By Karen Rubin, News& Photo Features
The venue for Senator Elizabeth Warren’s rally was strategic for her message: a former warehouse with dank walls now used for an entertainment space in Long Island City (though technically Astoria), the neighborhood that booted Amazon, despite its promise to bring 25,000 jobs, in exchange for a $3 billion tax incentive.
The message the declared 2020 Democratic candidate for president brought to the 600 eager supporters was that it is time to break up the high-tech companies that have come to wield out-sized economic power more like government, dictating demands.
“We have these giant corporations — do I have to tell that to people in Long Island City? — that think they can roll over everyone,” she said, comparing Amazon to “The Hunger Game.”
“Giant corporations shouldn’t be able to buy out competition. Competition has to be able to thrive and grow.”
“Who does government work for? Just the richest people and corporations? I want government that works for the people.”
“I spent whole life wondering what happening to middle class, why so much rockier, steeper, and even rockier and steeper for people of color – what has gone wrong in America.
“Our government works great for giant drug companies, not for people needing prescription drugs; for giant oil companies, not for people who see climate change bearing down; great for payday lenders, not for people of color and communities and poor people who are targeted, whose lives are turned upside down.
“It’s corruption plain and simple and we need to call it out.
“Whichever issue brought you here – income gap, climate change, affordable child care, housing, whatever issue brought you here, I guarantee decisions made in Washington that directly touch – runs straight through corruption in Washington.... We need big structural change.”
Her prescription: change the rules of government, of the economy, of politics:
Where to start? Change the rules of government by taking corruption head on.
“I introduced the biggest anti-corruption bill since Watergate; it’s big, long, complex, but here are a few pieces:
“End lobbying as we know it. Stop the revolving door between Wall Street and Washington; make Supreme Court follow the basic rules of ethics. Anyone who wants to run for federal office, must release their taxes.
“We need workers to have more power, we need stronger unions. Unions built American middle class and will rebuild the American middle class.”
Warren is advocating an ultra millionaire’s tax: imposing 2% tax for those with over $50 million in assets. That means the top 0.1% -75,000 households. She estimates that would generate $2.4 trillion.
In what sounds like an expansion of Obama’s oft-taken-out-of-context line, “You didn’t build that,” Warren justifies the wealth tax saying, “I’m tired of free loading billionaires. You built (or inherited) your fortune, good for you, but you built it using workers we educated, roads and bridges we paid to build, police – all helped. So yeah, you built a great fortune, so give a little back to the American people (who enabled you).
It’s a property tax, she said, not unlike the property tax that any homeowner, farmer, condo owner all pay, but includes the Picassos, diamonds and yachts.
What would it do? It would fund universal child care, and still have billions left over.
To change the rules of politics and protect our democracy, she said, “I want to see a constitutional amendment to protect the right to vote and make sure every vote gets counted. Overturn Citizens United.” (adding that she isn’t taking any corporate PAC money, but is depending on grassroots donations, ElizabethWarren.com.)
“I don’t go to closed door meetings with millionaires. I’m here with you.”
“My father was a janitor but his daughter got a chance to be a teacher, a college professor, a Senator and a candidate for President of the United States. I believe in opportunity because I’ve lived it. I want an American where every child gets a chance to build a future.
“This is our moment. Dream big. Let’s win.”
She then took questions (the questioners were picked at random):
Asked her view of Governor Andrew Cuomo trying to woo Amazon back after local progressives including State Senator Michael Gianaris, who introduced her at the rally, she said, “This is like ‘Hunger Games’ – it is not just the enormous economic power, but the political power they wield.
“A handful of companies spend $50 million lobbying Washington – a great return on investment if they get to keep Washington from enforcing regulations, antitrust laws, hold back oversight. That’s not how America is supposed to work. Corporate power... and billionaire power, all those who make their voices heard through money. They fund the think tanks that come to, predetermined conclusions, the public relations firms, the soft ads on TV, controlling government, they tilt the playing field over and over against everyone else.”
She reflected that she went to see Trump being sworn in, and realized that with control of the White House and both houses of Congress, the Republicans could have swept away health care and Medicare “by Tuesday.” “But the next day, there was the biggest protest in the history of the world.”
