopoly. So let me hold the book up for everybody before we turn it over to John. But I have to tell you, I was fascinated by the book, you're on the right path here. And I do hope that more of our policymakers pick up the book and learn from it. And we have some work to do here in terms of re-energizing and reengineering our society. But John Darsie, go ahead. I know you're dying to ask questions John.
John Darsie: (22:39)
Always, always.
Anthony Scaramucci: (22:41)
And by the way, he has a better portrait of his ancestry. See, he has Col'tre behind him, you've got George Washington. I just want you to know, I like David's ancestors a lot better than your ancestors Darsie. I just thought I would point that out.
John Darsie: (22:53)
All right. As normal, I'm going to no comment Anthony's critics of my background. David, how has the pandemic affected these monopolies and the monopolistic nature of our economy and the small businesses that are trying to compete with those monopolies?
David Dayen: (23:09)
Well, it's accelerated it and I want to thank Anthony for his kind words about the book. And I really was attempting to bring something together that wasn't left or right. That was really talking about people and how this issue affects their daily lives. So thank you for that. But it's absolutely accelerated it. So on a combination of factors, number one obviously, we have a lot of bankruptcies that are coming up because of the pandemic. And it's simply axiomatic that bigger companies have more reserves to hold out for a longer period of time than smaller companies do. And we're seeing that play out over the last couple of months. The second thing is the way in which Congress rescued the economy. They gave a large amount of money to bolster the Federal Reserves, sort of whatever it takes policy, including the purchase of corporate bonds which are really only in the market if you're a large company.
David Dayen: (24:09)
Whereas the PPP, which was a small business lending fund was time limited. It was eight weeks of payroll and that has run out by now, long run out by now. And it was not enough to save a lot of those businesses. So just the nature of congressional rescue favors big companies over smaller companies. And then the changing sort of personal tastes and dynamics that are sort of caused by the pandemic, online shopping, working from home, things like we're doing right now, all moved towards in particular a certain tech incumbents that were already big at the time, things like Amazon, Google Tools, Microsoft Tools, things like that that helps them increase their market share. I believe now the tech sector, sort of the five biggest firms, there's something like 20% of the S&P 500 in terms of value, which is an incredible amount. We've never seen anything like that before. So yes, there is an absolute acceleration of monopoly. And this is of course part of a 40 year trend, but it's now increasing much, much more as a result of the pandemic.
John Darsie: (25:26)
So you talked about the CARES Act. This doesn't necessarily have as much to do with monopolies as it does with general government oversight, but you've been critical. I've seen you on social media and in the media writing about the lack of oversight in the CARES Act and some of the corporate loans that have been given out. What is most concerning to you about that process and the precedent that it sets?
David Dayen: (25:48)
Well, the fact that we are 151 days since we signed the CARES Act, and we still don't have a chair of the main oversight committee that Congress put together to monitor the Federal Reserve portions of the legislation. I mean this is astonishing. In a similar situation after the financial crisis, there was also a congressional oversight panel that Elizabeth Warren ended up sharing. And days after that legislation passed, Elizabeth Warren was installed as the chair of that panel. We are months, five months away from the passage of that legislation. And we still don't have a chair of the panel that has a perception effect where the things ... Even though the panel with it's remaining four members has issued reports and they did one hearing, but the fact that they don't have a chair, keeps it sort of onto the sidelines, it keeps it sort of off the pages, the front pages.
David Dayen: (26:57)
And it's incredible to me, that we would not ... We're talking about trillions and trillions of dollars potentially on the table in these large corporate bailouts. And there are a variety of them, corporate debt, the airlines are getting specific grants, there's a municipal liquidity facility that could ... Right now, it hasn't been used very much, but it could be used to support state local government. And all of this is sort of being moved, billions of dollars right now could be tens of billions, could be hundreds of billions could be trillions in the future, and we're not really paying attention to how it's going. And there are ways in which we know from the first few reports that the fed is preferencing certain industries over others, certain size industries over others. And we need to get a handle on that. So yeah, it's a terrible precedent to do this. And remember, this was the Democrats, this was their big get they said in the CARES Act. They said, "We are going to do extreme oversight. We're going to figure out where this money is going. Don't you worry about it." And five months later, we still don't have a chair of the main committee.
John Darsie: (28:17)
Right. There's an opportunity certainly within the legislation for lawmakers to pick winners and losers, you talked about the municipal lending facility. I think one of the reasons it hasn't been used is because they're still sorting through how do you make those loans in a way that's not preferential to certain States or certain local groups. You want to elaborate on that?
