This election season has predictably amplified the argument that taxation and regulation suffocate growth and innovation. But Pulitzer Prize-winning journalist David Cay Johnston argues an opposing theory: that “corporate socialism” stifles innovation, and that the subversion of competitive markets is responsible for depressed domestic wages. As Exhibit A, he asserts that near-monopolies in the cable, Internet, and phone markets mean that in many areas of the U.S. connectivity speeds are both slow and expensive by world standards.
“We pay four times what the French do for a triple-play package,” Johnston claims in an interview with SmartPlanet’s David Worthington. “They get worldwide TV, not just domestic; their Internet is ten times faster and instead of two-country calling; they get long-distance to 70 countries at no extra charge. All that for $38 compared to the U.S. average of $160 including taxes,”
He is no less sparing in his assessment of how the so-called too-big-to-fail banks are “escaping the rigors of competitive markets.” Among his prescriptions for blunting the influence of corporate and banking lobbyists who chip away at regulations: prohibit “lobbying or working for companies a lawmaker’s committees dealt with for life after leaving office, even if that means paying much bigger salaries to members of Congress and state legislatures.”
Johnston believes that by reinstating consumer advocacy offices, restoring the Glass-Steagall Act, and establishing greater regulatory transparency, we can encourage a more level playing field and restore a free market that incentivizes rapid innovation. The outcome of the election may very well depend on which side of Johnston’s argument the majority of voters fall on.