THE IRONY AGE, ONE MORE TIME WITH FEELING…

The supreme irony of life is that hardly anyone gets out of it alive. ~ Robert Heinlein

Welcome back to the Irony Age. Its very distant relative the Iron Age is thought to have first taken place in Anatolia (part of present-day Turkey) as early as 1200 BC. Although there is no precise dating of the Iron Age, archeologists believe it occurred in Europe between 800 BC and 500 AD.

In contemporary times our Irony Age is often a quadrennial period coincident with our ever-extending presidential election campaign cycle. We are now (again) living in the Irony Age circa 2015-16 and its close associate the Hypocrisy Age, with a new twist.

Along with irony, a growing number of US voters believe they’ve been experiencing life in a zero-sum game. In decision theory, a zero-sum game references a situation where one or more participants' gain (loss) equals the loss (gain) of other participants. Thus, a gain (loss) for one must result in a loss (gain) for one or more others. In more familiar terms, the American economic “pie” isn’t expanding so whatever someone else (say, the 1%ers) gain in our economy is lost by the rest of us. This feeling of loss produces plausible frustration, upset and even anger for working-class folks, who I’ll describe below. On cue, the media has been producing a wide swath of stories centering on this working-class “anger.”

Abundant evidence provides genuine foundation for such feelings: annual real GDP growth has averaged a dreary 1.1% between 2007 and 2014; real average hourly earnings increased a lackluster 0.6% per year between 2007 and 2014; and real median household income has decreased 6.5% during this 7-year period. The real median hourly wage for white men with no more than a high school diploma declined from $19.76 in 1979 to $17.50 in 2014. Zero-sum indeed. 
On the other hand, according to Harvard economist Lawrence Katz, about 13% of our GDP has been massively redistributed to the top 1%ers from everyone else. Using our current GDP of $18.15 trillion that redistribution totals $2.36T and has directly contributed to increased income and wealth inequality.  
The Irony Age was initially launched about the same time that language and politicians were created, so it's been thriving for millennia. Fredrick Douglass’ insightful 19th century statement, “At a time like this, scorching irony, not convincing argument, is needed,” equally applies today.

Several examples from recent Irony Ages include:  First, people who vocally profess to want the government to "get off my back" and "make it smaller," but still want to receive benefits of "big government," including entitlements like Social Security, Medicare, mortgage interest tax deductions and subsidies for their business. Moreover, surveys have confirmed that many Americans who deny they’ve ever benefited from a government social or economic program have received much more fiscal support than they admitted or realized.  

In my mind, the tea partyers and their brothers and sisters are notorious residents of this Irony Age. A second set of denizens of our current Irony Age includes conservatives wedded to the advantages of free-markets but at the same time strenuously oppose regulation that insures such markets actually provide benefit to consumers and our health. Conservative hypocrites oppose establishment of a carbon tax – a mechanism founded on the strength of market mechanisms – to allow fossil fuel prices to more properly reflect the considerable public (externality-based) costs associated with fossil fuel consumption. For that matter the concept of public goods, like public parks and public education, seems to be dismissed as unnecessary by all too many irony-laden Republicans.

As the aura of Donald Trump (or as John Oliver points out, Donald Drumpf) brightens and extends to fill the Republican heavens, he has not only created political gravity waves but also a tsunami of irony on the part of GOP grandees. Virtually every GOP notable has publically stated they will support Trump if he becomes the party’s nominee, despite repeatedly called him dangerous, a con man, not conservative and even worse, a former Democrat. What’s a bombaster to do? In a narrow sense, this Olympian-level irony (also with a full helping of hypocrisy) couldn’t happen to a more-deserving bunch of people. Because ever since Reagan, they have glorified political pretenders and swindlers like Sarah Palin, the gun lobby, Wall Street plutocrats and the Koch brothers in the charade of helping working-class Americans. That’s never happened and won’t now; especially if any of the Republican candidates’ tax plans were to somehow become law.