“I want to rein in big tech. That won’t happen by talking inside the Beltway, but in rooms like this.”
Asked whether her wealth tax would cause billionaires like Trump to simply move outside the US, she quipped, “That would be a bad thing?” but explained the 2% wealth tax would be on all property where it is held, so a yacht in the Caribbean would be taxed. More tax treaties mean it can be tracked. The IRS (now underfunded and understaffed) would step up enforcement. Even with a 15% cheat factor, you still get nearly $3 trillion in revenue. As for moving and renouncing US citizenship to avoid the tax? There would be a 40% exit penalty.
“You built your fortune here, you owe something to the American people.”
Asked about addressing homelessness and the lack of affordable housing, Warren said, “It’s a matter of values. In the richest country in the history of the world, people shouldn’t be sleeping in the street. I have a plan, a housing plan, but the first step is to diagnose the problem: Why has the cost of housing gone up? Wages, adjusted for inflation for four decades are flat, but housing costs have risen by two-thirds. That puts a squeeze on families.”
She said that over the years, government has withdrawn investment in housing, while private developers have build the more profitable McMansions and luxury high rises. “There’s been an increase in housing at the top but no increase for middle class and down. The federal government is not making investment in housing for poor, working poor and middle class. Meanwhile, across America, the housing stock has deteriorated, shrinking in size, but the population is expanding, so people are paying more and more for less and less.
“The answer: build more housing. I want to build 3.2 million new housing units all across the country. That would decrease rents by 10%. I want more housing for purchase, so families can build equity over time.
“Housing is how working families have built wealth generation after generation – paying off the mortgage, and living on Social Security, grandma can live with the family, the home passes on wealth to the next generation.
“It is no surprise that for decades, from the 1930s, federal government invested in subsidized housing for white people, but discriminated against blacks. Red lined areas where federal government would block mortgages, so that generation after generation [was deprived of home ownership to build wealth]. In 1960, housing discrimination was legal, while the federal government subsidized whites and discriminated against black neighborhoods. Then, the gap between white and black home ownership was 27 points.
“Then civil rights made housing, voting discrimination illegal, and we see black middle class recover.
“But then the big banks came along – looked to black, brown home owners’ equity. They targeted black and brown people for the nastiest mortgages – Wells Fargo, Bank of America. Greed.
“Today, the gap between white and black home ownership is 30 points. Race matters in America.
“My housing bill has something we haven’t seen anywhere else: in formerly red-lined areas, first time home buyers or those who lost their homes during the housing crash, will get assistance to buy again.”
Asked whether she would support ending the filibuster which the Republican minority used to block progressive legislation during the Obama administration, to block his judicial appointments, even the Merrick Garland Supreme Court nomination, she said (not too coyly): “It’s all on the table, baby. I’m on record for filibuster reform. The Republicans used filibuster to block judicial nominees, the director of the Consumer Financial Protection Board, the National Labor Relations Board. “Republicans get to do what they want when they’re in power, and when we are, we drink a lot of tea. It’s all on the table.”
“I get that things I’m asking for all are hard – attacking corruption, changing the rules of the economy, democracy. I get that some people earn more or less, but everyone should have an equal share of democracy.”
People, she said, saved the Consumer Financial Protection Board, which she created after the 2008 financial collapse. “The people saved it, and it’s already forced the biggest banks to return $12 billion to the people they cheated.
“I’m calling for big structural change, but you don’t get what you don’t fight for,” she said, citing the abolitionists, suffragettes, union organizers, the foot soldiers of civil rights, gay rights activists. “They were all told, ‘it’s too hard, give up now, and yet, every one of them stayed, fought, organized, persisted [she said to big cheers], and changed. This is our moment to change.
“Dream big, fight hard, and let’s win.”
In an already crowded field of candidates – even the progressive faction – Warren is the only one who has clearly spelled out policy proposals and the underlying rationale, the powerful statistics of growing inequality, that she has studied and worked to change for years to level the playing field, “make government work for you”: campaign finance reform and government reform; housing; tax reform.
And in this venue, it was fascinating to see how she could be so factual, so academic, but so enthusiastic and personable, her audience asked for more detail about how she would address the critical shortfall in affordable housing, even taking her by surprise.
