Another Thumb on the Scales

[groovedaddy]

The world is in economic turmoil — much of it caused by American financial excesses — but the Bush administration isn’t budging from its anti-regulatory, unfettered-markets-know-best convictions.

The Justice Department’s antitrust division has published a new set of guidelines that narrow the interpretation of abuse that would justify government intervention against monopolies. It is a deregulatory gift aimed at getting pesky antitrust enforcers off of the back of big business.

The new doctrine bends over backward to protect big firms from accusations of anticompetitive behavior. It requires proof that the harm done by a monopolist’s actions — say, bundling new applications into a computer operating system to keep rival software makers out — be “disproportionately” greater than the potential gains to consumers.

If a dominant firm made an exclusive deal with a distributor to lock out a competitor, it would be illegal only if the competitor were denied access to least 30 percent of the market. If a dominant company used discounts as a tactic to smother competition, it could get off the hook if it let its smaller competitor survive, even if only barely. “Rivals’ continued presence in the market casts serious doubt on the existence of anticompetitive effects,” the report says.

http://www.nytimes.com/2008/11/01/opinion/01sat2.html?th&emc=th

[villager]

1. The real question is how much of this can practically, or swiftly, be undone by the Obama

...administration?

[groovedaddy]

2. With a willing Congress, alot can be done. n.t

[villager]

3. Will the Dems get it right, and start supporting the Presidents *worth* supporting

...for a change?

[groovedaddy]

4. There was a marked difference in the Dems elected to Congress in '06

and most of those who had been in Congress for awhile. They had a much stronger "populist" streak.
I'm hoping that more of these type Dems will be elected tomorrow.

[Turbineguy]

5. Muriel Siebert

was on CNBC last week saying the financial sector needs more regulation. She's smart enough to know that people who lose their retirements because of a market meltdown will not be coming back any time soon. Like 2 generations.

This is why finance wonks are pleading for people to stay the course. The derivatives and the inventors and floggers thereof have sucked all the real money out of the market.

Until we get some changes in the rules, there is no way to use this market for building up a nest egg for the future. Unless you are a skilled stock trader willing to play in a less-than-zero sum game.

The new financial landscape will have to function on significantly less leverage. I expect higher capital requirements for banks and higher margin requirements for commodities traders. Higher down payments for on-credit buyers, especially for high depreciation items. Investors will become a lot more cautious about "high return, low risk" investments.

[paparush]

6. Bush** is also currently pushing sweeping limits on Product Liability Lawsuits

Yet another gift to corporations.