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Home > Analysis and Commentary, Association, Business, Economy, Finance, Manufactured Home Communities, Manufactured Housing Industry, News Item, People, Politics, regulation, Trends > “Dissent, Brought by Monopolists,” Bezos, Warren Buffett, Big Tech, the Moat and Clayton Homes

“Dissent, Brought by Monopolists,” Bezos, Warren Buffett, Big Tech, the Moat and Clayton Homes

April 21st, 2018

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Not that long ago in America, no company as large and destructive as Amazon would have been allowed to exist. Preventing and breaking up such corporate behemoths, in fact, was at the very center of the Democratic Party’s agenda. “Private monopolies are indefensible and intolerable,” the party’s platform declared in 1900,” writes Matt Stoller in the progressive New Republic.

 

As monopolies broke up unions and drove down wages, Democrats increasingly came to rely on campaign contributions from the very corporations that were consolidating their control over the American economy,” said Stoller, who cites Amazon, Facebook, Google and others among the monopolies he and a growing number of progressive are concerned about.

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AT&T Time Warner case now in the courts are clear evidence that the Trump Administration is taking anti-trust concerns beyond mere talk. There are signals that more cases could be coming. Missouri’s attorney general has launched an anti-trust investigation against Google. The European Union fined Google $2.7 billion. Expert more such cases, some of which could include manufactured housing, and Warren Buffett’s brands.

While Stoller is a Democratic partisan, there are Republicans and independents who hold similar views, which will be briefly examined further below.  These monopolistic forces impact manufactured housing in a variety of ways, as will also be noted.

The Obama administration, like the Bush administration before it,” writes Stoller, “declined to bring a single major monopolization suit against U.S. companies.”

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Woodrow Wilson, the Democrat, took a different approach: He argued that monopolies are a fundamental threat to political liberty, and that the government should attack and disperse them to protect democracy from the corrupting influence of economic concentration. After his election, Wilson went on to lay the foundation for the government’s anti-monopoly apparatus,” per the New Republic, noting that Bezos personally owns the Washington Post, and calls it…

Dissent, brought to you by monopolists.”

The subject of monopoly, like the topic of affordable housing and manufactured homes, should not be seen as a partisan issue.

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Where the Left, Center, and Right Can Agree?

Don’t look now, but there are voices across the left-right divide who agree on the threat in America of modern monopolies. 

Some call for more regulations. But others are saying it is time to break the giant companies up, as was done with AT&T decades ago, or Standard Oil before them.

In what may seem like an ironic twist, but the leftist New Republic writer finds himself in agreement with Steve Bannon, the prior right-wing Breitbart Chairman and an important member of President Trump’s election campaign, and initial White House strategy team.

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They are not alone.

Those new to this topic may want read the entire column, and circle back later to linked additional references, like the ones below.

Progressive “Nation” Reports on Monopolies Cites Buffett, Clayton, Others – MH Industry Impact?

Buffett, Bezos – Time Announcement to Drop Market Ahead of SOTU? Plus MH Market Update$

Advocates of free market enterprise should be irate over the company’s [Amazon] crony capitalist practices and cities and states that enable it,” the American Conservative said last year.

Right of center National Review has fears over the rise of big tech and monopoly too. They argued last year that the answer is heavier regulations.

Virgil, writing in the right’s Breitbart said in March 2018 that “Theodore Roosevelt, our 26th president, left the White House in 1909, and yet his spirit — larger than life and larger, even, than death — is still with us. And that is in no small part because many of the problems that the Great Trustbuster grappled with back then seem so similar to the problems we confront today.”

Citing the progressive Seattle Times, ‘Virgil’ said, “The Seattle Times over the weekend: “Big Tech needs to face a Theodore Roosevelt-style trust busting.” That Seattle Times  article by columnist Jon Talton, may have caught the attention of Jeff Bezos, the world’s richest man whose company, Amazon, is based in Seattle.

And yet columnist Talton is clearly not a fan of his tech homeboys, nor of the other big tech firms further down the left coast,” said Virgil.

Big Tech’s greatest sins are locking in a winner-take-all economy, decimating the middle class and exercising monopoly-like powers that cause the free market to fail. Competition is stymied. Power is in the hands of too few,” the Breitbart columnist said.

During Teddy Roosevelt’s time in office, 1901-1909, his administration filed some 40 anti-trust actions, although perhaps the most famous application of the Sherman Act was resolved only in 1911, after Roosevelt had departed office. That was the case of U.S. vs. Standard Oil, which broke the vast oil monopoly into 33 different corporate pieces,” said Virgil.