The evening was organized a little like a townhall, with Warren moving freely about a stage in front of a giant American flag, taking questions, and then at the end, offering to stay as long as necessary so anyone who wanted to take a photo with her could get their chance.
Elizabeth Warren Releases Plan to Rein in Big Tech, Giant Corporations
Senator Elizabeth Warren (D-MA), a declared 2020 candidate for 2020 presidential nomination, came to Long Island City, where local activists rejected Amazon, to propose a plan to rein in big tech and other giant multi-national companies that use their economic power to stifle competition and intimidate government. Here is her proposal:
Today’s big tech companies have too much power -- too much power over our economy, our society, and our democracy. They’ve bulldozed competition, used our private information for profit, and tilted the playing field against everyone else. And in the process, they have hurt small businesses and stifled innovation.
I want a government that makes sure everybody -- even the biggest and most powerful companies in America -- plays by the rules. And I want to make sure that the next generation of great American tech companies can flourish. To do that, we need to stop this generation of big tech companies from throwing around their political power to shape the rules in their favor and throwing around their economic power to snuff out or buy up every potential competitor.
That’s why my Administration will make big, structural changes to the tech sector to promote more competition—including breaking up Amazon, Facebook, and Google.
How the New Tech Monopolies Hurt Small Businesses and Innovation
America’s big tech companies provide valuable products but also wield enormous power over our digital lives. Nearly half of all e-commerce goes through Amazon. More than 70% of all Internet traffic goes through sites owned or operated by Google or Facebook.
As these companies have grown larger and more powerful, they have used their resources and control over the way we use the Internet to squash small businesses and innovation, and substitute their own financial interests for the broader interests of the American people. To restore the balance of power in our democracy, to promote competition, and to ensure that the next generation of technology innovation is as vibrant as the last, it’s time to break up our biggest tech companies.
America’s big tech companies have achieved their level of dominance in part based on two strategies:
- Using Mergers to Limit Competition. Facebook has purchased potential competitors Instagram and WhatsApp. Amazon has used its immense market power to force smaller competitors like Diapers.com to sell at a discounted rate. Google has snapped up the mapping company Waze and the ad company DoubleClick. Rather than blocking these transactions for their negative long-term effects on competition and innovation, government regulators have waved them through.
- Using Proprietary Marketplaces to Limit Competition. Many big tech companies own a marketplace – where buyers and sellers transact – while also participating on the marketplace. This can create a conflict of interest that undermines competition. Amazon crushes small companies by copying the goods they sell on the Amazon Marketplace and then selling its own branded version. Google allegedly snuffed out a competing small search engine by demoting its content on its search algorithm, and it has favored its own restaurant ratings over those of Yelp.
Weak antitrust enforcement has led to a dramatic reduction in competition and innovation in the tech sector. Venture capitalists are now hesitant to fund new startups to compete with these big tech companies because it’s so easy for the big companies to either snap up growing competitors or drive them out of business. The number of tech startups has slumped, there are fewer high-growth young firms typical of the tech industry, and first financing rounds for tech startups have declined 22% since 2012.
With fewer competitors entering the market, the big tech companies do not have to compete as aggressively in key areas like protecting our privacy. And some of these companies have grown so powerful that they can bully cities and states into showering them with massive taxpayer handouts in exchange for doing business, and can act -- in the words of Mark Zuckerberg -- “more like a government than a traditional company.”
We must ensure that today’s tech giants do not crowd out potential competitors, smother the next generation of great tech companies, and wield so much power that they can undermine our democracy.
Restoring Competition in the Tech Sector
America has a long tradition of breaking up companies when they have become too big and dominant -- even if they are generally providing good service at a reasonable price.
A century ago, in the Gilded Age, waves of mergers led to the creation of some of the biggest companies in American history -- from Standard Oil and JPMorgan to the railroads and AT&T. In response to the rise of these “trusts,” Republican and Democratic reformers pushed for antitrust laws to break up these conglomerations of power to ensure competition.
