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Over the past several decades, the largest corporations have absorbed and destroyed all opposition–big and small–and slowly come to play a role in every aspect of Americans’ lives. That’s the central argument of journalist David Dayen’s latest book, Monopolized: Life in the Age of Corporate Power. On this week’s installment of Scheer Intelligence, the American Prospect editor joins host Robert Scheer to discuss how corporations peddle the idea that consumers have the “freedom” to buy whatever they want in order to distract the public as their rights are increasingly eroded.
“We have the illusion of choice in America,” says the Monopolized author. “Corporate branding exercises and marketing teaches us that we can choose this, that or the other thing, but they’re all really coming from the same place. And what that does is it anesthetizes you, really, to this reality of having an economy that is concentrated in fewer and fewer hands, and the implications of that, and the harms of that for society at large.”
“Not just for us as consumers,” Dayen continues, “not just because we pay more because there are fewer choices, but for us as citizens. […] This is a problem for us as workers, this is a problem for us as members of a community, where communities are being left behind by the concentration of power in certain markets that extract value from communities that used to have local stores and local businesses. It hurts us as citizens because economic power converts into political power, and democracy becomes a farce that’s controlled by corporate America.”
Scheer highlights how Dayen’s book gets to the heart of the fact that regardless of who is president or which political party is in power, the real power remains in the hands of people like Jeff Bezos, Mark Zuckerberg, and Warren Buffet. The billionaires not only profit from the destruction of labor rights, but wield extraordinary influence in a democracy that has been in and of itself monopolized by a wealthy few. In response Dayen argues that not only did the bipartisan deregulation essentially break the U.S. government’s social contract with its citizens, but actually led to the election of Donald Trump, a demagogue who was able to seize upon legitimate discontents in order to rise to power. Dayen warns, however, that solely getting rid of Trump, who Scheer calls the “armpit of monopoly capitalism,” will not solve the problem.
“We can’t rely on the people who got us into this position on a bipartisan basis to help fix [the problem of monopolies],” concludes the journalist. “So I really think that it is going to have to come from the people. We’re going to have the same problems if Joe Biden gets into office. […] And if we don’t handle this problem in a future Democratic administration, what we’ll get is a competent Trump. We’ll get someone that actually knows how to work the system a little better. And that would be nothing short of a disaster.”
Listen to the full conversation between Scheer and Dayen as the two discuss how governmental deregulation allows corporations to regulate themselves and the rest of us, and explore several specific examples of the many ways corporations have taken over American life.
Natasha Hakimi Zapata
RS: Hi, this is Robert Scheer with another edition of Scheer Intelligence, where the intelligence comes from my guests. In this case a really terrific journalist, David Dayen, who I first got to know and did a podcast with on a book he did about the whole housing meltdown and [the people] who profited from the great bailout, Chain of Title. And it’s a terrific–really, if you want to know the failure not just of Republicans in stoking the housing meltdown, but Democrats, both in helping get it going and then failing on the bailout, and really rewarding the very same people who caused it, that’s the book to read.
But the new book is even more provocative, and I would say more important: Monopolized: Life in the Age of Corporate Power. It’s from The New Press, which does a lot of good publishing on current-event issues. And let me just say to begin, in introducing you, really what we’re talking about is the great deception that we have choice in America. It reminded me of a John Lennon song, “Working-Class Hero,” and he talked about people like himself feeling so free and wonderful and everything, but–and then he said, you’re just f-word peasants to me. And what struck me in reading your book, we have this illusion that we have this great choice of brands. And then in the book you tell us, wait a minute, all these brands are owned by the same conglomerate. There is no choice. And the whole idea of antitrust, of capitalism and the free market, of Adam Smith, has been destroyed. You trace it back to Bork, the failed candidate for the Supreme Court in the Chicago school of economics, and Ronald Reagan. But it was certainly picked up by Bill Clinton, followed by everyone who came since. It’s the illusion of a free market, and yet we are in the most controlled situation. So take it from there.
DD: Yeah. Well, first of all, thank you, Robert. It’s always an honor to speak to you. You’re a giant in journalism, and thank you for those kind words. So yeah, I mean, I had a very direct experience with this whole illusion of choice thing, just through the process of reporting the book. So, you know, back when we could actually travel places, I had to go out in the world and talk to people. And you have to, you know, pick up certain services and goods in order to do that, whether it’s a rental car or an airplane or a hotel, or you know, just what all of us do in the everyday, in terms of shopping. And once I got interested in this topic, I just started learning more and more about what the realities of this were. And you just–it was really an eye-opening experience.
