Archive for July, 2021

denial, disinformation, deflection, delayism, doomism

Monday, July 26th, 2021

The New Climate War: The Fight To Take Back Our Planet, Michael E. Mann, 2021

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Mann has devoted much of his professional life and focus in an effort to educate the public about climate change. His role model was Carl Sagan who had a remarkable ability to communicate complex science to ordinary people.
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Mann, Bradley and Hughes 1998 Hockey Stick Chart

How quickly are temperatures rising?

The true warming rate is about 0.2%C per decade. Since current warming stands at about 1.2%C, it would at current rates take a decade and a half to reach 1.5%C warming, and another two and a half decades to reach 2%C warming.

Without CO2 reductions, we would expect a rise of 1.5%C by 2035 and of 2%C by 2060.

Researchers believe renewables can be scaled up to meet 80% of global energy needs in ten years and 100% in thirty years. Clearly that last 20% which would include air travel and other hard to solve problems will take time and research.
Guardian’s Fiona Harvey:

investments amounting to trillions of dollars (estimated 1 to 4 trillion) in fossil fuels–coal mines, oil wells, power stations, conventional vehicles–will lose their value when the world moves decisively to a low-carbon economy. Fossil Fuel reserves and production facilities will become stranded assets, having absorbed capital but unable to be used to make a profit…If the bubble bursts suddenly, as it might, rather than gradually deflating over decades, then it could trigger a financial crisis.

Banks are already reducing their investments and many University endowments are pulling their funds out under pressure from their students.

Why look at non solutions when a solution is in hand. Solar costs about $50, wind $30-$40, and nuclear $100 per megawatt hour. Fossil fuels cost about $50. If fossil fuel subsidies were removed and a carbon tax were added to reflect the real cost of CO2 emissions, the cost of fossil fuels would rise dramatically.

One group of climate experts has in fact published a set of “concrete interventions to induce positive social tipping dynamics.” They propose as key ingredients, “removing fossil-fuel subsidies and incentivizing decentralized energy generation, building carbon neutral cities, divesting from assets linked to fossil fuels, revealing the moral implications of fossil fuels, strengthening climate education and engagement, and disclosing greenhouse gas emissions information.

Air travel is often sited as a way to reduce CO2 but air travel accounts for about 3% of global carbon emissions. if everything is taken into account, travel by train can have an even higher carbon footprint than air travel.

We know that we can eliminate most CO2 emissions by converting to renewable sources of energy like solar, wind, geothermal, etc. Those who wish to continue to rely on fossil fuels for energy often propose “non-solution solutions” as a deflection tactic.

DEFLECTION DELAYISM
The most common of these is “clean coal” using carbon capture and sequestration (CCS). Global CCS Institute reports 51 facilities globally are under development. When fully deployed they would collectively capture nearly 100 million tons of C02 annually. We emit about 40 billion tons of CO2 annually so 100 million tons would represent about 0.25% of total emissions. It will take decades (which we don’t have) to determine the actual amount of CO2 that has been captured and stored successfully. Coal generators are rapidly being phased out. CCS is not a solution.

There has been much talk of geoengineering and Bill Gates has hired geoengineers to look into shooting reflective particles, sulfate aerosols into the stable upper part of the atmosphere. This is feasible and a muti-billionaire like Gates might even be able to try it without government assistance or approval. The big problem is “we don’t know what we don’t know.” Would Ozone layer destruction accelerate? Would polar ice melt faster? Would the sulfur falling back to earth result in catastrophic acid rain? If we don’t sustain the layer with continuous injections the earth’s temperature would rise suddenly. The danger here is not only from billionaires but from other countries that might attempt to solve their own problems without regard for the rest of the world. And we already have a known solution – renewable energy – so why even look at such a crazy unproven idea with huge unknown risks to the entire planet?

Reforestation sounds promising but at best, combined with modified agricultural practices, at absolute most 20 billion tons of CO2 could be captured or 50% of our current emissions. It would take decades to reach these levels of CO2 removal and meanwhile we would continue to increase emissions every year. We already have a real and proven solution, renewables, that can be implemented now so why focus on this. Reforestation and agricultural reform are important and should be undertaken but they are not a solution to our immediate CO2 problem.

