…for all the popular wisdom that programs to help low-income people are swallowing the economy, the truth is that like so much else that plagues our fiscal future, it’s all about health care spending. The figure shows that as a share of GDP, prior to the Great Recession, non-health care spending was cruising along at around 1.5% for decades. It was Medicaid/CHIP (Medicaid expansion for kids) that did most of the growing.
Regardless, the recent explosion in the ratio of Medicare/CHIP spending to GDP is largely due to the severity of the Great Recession, not the generosity of the programs. The recession increased poverty and thus eligibility for the programs, thereby pushing up the numerator, while simultaneously lowering GDP, the denominator. Moreover, spending on all non-health care safety net programs is on course to dramatically decline as a share of GDP. Even Medicare/Chip spending is projected to stabilize as a share of GDP.
These programs are essential given the poor performance of the economy, and in most cases poorly-funded. Cutting their budgets will not only deny people access to health care, housing, education, and food, it will also further weaken the economy, in both the short and long run.
For the last week of December, we’re re-posting some of our favorite posts from 2012.
If you pay attention to racist portrayals of African Americans, you will notice the frequent appearance of watermelons. The trope has its roots in American slavery.
Why watermelons? According to David Pilgrim, the curator of the Jim Crow Museum, defenders of slavery used the watermelon as a symbol of simplicity. African Americans, the argument went, were happy as slaves. They didn’t need the complicated responsibilities of freedom; they just needed some shade and a cool, delicious treat.
Here the copy makes explicit the idea that slaves needed little but a watermelon to make them happy:
Just look at these benevolent White people (sarcasm):
I think this is an interesting example of the way in which supposedly random stereotypes have strategic beginnings. The association of Black people with a love of watermelon isn’t just a neutral stereotype, nor one that emerged because there is a “kernel of truth” (as people love to say about stereotypes). Instead, it was a deliberate tool with which to misportray African Americans and justify slavery.
In the 1900s and 1910s, gun advertising frequently simply touted the benefits of the gun itself, ignoring completely any indication as to what the gun was for:
In the ’20s and ’30s, gun advertising more frequently involved a hunting or pest-reduction theme:
This theme continued through the 40s, but alongside a new theme, war (i.e., World War II):
Then, in the 1960s, the war theme disappeared and the hunting theme continued, this time with a new twist. Instead of just hunting for food (and sport) or to protect your property, ads included the hunting of exotic game solely for sport:
Market advocates have had their way for years now and one of the consequences has been the growing dominance of industry after industry by a select few powerful corporations. In short, unchecked competition can and does produce its opposite: monopoly.
As John Bellamy Foster, Robert W. McChesney, and R. Jamil Jonna explain:
This [development] is anything but an academic concern. The economic defense of capitalism is premised on the ubiquity of competitive markets, providing for the rational allocation of scarce resources and justifying the existing distribution of incomes. The political defense of capitalism is that economic power is diffuse and cannot be aggregated in such a manner as to have undue influence over the democratic state. Both of these core claims for capitalism are demolished if monopoly, rather than competition, is the rule.
The chart below highlights the rise, especially since the 1980s, in both the number and percentage of U.S. manufacturing industries in which four firms account for more than 50% of sales.
Number and Percentage of U.S. Manufacturing Industries in which Largest Four Companies Accounted for at Least 50 Percent of Shipment Value in Their Industries, 1947-2007:
As the table below shows, the concentration of market power is not confined to manufacturing.
Percentage of Sales for Four Largest Firms in Selected U.S. Retail Industries:
Industry (NAICS code)
Food & beverage stores (445)
Health & personal care stores (446)
General merchandise stores (452)
Book stores (451211)
Computer & software stores (443120)
As impressive as these concentration trends may be, they actually understate the market power exercised by leading U.S. firms because many of these firms are conglomerates and active in more than one industry. The next chart provides some flavor for overall concentration trends by showing the growing share of total business revenue captured by the top two hundred U.S. corporations. Notice the sharp rise since the 1990s.
Revenue of Top 200 U.S. Corporations as Percentage of Total Business Revenue, U.S. Economy, 1950–2008:
These are general trends. Here, thanks to Zocalo (which draws on the work of Barry Lynn), we get a picture of the market dominance of just one corporation–Procter and Gamble. This corporation controls:
More than 75 percent of men’s razors
About 60 percent of laundry detergent
Nearly 60 percent of dishwasher detergent
More than 50 percent of feminine pads
About 50 percent of toothbrushes
Nearly 50 percent of batteries
Nearly 45 percent of paper towels, just through the Bounty brand
Nearly 40 percent of toothpaste
Nearly 40 percent of over-the-counter heartburn medicines
Nearly 40 percent of diapers.
About 33 percent of shampoo, coffee, and toilet paper
A recent Huffington Post blog post, which includes the following infographic from the French blog Convergence Alimentaire, makes clear that Procter and Gamble, as big as it is, is just one member of a small but powerful group of multinationals that dominate many consumer markets. The blog post states: “A ginormous number of brands are controlled by just 10 multinationals… Now we can see just how many products are owned by Kraft, Coca-Cola, General Mills, Kellogg’s, Mars, Unilever, Johnson & Johnson, P&G and Nestlé. ” See here for a bigger version of the infographic.
