Inflation, Tax Cuts, and Antitrust.
Inflation, Tax Cuts, and Antitrust.
On the heels of a failed attempt to negotiate a special session, Governor Walz recently renewed calls for direct payments to Minnesotans, or Walz Checks, but has doubled his proposal from $500 a person ($1,000 a couple) to $1,000 a person ($2,000 a couple). Not to be outdone, GOP candidate Scott Jensen released his plan to combat inflation, which is primarily a plan to cut taxes.
This all follows back and forth between DFL and GOP lawmakers over a proposal to temporarily suspend the state’s gas tax as a way of dealing with rising prices at the pump, which prompted the following passage in a recent edition of the Minnesota Reformer newsletter.
Now, this is not an effort to pick on the Reformer, this likely reflects, unfortunately, the predominant view among state legislators given stories like this from the New York Times in May. That is why it has been so refreshing to see the rhetoric and proposals coming from the House Democrat Caucus in Pennsylvania recently where several lawmakers are looking to curb the pricing power of dominant firms, including a bill from Rep. Nick Pisciottano to stop price-fixing. Lawmakers in Minnesota could learn a lot from these Pennsylvania leaders.
Of course, Pennsylvania is not the only place where policymakers are taking on corporate power as part of fighting inflation. New York Attorney General Letitia James is using the state’s recently revamped price-gouging law to launch an investigation into dominant firms in industries like oil and gas. In Washington D.C. Attorney General Karl Racine’s antitrust lawsuit against Amazon is about the firm illegally raising prices across the economy. There is more to creating a fair economy than tax cuts!
AntiMonopoly Rising
Fortunately, while the debate around inflation in Minnesota leaves much to be desired, this past legislative session offered reasons to believe that legislators are starting to understand that combatting concentrated corporate power is not just a job for the federal government. Over the course of the spring the House heard bills that would establish the Right to Repair, protect workers at Amazon warehouses, break up the Apple-Google duopoly, stop price discrimination, and overhaul Minnesota’s antitrust laws. Over in the Senate efforts were made to prohibit price gouging and stop corporate ownership of housing.
The reforms to Minnesota’s antitrust statute, which has not been touched since a 1971 rewrite, were probably the most exciting antimonopoly development this session, even though the bills never received a vote. In March the House Commerce Finance and Policy Committee held an informational hearing to discuss HF4142, HF4143 and HF4144 sponsored by Rep. Zach Stephenson (DFL - Coon Rapids) and Steve Elkins (DFL - Bloomington). The bills would overhaul Minnesota’s antitrust laws, create new tools, and allow antitrust enforcement to return to its roots of challenging corporate concentration instead of being constrained by a narrow focus on consumer welfare. Testifying in support of the bills that day was Attorney General Keith Ellison, the Minnesota Farmers Union, a rural grocer impacted by dollar stores pricing power and a family farmer struggling because of the consolidation of meat processing.
I wrote about the bills in more detail for MinnPost, but collectively the legislation would create definitions of monopoly and monopsony power, put into state law Robinson-Patman Act like prohibitions on price discrimination, and create a new Abuse of Dominance Standard in antitrust law. While the hearing came late in session and did not include a vote, it might be the most significant antitrust action outside of the New York Senate’s passage of the 21st Century Antitrust Act. Hopefully 2023 will present an opportunity to make Minnesota a leader in state-level antitrust reforms.
The App Store legislation sponsored in the House by Dan Wolgamott (DFL - St. Cloud) was actually introduced back in 2021 – you can read more about the legislation in a piece that Pat Garofalo of the American Economic Liberties Project and I wrote for the Minnesota Reformer – but finally got a hearing this session and some good press coverage as well.
Minnesota is one of just a few states without any law prohibiting price gouging. While the House passed price gouging legislation in 2021, the Senate never even held a hearing despite prodding from Senator Lindsey Port (DFL - Burnsville). However, an effort was made to amend a bill on the Senate floor to make price-gouging illegal and while it did not pass, seven Republicans joined DFLers in voting for the legislation. While protecting Minnesotans from getting ripped off by monopolists might not be popular with the Minnesota Chamber of Commerce, that vote suggests senators believe it would be popular with their constituents.
The final intriguing effort to combat corporate power in the Senate came from Senator Kari Dziedzic (DFL – Minneapolis) who offered legislation that would ban corporate ownership of single-family housing in Minnesota. The Minneapolis Federal Reserve Bank has started to collect data on corporate ownership of housing, which has become a growing phenomenon nationwide. Flush with cash, private equity firms are gobbling up single family homes all across the country and converting them into expensive rentals. It has the effect of increasing rents while further restricting the supply of single-family homes and raising those prices.
On to November
While none of these bills/amendments have made it into law, they should, and hopefully candidates will start talking about them more as they hit the campaign trail this summer. As polling from Fight Corporate Monopolies shows, Americans want policymakers to take on the powerful companies that control our lives. We just need policymakers, at all levels, that understand how to do so.
