I wrote about this matter just a bit ago. Now DoJ has gone ahead and filed its lawsuits seeking to block the mergers between Anthem Inc and Cigna Corp and between Aetna Inc and Humana Inc. Attorney General Loretta Lynch’s rationale for this is this:
If these mergers were to take place, the competition among these insurers that has pushed them to provide lower premiums, higher quality care and better benefits would be eliminated[.]
They would leave much of the multi-trillion dollar health insurance industry in the hands of three mammoth insurance companies, and restricting companies, and restricting competition in key markets[.]
The one is mere speculation, and the other is prior restraint. It’s certainly true that the mergers would create very large companies and leave fewer of them in the market. But to say that this must reduce competition is just a guessing game, especially since Lynch declined to say—as her predecessors have declined to say, and as economists cannot say—what the minimum number of enterprises must be in any industry for there to be competition. Indeed, absent collusion, which is illegal, two companies are driven to compete with each other by the economic forces extant in a free market.
Never mind, either, that as Lynch knows full well, that what’s illegal in America, what’s illegal under our antitrust laws—and all that’s necessary to be illegal—is abuse of monopoly power, not the existence of it. As with the rest of our laws in a free country, these companies must actually commit the misbehavior before they can be sanctioned for it.
On the other hand, Government does allow protected monopolies—Ma Bell before its court-ordered breakup is one example. A protected monopoly is a monopoly that is explicitly protected by Government: the monopoly is allowed to exist, and it is overtly protected from competition, in return for which the monopoly agrees to be heavily regulated by Government, including the prices it’ll be allowed to charge and the services it’ll be allowed to provide. Indeed, protected monopolies are textbook examples of regulatory capture—only two-sided: the monopoly and the regulators have captured each other.
Lynch’s action, though, is an abuse of our antitrust laws; it’s nothing more than the Democrats’ campaign of lawfare. Given the nature of Obamacare, though, maybe this protected monopoly/regulatory mutual capture is this administration’s final goal for health insurance companies. That would be both a further effort to nationalize our private companies and an example of this administration’s view that it can control the capture.
This sort of behavior, too, emphasizes that the coming election will have consequences, not only for the White House, Congress, and the Supreme Court, it’ll have consequences for the nation’s Department of Justice and the other Executive Branch Cabinets and Agencies (and for our lower courts).
All of this, in the end, is motivated in part by individual Progressive-Democrats’ grasping for personal gain.
It is, though, even more strongly motivated by Progressive-Democrats’ collective contempt for their Lessers, us poor, dumb, plebeian Americans.
[T]he average American individual is morally and intellectually inadequate to serious and consistent conception of his responsibilities as a democrat.