Other examples from the smorgasbord of Republican irony include: Chris Christie’s lightning-quick endorsement of Trump, where he managed to look like a 10-year old who’s been sent to the principal’s office. And Donald Trump’s straight-faced statement that his gilded Florida Mar-a-Lago club – with a membership fee of $100,000 – is “totally open to everybody,” adding that “There’s nobody that’s done so much for equality as I have.”

As Trump’s star continues to dominate the Republican firmament, the media’s coverage of our presidential primaries has offered wall-to-wall coverage of him. His competitors have complained about the disproportionate media coverage the Donald receives. The Economist estimates that Trump has “grabbed” more than 40 times as many minutes of coverage than either Senators Cruz or Rubio. With such a media tailwind, how could he help but not become high-flying? It’s hard to tell if this media focus on Trump is cause or effect. In contrast, Hillary has about 3 times the amount of media minutes as Bernie has. Donald Trump is no-one’s apprentice at gaining public attention.
Clearly, this is not a propitious time to be affiliated with the political “establishment.” This holds for Democrats as well as Republicans. 
A key irony on the Democrats’ side of the isle is that their up and coming “protest” candidate, Bernie Sanders, has won elections since 1981 (when he became Mayor of Burlington, VT) and has served in the US Congress for 26 years. How is that not establishment, even if he’s espoused strong left/socialist positions? Yet The Bern’s deft and virtually singular focus on berating Wall Street’s financial powers, together with promising “free” public college tuition and remedying income inequality has been very successful. So successful that at the last debate Hillary Clinton had to admit she wasn’t a “natural campaigner,” as if to ask forgiveness of voters in Florida and beyond for her stoic, detached approach to campaigning. Nice try, Hillary. But how come your political doctors haven’t required you to swallow 500mg empathy-enhancement pills every day you’re on the campaign trail, even if they’re not covered under your Medicare Part D plan?  If you’re afraid of Medicare’s “donut-hole” Bernie's single-payer plan will no doubt remedy it.

Back to working class folks who are a conspicuous segment of Donald Trump’s appeal. The definition of “working class” is neither precise nor fixed. Sociologists often say working class is akin to lower-middle class or to people who do not have a college degree. They’re “non-college.” As more and more people receive college degrees, they represent a diminishing slice of the broad middle class and of voters. About 30% to 35% of the US population is working class. The share of blue-collar, working-class jobs in the US economy declined from 28% in 1970 to 17% in 2010. In addition to its socio-economic decline, the working class signifies a diminishing share of voters; by 2020 they are expected to dip to just 30% of all voters. In 1980 they characterized 65% of all voters; in 1988, 54% of all voters.

Is the Irony Age lost on working-class voters? Probably. Irony be damned, many of these people are more focused on survival. These people, who feel neglected and overlooked by politicians of every persuasion, are enthralled with Trump through their gut-level instincts, not rationality. As Eric Idle said, “Nobody gets irony anymore; we are now living in the post-ironic age. Once George W. Bush gets a library, irony is dead.” 

THE MIDDLE CLASS. WHY VIRTUALLY EVERYONE'S IN IT.

Upper classes are a nation's past, the middle class its future. ~ Ayn Rand

President Obama's January 20th State of the Union speech (since every action in Washington seems to require an acronym, his speech is the SOTUS) was characterized by the White House and then the media as addressing "middle-class economics." It's a politically smart focus, especially because there have been lots said about the denouement of the middle class, its "hollowing-out" and its on-going struggles. Even Republicans are extolling "middle class economics," since they (mistakenly) believe they've been vaccinated against shameless duplicity – endemic to GOPers.

Because it's once again a focus of our political nobility, being middle class is in the news. So how does one qualify as a "middle-class" American? Alas, there is no single definition of "middle class," a social, cultural, economic, and of late, political concept that has been central to American's self-image for a long time. A recent survey by the Pew Research Center indicates that nearly 90% of respondents judge themselves to be some version of "middle class," which defies math and statistics, but is a truly-held belief for lots and lots of folks. This survey result echoes Garrison Keillor's Lake Wobegon residents who are all "above-average." It also reflects the ever-broadening characterization of who is middle class, especially at the top end. At this point, almost everyone's middle class, which suits politicians just fine.