Then there is the nuclear power option, forgetting the meltdowns at Three Mile Island, Chernobyl, and Fukushima. Nuclear cost is double that of renewables. Mann suggests we leave existing nuclear plants operational since the investment has already been made until they are decommissioned at the end of their useful lives, hoping they continue to have access to adequate cooling water and avoid other accidents. Building new Nuclear plants would also take far too long to displace existing fossil fuels.

Much of this important book is dedicated to educating the public in the tactics developed by monopolistic companies whose products are harmful in attempts to convince the public otherwise. These tactics no doubt originated in the 19th Century but came to public awareness over the dangers of tobacco, plastic trash, chemicals like DDT, CFC refrigerant destroying the ozone layer, Roundup, etc., Fossil Fuels and CO2 levels, etc. The playbook was even attempted for COVID-19 because the pandemic posed a threat to companies wanting business as usual (Urging us to take one (die) for the sake of the economy). The successes of these campaigns is due to the enormous resources available to these companies, their willingness to sponsor fake research (Koch and Mercer), their control over messaging and media (Fox WSJ, the petrostates led by Russia and Saudi Arabia), and exploiting the ignorance of the public about science and research (disinformation). Who does the powerful global fossil fuel industry most fear? Greta Thunberg and the international climate youth movement. Mainstream media is notorious for failing to report on climate change. Young climate activists have succeed in making the front page of major newspapers around the world, something climate scientists have been unable to do. As Bob Dylan would say “The times they are a changin”.
Stephan Schmidt, former presidential campaign co-advisor to McCain tweeted about the COVID-19 campaign “The injury done to America and the public good by Fox News and the bevy of personalities from Limbaugh to Ingraham will be felt for many years in this country as we deal with the death and economic damage that didn’t have to be.”

The Coronavirus crisis, in fact, underscored the importance of government. The need for an organized and effective response to a crisis, after all, one of the fundamental reasons we have governments in the first place. Crises, whether in the near term like COVID-19 or in the long term like climate change, remind us that government has an obligation to protect the welfare of its citizens by providing aid, organizing an appropriate crisis response, alleviating economic disruption, and maintaining a functioning social safety net.

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The book includes discussions of social media and the role of bots and troll bots, artificially generated internet postings with the ability to automatically analyze real people’s postings and create artificial responses. So then bot sentinel is created that uses machine learning and artificial intelligence to classify accounts and their postings as being the creation of bots and trollbots and to automatically generate a trollbot score for the likelihood that the the account is automated. This is not a fictional dystopian world. Users of social media are facing this mad world of bots where it may be impossible to know if you are having a conversation with a machine or a person. Imagine an entire discussion thread generated completely by warring bots with no actual human participation. Forget annoying automated phone calls. This is total out-of-control madness.

Rediscovering the Magic of Antitrust

Friday, July 23rd, 2021

Break ’em Up; Recovering our Freedom from Big Ag, Big Tech, and Big Money, Zephyr Teachout, 2020

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This is a compact must read book. Here are some highlights:

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Antitrust Can’t Bust a Monopoly of Ideas WSJ

The highest and best goals of America–equality and freedom–require government to protect citizens from any group or any person wielding too much power. We used to do pretty well, using antitrust, campaign finance laws, public utility regulation, labor laws, and other anti-monopoly tools. But in recent years, our government has failed on all these fronts. Meanwhile, corporations have disabled key institutions designed to protect against arbitrary power.

After the crash of 2008, the impunity of elite networks was on full display when no banker was jailed for lawless activity. Pharmaceutical and big tech corporations regularly get away with laughably trivial fines for their major violations of the law…Public courts have been replaced by arbitration in which judges are paid by corporations, reasons aren’t given, and no one knows what happens.

Unelected “megalomaniac President” Zuckerberg: “In a lot of ways Facebook is more like a government than a traditional company.” Facebook “set up a more democratic or community-oriented process that reflects the values of people around the world.”

The will to power is connected to the desire for material accumulation, but it is made of something different, and Zuckerberg clearly has it. The ability to affect the lives of everyone on earth, to know everything about them, to shift elections, to change the practice of democracy–these are not unforeseen by-products of a business plan. They are not an accident. They are the point.