But where the value of the company came from its network, reformers recognized that ownership of a network and participating on the network caused a conflict of interest. Instead of nationalizing these industries -- as other countries did -- Americans in the Progressive Era decided to ensure that these networks would not abuse their power by charging higher prices, offering worse quality, reducing innovation, and favoring some over others. We required a structural separation between the network and other businesses, and also demanded that the network offer fair and non-discriminatory service.
In this tradition, my administration would restore competition to the tech sector by taking two major steps:
First, by passing legislation that requires large tech platforms to be designated as “Platform Utilities” and broken apart from any participant on that platform.
Companies with an annual global revenue of $25 billion or more and that offer to the public an online marketplace, an exchange, or a platform for connecting third parties would be designated as “platform utilities.”
These companies would be prohibited from owning both the platform utility and any participants on that platform. Platform utilities would be required to meet a standard of fair, reasonable, and nondiscriminatory dealing with users. Platform utilities would not be allowed to transfer or share data with third parties.
For smaller companies (those with annual global revenue of between $90 million and $25 billion), their platform utilities would be required to meet the same standard of fair, reasonable, and nondiscriminatory dealing with users, but would not be required to structurally separate from any participant on the platform.
To enforce these new requirements, federal regulators, State Attorneys General, or injured private parties would have the right to sue a platform utility to enjoin any conduct that violates these requirements, to disgorge any ill-gotten gains, and to be paid for losses and damages. A company found to violate these requirements would also have to pay a fine of 5 percent of annual revenue.
Amazon Marketplace, Google’s ad exchange, and Google Search would be platform utilities under this law. Therefore, Amazon Marketplace and Basics, and Google’s ad exchange and businesses on the exchange would be split apart. Google Search would have to be spun off as well.
Second, my administration would appoint regulators committed to reversing illegal and anti-competitive tech mergers.
Current antitrust laws empower federal regulators to break up mergers that reduce competition. I will appoint regulators who are committed to using existing tools to unwind anti-competitive mergers, including:
- Amazon: Whole Foods; Zappos
- Facebook: WhatsApp; Instagram
- Google: Waze; Nest; DoubleClick
Unwinding these mergers will promote healthy competition in the market -- which will put pressure on big tech companies to be more responsive to user concerns, including about privacy.
Protecting the Future of the Internet
So what would the Internet look like after all these reforms?
Here’s what won’t change: You’ll still be able to go on Google and search like you do today. You’ll still be able to go on Amazon and find 30 different coffee machines that you can get delivered to your house in two days. You’ll still be able to go on Facebook and see how your old friend from school is doing.
Here’s what will change: Small businesses would have a fair shot to sell their products on Amazon without the fear of Amazon pushing them out of business. Google couldn’t smother competitors by demoting their products on Google Search. Facebook would face real pressure from Instagram and WhatsApp to improve the user experience and protect our privacy. Tech entrepreneurs would have a fighting chance to compete against the tech giants.
Of course, my proposals today won’t solve every problem we have with our big tech companies.
We must give people more control over how their personal information is collected, shared, and sold—and do it in a way that doesn’t lock in massive competitive advantages for the companies that already have a ton of our data.
We must help America’s content creators—from local newspapers and national magazines to comedians and musicians — keep more of the value their content generates, rather than seeing it scooped up by companies like Google and Facebook.
And we must ensure that Russia — or any other foreign power — can’t use Facebook or any other form of social media to influence our elections.
Those are each tough problems, but the benefit of taking these steps to promote competition is that it allows us to make some progress on each of these important issues too. More competition means more options for consumers and content creators, and more pressure on companies like Facebook to address the glaring problems with their businesses.
Healthy competition can solve a lot of problems. The steps I’m proposing today will allow existing big tech companies to keep offering customer-friendly services, while promoting competition, stimulating innovation in the tech sector, and ensuring that America continues to lead the world in producing cutting-edge tech companies. It’s how we protect the future of the Internet.
___________________
© 2019 News & Photo Features Syndicate, a division of Workstyles, Inc. All rights reserved. For editorial feature and photo information, go to www.news-photos-features.com, email editor@news-photos-features.com. Blogging at www.dailykos.com/blogs/NewsPhotosFeatures. ‘Like’ us on facebook.com/NewsPhotoFeatures, Tweet @KarenBRubin