David Dayen: (28:39)
Well, I mean just by the very nature of the initial Federal Reserve rules on the MLF, it left out I think 97% of the states and cities that were able to be eligible for the loans. In large part it hasn't been used because it's actually more expensive than it would be to use the regular market. And that makes it a nonfunctional kind of system. Obviously it would be better to use fiscal policy to support state local governments who would have this tremendous revenue shortfall. However, if fiscal policies is left wanting, and we still don't have any certainty about whether they will step-in to backstop states and cities, the Fed has options to come up with ways, creative ways to support these businesses, so we don't get in situation like we did after 2008, when the austerity at the state and local level offset the spending at the federal level and put us right back to square one. That's the scenario, we know it happened, it happened last time and we're headed right down that road again.
John Darsie: (29:51)
So this is sort of a macro question. We have all these forces like globalization, like technology that are depressing wage growth in the United States, and this is a 30, 40 year problem, as you talked about. And at the same time, you have these monopolies that are destroying jobs and destroying small businesses. How much of this would be solved by breaking up monopolies and creating sort of free market competition? And how much do we need sort of energetic government enterprise to fill the gaps in places like the healthcare industry to make things more affordable for Americans at the same time that wages are falling or wage growth is falling at least, you have healthcare costs increasing, access to education more uneven, so how much do we need an energetic government to step in and fill some of the gaps here?
David Dayen: (30:33)
I think this is a big enough problem that it's an all hands on deck moment. I don't think you can say that there's a silver bullet here or there. It's not one thing that's going to help us through. Obviously, I think stronger merger policy is incumbent upon us to get to a situation where companies just don't get bigger and bigger, and bigger, and bigger. So that's a piece of the puzzle. A stronger fiscal intervention is certainly going to be needed in the short-term. I think the nature of our healthcare system robs our competitiveness. It makes businesses responsible, what's the story that a Ford Motor company spends more on healthcare than steel. This is a global competitive in this problem, as much as it is anything else. And some would say it's a moral problem to have your wellbeing and your health tied to your job, or whether you have a stored personal wealth.
David Dayen: (31:36)
So I think you need to work on a number of different fronts, but Congress needs to get involved again in these issues. I mean, we had a long period of sort of letting the markets sort of dictate what the outcomes would be. And it's led us to the place that we're in now. And I think the pandemic was an eyeopening moment for that. I mean, we saw that the free market wasn't available to take care of a situation when we had massive needs and the supply chains were all the way over in China, and we couldn't make a piece of cloth with two strings tied around it right away. This has been a moment that has exposed some of the fault lines in the way that the economy runs right now, both through monopoly and through other factors. And I think that now that we have seen the effects of this, it's incumbent upon us to do something about it.
John Darsie: (32:36)
So we have a business contact, his name is Winston Ma. He used to work for the China Investment Corporation, which is the large sovereign wealth fund in China. And he wrote a great book a few years ago about the mobile economy in China, how they've invested heavily in building out this mobile-first economy. And in a communist regime, they're able to then harvest all that data that's driven from a mobile-first society to make advancements and things like AI and other industries. And part of the reason they've been able to do that is because they've subsidized heavily some of the tech giants in their country, like Tencent who developed WeeChat, which is probably the most powerful app in the world. It's sort of come on the radar of American, normal Americans because of Trump's recent actions to try to ban it in the United States. But how do we compete in the United States against someone like China who is actively engaging, I guess you could call it fiscal policy or heavy handedness in terms of driving innovation in areas that are important, and what advantages does the American system present versus the Chinese system? And how do we compete over the next 10, 20 years with China in that regard?
David Dayen: (33:42)
Well it's mercantilism. I mean, that's what China's engaged in. And in the tech sphere, it's actually very dangerous. It's a surveillance society. Not that we don't have one here, it's just being done by private interests rather than by the government itself. I think to take your question in maybe a different direction, one thing you're talking about is the preparation of an industrial policy and an infrastructure policy. So I have a chapter in the book about broadband, Chattanooga Tennessee has the fastest broadband in the United States and maybe the fastest in the world. And it's done through a public utility that brings fiber optic directly to the home, to Tennessee Valley Authority, public utility in Chattanooga.
