“Reigniting Competition in the American Economy”: Keynote Remarks at New America’s Open Markets Program Event
By Elizabeth Warren
June 29, 2016
Thank you, thank you. As Barry mentioned, before I was a senator, I was a law professor. What he didn’t say is that I taught contracts, secured transactions, and bankruptcy—all courses related to the functioning of competitive markets. I love markets! Strong, healthy markets are the key to a strong, healthy America.
That’s the reason I am here today. Because anyone who loves markets knows that for markets to work, there has to be competition. But today, in America, competition is dying. Consolidation and concentration are on the rise in sector after sector. Concentration threatens our markets, threatens our economy, and threatens our democracy.
Evidence of the problem is everywhere. Just look at banking. For years, banks have been in a feeding frenzy, swallowing up smaller competitors to become more powerful and, eventually, too big to fail. The combination of their size, their risky practices, and the hands-off policies of their regulators created a perfect storm, resulting in the worst financial crisis in 80 years. We know that excessive size and interconnectedness promotes risky behavior that can take down our economy—and yet, today, eight years after that financial crisis, three out of the four biggest banks in America are even bigger than they were before the crisis and two months ago five were designated by both the Fed and the FDIC as “too big to fail.”
The concentration problem—and particularly the idea of too-big-to-fail in the financial sector—gets a lot of attention. But the problem isn’t unique to the financial sector. It’s hiding in plain sight all across the American economy.