Will Santa Sleigh the Monopolies? (Episode 62)

The big question on my mind is will Santa sleigh the monopolies? That’s my big hope for the end of the year.

I mean, you know, it’s funny, we were talking a little bit about how we were afraid won’t think it’s very exciting, but frankly this is just the future of like whether or not the planet is habitable, what price we’re paying for energy, and things like that. So we’re going to talk about what John’s been looking at and the timeline in which the entire electric system is changing, where we get our energy from.

We’ll talk a little bit about broadband regarding AT&T buying Time Warner and the Department of Justice really trying to challenge that, even though it has kind of a flawed argument and it seems clear that the world is stacked against it.

But let’s start, Stacy, with Amazon, a year in review. And is it two years ago you released your big Amazon report around this time?

And then this year was a moment when people started to really look at what those intentions are and became increasingly concerned about the ways that Amazon’s tentacles are reaching into every part of the economy, and not just dominating markets, but really controlling markets in ways that are deeply disturbing.

But I think … You know, I think there was … You know, that acquisition I think got some people starting thinking, but then, you know, Stacy has been relentless in terms of putting out more information to help people understand what’s going on, so she had a report about procurement and the way in which Amazon is involved in public procurement that I saw, you know, circulate in a lot of circles.

I saw her stuff about H2Q as that decision was kind of coming to an end, so I … To me it’s like within the last six months all of a sudden it has gone from being like there were a couple of different like select pockets of people that were caring about this, economists, you know, folks that look at online shopping or something like that, and all of a sudden now everybody is talking about it, like this is the thing to focus on when you talk about concentration in the economy.

And then Amazon at some point in the year announced that they’d whittled the list down to 20, and there was another like flurry of media coverage. And then something began to happen in right around September of this year. I think a lot of people started to realize that this whole thing was a ruse. I mean it was like it had worked as a publicity stunt for them for months and months and months, and then something started to shift in the public consciousness.

And it was really interesting to watch, because the reporting started to change. Amazon, the way that they talked about it, started to change, so it was really clear that people suddenly started to think oh, this is a company that is using its power to gain government favors, to manipulate all these local governments into turning over this incredibly valuable data, and that this was really a ploy by a monopolist basically that’s a threat not just to the economy and like the opportunity that we have as workers and producers, but like a threat to democracy and to like our ability to run our own cities and our own lives.

And even at times I remember thinking oh, like I agree, but I don’t want to alienate, you know, my few followers that still listen to me by just harping on Amazon. But definitely toward the end it seemed like everyone was saying this is not good and this is a sign that something is wrong.

Now let me ask you this Stacy. You were on the Hasan Minhaj show, The Patriot Act, on Netflix, talking about this, an entire episode about Amazon and antitrust. To me that’s another sign that things have shifted. What did you take away from like a popular show aimed at a non-policy audience talking about this?

And I got a little … As you mentioned, a little cameo along the way in his montage on Amazon, and I just … It was so encouraging, because I thought there’s a way in which this has entered the mainstream popular discussion. I couldn’t have ever guessed that this would happen, but it’s critical, because I think, you know, we have, as you noted, economists and some policymakers and other folks who are looking at this and are deeply concerned about Amazon and about monopolies in general.

But what is going to actually make action happen is going to be popular will. And so the fact that this issue is resonating, I think people in their own lives know that there is something fundamentally wrong with economy. We’ve got polling on this now that shows that most people, the vast majority of people in both parties believe that monopoly is a problem, that big companies have too much power, that our local economies, or job opportunities are all being squeezed by these company.

So I mean it’s interesting in the context of Amazon, because there’s this way in which we’re sort of of two minds. A lot of people enjoy Amazon as consumers, and at the same time are deeply concerned about its power, and those things can be true at once, and we really saw that this year.

And then all of a sudden we start to see New York City Council members re-tweeting Stacy’s stuff and saying hey, this is really kind of crappy, like this might not actually even be a good deal for us. We don’t want to be an HQ2 city. We could more profitably invest this in a lot of other local initiatives.

So I think that’s where for me it felt like this notion that Amazon is a problem really had some traction. When you have cities willing to turn down the potential to host this headquarters and say actually we have lots of other ways we think we can support our economy that are a much better deal.

And, you know, I think John is right. I mean I was surprised, and it’s been great to see … I sort of expected that people would be maybe upset about the subsidies and there may be some debate about getting something in return for those giveaways, that kind of thing.