One traditional foundation of our middle class is to define it by one's annual income. By calculating what the median income^[1] is for the US we can determine a central point of the middle-class. So what is the median income in the US? Excellent question; unfortunately there are multiple answers, depending on how you measure income, as shown in the following table that shows 3 different median income calculations.

Table 1:  US Median Income

Measure of Median Income	Amount	Year	Source
Household income	$52,250	2013	US Census
Annualized real weekly earnings	$40,768*	2014Q1	Dept. of Labor
Adjusted gross income	$36,055	2012	Tax Foundation

* In 2013 dollars.

Median household income is the most often used way to gauge middle-class income, and provides the highest measure of median income, $52,250. But weekly earnings for full-time workers (there now are 104.3 million full-time workers according to the Department of Labor) and adjusted gross income (AGI) from your Federal income tax form 1040 are well-known and -regarded alternative measures of income. As Table 1 illustrates, even determining a mid-point of middle class income is perplexing as there's a 40% difference between $36,055 (AGI) and $52,250 (Household Income).

One gloomy finding is that real median weekly earnings have not increased in 10 years; they're now virtually the same as they were in 2004. Adjusted gross income includes not just wages and salary but income from interest, dividends, capital gains (that collectively comprise "investment income"), business and pension/retirement and other sources. Unsurprisingly, personal income from investment is 46% of total 2012 AGI for those with income exceeding $1 million. For people whose total AGI is less than $100k, investment income is 3%. With AGI between 100k to 200k, investment income is almost 4% of their AGI. Why median AGI is so much lower than Household Income is puzzling.

But there is a range of income that encompasses the middle class, not just the mid-point (the median). An often-cited income range for the middle class is $25,000 to $100,000/yr. The lower bound of being "middle class" frequently employs the federal "poverty-level" income (FPL) or a multiple of FPL, which varies by family size. In 2015, the FPL for a 4-person family is $24,250. This poverty-level income is used as a basis to determine eligibility for certain public programs and benefits. For example, the federal Affordable Care Act defines a lower and upper AGI range for people to receive premium savings (e.g., subsidies, discounts or tax credits). If a family of 4 people has an AGI of $23,850 to $95,400, they can qualify for lower premiums at the Health and Human Services' federal marketplace healthcare website.

Defining what the upper-end of middle-class income is far more fraught. Politicians, among others, offer an expansive view. In speeches during his run for his second term, President Obama has said “the rich” are those who make $200,000 or more as individuals and $250,000 or more as households; adeptly implying that those households making less than $250k are not "rich," and thus middle class. Remarkably, this upper-range was also cited by Mitt Romney when he was a presidential candidate. Stretching the middle class to include households whose income is $250k means the middle class includes families within the top 3% of all income earners. It may be good politics, but it's wholly unsound economics and math.

After his election, when President Obama and the Republicans were negotiating how the government would not push itself off the infamous "fiscal cliff," they agreed that "the rich" really made a lot more money and raised the definition of “rich” to $400,000 for single people and $450,000 for couples. Making $450k places a household in the top 1% of all earners, nationally. Whether it's $200k or even $450k, that's a very spacious upper-end definition of middle class.

Culturally, being part of the American middle class is tied to several keystone fixtures beyond income. These fixtures include owning a home and sending one's children to college. Home ownership peaked in 2004, when 65% of Americans were paying mortgages for their domicile. Now, after the housing bust, just 64% own their homes, and a rising 34% of middle-class people say they'd rather rent than own if it were time to move.

However, a college education remains highly-sought after. It is closely intertwined with the American Dream, prominently wished for by all of us perhaps especially by middle middle-class folks. Sending our kids to college to improve their future prospects has become more of a perceived necessity rather than an option, given the lethargic growth in even middle-skilled jobs and wages. Thus, the president's middle-class economics plan included proposals to broaden the affordability of college education.

