sanders warren split
CNN  — 

An emerging sub theme of the 2020 primary so far is that Democrats want to take a wrecking ball to some institutions of the US economy.

Sen. Bernie Sanders of Vermont wants to break up big Wall Street banks, and he’s recently pushed a bill specifically to tax Amazon. Massachusetts Sen. Elizabeth Warren has a plan to cut the size of Amazon, Apple, Facebook and Google.

A number of presidential candidates have opposed a planned merger between two of the nation’s top wireless carriers over concerns about industry consolidation in the US, even as the cell providers have warned that the real monopoly power is China.

Democrats are channeling a deep distrust of big companies and corporations in the progressive base and are making a gamble that it extends into the middle of the electorate, which may be more accepting of the status quo.

Big banks

On the 10-year anniversary of the Wall Street bailout in 2018, Sanders proposed legislation that would force banks with exposure larger than 3% of the US GDP – more than $500 billion – to break apart.

“No financial institution should be so large that its failure would cause catastrophic risk to millions of Americans or to our nation’s economic well being,” Sanders said in a statement at the time. “We must end, once and for all, the scheme that is nothing more than a free insurance policy for Wall Street: the policy of ‘too big to fail.’”

Wells Fargo CEO Timothy Sloan will be answering questions Tuesday at a hearing organizers have titled, “Holding megabanks accountable.”

With expected appearances by Democrats like Maxine Waters of California, who chairs the subcommittee, and New York freshman Alexandria Ocasio-Cortez, the hearing could include some fireworks.

Big wireless

Consolidation among large companies has been an accelerating phenomenon in recent years and the merger between Spring and T-Mobile could leave US consumers with just three options for a wireless carrier.

Sprint CEO Marcelo Claure and T-Mobile US CEO John Legere can expect a grilling Tuesday before a House subcommittee that focuses on antitrust issues.

At least five Democrats running for President oppose a planned merger between Sprint and T-Mobile, two of the country’s four largest wireless carriers.

“This merger will turn the clock back, returning Americans to the dark days of heavily consolidated markets and less competition, with all of the resulting harms, the senators wrote to the FTC and Department of Justice.

The group includes presidential candidates Sens. Cory Booker of New Jersey, Kirsten Gillibrand of New York, Amy Klobuchar of Minnesota, Sanders and Warren. But they’re led by Sen. Richard Blumenthal, who is not running for President, but who did take part in the landmark Microsoft anti-trust case of the late 1990s when he was attorney general of Connecticut.

Separately, a group of 36 House Democrats wrote the FTC opposing the $26 billion marriage, arguing the companies have a large number of customers in communities of color and that the merger would “hurt lower-income people and communities of color.”

The companies have argued their merger is necessary to make them competitive at creating a 5G wireless network, particularly since China has already aggressively moved into that space.

Big tech

The boldest proposal to break up part of the US economy came last week from Warren, who wants to to restrict the largest tech companies that provide platforms to consumers. Any company with $25 billion in revenue or more would be affected (Google, Facebook, Amazon). She argues such companies are “platform utilities,” language that brings to mind public utilities like electric and water companies.

Warren would split up Google in several different ways and look to unwind its acquisition of navigation service Waze.

She’d do the same for Amazon and look to split off Whole Foods, which the online retailer bought last year.

Over the weekend she added Apple to her target list.

“Apple, you’ve got to break it apart from their App Store,” she said during an appearance at the SXSW conference. “It’s got to be one or the other. Either they run the platform or they play in the store. They don’t get to do both at the same time.”

Not all Democratic candidates agree with Warren’s position. Jay Inslee is building a presidential campaign around the single issue of climate change, but he is the governor of Washington, home to Amazon, and was asked about Warren’s proposal by CNN’s Jake Tapper. While saying there needs to be better protections for Americans’ privacy online, he also clearly opposed Warren’s proposal.

“I think that when you do antitrust laws, you should set up antitrust laws for the whole economy, not for one company, so I’m not sure the best route for determining antitrust law should be sort of rifle shots at the one company that you decide that you don’t like,” Inslee said.

Inslee responds to Warren plan to break up Amazon
02:44 - Source: CNN

Sanders, by the way, already had a plan to tax companies like Amazon – the Stop Bezos Act – that he says don’t pay their workers enough while draining public resources. That’s not exactly breaking the company up, but it does show his willingness to take on the tech giant. Shortly after he announced his proposal, Amazon announced it would raise its minimum wage to $15.

Trump vs. Amazon

The Democratic push to crack down on big everything, in the same vein as Democratic proposals for new wealth taxes to fund social programs, could factor into President Donald Trump’s clear plan to paint Democrats as socialists bent on taking over the economy.

But the issue is more complicated than that, particularly since Trump has attacked Amazon and its use of the postal service and last year he threatened antitrust action, although he has not yet followed through. He also opposed the merger between AT&T and Time Warner (CNN is a division of WarnerMedia, which was created as a result of that merger).

In February the FTC launched a new task force to monitor anti-competitive behavior in the technology markets.

But most of Trump’s gripes with tech companies are more about Trump. In August he groused that Google and Facebook were pushing negative stories about him in search and social feeds. And the administration’s unsuccessful effort to block the AT&T and Time Warner merger seemed at times to target CNN. The Justice department did not seek to block a similar merger between Disney and 21st Century Fox, which owns Fox News.

Trump’s reelection argument will hinge in part on the success of the stock market and the economy. And his antipathy toward Bezos notwithstanding, Trump has tried recently to appear cozy to tech companies.

He appeared last week alongside Apple’s CEO Tim Cook at a White House event for a workforce council Cook takes part in. Trump even shorthanded his name as Tim Apple, which drew jokes – and subsequent explanation from the President that he was just being efficient.

Anti-trust politics

For some voters and activists, there is clearly an anti-monopoly furor brewing. What’s not clear is if that opinion will resonate beyond the Democratic base.

Warren announced her plan to break up tech companies in Long Island City, New York, where local opposition and organizing repelled Amazon’s plan to build half of its second headquarters. But there was plenty of frustration among Democrats at the opposition and several Democratic lawmakers, notably Gov. Andrew Cuomo, had fought hard to bring Amazon to the city. Democratic policymakers in Virginia had done the same.

A Siena College poll released Feb. 12, just as Amazon pulled the plug on its New York plans, suggested majority support (56% – 36%) for it among New York registered voters.

Opposition was broadest further from the city, upstate, according to Siena College Research Institute director Don Levy. Suburban and city voters showed strong support in that poll despite the state’s plan to grant billions in incentives to the company.

Support for Amazon coming to New York is a different question, clearly, than whether Amazon should be broken up, but it does suggest an openness to the company at the local level.

Americans are clearly worried about the influence of big corporations. A Kaiser Family Foundation poll from 2018 asked if various groups have “too much influence” in Washington.

A non-specific answer of “large businesses” got the largest reaction; 76% of Americans said they have too much influence, 72% said pharmaceutical companies have too much influence and 69% said Wall Street has too much influence.

But feelings toward Wall Street may have improved in recent years. In a January Pew poll, 39% of Americans said Wall Street hurts the American economy more than it helps. That’s down from more than 50% who said Wall Street hurt the economy more than it helps in December of 2011. Republicans were more likely in the poll to say Wall Street helps the economy, but it was still less than a majority of Democrats (46%) who said Wall Street hurts the economy more than it helps.

Democrats will need to pay attention to that kind of sentiment and whether the party’s activists have a different point of view than most of the country.