Consolidation is messing with the economy

Make Me Smart

Marketplace

News, Business

4.6 • 5.4K Ratings

🗓️ 15 March 2022

⏱️ 25 minutes

🔗️ Recording | iTunes | RSS

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Summary

Corporate consolidation has been getting a lot of attention lately. But it isn’t a new phenomenon. It’s been on the rise since the ’80s, and it’s led to just a handful of companies controlling entire industries and fewer companies out there to deliver goods and services.

“One really good example would be health care — this is a pretty concentrated sector in the U.S. economy,” said Kate Bahn, director of labor market policy and chief economist at the Washington Center for Equitable Growth. “[Consolidation] is when there’s hospital mergers … maybe one big management company overarching a whole sort of sector in one location.”

But it means a lot more than companies just getting bigger. Corporate consolidation has a big impact on the way our economy is shaped.

On today’s show: How corporate consolidation influences wages and consumer prices — and why it calls into question the success of capitalism.

In the News Fix, we’ll discuss how a spike in global food prices could trigger unrest around the world and the fate of Sarah Bloom Raskin’s nomination to the Federal Reserve board. (We taped today’s episode before she withdrew her nomination.)

Also, listeners celebrate Kimberly’s official spot in the host chair and a debate over who is more introverted!

Here’s everything we talked about today:

“America’s Monopolies Are Holding Back the Economy” from The Atlantic
Kate Bahn’s testimony on corporate power
“Ukraine War Could Put Food Security on Pentagon’s Plate” from Government Executive
“Manchin Won’t Support Raskin for the Federal Reserve” from The New York Times
“Big container ship goes aground in Chesapeake, recalling Suez ordeal” from The Washington Post

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Transcript

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0:00.0	Oh my goodness.
0:03.2	Hey everybody, I'm Kai, Rizda, welcome back to Make Me Smart.
0:09.2	None of us is as smart as all of us as what we say on this podcast.
0:13.2	It is indeed, and I am Kimberly Adams.
0:15.4	It's Tuesday, which means it's time to take a deep dive into a single topic.
0:20.8	And today we are going to talk about corporate consolidation and how it's shaping our economy
0:27.3	today.
0:28.6	And I guess maybe the way to think about this is sort of a continuation of some of the
0:31.5	stuff that Molly and I did a number of years ago about whether capitalism is working,
0:37.4	the way it ought to, because as companies consolidate, the company is generally win, but there are
0:43.3	losers.
0:45.1	And there are losers on the supply side, there are losers on the demand side.
0:49.4	It's tricky to make sense of all this stuff, and that's what we're going to try to do today.
0:53.9	Yeah, I mean, and in the simplest of terms, consolidation, which we're going to get into the definitions
1:00.9	of that later, it's been going on since the 80s in the way that we think about it today,
1:05.8	which means that there are just fewer companies out there, period.
1:10.2	Sometimes that's because one company bought out smaller ones, eating them alive sometimes.
1:15.9	Fewer different employers, competing for workers, fewer companies out there competing with
1:20.4	each other, whether it's to make your mustard or even deliver you your health care.
1:26.5	So here to make a smart about this is Kate Bonn, who is the chief economist at the Washington
1:34.3	Center for Equitable Growth, which is a brand new title for you.
1:37.4	Hey, Kate.
	...

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