David Dayen: (34:31)
And it's created this tremendous amount of opportunity. Not only is it super fast internet, 10 gig per second, but it's created an industry around 3D printing in Chattanooga. It's created incubators for more tech policy and tech businesses. It's created new options for telehealth, even before the pandemic. It's created education options and things like that. And if you go three minutes outside of Chattanooga Tennessee, you have [inaudible 00:35:04] and you have kids who are sent to Starbucks parking lots to catch wifi to do their homework every night. And the reason that that dichotomy is there is because the monopolist, telecommunications companies, AT&T and Comcast got their buddies in the legislature in Tennessee to pass a law that says public utilities can only do this kind of municipal broadband through the edge of their service area. So even if cities outside Chattanooga want the service, they are not allowed to get it by law. That is absolutely backwards. We have the opportunity and we obviously have the technology and the ability to create something like Chattanooga in practically every city in America, but we don't do it because investor-owned utility and large telecommunication firms don't want it to happen.
David Dayen: (36:03)
A forward thinking country would see the example of Chattanooga and say, "This is something that we can do." And it wouldn't really cost that much because it's brought back more for the Chattanooga public utility than it has been in paying out. We can do this across the country. We can build sort of a national network that is completely wired. And that's the kind of thinking that we do not do in the United States and maybe future administrations will figure it out. But I think that's a perfect example of the kind of thing you're talking about, which is really a forward thinking way of looking at this issue.
John Darsie: (36:43)
Yeah. You might've taken it in a little bit of a different direction, but it's a big theme in Winston's book that I mentioned is China's investment in that broadband infrastructure that continues with 5G and all of the ancillary benefits of that within the society, their ability to build out their AI systems, gather data and incubate technology companies. So you talked earlier about the fact that you tried to write this book, not as a left or a right book, but it's something that you hope to unite people in terms of building more equitable legislation around monopolies and understanding the impact on small businesses or some of these forces that have been in place for 30 years. How optimistic are you that that process is going to take place? How much of it is driven, the lack of action is driven by special interests and money and politics? And what do you think the path is to really meaningful action in terms of regulating some of these monopolies and creating more competition in our economy?
David Dayen: (37:38)
Well, a lot of it is driven by money and politics. Economic power converts into political power. And we see this across the board, whether it's through campaign donations or lobbying or the revolving door of people coming from industry into the government. So am I optimistic? I think what makes me hopeful in doing this book is I was able to travel around back when we could do that and go to talk to people all over the country, Iowa, Tennessee, California, New York, Ohio, North Carolina, where have you. And I did see a lot of commonality of experience, as I said, they couldn't say what percentage market share a certain airline had or things like that. But they all had a sense that there was this problem with the economy, this problem with companies taking up more and more space in their lives and affecting their lives in larger and larger ways.
David Dayen: (38:43)
And they all sort of got it in that sense. And when you have sort of an understanding, a commonality of understanding, which is rare in our sort of tribalized, polarized political and social environments, when you have that, you have the basis for something that can lead to action. And so the thing that we don't have is political will, and I think political will can be brought along by movements. So one of the things in the last chapter of the book that I talk about is the situation in Israel. Israel was even more concentrated than the United States, they have these tycoons and interlocking directorates that controlled large segments of the Israeli society. There was a social movement, it actually started through a journalistic enterprise. It led to mass action on the streets, well beyond anything we've seen in the United States.
David Dayen: (39:44)
And it led to the dismantling of these large concentrated industries, such that for example cell phones were extremely concentrated in Israel. And after the anti-concentration law that was passed by the Knesset, you now have prices for cell phones that are 90% below what they were originally. So I think it takes a movement. There was a famous paper written by Richard Hofstadter called What Ever Happened to the Antitrust Movement. This was written in the 1950s, 1960s, where it talked about how first there was the movement and no policy, and now there was policy and no movement, everyone got comfortable. They thought that the antitrust enforcers were doing a good job and they can sort of be left to their own devices. Within 20 years, those laws were changed sort of without changing a word of the law, they were just reinterpreted, and we had no movement and no policy. And so I think the way to get that back is through grassroots mobilization and getting people interested in this topic and forcing the political system to act.
John Darsie: (40:59)
Well the grassroots movement triggered by a journalistic outlet educating people on the problem. That sounds-
David Dayen: (41:06)
Imagine that.
John Darsie: (41:06)
It's something you might be at the middle of hopefully over the next several years. I'm going to leave it to Anthony for one final word. It's fascinating, the book, I would recommend it to everybody, Monopolized. Anthony, you have a final word for David?
Anthony Scaramucci: (41:20)
David, thank you for coming on. And we hope we can catch up with you after the election to talk about potentiality or policy that could come out of a great book like this. But I do agree with what John said, it is a post-partisan book. It's actually regaling back to an earlier time in the American society where our public politicians were trying to make things fairer and evening up the playing field. And so to me, as somewhat of a libertarian, I think it's a bipartisan book. It should be read by everybody. Thank you so much for joining.