But instead what we’re seeing is people are like definitely no subsidies, and we don’t even think we want Amazon here at all. And it spoke about we don’t want to be part of supporting this monopoly and all of the negative impacts that it’s having, but it’s also like looking at what this is going to mean Queens and all the ways in which local people are going to lose because of Amazon.

It’s just galling too when you have the world’s richest man … I mean Jeff Bezos is worth something like $160 billion. It fluctuates, but something like that. The idea that taxpayers, in a state where the school systems are really struggling and there are a lot of other problems, are going to be ponying up this incredible amount, billions of dollars. It’s just so galling to people. There’s something about that that I think is really crystallized what’s at stake with Amazon.

So I’m curious if you can respond to the argument that New York, even though they’re giving all these subsidies, is better off because Amazon is coming because of how it’s structured?

I mean the reason Amazon is going to New York and also the Virginia suburbs of Washington, DC is because that’s where they think they can find and attract the tech talent that they need, and that’s the only reason. The reason they split the HQ2 into two locations is because they recognize that they wouldn’t be able to find enough of the right kinds of workers in one locations, so there are very few places that actually work for what it is that Amazon needs.

So, you know, a smart negotiating strategy on the part of the city is to recognize that and say oh, you need to be here. You need New York, so what is it that you’re going to do to support this city, to help us alleviate affordable housing, the strain on the transportation system? I mean that’s the right way to go into that negotiation, instead of let me figure out how we can give away, you know, the public bank to a private entity.

So it’s all these second tier cities, and rural areas and small towns are really struggling. And one of the things … At ILSR, we’ve been getting a lot of email for the last couple of years about dollar stores. People writing us and saying, “I’ve got Dollar General coming in, and we’re really concerned about what it’s going to do to the community, or maybe after it’s come in, the impacts that it’s having.” And so we decided this year to take a deep look at this. And Marie Donahue on our staff led our research on this and started looking at this question of dollar stores. Dollar stores had a … The two major chains, which are Dollar General and Dollar Tree, which owns Family Dollar, they had about 20,000 locations in 2011, at the end of the financial crisis, and today they have about 30,000 locations. And they have plans to grow to a total of 50,000 locations in the next few years. They’re expanding in places where they feel like that the economy is hopeless and that they can find sort of a permanent state of poverty and economic distress.

And we’ve now … Since this report came out, we’ve just been inundated with email messages and Twitter messages, people telling their own dollar store stories from New Orleans, Detroit, rural Louisiana, and there’s this consistent pattern of these companies targeting areas based on race.

And then I think you’re right. I think another part of this may be that they think, “Well, these are areas that don’t have political power.” I mean, in Tulsa there are dollar stores that are sometimes just a few blocks away. I mean, they’re packing them into this district. And I wonder if these companies think, “Well, if we try to do that in a whiter neighborhood, we probably wouldn’t get away with it.” But there’s a lack of political power, at least that they perceive. In the case of Tulsa, the neighborhood has fought back, and they’ve now passed an ordinance that has become a model that cities across the country are looking at. So it’s great to have a story of some of that political power coming back.

And so … You used the term food desert there, which is that one plausible explanation, right? They’re coming in where there hasn’t been a grocery store. But in some ways, it’s more like grocery deforestation, right? It’s Wall Street coming in and saying, essentially, “We’re going to eviscerate this neighborhood by not lending to the people that live there, to the entrepreneurs that would provide the full service grocery store, or any of the other kinds of services. Instead, we’re going to back these extractive companies that come in, build overwhelmingly to drive out other local merchants that would help retain some local wealth, and not even give people access to the basic things that most people expect in a neighborhood, like a grocery store or fresh produce.”

Walmart, in the region, has pulled all the dollars away for the most part and then left these places that are like a denuded landscape. It’s like an ecology. It’s like when you have a landscape that’s been compromised in some way. And then the dollar stores are like the invasive species that prey on that and just multiply and come in. And in doing so, they’re not just a symptom or a byproduct of the deeper problem, they’re also making it worse. They’re coming in in such numbers that they make it hard for new local businesses and grocers to get started.

And in some cases … I mean, they’re not just going into food deserts. As we talk about in the report, there are a lot of places where they’re going in and there is still a local grocer that managed to hang on through Walmart and all the rest of it, and the dollar store is the thing that tips them over and causes them to close. So you’re right, we’re increasingly living in this world that’s two different places. There’s Whole Foods land and then there’s dollar store land, and people don’t cross over very much. And if you live in Whole Foods land, it’s very hard to even see that there is a dollar store land.

So, my turn to ask the question. So the first one I have is … It’s the end of the year, and we’re in our big annual fundraising drive to try to scare up the donations that matter so much to us, and to what we’re able to do in 2019. So Chris, why do you think people who are listening to this should chip in to help ILSR?

