American capitalism built the greatest middle class in history. When it works the way it should, our system is defined by innovators constantly sparking new ideas, workers sharing in the profits they help produce, consumers enjoying ever-greater choices, and small business owners like my father, working hard to give their families a better life. But sometimes, the system doesn’t work the way it should and we need to fix it. Teddy Roosevelt had to do it. Franklin Roosevelt had to do it. Barack Obama, too.
Despite all the progress we’ve made coming back from the financial crisis, we still have a lot of work to do. Consider:
Some pharmaceutical companies recently have raised the price of medications that have been in use for decades by up to 5,000% overnight—gouging patients on drugs that should be getting cheaper over time, not more expensive. The three largest health insurance companies now control 80% of the market in 37 states.
Over the past year, oil prices have fallen from over $100 a barrel to under $50, and the price of jet fuel has dropped more than a dollar per gallon. But the four major airlines—down from 10 airlines just 15 years ago—are charging as much as ever for tickets, even as they hit travelers with extra fees, for everything from checking a suitcase to picking a seat when they fly home at the holidays.
Monthly prices for high-speed broadband are far higher on average in some major American cities than in Toronto, London, and Tokyo. In part, that’s because most of our communities are subject to local monopolies for service. Three-quarters of US households have at most one option for purchasing the Internet service families now depend on for shopping, streaming, and doing homework. When alternatives do emerge, however, as they have in places like Kansas City, prices go down and speeds go up.
Economists, including President Obama’s Council of Economic Advisers, have put their finger on what’s going on: large corporations are concentrating control over markets. Two-thirds of public corporations operated in more concentrated markets in 2013 than in 1996, according to recent reporting by the Wall Street Journal. Rather than offering better products for lower prices, they are using their power to raise prices, limit choices for consumers, lower wages for workers, and hold back competition from startups and small businesses.
It’s no wonder Americans feel the deck is stacked for those at the top. It’s good for our economy when companies prosper by innovating, creating new products, and investing in their workers. But in too many instances, that’s not what’s happening. Just as declining union membership means workers have less bargaining power to improve wages and benefits, increasing concentration in a given market means customers can no longer vote with their feet and take their business elsewhere. And all too often, the additional corporate revenue is going to stock buy-backs and executive bonuses instead of benefiting consumers, employees, and the economy as a whole.
As president, I will take on this fight.
First, I will take steps to stop corporate concentration in any industry where it’s unfairly limiting competition. For example, right now, it’s perfectly legal for a pharmaceutical company to pay a competitor to keep a generic drug off the market. These so-called “pay for delay” agreements keep prescription drug costs artificially high and diminish patient choice. I will empower the Department of Justice to vigorously investigate proposed health insurance mergers and take action to rein in prescription drug and out-of-pocket costs.
Closing these loopholes and protecting other standards of free and fair competition—like enforcing strong net neutrality rules and preempting state laws that unfairly protect incumbent businesses—will keep more money in consumers’ wallets, enable startups to challenge the status quo, and allow small businesses to thrive.
Second, I will prevent concentration in the first place by beefing up the antitrust enforcement arms of the Department of Justice and the Federal Trade Commission. I will direct more resources to hire aggressive regulators who will conduct in-depth industry research to better understand the link between market consolidation and stagnating incomes. Ultimately, this will foster a change in corporate culture that restores competition to the marketplace.
Third, I will close the loopholes and end the tax breaks that allow a few big corporations to profit just by stashing their money in offshore tax havens with the help of their lawyers and accountants. I’ll encourage companies to share corporate earnings with their workers, not just their executives, by creating a new tax credit to encourage profit-sharing programs. And I’ll invest in creating good-paying jobs in the industries of the future. We’ll build a 21st century infrastructure by developing and deploying more clean energy, and fuel innovation by investing in basic research.
Republicans will claim this is an anti-business agenda. But I don’t know what could be more pro-business than promoting competition and consumer choice. I don’t know what could be more pro-business than giving hard-working families a raise—which means more money to spend on goods and services. I don’t know what could be more pro-business than ensuring innovative new companies can have the chance to succeed.
It’s time to take a page from Teddy Roosevelt’s book and get our economy working for Americans again. That’s what I’ll do as president.