Any change federal tax policy to strengthen the middle-class' economic situation and make college education more affordable should be a bipartisan slam dunk. Nope. Exhibit A is the response to the president's proposed change to benefit middle-class citizens in their efforts to save for their kids' college expenses. He briefly mentioned this proposal in his SOTUS, which was to reform tax-free higher-education savings (aka, 529) plans so more benefits would be focused on "true" middle-class folks.

The president's proposal was to eliminate the tax-free status of 529 plans and instead broaden an existing educational tax credit – the American Opportunity Tax Credit (AOTC) – that would provide more money than 529 plans for lower- and middle- middle-class families to cover their kids' college costs. The AOTC would be phased out for families with incomes greater than $180,000. The AOTC is used far, far less than 529 accounts. And that's saying something because less than 3% of US households even have a 529 account. Not mentioned at all was that about 70% of all undergraduate college students use loans to finance their educations. Thus, reforming student loan policies – like making the loans' payments depend on the income of the newly-graduated person (so-called Pay-As-You-Earn (PAYE) loans) – would likely have a more pronounced benefit for true middle-class families for lowering the costs of higher education than changing 529 plans. Oh well.

The White House stated that 70% of balances in the college accounts were held by families making at least $200,000 a year. Others stated that more than 70% of the total number of accounts are owned by households with incomes below $150,000. The average 529 account balance in 2013 was $19,584, which as all you tuition-payers know might cover, at best, one year at an in-state public college/university.

This White House proposal was the target of vehement criticism across a broad political spectrum, with lightning-quick disapproval from both John Boehner and Nancy Pelosi. Less direct condemnation was spread by the financial industry, which manages 529 accounts and often receives hefty fees for that service. Why? Because 529 plans are popular, despite their low numbers. There is over $240 billion in 529 accounts, and to listen to the criticism, each and every one of these accounts are held by certified middle-class citizens. Certainly many "middle-class" folks have money in 529 accounts, but as the White House pointed out, the benefits of such accounts disproportionately accrue to people in the upper reaches of the middle-class.

Unfortunately, there is enough of a middle-class patina on 529 plans to ensure the president's proposed 529-plan educational benefit reform entered face down into the political waters without even getting its toes wet.

This episode illustrates several inter-related issues in dealing with the "middle class economics." First, there's the difficulty that I've discussed above: defining who resides (or more to the point, who doesn't reside) in the middle-class. From a political perspective, we're virtually all middle class, even families who make $450,000. Silly me; I thought the middle class was a state of economics, not of mind. Second, paying for tax reform that can assist "middle class" people, a goal virtually all politicians pay at least lip service to achieving, is fiendishly difficult. Because tax reform usually means some folks will be winners (who get the benefits) and some will be losers (who pay more taxes).

If the middle class embraces virtually everyone – each of whom want to be tax reform winners – then it's next to impossible to offer benefits to households whose income is far closer to the $52,250 median income. There are simply not enough families who earn over $250k to provide tax revenue to assist middle-middle-class families, whether it be for college education or any other fiscal benefit to make their lives less fraught.

P.S., If you're interested in seeing where in the middle class your income places you, go here.

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[1] Median income is the numerical value separating the higher half of a distribution of income from the lower half.

OUR INCOME DISTRIBUTION IS FAST BECOMING NON-NORMAL.That's not good.

Anyone who has struggled with poverty knows how extremely expensive it is to be poor. ~ James Baldwin

What do the beef, cable TV, smart phone and soybean markets have to do with eroding middle class income? In this blog I will discuss one root cause of the US middle class' ever-withering income: the ever-increasing market power of industrial employers. This cause has not received much notice. Other reasons for the declining economic welfare of our middle class have been far more discussed – the weakening of labor unions and more international competition (aka, globalization). It is my contention that these reasons are, in fact, based on the ever-increasing power of relatively few, very large firms. These firms' power radiates directly from their concentrated market power.