But the fundamental effect is that it’s organizations like ours … I mean, in particularly, I would plug Stacy. There’s a reason we put so much emphasis on your work at the end of the year. There’s no one else doing the kinds of stuff you’re doing, and we need people to support that, to make sure that we can keep doing it.

ILSR tries to do that in all of the different pieces of the economy, to help us understand, how is it that the players that are out there work? Who is it that has the power in the economy, and in what way are they trying to use that power to either advantage or disadvantage our communities? And so Stacy’s work does that with Amazon. Your work does that to help people understand that basic question of access to the digital economy. In my work, we talk about the fact that energy is this opportunity to transform to not only an environmentally benign way of doing business, but a way that communities can keep wealth in their economy.

Our Waste to Wealth program talks all about all of these inputs into our system that can be preserved, rather than burning them or throwing them away. And we fundamentally do that in a way to explain how there are these incumbent powers that have a way of doing things that may not be good for our economy, and how to understand not only why that might be harmful to us, but how we can solve that at the local level. And there’s just not a lot of other organizations that take that perspective.

And you know, I think the one other thing I wanna say is that individual donations are really important. We are supported by foundation grants and those are incredible, but individual donations do make up a significant share of our funding. They’re the funding that gives us some flexibility to do some of the most important work that we do and those individual donations, they come in amounts of 50 dollars and 500 dollars and they really matter. So, really appreciate everyone who’s listening, if you can think about us as we head into the end of the year.

This is the year where there were huge increases in people installing solar behind the meter, which is to say they installed it with a solar array, they were using it to store energy at home. It’s also interestingly enough, a year in which a major US Midwest utility just announced that it’s going carbon free by 2050. And these things are happening at the same time and in some interesting ways and creating some interesting tensions.

It’s huge, but the bigger thing, even the amount of power that’s generated by all those installations, is the fact that all of these people made that decision, not because they want to be a little power plant operators, but because it made financial sense for them. And that’s really the crux of what’s happening all of a sudden in the energy business is, you have all of these individual actors are wanting to act together individually or collectively, they can make decisions that impact our energy system, but that aren’t done through this traditional top down planning method and that don’t rely on the incumbent utility.

And the real difference is that, because we don’t have to deploy that capital in billion dollar chunks to accomplish good things in the energy sector, those decisions can be made by anybody. So you’re absolutely right, people have this notion like, “We can only make decisions if they’re big.” And especially in the energy sector, where we’re facing this climate crisis. People are like, “Well the only thing we can do is big things because this problem is so big.” Missing the fact that all of these little decisions often add up to faster reactions and more substantial steps towards solving the problem. And the perfect example of this is, in Minnesota right now, this utility company, this big utility it serves half the customers in the state, it said, “We’re going carbon free by 2050. We don’t totally know how we’re gonna do it, but we’re gonna do it.”

And the thing is, it’s a great commitment, I’m excited about it because it sort of helps set a standard in the public consciousness for what can happen. And yet at the same time, we’ve just installed hundreds of megawatts of solar in community solar arrays that are owned by third parties, that are subscribed to by tens of thousands of Minnesota residences and businesses and the utility had nothing to do with it. And so, people sort of miss that fact and unfortunately what’s gonna happen is that when the big player decides to make this commitment, they also have some big asks. They’re gonna be at the legislature this year saying, “Hey, in order to meet that goal that we set, we have these two big nuclear power plants, they’re getting kind of expensive to run. We’re gonna need to fix them up and we would like you to take the risk of fixing them up for us. It’s probably gonna be billions of dollars.”

And the worry that I have is because they made a big commitment that people see as important and because they’re a big player, we’re gonna give them a big handout instead of thinking about, how could we spend … Best spend, for example, five billion dollars on clean energy? Is it really to give a handout to the big guy or would we be better off investing it into all of the ways that small individuals or cities could make investments in clean energy?

Thank you for tuning into this episode of, Building Local Power. You can find links to what we discussed today by going to our website, ilsr.org. That’s ilsr.org. While you’re there, please consider supporting our work with a donation. And if you enjoy this podcast, please consider sharing it with your friends. This show is produced by, Lisa Gonzalez, Zach Freed and Hibba Meraay. Our theme music is, Funk Interlude by, Dysfunctional. For the Institute for Local Self Reliance, I’m Stacy Mitchell, joined today by John Farrell and Chris Mitchell. I hope you’ll join us again in two weeks with the next episode of Building Local Power.