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How Hillary Can Make a Huge Economic Impact in Her First Term

If she follows through on her antitrust proposals, it would go a long way toward resolving a host of economic ills.

Justin Sullivan/Getty Images

Years from now, if we are lucky enough to look back on a Hillary Clinton presidency, the speech she gave in Toledo, Ohio, on Monday might represent a turning point for the nation, the moment when corporate behemoths began to shrink and economic liberties were strengthened. Or it might represent the latest in a line of broken promises from the political class, more evidence that the best intentions of concerned public officials run aground on the vast clout of big business.

When it comes to antitrust policy, it could go either way. But this time, Clinton has an actual antitrust movement behind her, one that will both reward attempts to break up monopolies and criticize any retreat. She can also bypass expected gridlock in Congress. Laws already on the books enable engaged antitrust agencies to address an extreme market consolidation that has, in large part, created our unequal economy. If Clinton wants to make a real impact in her first term, reviving antitrust enforcement would do more than practically anything else to change the trajectory of the American economy.

As Clinton demonstrated in Toledo, the trend toward monopolization explains the frustration of those left out of economic gains. “Part of the problem is large corporations are amassing so much power in our economy,” Clinton said. “With less competition, corporations can use their power to raise prices, limit choice for consumers, cut wages for workers, crowd out start-ups and small businesses.”

The impact of this consolidation is everywhere. Health insurance premiums rise while the three largest insurance companies control most of the market. Airline service craters while four carriers dominate all the routes. Half of our books are sold on Amazon, where discounts squeeze producers. Dying rural areas, declines in real income, lack of startup businesses, soaring inequality, the loss of distinct cultural identities, a government prey to corporate interests—concentrated markets feed all of this.

Rolling back this trend has quietly become part of the liberal framework. The Center for American Progress, often called Clinton’s government-in-waiting, highlighted the need for stiffer antitrust enforcement in a paper this June. The paper was presented at a New America Foundation conference that featured a keynote address by Elizabeth Warren. The White House issued an executive order on competition, after numerous policy papers highlighted the consequences of excessive market concentration. The Democratic platform featured an antitrust plank for the first time since 1988.

Clinton has highlighted antitrust once before, in an op-ed in Quartz, riding this wave of new interest in the topic. But the Toledo remarks, and more specifically the accompanying fact sheet, solidified an actual agenda. First, while Clinton embraced President Barack Obama’s executive order on promoting competition, she explicitly committed herself to strong leadership at the two antitrust agencies that enforce the Sherman and Clayton Antitrust Acts: the Department of Justice’s Antitrust Division and the Federal Trade Commission (FTC). In addition to providing sufficient resources and staffing, Clinton “believes we should encourage building up jurisprudence that supports strong enforcement,” hinting at challenging monopolies in court rather than brokering settlements. There are likely to be three open seats on the FTC that will need filling in the next administration, so Clinton will certainly have the opportunity to make her mark.

Next, Clinton contrasted the “highly permissive approach of the Reagan era” to her vision of creating “strong presumptions that market concentration can lead to anti-competitive conduct.” This suggests that she sees consolidation as a problem in and of itself. She also wants the agencies to look retrospectively at mergers to monitor their impact on competition and inform responses to future mergers.

And rather than just block mergers to fend off deeper concentration, Clinton would “prevent the inappropriate exploitation of excessive market power where it already exists.” That means using Section 2 of the Sherman Act, a forgotten tool that empowers the agencies to break up existing monopolies if they abuse their status.

This is a huge break with the “Law and Economics” movement exemplified by Robert Bork and the University of Chicago, which sees concentration as acceptable as long as it benefits consumer welfare. In Clinton’s vision, prices are not the only lens through which we can view monopolies—they can hurt workers, suppliers, and small businesses. “It’s an important acknowledgement that antitrust law and competition policy are central to creating and maintaining a fair and democratic economy,” says Lina Khan, a fellow with the Open Markets Project at the New America Foundation.

However, we’ve been here before. As a candidate, Barack Obama talked quite a bit about monopolistic consolidation, particularly in agriculture. It arguably helped him win the 2008 Iowa Caucus, which was his stepping stone to the presidency. As Khan laid out in a 2012 Washington Monthly article, after the election, Obama sent Attorney General Eric Holder and Agriculture Secretary Tom Vilsack to rural communities to hear how large agriculture processors squeeze small suppliers. Family farmers feared retaliation from speaking out, but did so in the hopes that the administration would revamp the industry.

And then it did nothing. Markets for meat, poultry, dairy, and seeds have concentrated further (see the impending Monsanto-Bayer merger). Family farmers still must submit to the predatory terms of Big Agriculture, competing with their fellow suppliers in a race to the bottom. A Republican backlash against proposed rules to protect small farmers, and the expectation that the courts would not sanction radical reform, contributed to the failure. But after building up so much expectation, to timidly abandon an anti-monopoly cause was a tremendous setback. Recognizing the problem is not enough. After decades of consolidation, we need follow-through.

Big Ag lobbies led the charge against the aborted Obama effort, and unquestionably big companies would fight Clinton. The pushback would likely include sectors that have enjoyed a friendly relationship with the Democratic nominee throughout the campaign, most notably Silicon Valley. She has hundreds of industry advisers crafting a “technology and innovation initiative” that reads like a tech sector wish list.

Like 19th-century railroads, Facebook, Amazon, Apple, and Google have narrowed distribution channels for communication, and exploited their power over producers. Breaking up banks only to shift market power to online lenders, or ending cable company abuses of set-top boxes while benefiting Google, merely transfers one monopoly into another. “The big open questions are whether a Clinton administration would actually follow up, and whether they’d also apply it to tech platforms, whose growing control over markets and data carries anticompetitive implications,” says Lina Khan.

But though history paints a bleak picture for politicians taking on corporate power, an executive branch with sufficient will power can actually accomplish a lot under existing authority. And this time, if Clinton chooses to go big on antitrust, she’ll have a countervailing force ready to take on corporate giants. Eight years ago there was no antitrust movement to encourage busting up monopolies, no intellectual force to identify precisely how lack of competition affects so many areas of the economy. Whether Clinton follows through on this bold agenda depends in part on whether that movement forces her to do it.