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Anti-Trust by Feds, or Private Citizens, Companies

Looking ahead, we can see that more antitrust litigation is inevitable, and some of it may yet be painful to the defendants. For instance, we might note that private anti-trust litigation is also possible. And under the provisions of the Clayton Anti-Trust Act of 1914, a successor to Sherman, economic victims of monopolistic abuse can sue, through private action, for treble damages. In other words, all the myriad media companies that have suffered so much financial damage from Facebook and Google might have a legal remedy,” said Virgil.

It’s a point the Daily Business News has also raised, in the report linked below.

 

Lawsuits for Triple Damages – Anti-Trust, Anti-Monopoly Law, Manufactured Housing, and You

So, readers may be libertarian, progressive, conservative, or anything else, and find someone with your political position arguing for a break-up of mega-corporations for the public, political, and economic good.

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www.mhmarketingsalesmanagement.com/blogs/daily-business-news/department-of-justice-anti-trust-and-manufactured-housing-institute-mhi/

Talton said the new monopolies have better people skills than the ones in Roosevelt’s time.

Unlike Microsoft, which was typecast early on as the “Evil Empire,” Google, Apple, Facebook, and Amazon have combined savvy public-relations efforts with sophisticated political lobbying operations.”

Facebook is said to be mobilizing “armies” of lobbyists in the wake of their Washington woes.

Among manufactured housing associations, the monopolistic tool-of-choice has arguably been the Manufactured Housing Institute (MHI), which has been dominated by the interests of larger producers, communities, and lenders for years.

But Clayton’s revealed that they are doing their own lobbying too, apart from MHI.

There are investigations – civil and federal – into Warren Buffett’s Clayton Homes, per several sources to the Daily Business News.

 

More Anto-Monopoly Legal Background from the New Republic

In 1933, just days after Franklin Roosevelt was inaugurated, Brandeis issued a stirring dissent in Liggett v. Lee,” said the New Republic, “which struck down a Florida law designed to protect local businesses from out-of-state chains. Reading from the bench, Brandeis blamed the Great Depression on “the gross inequality in the distribution of wealth and income which giant corporations have fostered.”

The government, he argued, had the right to regulate the “concentration of wealth and power” if it threatened the public welfare. Antitrust, as Brandeis saw it, wasn’t about protecting consumers—it was a way to safeguard democracy,” stated Stoller.

Thurman Arnold, FDR’s head of antitrust enforcement, cracked down on some of the country’s biggest corporations and trade associations, from General Motors and Alcoa to the American Medical Association and the Associated Press, which were engaged in price fixing and other anti-competitive activities,” Stoller stated.

The anti-monopoly principle that Arnold and Brandeis established—the idea that economic power should be decentralized and spread into many hands—became the basis of a new social contract. For the next three decades, the federal government largely permitted big business only in segments of the economy that required scale and technical know-how, such as cars, chemicals, and steel. Labor unions made sure that workers were treated fairly, while stores, farms, and banks remained relatively small and under local control...,” he wrote, adding, “Productivity boomed, and America entered a golden age of egalitarian prosperity, with a large and expanding middle class.”

Again, the ironies here are many.

One is presidential signals that Donald Trump is developing positions that agree in good measure with Democratic positions held in decades past, or that  Teddy Roosevelt once held.

So, before the hyper-partisan positions are staked out, a step back to see the broader picture is warranted.  Because voices across the political divide are finding common themes in the threat that monopolies pose to the economy, small businesses, and job creation.

MHProNews has spotlighted concerns that Scott Galloway, or PragerU have also given voice to, which include calls for breaking up or heavily regulating the big tech giants.

NY Stern University’s Scott Galloway on Facebook Founder Mark Zuckerberg’s Capitol Hill Hearings

Can forward thinkers on the left and right agree that monopolistic behavior by some associations and companies today are also problematic?

Billionaire Titans Battle, Overshadowing Modest Independents – Surviving, Thriving in Manufactured Housing Industry Today, Tomorrow

 

Warren Buffett, Moats, and Monopolies – Berkshire Chairman’s Words, Applied to Clayton Homes, and Manufactured Housing

While monopolistic business practices tend to have an adverse effect on consumers,” says Investing Answers, “they can be investor friendly. Obviously, from a shareholder’s standpoint, competitive pressures can crimp profits, and companies that have a wide economic moat or high barriers to entry are somewhat insulated from the encroachments of would-be rivals.”