Eons ago when I was sitting in graduate-school economics classes there was much discussion in my favorite slice of microeconomics (the economics of individual markets and/or decision-makers) - industrial organization – about the "concentration ratios" of important industries. These ratios provided one measure of how competitive an industry might be by measuring an industry's largest firms' market share. The more concentrated the market (the higher the market share), the less competitive it is likely to be, despite protestations from the largest firms' CEOs.

If the largest 4 firms in an industry capture more than one-half of the total market, this industry historically was judged to be concentrated and thus not terribly competitive. In bygone times, such concentration provoked the US Department of Justice (DOJ) or the Federal Trade Commission (FTC) to initiate an anti-trust assessment and lawsuits of the largest firms in this industry to reduce their market power. No longer. Mergers between an industry's largest firms routinely are approved by the DOJ or FTC, with minor concessions, if any.

In general, the more competitive an industry behaves, the greater are the benefits that accrue to customers in the form of lower prices and greater choices. Classic examples of significant industrial concentration include the Standard Oil Trust in the early 1900's oil industry, steel makers, tobacco manufacturers and the telephone company (the original AT&T). Large, integrated firms that dominated these markets were split up by the government's successful anti-trust actions.

However, over the past several decades when increased industrial concentration has proliferated across many US industries, the DOJ and FTC seem asleep at their anti-trust wheels. This lack of proper judicial and regulatory oversight has had important – and detrimental – consequences.

With stout market power, large firms can dominate not only the markets they sell products in – and thus set non-competitive retail prices and/or conduct anti-competitive behavior – but they also can dictate the markets they buy their inputs from (like labor and materials). The current class-action anti-trust lawsuit brought by 64,613 software engineers against Google, Apple, Intel and Adobe accuses these companies of agreeing not to solicit one another’s employees in a scheme developed and enforced by Steve Jobs of Apple. These workers allege they were unable to apply for jobs at these prominent high-tech employers in Silicon Valley because of a collusive "do not raid" agreement among the firms regarding their competitors' employees. This agreement thus thwarted these workers' opportunities to increase their income and job responsibilities. That's concentrated market power in action infecting employees' opportunities and livelihoods.

Here are other examples of strong market concentration. For Internet searches in the US, the top 2 search engines Google and Microsoft's Bing, control 85% of the search market. To no one's surprise, Google itself dominates with 67% of the market. In many other countries the top 2 search engines account for more than 90% of all searches.

The top 2 producers of the fast-growing smart phone operating system market –Google/Android and Apple – together control 91% of the world market. In the smart phone market (250.2M units in 2013), the top 2 producers –Samsung and Apple – control 42.2% of the world market (the top 4 producers capture 54.1% of this market) which in 2013Q3 represents 55% of total cell phone world sales – the first time smart phones outsold "regular" cell phones worldwide.

The recently proposed merger between the US's 2 largest cable TV providers – Comcast and Time-Warner Cable (TWC) – will place over 30% of the retail pay-TV market across America within one huge, vertically-integrated corporation. As one news article noted, if approved this merger would place Comcast as the dominate cable provider in 19 of the 20 largest US TV markets, and could give it unprecedented leverage in negotiations with content providers and advertisers. Comcast now owns NBC-Universal (a TV network as well as a major producer of TV shows and movies). It is no surprise that this week Netflix publicly stated it was opposed to the Comcast-TWC merger. And, according to Comcast, such increased market power will not affect its well-documented ability to considerably and continuously raise customer prices. To believe that, you must also believe in Tinkerbelle and the Tooth Fairy.