So I had a couple of examples of when I was on the road, and I was in a hotel, and I started walking along to the elevator and I saw this other part of the hotel, the hallway just kept going, and it turned out I had walked into a different hotel. That it was, you know, there was a sign that said “You are now entering the Hampton Inn,” and I was in a Homewood Suites, and they both have the same corporate parent. So this was on the same–there wasn’t a wall or anything in between these two allegedly separate hotels, but I was able to walk in between one and the other. I had another experience at a rental car counter, where I was at an Enterprise counter the woman said, OK, I’ve got all your information, hold on a second. Walked out of the counter, walked over to the National rental car counter, picked a set of keys out of a bowl and returned them, and gave them to me. And what I later learned is that Enterprise and National have the same corporate parent, and apparently the same cars and the same keys.
So this was just pervasive. And it’s a larger display of what you just said: that we have the illusion of choice in America. That corporate branding exercises and marketing teaches us that, you know, we can choose this, that or the other thing, but they’re all really coming from the same place. And what that does is it anesthetizes you, really, to this reality of having an economy that is concentrated in fewer and fewer hands, and the implications of that, and the harms of that for society at large. Not just for us as consumers, not just because we pay more because there are fewer choices, but for us as citizens. I mean, we’re more than our Amazon Prime accounts. This is a problem for us as workers, this is a problem for us as members of a community, where communities are being left behind by, you know, the concentration of power in certain markets that extract value from communities that used to have local stores and local businesses. It hurts us as citizens because economic power converts into political power, and democracy becomes a farce that’s controlled by corporate America. So in so many ways, there are these tremendous harms. And as long as we think that it’s not true, that we have some choice in the matter, we blind ourselves to these harms. But when you see reality for what it is, and the fact that we do have this concentrated economy, you can see the connections much more clearly.
RS: But maybe the scary thing is we are only our Amazon Prime accounts. Maybe–you know, this was the warning of dystopian novels like Brave New World. You know, the buffet, the endless buffet of choices that are not real choices. The illusion of consumer sovereignty is the great trap of capitalism. John Stuart Mill warned about it; you know, the difference between use value and exchange value. This illusion of freedom, the right to shop. And a large number of people in this world, no matter what system they live under–they could live in communist China, but they’re trapped in the same illusion of choice, consumer choice. And you sacrifice your political freedom, you [don’t] even hunger for it, you don’t really care about the depth of debate–as long as you can consume. And when you can’t consume, then you get angry.
And in your book you have a really interesting explanation of why the country–I forget the phrase you use about the discontent, you use that word a lot. And you say, “The country cannot come together because monopoly has separated us, and thrown us from power.” And then you say, “[And a] democracy run by [plutocrats, for plutocrats, bears] no resemblance to democracy.” So you really provide, in your book–and the book, you know, the title is not as grabby as it should be. [Laughter] Monopolized: Life in the Age of Corporate [Power]. No, it should be “monopolized”–you know–“life in the dystopia of modern capitalism.” Because it’s really this delusion of freedom that is what your book spells out.
And it doesn’t really matter who’s president. The country is not divided because we have this obviously atrocious president right now. Because it was divided, and continued to be divided ever since–Reagan was more genial; Bill Clinton embraced us, and he was supposedly more progressive; George Bush was charming, except when he was inventing wars; and you could go on. And what we are trapped in is a notion of freedom that is tied to consumption and the idea of choice in the marketplace. And the example that sticks in my brain–because only last night I had a fight with my wife for buying Häagen-Dazs ice cream instead of Ben & Jerry’s. And then I read in your book, Ben & Jerry’s is just like one of these other companies now.
DD: Yeah. They’re owned by Unilever.
RS: Ben and Jerry were great guys, are great guys–yeah, you ruined my night last night, I lost my whole argument. [Laughter] You know, but it’s a dangerous illusion to think that these consumer choices–this is why I get back to Amazon Prime. Here we are, locked down in a pandemic; the only thing that prevents a lot of people from going crazy is they have the freedom to shop, and then some Amazon worker will risk his life or her life to get you the product, and maybe the doorman will bring it to you and others, and then you can leave it, you know, sitting somewhere for 10 hours, and then you’ll open it. But this ability to shop–and the definition of freedom is the freedom to shop–is really this incredibly dangerous notion.