 

 

A wide economic moat is a significant competitive advantage that is extremely difficult to copy or emulate, thereby creating a barrier to entry for competing firms,” says Investing Answers.

The video below explains in brief in Buffett’s own words some of his ‘competitive advantage’ strategies.  Some of them, most anyone can do.  But once someone gets into the fine points of “the Moat – and how that’s been executed by Buffett’s Clayton Homes in the manufactured housing industry – concerns about monopoly power are being raised by parties across the political spectrum.

 

How a Moat Works (Example):

Castles were traditionally part city and part defensive fortress. The moat was a key part of this defense — by surrounding the castle with water, the fortress was more difficult to penetrate. The wider the moat, the more difficult it would be to attack a castle’s defenders,” Investing Answers stated.

Companies are not unlike medieval castles. A successful company will undoubtedly attract competitors. Patents, brand identity, technology, buying power and operational efficiency create moats that make these companies hard to attack,” says Investing Answers.Companies with wide economic moats operate business models that are difficult — or in some cases even impossible — for competitors to attack or emulate.”

Some argue that these moats that Buffett promotes is a smart play for investors.

But broader question are being raised.  Sources like the progressive publications New Republic, the Nation, or right-side sources such as the American Conservative or Breitbart point largely agree that monopolies – which are promoted by these moats – harm the nation, and the industries they operate in.

Economic and political advantages are gained from heavy regulations.  Dodd-Frank benefited bigger businesses at the cost of smaller ones.

Big business can buy political access that small businesses can’t, says sources like Prager. Smaller firms have higher proportionate cost to deal with regulators than a big company does. Part of the reason for MHARR’s existence is because for years, the larger companies that are members of the Manufactured Housing Institute (MHI) were in practice okay with heavy regulations.

 

The Nation, New Republic, American Conservative, Prager U, MHARR, and MHProNews Aren’t Alone…

The rising tide of concerns across the left-right divide should be another reason for manufactured home industry members and public officials to sit up and take careful note about what has been transpiring in the manufactured housing industry since Warren Buffett entered the space in 2003.

 

 

Since the video interview above was initially recorded, Clayton went from some 25 percent of the market share, to about 50 percent.  The trajectory of the industry is towards consolidation.

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Since this chart was developed, there are new statistics – from MHI – that indicate that about 75 percent of the industry’s production is in the hands of just three companies, all of them MHI members. Clayton has half of the industry, and sources say that more expansions of plants and new production centers are coming.

 

A Clayton manager told MHProNews recently, ‘what’s wrong with crushing the competition?’

Plenty, as each of the third-party thinkers cited above have outlined.

Independent businesses are lost – in manufactured housing – by the thousands, as former Clayton manager Ken Corbin has noted.

Ken Corbin “the 10,000 Drop,” points to Industry Woe, Causes of Manufactured Housing’s 10 & 20 Year Collapse?

That means, jobs are also lost.  As more industries are consolidated into fewer hands, tremendous numbers of jobs are lost over time.

 

Manufactured Housing – Regulatory, Other Roadblocks and Potential Solutions, Up for Growth Research, plus Urban Institute Report Revisited

 

Perhaps the most comprehensive look ever at how ‘the moat’ has operated and impacted manufactured housing is found at the link above.

The points made by other writers of how public relations are being used to blunt the concerns over monopoly must be noted by every professional in manufactured housing.

The allegations of monopoly in manufactured housing are believed by some to be confirmed by facts hiding in plain sight.

Buffett and Kevin Clayton – in written and video comments – have both stated very clearly the “moat” principles they are using to grow their portion of the industry. Meanwhile, the rest of the industry’s competitors shrink statistically, are acquired, or vanish. Unchecked, projecting out the trend lines of the last 15 years would mean the industry’s production, lending and other elements will increasingly fall into the hands of Berkshire Hathaway owned brands.

When voices across the left-right divide raise concerns over how that impacts the vast majority of everyday Americans, one of the questions that ought to be posed to politicians of either party going into the 2018 midterms ought to be, what position will you take on breaking up monopolies?

Clearly, good business practices must be at the core of every remaining operation and the new companies that are trying to enter the industry.

But as Virgil suggested above, business harmed by monopolies ought to explore the legal options for civil anti-trust action.  By law, once successful, the potential for triple damage recoveries await.

A multiple pronged effort must be made to reverse the trend of monopoly in manufactured housing.  It begins with understanding and education. “We Provide, You Decide.” © ## (News, analysis, and commentary.)

Related Report:

Who Will Google and YouTube Silence Next?

(Third-party images are provided under fair use guidelines.)

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