What about a non-digital market ? Glad you asked. Here's the market for beef, chicken and pork in the US. Four companies produce 85% of America’s beef and 65% of its pork. Just 3 companies make almost half of all chicken sold in America. These figures probably understate the reach of these modern meat oligopolies, which includes companies like Tyson Foods and Cargill. Today’s vertically-integrated meat conglomerates control each level of the food system in a way that that firms in the past could only dream about. Companies like Tyson Foods have pioneered a new model of food production that gives them ownership and control over virtually every stage of the business. By controlling the supply of meat, these producers control retail prices that consumers face for all types of meat, from T-bone steaks to turkey breasts.

Other agricultural markets beyond meat are similarly concentrated, belying economics professors' statements to their students that agriculture is a classical example of competition. It no longer is. A mere 46,000 of the 2.2 million US farms (2.1% of all farms) account for 50% of total sales of agricultural products. US behemoths such as Cargill  and Archer Daniels Midland (ADM) – remember them from the above paragraph – control significant agricultural markets as diverse as cocoa and corn to soybeans and wheat. ADM and several of its executives were convicted of participating in an international cartel to fix the price of lysine, a widely-used animal feed additive.[1] The world's 4 largest food producers-processors-traders – that go by the acronym ABCD derived from their names: ADM, Bunge, Cargill and (Louis) Dreyfus – account for between 75% and 90% of the global grain trade. Forget about the little farm on the prairie.

And don't forget about the banking sector, one of the most reviled by the public. As one astute observer noted: At some distant point in the past the banks have transformed from being the lubrication system for the engine of our economy to being treated as the engine itself. How did this happen? And the answer please…

The financial services/banking industry has increased in size, concentration and power with the explicit support of the federal government. After the 2008 bankruptcy of Bear Sterns and as part of the disastrous "credit crisis" the government not only allowed, but often coerced financial institutions to merge (e.g., the Bank of America's take-over of failing Merrill Lynch). Once again[2] our government – meaning taxpayers – provided beaucoup funds to bail-out the largest banks and required virtually nothing in return – other than eventual payment for certain provided funds. This bail-out of Wall Street (and many, many other firms including GM and AIG) by Main Street cost us $700 billion (B) via the Troubled Asset Relief Program (TARP) plus more than $960B in other direct and indirect financial "assistance" to the financial sector and beyond.

During the past 30 years, the financial industry's share of the US GDP has doubled. Heretofore big banks have gotten much, much bigger. According to the Federal Deposit Insurance Corp. (FDIC) in 2013, the nation's 5 largest banks controlled 40% of all bank deposits, and 44% of all financial institutions' assets. In 1990, the 5 largest banks accounted for only 9.7% of total market assets.

Most regions of the US are even more dominated by a few giant banks. For the San Francisco-Oakland- Hayward area in June 2013, the top 4 banks controlled 71% of all bank deposits; the top 2 banks (BofA and Wells Fargo), control 64.7%, illustrating a very high degree of market concentration and power. With such power you shouldn't be wondering why the 2010 Dodd-Frank Act's useful bank reforms and regulations, and consumer protections have been watered down and not yet fully implemented.

It is not a coincidence that as corporate power has dramatically swelled, the compensation provided to the CEOs of gigantic businesses has stratospherically grown relative to the pay of ordinary workers. Recent headlines like, "CEO-to-worker pay ratio ballooned 1,000 Percent since 1950"and "CEO-to-worker pay gap is obscene" describe this inequitable trend.

So, the market power of colossal businesses has steadily multiplied – along with their CEO's compensation – in no small part because of the neglect and/or active persuasion of the government. What has been happening to workers' income? The answer in two words, nothing positive.

The US income distribution is fast becoming non-normal; it's becoming bimodal, with many more poorer people and more higher-income folks. The middle income earners are withering both in numbers and in wages.

The 2013 median annual wages of workers was $35,090 according to government statistics; that is $16.87/hr. The US median, real annual household income in Feb 2013 was $51,404, 7.9% lower than when the great recession officially started (Dec 2007), and 8.4% lower than in Jan 2000. The figure below illustrates this depressingly downward decline in median household income since 2008. The Bottom 50% of taxpayers earned a mere 11.6% of total adjusted gross income (AGI) in the U.S. according to 2011 tax returns (the latest available for analysis). All by themselves the Top 1% received 18.7% of 2011 AGI. The Top 1%ers earn at least $390,000 per year.