And your book, and you go through very important–this is not just, you know, thoughts while showering, some big rubric of an idea. You go through case studies of what happens when we fly on an airline, or what happens when you’re a journalist. You know, I wrote a book called They Know Everything About You about the role of advertising in media and the destruction of journalism. And you can’t blame it on Craigslist or just the coming of the internet; you have to blame it on basically the marketing of private data by Google and Facebook that make up well over 90 percent of all the advertising money. Goodbye, journalism.
So your book is–and you could take us through some of those case studies. Because I want to do it, give it its due. What we’re talking about here, it’s not just this word “monopoly.” We’re talking about the very thing that Adam Smith and David Ricardo and the classical economists abhorred, right? Which is, you mentioned the English tea trade and so forth. This very idea–in fact, you trace it back four or five hundred years, this loathing–or a thousand years–this loathing of monopoly. So flesh it out.
DD: Absolutely. You know, you’re a better marketer than I am, I guess. [Laughs] Because you’re right; I mean, it is a dystopia. It is a false, a false facade. It’s, you know, like a Potemkin village, this idea that we are “free to choose,” as Milton Friedman’s famous set of books said. But the truth is, we don’t have much choice.
So yeah, I tried to take a chapter and make it about one sector of the economy, and find one person for whom that economic system and the small group of companies that control it, are affecting their lives. And not just because they have to pay a little bit more. So the example with respect to airlines is I talked to this woman Kate Hanni who got stuck on a plane for 12 hours in Dallas. And this radicalized her; [she] said, you know, this is impossible, that they force planes not to take passengers off it, and stick people on a tarmac when there are delays for hours and hours and hours. And how long did it take her to get just to a reasonable amount of, you have a time limit of three hours where you can stick people on the tarmac–like, the length of an NFL football game? It took her 12 years to get to that point. Because the airlines have captured the FAA and the Department of Transportation, and made it impossible to put in regular policies for people so that they’re not essentially captives on these giant tubes in the sky. And shoved into smaller and smaller spaces and given a terrible experience, and then told, oh, if you want to pay us a little more we’ll give you the experience we gave you 10 years ago, which was just adequate, but you’ll have to pay for that more now.
So that was the example with airlines. With respect to agriculture, I talked to people who are multigeneration farmers, people who’ve had it in their history for generations. Where the new generation can’t do it anymore, because these concentrated animal feed lots and these agribusinesses are just forcing out the small family farmer. I talked to a man who’s, you know, who came over from Scandinavia, and his ancestors were farmers, and he’s a farmer now. And his daughter had to become a hotel clerk, and she calls him, you know, talking about how she had a tough day at work. And then she just breaks down crying and says, you know, dad, all I wanted to do was farm. And I mean, this is this notion of freedom; you know, the bargain of America is that we bring our talents and our skills and our aptitude to bear, and we can always find an opportunity, an outlet for those talents and skills. And because of monopoly, that is just not true anymore.
And it’s not just in farming or agriculture; it’s true in a host of walks of life, the ways that innovation gets completely squandered, and entrepreneurship gets squashed by large incumbents who don’t want to see any competition. I mean, our business formation in America is at about half the levels that it was in the 1970s. This is a pervasive problem, and it really comes back to freedom and liberty. People don’t have the liberty to do what they want, at a fundamental level within American life, because of the pervasive power of concentrated industries and a few small corporations controlling everything. So those are just a couple examples; there are many in the book of different harms that monopoly causes.
RS: Well, let’s bring it closer to our craft of journalism. You know, these journalists are great at copping out and not talking about their own shop, you know. And you’ve got Rachel Maddow, the heroine right now, I think she makes 15 million bucks thanks to whoever at the moment owns MSNBC. You got some people making good money, left and right, on Fox and everywhere else. But the fact is this journalism model has been broken. You describe it very effectively in your book. But the people who broke it didn’t break it because there was some Russian agent manipulating Facebook and Google. They broke it because over 90–in your book you say 90 percent of the new ad dollars goes to Google and Facebook. They now, along with Apple News and everything else, they control what is news. And you’ve got these traditional surviving organs of journalism that can get big internet readership–so what, they get it through Facebook, they get it through Google searches and so forth, and they don’t get the revenue. So the model is broken. And you know, and journalism is really being strangled, and you describe it very effectively in your book.
