CNN has presented around-the-clock negative coverage of the Trump administration since Inauguration Day. It reports on everything from fake news stories (former FBI director James Comey will testify that President Donald Trump is under investigation) to pointless news stories (Trump gets two scoops of ice cream). For this reason, the president, like many other Americans, despises the Counterfeit News Network.
The key question is: does CNN’s leftist reportage justify siccing the Department of Justice on a merger between its parent company, Time Warner, and AT&T?
On Monday, the Justice Department submitted a lawsuit to block AT&T’s $85 billion acquisition of Time Warner, citing antitrust concerns. This contradicts the DOJ’s longstanding stance that allows mergers between companies that do not directly compete.
Should the merger move ahead, an AT&T-Time Warner conglomerate would be a media and telecommunications juggernaut. But Makan Delrahim, the Justice Department’s top antitrust regulator, argues that American consumers would be significantly harmed by this merger, causing higher monthly bills and fewer options.
Does the Trump-led DOJ care about the consumer or about exacting revenge?
DOJ Blocking AT&T-Time Warner Merger
The DOJ filed a lawsuit against AT&T, Time Warner, and DirecTV in Federal District Court for the District of Columbia. DOJ officials argue that a merger would limit competition in the news, entertainment, and telecommunications. They did tell reporters that they are willing to settle if the companies agree to sell off some of their assets.
Assistant Attorney General Makan Delrahim of the Department’s Antitrust Division said in a statement:
“This merger would greatly harm American consumers. It would mean higher monthly television bills and fewer of the new, emerging innovative options that consumers are beginning to enjoy.
AT&T/DirecTV’s combination with Time Warner is unlawful, and absent an adequate remedy that would fully prevent the harms this merger would cause, the only appropriate action for the Department of Justice is to seek an injunction from a federal judge blocking the entire transaction.”
The participants disagree, including AT&T CEO Randall L. Stephenson. He asserted that the DOJ’s attempts “defy logic” and are “unprecedented,” adding that the concept “borders on comical.”
In other cases, the government intervenes when two companies that directly compete merge. What makes this a challenging situation is the vertical merger of business models that complement one another: AT&T’s distribution network with Time Warner’s successful content. It has been about 30 years since a vertical merger case was challenged by the U.S. government.
Moreover, unlike other proposed deals in the past, this is an important circumstance because President Trump pledged last year that his administration would prevent the corporate fusion from happening. The DOJ did confirm that the White House is not influencing its decision, but analysts agree that AT&T will inevitably bring it up.
Is Trump Playing a Part?
A couple of weeks before Election Day, then-Candidate Trump promised he would not approve a merger between AT&T and Time Warner. He complained about heightened consolidation in the media, stating that the deal is “an example of the power structure I am fighting.”
He also said during the campaign rally in Gettysburg, Pennsylvania that he would never have given the nod to the Comcast-NBCUniversal merger. Trump said:
“Comcast’s purchase of NBC concentrates far too much power in one massive entity that is trying to tell the voters what to think and what to do. Deals like this destroy democracy. And we’ll look at breaking that deal up and other deals like that. This should never ever have been approved in the first place.”
This is what makes the present controversy so fascinating.
Despite the DOJ’s denials, you can’t help but wonder if President Trump is playing a part in obstructing the proposed merger.
The Wall Street Journal reported that the president’s son-in-law and senior adviser, Jared Kushner, requested a Time Warner executive earlier this year to eliminate 20% of CNN’s staff. This did not happen. U.S. regulators also reportedly demanded the sale of CNN to get approval for the merger – the DOJ denies this story – but AT&T failed to agree to sell off the anti-Trump news network.
Targeting Political Enemies is a National Pastime
If it is discovered that Trump played a role in blocking the merger, he would certainly not be the first – or the last.
Former President Barack Obama used the power of the state to go after political opponents.
One of the biggest controversies that rocked his administration was using the IRS to suppress conservative organizations with heavy scrutiny, invasive questions, and double standards.
Another scandal that came to the surface towards the end of his administration was the surveillance of members of Congress, Israeli Prime Minister Benjamin Netanyahu, and the Trump team.
In the 1960s, then-President John F. Kennedy urged the IRS to establish the Ideological Organizations Audit Project to target right-wing groups, like the American Enterprise Institute (AEI) or the Foundation for Economic Education (FEE). He didn’t stop there. Kennedy got the IRS to coerce businesses to comply with so-called voluntary price controls, and if they did not oblige, then they would face audits.
Who could forget about President Richard Nixon’s Enemies List? Nixon directed White House counsel John Dean to “use the available federal machinery to screw our political enemies.”
Presidents have always abused their authority to attack political adversaries. It didn’t just begin with Trump.
Antitrust Laws Are Corrupt
There is one topic that is absent in this conversation: antitrust laws. It may be unpopular to aver in this hostile climate, but it is time to abolish this law, otherwise known as the Sherman Antitrust Act.
Despite its intent “to protect the public from the failure of the market,” antitrust laws do not preserve competition, they only crush it. They do not diminish a monopoly; they stifle efficient enterprises from forming. They do not help the little guy; they protect special interests, especially the protectionists.
Whether it was the case against Standard Oil or the case against Microsoft, the U.S. government has done its very best to ensure it is seen as the crusader of justice. But the state usually has more nefarious objectives in their quests to apply antitrust laws.
For instance, economist and historian Thomas DiLorenzo wrote about the late 19th century:
“Protectionists did not want prices paid by consumers to fall. But they also understood that to gain political support for high tariffs they would have to assure the public that industries would not combine to increase prices to politically prohibitive levels. Support for both an antitrust law and tariff hikes would maintain high prices while avoiding the more obvious bilking of consumers.”
A monopoly is one of those things the government routinely warns consumers about that rarely happens. In a genuinely free market, monopolies never form, or if they do, then they will not last very long.
They happen because of government. Without certain privileges extended by the state, certain industries would not be controlled by just one or a few names. Trade unions, steel companies, television networks – are all entities that greatly benefit from cronyism.
Legendary economist Milton Friedman regularly pointed out that the only private monopoly he had witnessed was De Beers. However, even their exclusive hold on the diamond market has waned; the company’s control over the industry has decreased from 85% in the 1960s to 35% today.
Antitrust laws are superfluous. Television licenses are archaic, particularly in today’s economic environment. DOJ interfering in private mergers is morally suspect. If President Trump does care about preventing monopolies from cropping up, then all he needs to do is limit the power of the state. So-called monopolies would fall under the weight of competition and the free enterprise system.
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