Source: New York Times and Sentier Research

The distribution of US wealth (the value of all assets – possessions, property, money – held by a person, family or organization) is even more skewed than that of income. In 2009, the top 20% of households held 87.2% of all wealth in the US. The top 1% earns a bit less than 1/5th of all earned income (mentioned above) and holds 35.6% of all US wealth. The biggest winners in the wealth arena during the last decade have been the very most moneyed people of all (the top 0.1%); they have left even the 1% far behind. The top 0.1% countryside often includes CEOs home territories. Unlike CEOs, average middle-class families, those dead center in the US income distribution, had about 90% of their assets in their home. After the 2007-08 popping of the real-estate bubble, between 33% to 50% of their total wealth disappeared, unlikely to return any time soon, if ever.

On Apr 22, the New York Times offered an international perspective on the plight of the US middle class. Using data from 9 other nations, this article concluded that the US middle class has lost significant ground to other nations. The American middle class is no longer the world's richest.

Middle-class (50th percentile) real disposable incomes in Canada now appear to be higher than the US. The Times analysis shows that across the lower- and middle-income tiers, citizens of other advanced countries have received considerably larger raises over the last 30 years than similar people in the US. At the 20th income percentile (representing people whose income level is exceeded by 80% of the population), people in 5 nations have higher incomes than in the US – Norway, Canada, Netherlands, Germany and Finland. So much for the American Dream. But for the 95th income percentile folks, US incomes far exceed all other nations; the US real disposable income appears over 20% larger than the 2nd-ranked nation, Canada, and 50% more than the 5th-ranked nation, Netherlands.

Many local and state groups are now increasingly engaged in improving the economic plight of middle-class and working-class US families through a variety of actions. Most visible have been local group pushing to raise the stagnated federal minimum wage. The federal minimum wage certainly needs to be raised above $7.25/hr.

But raising the minimum wage does not address a major structural cause of stagnated incomes – exorbitant market power. Two economic policies must be changed to address this.

First, the Dept of Justice and FTC should immediately establish a 24-month hiatus in approving any and all mergers and acquisitions (M&A) involving any firm that is among the 10 largest in any specific market it now operates in. Anti-trust policy should be removed from its crypt at the DOJ and actively resuscitated, now. Standards for M&A acceptance should be tightened and enforced. In this age of multinational business, the US anti-trust authorities – the DOJ and FTC – should cooperate more effectively with their European (and other nations') counterparts; in particular with the European Union's Directorate-General for Competition. To date, the record of cooperation between the US and EU on matters of competition is spotty at best.

Federal and state authorities must immediately revive their now-moribund commitment to improving markets' competitiveness. This proven strategy can advance workers' incomes and offer consumers better, lower-priced goods and services as more competition is revitalized. With this M&A hiatus, currently-proposed mergers like Comcast-TWC, GE-Alstom, and Facebook-Oculus would be stopped. Corporate giants would not be able to broaden or deepen their market power. Every-day customers would have more, and less-expensive, market choices, and eventually workers wages would not be hammered by this country's oligarchs.

Second, there must be a supplemental, progressive inheritance/estate tax established for the very wealthy. Such a tax would be implemented on estates greater than $25M (adjusted annually for inflation) at a rate of 45%. For estates exceeding $50M, the tax rate would be 50%. The current estate tax starts with $5M estates, taxed at 40%.

These two policy changes would ultimately reverse eroding middle-class incomes and benefit the vast majority of US citizens.

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[1] This conspiracy was the basis of a popular movie, "The Informant!", starring Matt Damon as one of the ADM conspirators.

[2] The first publicly-funded bail-out of a US bank happened in March 1792, when the nascent US government provided funds to the failing First Bank of the United States. See The Economist for a fascinating essay about multiple financial crises during the past 200+ years.