DD: Yeah, thank you. Yes, absolutely, Google and Facebook now are gatekeepers of communication, and to a lesser degree Amazon, if you’re talking about books. They are gatekeepers of communication; their algorithms dictate what news gets to people in a fundamental way. And though they don’t produce any of this product, they earn a large segment of the revenue from this product. So what we’ve seen in the last decade or so, a study from the University of North Carolina shows I believe 1,800 metropolitan areas have no daily newspaper right now. We did a piece in the magazine I edit, The American Prospect; the Cleveland Plain Dealer went in a decade from 340 journalists to 13. There is this hollowing out, particularly of local journalism. And I’m reminded of a line that I put in the book before any of us had ever heard of coronavirus or COVID-19. It was a study that was done that shows that news deserts, places that don’t have reliable daily news outlets, are more susceptible to the spread of viruses. Because epidemiologists use local news to track where viruses are going. And so it was interesting that that suddenly came up again, even though it was not written in that context whatsoever.
Facebook and Google, they not only dictate sort of what gets seen by people, they dictate the means by which those pieces of journalism are directed now. So Facebook a few years ago–this is the core story that I tell in the book–Facebook a few years ago decided, we’re only showing video. Video is the new frontier, and if you’re a content producer you’d better produce video for us, because that’s what’s going to move on Facebook. And all of these journalism outlets, these digital journalism outlets fired writers, hired video directors, hired filmmakers, and they called it “the pivot to video.” They shifted their operations into video at the whim of Facebook.
Then a couple years later, Facebook was forced to admit to its advertisers that it had goosed all the stats on video viewing. That nobody was really watching video on Facebook. That they knew about this for about a year and didn’t tell their advertisers, who were paying for the privilege of getting ads placed in these videos. And the fallout was that Facebook just changed their minds. They didn’t face any sanction for it. They just said, oh, now we’re not doing video anymore; we’re going back to print, we’re going back to text. And so all of these digital journalism outlets that had completely revamped their operations suddenly had to revamp them back. And many of them had put so much cost and so much expense into buying equipment and hiring these filmmakers, that they just went under as a result. And I tell that story in the book.
And so what that shows is that we’re all sort of, as one person in my book put it, serfs on Google’s farm, or serfs on Facebook’s farm. That we’re just doing their bidding and changing our entire modes of being at the whim of the algorithm, or at the whim of the decisions of Mark Zuckerberg, and why should he have that power to dictate what people see and what people react to and relate to on a daily basis.
RS: Well, let’s examine that question. Why should he have the power? And obviously, there’s been a tension between a notion of private enterprise and capitalism and political democracy ever since these concepts were afloat. And I began by talking about the classical economists, you know, Adam Smith and Ricardo and others. And the whole belief in Adam Smith’s notion of the invisible hand of a free market was an anti-monopoly, anti-cartel notion. Cartels were around. Monopolies were around. The free market was an alternative to that. So this was not a plea for getting bigger and bigger; this was a plea, really, for something you don’t associate with Adam Smith, but was true–was government regulation. And your book very effectively examines this concept of regulation. And in the name of something called deregulation–you had this movement ever since the Reagan years; it’s been longstanding, coming out of the war, the destruction of trade unions, and freeing industry to do its thing, and so forth. But the idea that somehow regulation is needed to preserve free-market capitalism has been lost. Not only lost; it’s under direct attack by the Silicon Valley philosophers and so forth.
So the whole idea–and your book is particularly important as an examination of this use of language. They took this language of regulation, and instead of it being something to preserve a free market–after all, that’s what regulation should be about: antitrust, break up the phone company, you know, have competition. They’ve turned it into a dirty concept, deregulation. Inefficiency, anti-freedom, you’re getting in the way of the speeding train. So why don’t we examine that, and recognize–you know, the season now is to focus all of our energy on Trump as the great menace. But the point in your book is that the anxiety, the alienation, the tension in America has been brewing for half a century, more than a half a century. And you have very poignant descriptions of this–yeah, take it away.
DD: Let me say two things. That number one, this notion of regulation–when you think of regulation, it’s really just rules that are put in place to govern a particular market. And that doesn’t go away whether you have a lot of government regulation and rules or not. You either have regulation by democratically elected processes that go through very specific steps and get out to the public, in a public forum; or you have regulation that is determined by the corporate board room, which has no thought of the public interest in it whatsoever.
So you’re either going to have rules that are set up to, for example, in the case of consumer product safety, that we’re going to have inspectors and we’re not going to let anything get into the hands of consumers that can explode in your hands. Or you have regulation set up by Amazon which says, well, we’re not responsible, we’re just a flea market location, and if you buy something from one of our third-party sellers on Amazon and it blows up in your hands, ah, you’re going to have to take it up with them. We’re not responsible, we’re indemnified, not our problem. And that’s regulation by Amazon; that’s what that looks like. It’s based on protecting their interests, and not really caring about the public interest. And so when you make that the choice–not between regulation and deregulation, but between regulation by the public and regulation by the corporation–I just think that that puts the thing in a very different light.