People in power are more likely to interrupt, to look away when others speak, to touch others inappropriately, to say what they want, to take risks…They are more likely to be rude, hostile, and humiliating. They are more impulsive,more self-centered in their choices, which they make obliviously, because they are less able to read other people’s reactions. People in power rely more on stereotypes when making judgments about others, with less awareness of unique or individual traits. They aren’t good at describing the interior lives of others, and are bad at guessing what others want or feel.

Researcher Jake Dunagan: “The experience of power might be thought of as having someone open up your skull and take out that part of your brain so critical to empathy and and socially-appropriate behavior.”

Denmark has appointed an ambassador to deal directly with the quasi governments of Google, Facebook, and Amazon.

At the heart of (Antonin) Scalia logic in the Gilmer case, and entire series of cases involving arbitration agreements, is a fantasy of choice–a fantasy that relies on a nonexistent power dynamic and and set of unavailable non-arbitration options…Scalia’s contract logic reflects neoliberalism, a powerful ideology in American legal thought. Neoliberalism is defined by a deep skepticism of democratic institutions, which it treats as corrupt and unreliable, and a mirror-image faith in market institutions, which it treats as responsible and reliable. For most of Anglo-American history, a whole series of principles shaped contract enforcement. Corrupt contracts weren’t enforced, and contracts with real power imbalances were not enforced. The neoliberal view is that freedom of contract should be presumed and contracts almost always enforced…If you sign a contract, the presumption is that you signed it freely, and freedom is treated as a formal matter, not a contextual one…Was Scalia cynically serving big business or naively imagining a world that didn’t exist?

Political parties are being replaced by corporate-run institutions. Big corporations, which consider political strategy essential to their overall strategy, increasingly use the tools of authoritarianism–centralized regimes, opposition suppression, forced public displays of alignment–to hold on to their power, and they do it in the name of free speech. A persistent paranoia has naturally slipped into politics as these institutions are corroded, and this has led millions to flee politics as quickly and quietly as possible, and millions of others to embrace the nihilism of Donald Trump and Fox News.

The cutting edge of monopoly racism is, as with so much else, in big tech companies, where a toxic combination of power and opaque bias is repackaged and defended as neutral algorithms…When doing web searches, poor people are shown worse jobs and apartments, while elites with purchasing power get access to real estate deals and better employment opportunities…Google, Facebook, Amazon, and Apple pose unique race bias dangers in two ways. First, they are among the few companies with the resources to extract and exploit publicly available datasets in combination with their own data, creating data monopolies. Second, their choices about what data they use to serve what content have uniquely powerful impacts on everyone in society…Finally, they don’t just passively allow bias, they make money off it.

Researcher Marshall Steinbaum:

“Permitting consolidation and vertical integration and control in supply chains has made labor markets less competitive and worsened outcomes for workers, which is in direct contradiction to the (untested) economic assumptions that motivated the Chicago School’s antitrust takeover in the first place.” Monopoly turns out to be a major driver of inequality…With the massive collapse of an economy into sectors that are each dominated by corporate monopolies, workers may be in great demand, but they are not in a good position to bargain for a fair portion of the value they create…In simple terms, “Capital won, labor lost.”

Wall street has been a driving force behind the gutting of antitrust laws, because when it is allowed, monopoly power is a means of taking a big chunk of money and multiplying it, without adding any value. Access to seed capital, combined with bad antitrust policy, meant big unearned profits…Warren Buffet, one of the richest men in the world, has made his money by investing in already-monopolized industries…He invests in closed markets, monopolies, and oligarchies…He prefers businesses with substantial “moats”, or, as a friend of his called it, “unregulated toll bridges.”

Business school graduates today are taught to invest in the areas where antitrust fails.

In 1967, the Chicago School of Economics launched an all-out war against American predation rules…after President Reagan (in the 1980’s) installed new judges, and economic departments were flooded with Chicago School scholars, the new theory won…The new court decisions did not get rid of predatory pricing laws as a concept, but they made it so difficult to prove a predatory pricing claim that in practice any lawsuit became nearly a dead letter.

