“Money Changes Everything”–Paul Krugman, Carlos Slim, And The NY TIMES
Paul Krugman opinionizes in the NYT:
… In recent years many economists, including people like Larry Summers and yours truly, have come to the conclusion that growing monopoly power is a big problem for the U.S. economy — and not just because it raises profits at the expense of wages. Verizon-type stories, in which lack of competition reduces the incentive to invest, may contribute to persistent economic weakness.
The argument begins with a seeming paradox about overall corporate behavior. You see, profits are at near-record highs, thanks to a substantial decline in the percentage of G.D.P. going to workers. You might think that these high profits imply high rates of return to investment. But corporations themselves clearly don’t see it that way: their investment in plant, equipment, and technology (as opposed to mergers and acquisitions) hasn’t taken off, even though they can raise money, whether by issuing bonds or by selling stocks, more cheaply than ever before.
How can this paradox be resolved? Well, suppose that those high corporate profits don’t represent returns on investment, but instead mainly reflect growing monopoly power.
Of course, as I pointed out a couple of years ago in Taki’s Magazine, the most flagrant example of the decline in anti-monopoly wariness is the lack of criticism in America of the New York Times for taking the Danegeld from intermittent Richest Man in the World, Mexican telecom monopolist Carlos Slim.
I don’t see much evidence on Google of NYT columnist Paul Krugman criticizing Slim, the most absurd example of monopoly power debilitating a national economy.
From Time Magazine in 2009:
The 2009 TIME 100
In our annual TIME 100 issue, we do the impossible: name the people who most affect our world
BUILDERS & TITANS
By Arthur Sulzberger Jr.
Apr. 30, 2009
I recently had the great pleasure of meeting Carlos Slim. He had decided to invest in the New York Times Co. and thought it would be a good idea to get to know me and my senior colleagues. It was obvious from the moment we met that he was a true Times loyalist. We had an enjoyable conversation about what was happening in this country and everywhere else in the world. Carlos, a very shrewd businessman with an appreciation for great brands, showed a deep understanding of the role that news, information and education play in our interconnected global society.
What also became apparent is that for Carlos, insight and understanding are catalysts for action and accomplishment. This speaks to why Carlos has funded extensive public-health education programs and why he’s helped thousands of students throughout Latin America get their own laptops and learn more about digital technology.
Carlos, 69, believes that as people know more, they have a far better opportunity to change and improve their lives. As he spoke at our meeting, he conveyed the quiet but fierce confidence that has enabled him to have a profound and lasting effect on millions of individuals in Mexico and neighboring countries. … And I am delighted that he brings those attributes to the New York Times Co., to Mexico and to the world.
Sulzberger is chairman of the New York Times Co. and publisher of the New York Times
After all, Slim’s hero is Genghis Khan.
A very 1979 song.