So that’s the first thing I would say. The second thing is how, you know, we’re in an election season, and it’s very binary, and you think about, you know, it’s Trump or Biden, you’ve got to pick a side, right? In this case I’m reminded of something that Zephyr Teachout, the great professor at Fordham who ran for a couple of congressional races and tried to become attorney general of New York, here’s the way she put it to me. She said that conservatives say you’re out of power, and that’s because of government; government has all the power. And Democrats respond to that by saying, no, you’re not out of power; you do have power. And the truth is that you are out of power, but it’s not because of government. It’s because JPMorgan and Comcast and Google and Amazon took that power, and they’re using it and operating it for their own devices.
So once again, it’s a matter of changing the frame here, and looking at what’s really at stake. I really feel that this issue of monopoly power is the key to unlocking all of these other challenges that we talk about perennially anytime there’s an election, whether it’s health care, whether it’s education, whether it’s immigration, or all of these things; monopoly is really at the heart of so many of them. And if you can figure out how to break up these concentrations of power, then we can make progress on all these other issues. But you have to sort of lead with the thing that’s the key that’s going to unlock the door, and I really feel that that is getting a handle on this monopoly problem.
RS: Well, the problem is that the only way the public gets to know what’s going on is when they lose their jobs. When they can’t afford the goodies. When health care fails for them. And then the problem is, they have to isolate–why is this happening? Is it their own personal failure, were they not good enough in school, why is their son who went to the best college now driving Uber or something? You know, where are the jobs? So you have this general unease, which your book captures, because it’s a lot about the human beings caught in it. And we know it’s a generalized phenomenon, that the society is coming apart. But the problem is the two competing narratives about why it’s coming apart by people who recognize it. The right wing has a neofascist vision which blames–if Trump started out at least not blaming foreigners, now he’s all for China-baiting and, you know, blame the others out there. But still it’s generally blame the losers, the troublemakers, or what have you, and defend the rich. And then the progressive side is bought out by the rich.
And this goes into journalism. Who are the good guys and the bad guys now, you know? Big money is supporting both. And they supported it in the last election. And you mention Comcast, you mention these companies–well, we have two models of control of media in this democracy now. You point out, by the way–I think a brilliant part of your book is an examination of the original good old days. And you make a point: they weren’t good; the media could be fake news, whether it was run by Jefferson or it was run by Hamilton or anybody else. And they could lie with impunity–well, not with impunity. They would lie, and they could distort, and there was a lot of deception. But there was diversity. It didn’t take a lot of money to have the penny press. It didn’t take a lot of money to be a town crier, to put up a wall poster. And you had lots–and even when I grew up in New York City, I think you had 19 newspapers, you know? And if you didn’t like one, you’d find another one, and so forth. What you have now is either a corporatist model–I forget who owns MSNBC right now, is it Comcast? I don’t know, I’ll have to look it up–
DD: It’s Comcast, yeah. It’s Comcast.
RS: –OK, these things change, you know. And–right, thank you. And so we have the corporate model, and you know–so what is Rachel Maddow, what is MSNBC–are they going to really take on big corporate power? Even to the degree that Bernie Sanders did? Are they really–no, they pull back. And they’ll be thrilled with a centrist who embraces all that. And then you have the right-wing side, which has a more rapacious capitalist. But then who are the saviors? The saviors are the lone billionaires, like Jeff Bezos, who you take apart in your book. But those are the people, they come–oh, he saved the Washington Post with his own chump change in his pocket. Not his $130 billion or something, but oh, his pocket change–I’ll buy the Washington Post. And you’ve got a billionaire in Los Angeles who buys the L.A. Times, you know. But then you look at these companies, Microsoft or Amazon, competing for Defense Department money. Amazon has a big part of the national security cloud; they’re in bed with the military. Microsoft just got this huge Pentagon contract, $10 trillion, whatever it is, you know, yeah. So come on, give us our reality check. Can this democracy really be saved? Or is it absurd, is it an oxymoron, the idea of a free monopoly society? And I’m quoting, I’m citing Adam Smith here now, not Karl Marx.
DD: I mean, I’m glad that you keep bringing it back to Adam Smith, because it’s important. Adam Smith loathed monopoly power; he thought that that was the death of capitalism. And now we laud it as the lifeblood of capitalism. We, you know, have these testimonials to Warren Buffet, whose entire investing and economic strategy is build a moat around your business, which is literally a monopoly power strategy. It says that, you know, what you should do is hold your customers captive and put alligators in the water if they try to escape. So I mean–and I go back to Buffet several times in the book, as sort of this avatar of monopoly, this cheerleader for the type of capitalism that is practiced in the United States.