The monopoly-predation-subsidy-capital cycle goes like this:
1. The promise of monopoly power attracts excess capital investment;
2. with that investment, the company can engage in predatory pricing to push out competitors and win subsidies;
3. only the biggest companies win individual company subsidies, which they use to push out remaining competitors and reinvest in politics.
4. they then use the investment in politics to block antitrust and influence tax code;
5. without being subject to antitrust and having to pay taxes, they can promise more monopolistic behavior and attract more capital investment.

These new judges–including Justice Antonin Scalia and judges Frank Easterbrook and Richard Posner, the biggest defenders of big business–overturned decades of case law. They treated all mergers as presumptively positive. They effectively wrote predatory pricing out of the Clayton Antitrust Act, concluding that almost any price-cutting was good for customers–even if price-cutting was designed to push out competitors and monopolize a market. They reinterpreted antitrust laws as consumer price-protection tools. They rejected a vision that these laws were designed to curb despotism. They rewrote hundreds of years of contract law, excising the power analysis that once accompanied contract interpretation.

Clinton, Bush, and Obama all presided over an ongoing merger wave that would have horrified any 1960’s judge. From 1992 to 2016, antitrust was not even in the Democratic Party platform.

In sum, from 1980 to today, antitrust was triply depoliticized. First, courts treated the body of antitrust laws as if they were designed only to serve consumer welfare, not growth and abuses of political power in the private realm. Second, practitioners of antitrust–prosecutors, judges, and law professors–depoliticized their own roles, allowing technically trained economists to make the big judgements about what society should look like. They deferred to professional elite economists, whose jargon is complicated and whose claims to special knowledge make it hard for people to feel comfortable challenging them. Giving economists the final say also allowed practitioners to avoid responsibility and to treat decisions as if they were required by abstract laws instead of as hard political decisions that shape power in society. Third, and most bizarrely, these same practitioners treated antitrust as if it were a job for courts, not Congress.

We are in the early stages of a major battle to reinvigorate the anti-monopoly movement. There are huge toolboxes of existing laws that can be enforced right now; a lot of bad Supreme Court precedents that can be overturned by congress; and new laws that need to be passed to address weaknesses in the old laws and new obstacles. The new antitrust era, to meet the crisis of concentration we now face, will require us to do all three.

The Federal Trade Commission–right now– can also play a critical role in changing basic competition rules. As Sandeep Vaheesan argued in a significant article in 2017, the FTC has substantial power, to define the scope of federal laws. Congress, anticipating changing business practices and changing methods of unfairness, purposefully gave the FTC the power to define “unfair methods of competition.” Executive agencies have enormous discretion to act, as Vaheesan points out, the FTC can and should change merger law by making mergers presumptively illegal in competitive markets, and should lay out particular clear, bright line rules–like speed limits– against certain kinds of “vertical” behavior, like when Tyson forces farmers to use building firms it prefers.

The next president (Biden), in particular will have outsized power when it comes to antitrust; she (or he) can unilaterally promulgate new merger rules, directing the FTC to adopt clear guidelines that declare that it will oppose mergers of a certain size and percentage of the market. The new guidelines for the Department of Justice and the FTC can adopt the posture that policing conduct violations is a top priority. They can strongly signal that they won’t stand for a few small changes, but will require structural reorganization.

Even with strong enforcement, we need new laws. Congress should start by overturning all the bad decisions made by Reagan judges. That alone would serve to sharpen the swords of the laws already on the books.

When people are allowed to amass great pools of capital, one of two things happens; The logic of investment overcomes the moral sensibilities of the people who hold the investments, and the investments agents’ instructions to maximize profit sever the moral relationships between people and their impact on the world. Or the logic of power overcomes the moral sensitivities of those who hold too much power, and they start governing from a place of whimsy and self-importance, disconnected from human reality and unable to honestly perceive the world over which they trample. Both outcomes lead to destruction, instability, and cruelty.

For today’s neoliberal economist, market freedom does not mean moral action or thought in the commercial realm, it only frees the buyer and seller from state interference; the only morality in a market lies in cheaper consumer goods. Efficiency has become more than a value, it’s become something approaching an unhealthy, elite obsession.

As (Langston) Hughes understood, the biggest, most powerful dream of America, the one we can’t forget, the one that underpins the right to eat, breathe clean air, have dignity, is the dream that people, not kings or lords or dukes, should govern themselves. The basic dream of America is the fight against illegitimate power. Money is not a legitimate source of political power. The only source of legitimate power over others–the power to imprison, the power to tax, the power to make decisions–flows from we the people.