So I mean, look, I certainly lay out a very distressing scenario in the book. One thing–I don’t know if it gives me hope or not, but when I went around and talked to people–and I talked to people from all walks of life, all ideological persuasions, Trump supporters, libertarians, liberals, it ran the gamut. And as well, I talked to people who were, you know, at the bottom rung of the ladder, in the middle, at the top; I talked to CEOs. They all really had a sense, a similar sense, that there was something very, very wrong with U.S. society and the U.S. economy. And that there was–they might not have been able to put their finger on it and say directly “monopoly” or “market share” or whatever, but they realized that the game is rigged. They realized that there is something that is holding them back, and that corporations have way too much power over their lives. And I do think they understand that. This sort of, this notion hasn’t been organized in any meaningful way until maybe the last year or two, when we’ve finally seen these organizations dedicated to monopoly that are rising up.
And you talk about how people don’t really get this until they’re out of work–well, that’s the situation today, right? And it’s probably going to get worse with this pandemic and the lack of federal support for people who are struggling right now. Right now we have two economies, like a complete severing–you know, John Edwards in 2004 and 2008 talked about the two Americas; it’s way worse than it ever was before that. You have the stock market soaring; you have real estate sales through the roof; you have people locking themselves away in the Hamptons, and having private school pods for their children to learn, and everybody else is suffering. And that is untenable. Historically, that is untenable, right? I mean, you know this. That you cannot go through a society with that much of a cleavage between the rich and the poor; social unrest is the inevitable result of that.
So we’re in a moment where we could see some organization, if we get it, at the local, the grassroots level, a popular movement, to say this doesn’t work anymore, that we need to make these changes. And that could force the political system to act. Now, you know, I know you’re a very cynical sort, and I often share that perspective as well. But I think back to the New Deal and how Franklin Roosevelt ran on balancing the budget, right? He was not like this hard-charging progressive during the election itself. Only afterwards did he realize that the public was crying out for, you know, something to happen, and were really angry, and something needed to change within the country. And so, you know, that level of grassroots, bottom-up movement-building is, I think, what it’s going to take, if it’s going to take anything to dislodge these concentrations of power.
RS: So let me ask you. You just said that you’re not as–was the word “cynical” as I am?
DD: [Laughs] I’m sorry to characterize you in that fashion.
RS: No, no, no, no. It’s an interesting–but was the word “cynical”?
RS: OK. But it’s interesting, because you know, I actually think of myself as quite naive.
RS: You know, for instance–no, seriously, I’m being honest about it. I drank the Kool-Aid. I actually, I’m the child of immigrants who came to this country for a better life, spoke another language and everything. I grew up in the Bronx, I benefited from good public schools. I drank the Kool-Aid. And I always–I wouldn’t be politically concerned and active if I didn’t think we could make change within a democratic, capitalist society, if I didn’t think voting mattered, if I didn’t think a free press mattered. And I’ve done that–you know, I’m 84 years old now, you know, for whatever radical rhetoric I’ve had at different moments or something. The fact of the matter is, I bought the whole thing about the system. And I have voted, ended up voting for lesser-evil war criminals and sellouts and everything. You know, I was a–I thought very highly of Bill Clinton at one point, and interviewed him before he was president. I’ve spent a lot of time with these people.
But reading your book–let me hold you to your book–reading your book, I think those views that I even entertained were naive in the extreme. And they serve the plutocrats. As long as we can keep the illusion of power alive, and that oh, I’ll tell my students once again, [vote]–yes, we should vote. Yes, there are lesser evils and so forth. But reading your book, none of this deregulation can really be blamed in any serious way on Donald Trump. It was endorsed–you even have the example of Rahm Emanuel being one of the really bad actors here, and his brother being the White House chief of staff, right, in the administration, Democratic administration.
DD: Well, Rahm Emanuel–just to be clear, Rahm was the chief of staff and his brother was on the board of Live Nation when they made their merger with Ticketmaster, which has created just a really horrible situation with live event venues, back when we could do that, right, and ticketing, and really gauging the American public. There’s no question that voting is not enough. It’s not the sum total of participation in a civic society. There is no question that this is a bipartisan problem. If you trace it back to Bork, you can go back further to Carter deregulation of the airlines, you can go back to Kennedy’s comptroller of the currency trying to break up or end, repeal Glass–Steagall, and give the banks more power. You can just go back and back and back and back.