Monopolies, Created Deserts, and Warren Buffets

Friday, July 9th, 2021

Monopolized; Life in the Age of Corporate Power, David Dayen, 2021

This book is one of the most depressing, even apocalyptic in recent memory. It is also well researched, organized, and important.
Each chapter addresses an industry segment that has fallen to monopoly: Airlines, Big Agriculture, Journalism and media, Broadband Internet, Opioid medication, Banks, Offshoring essential products, Amazon and Google, Hospitals Supply chains, Rental Housing after 2008, Prisons and Immigrant detention. The book is focused on monopolies in each of these segments. Warren Buffet is mentioned as a significant investor in monopolies in each chapter. Dayen estimates that twelve mega-billionaires like Warren Buffet effectively control the entire US economy today. What can these handful of men possibly do with the wealth they have accumulated? This is from Jeff Bezos, currently the wealthiest:

The only way I can see to deploy this much financial resource is by converting my Amazon winnings into space Travel

Tesla’s Elon Musk seems to share Bezos’ sentiment. Dayen — “Our overlords literally shoot money into space while millions around them suffer.” Here is Buffet;

We think in terms of that moat and the ability to keep its width and its impossibility of being crossed.


Dayen — “Morningstar offers an economic moat index fund of the twenty companies with the highest walls around their businesses.”

The average age of a farmer in America is fifty-eight. In Iowa, 60 percent of all farm owners are over the age of sixty-five; just 1 percent are thirty-four or younger. More than half of all Iowa farmland is rented out, and the startup costs of land, machinery, and other inputs are a huge barrier to entry. A substantial number of farm owners are elderly widows who inherited the land. As they pass on, Iowa could be transformed.

As Iowa and other agricultural states empty out and businesses close, the states turn into people less deserts. Mono culture (single crop) farming with huge chemical inputs are transforming formerly fertile land into barren deserts. Deserts can take many forms and empty farmland is only the first discussed here.

The news deserts created primarily by the dominance of Facebook and Google and by the crippling of the media business model have grave implications for democracy…it’s undeniable that corruption spreads, conspiracies are fostered, and truth is obscured where journalism is absent.

This is the curse of bigness in San Francisco, a city so teeming with money that nobody can afford to open a store to take it…But the truth is that the San Francisco Bay Area is the nation’s second-most dense…Big money has created a vicious spiral: a winner-take-all city keeps accumulating vacant lots, dead-eyed commuters drive for hours to their barely affordable homes, landords must keep rents astronomically high to cover their own astronomically high loans. The concentration of extreme wealth isn’t just bad for the losers in depressed counties and towns. It’s bad for the winners.

Urban deserts are not limited to Flint and Detroit Michigan, to Oakland California and Philadelphia and Baltimore. Try living in today’s San Francisco. Several of my son’s San Francisco old high school friends are living lives as nomads in the city, complete with vans.

In telecommunications including cellphone and broadband America is a disgrace with the highest prices and lowest quality and service anywhere in the world. At America’s founding, postal service was guaranteed to every American. FDR’s Tennessee Valley Authority (TVA) together with massive western dam projects guaranteed electrical power to every American. At one time every American was guaranteed phone service. Dayen describes Chattanooga, a big beneficiary of the TVA, and its TVA run utility the Electric Power Board (EPB) which decided to upgrade using fiber optics to improve the reliability of its electric grids. In 2007 EPB decided to offer fiber optics to every home in its service area paid for by a $219.8 million bond. Comcast sued to stop the plan alleging illegal cross-subsidy of electric rate payer funds. Comcast lost and residents of EPB’s service area have access to gigabit broadband access supporting phone and internet service. If you are not in EPB’s service area you are in the communications desert.
I live in the heart of Phoenix Arizona and have access to Centurylink’s (baby Bell) DSL “service” of 16MB sometimes at a cost of about $50 per month. I have a grandfathered T-Mobile prepaid phone that gets no signal at my home even after the T-Mobile Sprint merger. I can make phone calls from my home via Android wifi on my T-Mobile phone or via voice over IP (VOIP) through google voice.
I live five miles from Phoenix’s TV Towers but receive no over the air (OTA) signals for any major network on my TV. Using advanced rooftop antennas and signal amplifiers, I used to be able to receive 5 major networks 95 miles line-of-site to the towers on Mount Lemon near Tucson. Continued reduction in transmit power by network operators has reduced reception to 3 major networks today. Even these 3 are sensitive to weather. I tried to raise the issue of reduced OTA transmitter power over the publicly owned airwaves with newly elected Senator Mark Kelly and was blown off by staff members.
If you live in rural America chances are you have no access to broadband. Urban Americans may typically have two “options” for broadband, your baby bell or surviving phone company and one cable operator. Both will have atrocious customer service and questionable reliability and unconscionable low speeds. Somewhere in a streaming chain, maybe the local broadband supplier is able to restrict speeds or break a stream altogether. We could get better service almost anywhere in the world. Most Americans live in a communications desert.

Dayen talks about the mergers and acquisitions (M&A) banking business that came into it’s own in the 1960s. Today it is a huge industry dominated by the six too big to fail banks.

As of 2019, the six biggest banks–JP Morgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley–control $10.5 trillion in financial assets. These banks also happen to be serial transnational criminal enterprises, paying $182 billion in (inadequate) penalties for rap sheets of incomparable length. Few of the violations even relate to the financial crisis’s run-up and aftermath, though those were significant. Incidents of debt collection fraud, market rigging, money laundering, misrepresentations to clients, kickback schemes, and unlawful securities sales all occurred after the crisis.

The media has focused on stock buyback after tax reductions and record profits but gives little attention to the bigger story; mergers of corporations into ever larger and more unaccountable monopolies. The six big banks are key players in these mergers pocketing huge fees for their services. Goldman Sachs, in one merger featured in the book involving United Natural Foods Inc. (UNFI), continued to change the terms of the merger to favor themselves and even created and sold derivatives for hedge funds wanting to bet against the merger.

Mergers in the health care industry, especially hospitals has created large healthcare deserts in America. Hedge funds often buy hospitals for their real estate value and close them after gutting their operations. Millions of Americans are left with few options and long travel distances and time to seek services.

Monopolies create highly vulnerable supply chains often with sole source and offshore production. Dayen talks about an acute shortage of saline drip bags (cost $1) because production in sole source Puerto Rico was disrupted. This failure disrupted services in hospitals across the country. Covid19 protective equipment like masks, shields, gowns, etc. were simply not available for months. Then there are sole source parts like faulty batteries for the F-35 $100 million fighter jets that made them unable to escape Hurricane Michael in 2018. All current US Weapons systems are dependent on parts from China! Supply deserts are disruptive and dangerous and we are inundated in them.

Ten million American homes were lost to foreclosure as a result the 2008 financial subprime disaster. Dayen has an earlier book Chain of Title focusing on the struggle of American’s being illegal foreclosed on as a result of the massive production of fake documents purporting to support the existence of loans. Aaron Glantz in 2019 published Homewreckers, showing the macro side of how all these illegally foreclosed homes ended up in the hands of hedge funds and other bottom feeders and were removed permanently from the American supply of individually owned homes. Dayen here talks about how these new owners, without experience in real estate rentals and without any regard for the law or people converted these homes into badly or unmaintained rentals and profited from illegal fees, penalties, evictions, and extortion while the huge inventory of once livable single family homes are turned into slums. These few corporations make the Trumps and Kushners of the world look like petty thugs. Meantime, Americans looking to buy homes find limited options and soaring prices. Welcome to the housing desert.

We know how to handle monopolies. You restore the interpretation of the antitrust laws to cover the full spectrum of harms, beyond just consumer welfare. Then you break up dangerous concentrations of economic power, block mergers that would excessively consolidate markets, regulate natural monopolies as public utilities, structurally separate functions where necessary, intervene in the public interest so citizens are protected and empowered, and vigilantly examine markets to prepare for monopolies to emerge again. Maybe that sounds impossible in the abstract. But it is entirely possible under existing law that either hasn’t been enforced in decades or has been misinterpreted for decades. We have over a century of experience with both successfully preventing unnecessary concentrations and failing to do so. The mechanisms are clear; getting the political class to enforce them is the stumbling block.