And this is something, certainly since Reagan, that has been a bipartisan situation where both parties have, you know, essentially left corporate America to its own devices in terms of antitrust law. There has not been a lot of regulation, or a lot of enforcement, of the existing laws. The only way that this has changed throughout history–and we’ve had, you know, you look back to the Gilded Age, that was another time where it didn’t matter who was in power; there were robber barons and they reigned supreme over the country. And there was nothing that was going to stop them coming out of Washington. And what ended up happening is that you had a movement, the granger movement of farmers and laborers and small business owners, that forced the political system through the Progressive Era to respond to their concerns, anger, and frustration.
And that’s really the only way that real change has ever been made in this country. I would argue the New Deal occurred in the same way. One of the stories–it’s not in the book, but I’ve written about it recently–that I like to talk about is Glass–Steagall. So Glass–Steagall is one of the greatest anti-monopoly laws that we have put together in the last century. It was the structural separation of investment and commercial banks so that depositor money wasn’t used for, essentially, gambling. And of course Bill Clinton repealed that in 1999. But if you go back to when it was built, who is Carter Glass? Who is Glass, who is the Glass in Glass–Steagall? Carter Glass was a right-wing, Southern Democrat from Virginia. He was the chair of the Senate banking committee. And he was an absolute stooge for banking interests. Everything that banks wanted, Carter Glass would provide. He was a reliable ally to Wall Street. And so why is his name on Glass–Steagall, this fantastic structural separation, anti-monopoly law of the financial industry? Because there was so much anger in the country, they wanted the total and complete nationalization of the banking sector. They didn’t want private banks to exist anymore. And so the compromise that Carter Glass came up with was to, you know, put forward this structural separation.
And so, you know, there are rare moments in American history where the people do have a voice, and that you know, they might not get everything they want, but what they end up getting is this unbelievable advance. The fact that Carter Glass, who’s like the Joe Lieberman of his day, or pick your right-wing bank toady of this day–the fact that Carter Glass created Glass–Steagall gives me a little bit of hope. That it doesn’t matter who that politician is, what matters is that the political system is made uncomfortable by an organized political movement. And made up of people using their collective voice. So to the extent that I lack cynicism, that’s my answer.
RS: No, it’s not a question of cynicism, and I’m not going to accuse you of being naive, [Laughter] which I guess would be the counter-charge. I don’t think those labels really work. The problem is, if you don’t have adults watching the store–and by the adults, I mean people who have some sense of obligation to their constituents and to the long-run future of the country, and to the well-being of the people. And that can come in different forms, you know, of who represents the people. They’re torn between a progressive vision, which you would offer, and you have people in the U.S. Congress now–Ed Markey, for instance, who just at least survived his primary in Massachusetts, has been such a person. You have other enlightened people; certainly Robert Reich, when he was Clinton’s labor secretary, warned about all this. You’ve had others. Or people went to the right wing, particularly when there’s a racist, low-level, xenophobic appeal.
And your book–and why I admire it so much is it takes on, front and center, the fundamental disarray in American society. And instead of taking the cop-out MSNBC position, that it’s all Donald Trump’s fault, you know, with no responsibility on the Clintons or the Democrats generally–that’s a distortion, but it’s not only a distortion in terms of accountability; it’s misleading. Because if you think the people that are angry and go for Trump are just “deplorables,” to use Hillary Clinton’s word, you’re not getting the upset out there, the anger out there. And I want to end this–because you did write a terrific book on the housing meltdown, and you know, people in addition to reading your current book, which is Monopolized, ought to take a look at Chain of Title–the total irresponsibility baked into the recovery from the banking meltdown, very important book.
But I want to end on this last note that you raised about Glass–Steagall. Because, yes, you have in Donald Trump an embarrassment for monopoly capitalism. He’s grotesque, he’s grabby, he’s just interested in his own ego. And he’s the armpit of monopoly capitalism, OK? It stinks. And on a basis of manners, people say, we don’t want that. This is foul, it’s vulgar, it’s in my face–obviously that’s not who we want running the country, he’s an embarrassment in front of the children. OK. That’s the basic Democratic appeal, once again: manners. However, the well-mannered Lawrence Summers, who was Bill Clinton’s treasury secretary after Robert Rubin, even better mannered–Lawrence Summers went on to be president of Harvard; Rubin who had been at Goldman Sachs when they concocted a lot of these things and becomes Clinton’s treasury secretary. They were able to do something Ronald Reagan couldn’t do. The right-wing Republicans, they always wanted deregulation. Reagan was a prophet of deregulation. But he couldn’t get this kind of gift to Wall Street of the reversal of Glass–Steagall, the Financial Services Modernization Act. Because he was confronted with the Savings & Loan scandal. And at the end of Reagan’s administration he tightened regulation, even, in response to that scandal.
So these good Democrats, you know, talking a great progressive game, come into power. And Robert Rubin is appointed straight from Goldman Sachs to be treasury secretary, and then when he wants to go back to run Citibank–which has been made legal by the reversal of Glass–Steagall; you know, this bank in both commercial and investment sector. It took the destruction of Glass–Steagall to give Robert Rubin the job he wanted, running Citibank. He brings in Lawrence Summers, who ends up then being Barack Obama’s big advisor after being on Wall Street as well as at Harvard. And then you had the Commodity Futures Modernization Act, which event went worse and said all of these swindles of collateralized debt obligations, credit-default swaps, all of that’s legal; they know what they’re doing. The ultimate deregulation of the financial sector, the destruction of the whole housing market, came with a smiling, charming, Democratic president who said a lot of the right things, OK? And so I’m not cynical; I’m just trying to be a good journalist here. And I think in your book–your book does excellent journalism in precisely this regard. You can leave it there, or you can have the final word.
DD: I’ll just have a final word. Not only does this create, you know, deregulation for its own purpose, but I would argue that it led to the rise of Trump. That the lack of accountability for the fraud and the deception that happened on Wall Street led to a certain alienation from the whole concept of government, and led people to a demagogue. And you know, the rise of monopoly power left behind certain states that Trump ended up capitalizing on. Places like Michigan and Wisconsin and Pennsylvania, those regions which suddenly couldn’t handle a corner store anymore because Walmart became the one retailer to that entire area, and sucks money out of those communities, moves that money off into the corporate treasuries of Walmart. The terrible opioid crisis that we have in those sections of the country, which is, you know, certainly facilitated by monopoly power and pharmaceuticals, and in the distribution of prescription drugs, and all of these other various parts of the pharmaceutical supply chain. All of these things, I think, led to the despair, led to the discontent, that prefigured Trump.
So you know–and I talk about that in the book quite a bit, about regional inequality and the political implications of this. You know, Hillary Clinton famously said that I won the areas that were really dynamic in 2016, I won the good areas, I guess–she didn’t say it exactly like that, but I won the forward-looking, dynamic areas in the country. And the truth is that the reason those areas are forward-looking and dynamic is because they’re robbing from all the other areas. And those other areas, naturally, turned away, and looked in a different direction.
So we need to figure out this monopoly problem, because it’s hurting our economy, because it’s hurting our people–but it’s also because it’s hurting our politics. And we can’t rely on the people who got us into this position on a bipartisan basis to help fix it. So I really think that it is going to have to come from the people. We’re going to have the same problems if Joe Biden gets into office. We’re going to have the same problems with the same cast of characters; it may be son of Larry Summers, son of Robert Rubin. In some cases literally. [Laughs] Jamie Rubin is Robert Rubin’s son, and he’s a big centrist player in these debates. But you know, we’re going to have these same fights. Democracy is never simple. You know, the idea that you get rid of Trump and everything is going to be [peachy] keen, it’s not going to happen that way. And if we don’t handle this problem in a future Democratic administration, what we’ll get is a competent Trump. We’ll get someone that actually knows how to work the system a little better. And that would be nothing short of a disaster.
RS: Well, that summarizes the book. And I’m glad we got to the spirit of the book; sometimes in these interviews we sugar-coat it. Your book is a tough book. It really takes ’em on. The book we’re talking about, Monopolized: Life in the Age of Corporate Power, published by The New Press. The author is David Dayen, who wrote a very important book on the housing meltdown before that. Please check it out, Monopolized, if you can find the place; if you have to, get it on Amazon. [Laughter] I guess you can get it somewhere else, also, hopefully.
And so I want to thank you for doing this, David Dayen. I want to also thank Christopher Ho at KCRW for getting these things up in the world, remaining world of public radio. Natasha Hakimi Zapata, who does the introduction. Lucy Berbeo, who does the transcription. Joshua Scheer, who is our producer. And I want to thank the JWK Foundation, who in the memory of the great writer Jean Stein–great personality, great writer, great liberal in the best sense–helps fund these shows. See you next week with another edition of Scheer Intelligence.