And, it is not just the consumer goods industry that’s highly concentrated. As the Huffington Post also noted: “Ninety percent of the media is now controlled by just six companies, down from 50 in 1983…. Likewise, 37 banks merged to become JPMorgan Chase, Bank of America, Wells Fargo and CitiGroup in a little over two decades, as seen in this 2010 graphic from Mother Jones.”
Not surprisingly, there are complex interactions and struggles between these dominant companies. Unfortunately, most end up strengthening monopoly power at the public expense. For example, as Zocalo reports, Wal-Mart, Target, and other major retailers have adopted a new control strategy in which:
…these retailers name a single supplier to serve as a category captain. This supplier is expected to manage all the shelving and marketing decisions for an entire family of products, such as dental care.
The retailer then requires all the other producers of this class of products — these days, usually no more than one or two other firms — to cooperate with the captain. The consciously intended result of this tight cartelization is a growing specialization of production and pricing among the few big suppliers who are still in business…
It’s not that Wal-Mart and category copycats like Target cede all control over shelving and hence production decisions to these captains. The trading firms use the process mainly to gain more insight into the operations of the manufacturers and hence more leverage over them, their suppliers, and even their other clients… Wal-Mart, for instance, has told Coca-Cola what artificial sweetener to use in a diet soda, it has told Disney what scenes to cut from a DVD, it has told Levi’s what grade of cotton to use in its jeans, and it has told lawn mower makers what grade of steel to buy.
And don’t think that such consolidation within the Wal-Mart system makes it easier for new small manufacturers and retailers to rise up and compete. The exact opposite tends to be true. . . . This [system] boils down to presenting the owners of midsized and smaller companies, like Oakley or Tom’s of Maine, with the “option” of selling their business to the monopolist in exchange for a “reasonable” sum determined by the monopolist.
This was the message delivered to many of the companies that in recent decades managed to develop big businesses seemingly outside the reach of the Procter & Gambles, Krafts, and Gillettes of the world. Consider the following:
Ben & Jerry’s, the Vermont ice cream company that reshaped the industry, was swallowed by Unilever in 2000.
Cascadian Farm, one of the most successful organic food companies, sold out to General Mills and was promptly transformed into what its founder calls a “PR farm.”
Stonyfield Farm and Brown Cow, organic dairy companies from New Hampshire and California, respectively, separately sold con-trol to the French food giant Groupe Danone in February 2003 and were blended into a single operation.
Glaceau, the company behind the brightly colored Vitamin Water and one of the last independent success stories, sold out to Coca-Cola in 2007.
The practical result is a hierarchy of power in which a few immense trading companies — in control of and to some degree in cahoots with a few dominant supply conglomerates — govern almost all the industrial activities on which we depend, and they back their efforts with what amounts to police power. This tiny confederation of private corporate governments determines who wins and who loses in this country, at least within our consumer economy.
Of course the growing concentration nationally is matched by a growing concentration of power globally, with large transnational corporations from different nations battling each other and, in many cases, uniting through mergers and acquisitions. We cannot hope to understand and overcome our current problems and the structural pressures limiting our responses to them without first acknowledging the extent of corporate dominance over our economic lives.
Fish farming, the raising of fish in captivity, is often seen as a more sustainable way to feed the increasingly global hunger for seafood. At least, the story goes, it doesn’t contribute to the over-fishing of our oceans.
The answer turns out to be: not necessarily. Carnivorous species of farmed fish still need to be fed, so there is an entire secondary industry: fishing for fish food. Just about anything that can be caught will do; the mix of sea animals is simply ground up and made into pellets. So, the fisherman typically catch absolutely everything that they can, sterilizing a small piece of the ocean. They don’t distinguish between large and small fish (the large they can sell as human food, the small they sell as fish food) or adults and juveniles. By taking the larger fish, they’re taking out populations before they have a chance to reproduce. You can see how this is a system with a devastating expiration date.
This 9-minute clip from Grinding Nemo covers the environmental impact of this practice, as well as the inhumane working conditions of some of the men hired to work in this industry:
Last Halloween my students (at a private liberal arts school) told me that it was considered embarrassing to wear the same costume to two separate parties. Many of them, then, had purchased two or more costumes for the week preceding the holiday. I remarked about how convenient that was for the economy, creating a need to spend money that helped our economic engine keep churning.
I thought of their stories when I came across this vintage ad for Halloween candy. It tells the viewer that a really cool house will offer trick-or-treaters more than one type of candy and allow them to take one of each. How excellent for the candy companies if offering only one piece of one kind of candy is considered below the bar.
In this five-minute interview, Sociologist Joel Best debunks the idea that people are poisoning Halloween candy and talks about how his research in the area prompted his career studying the social construction of social problems:
Well, first, they’re not baby carrots. The two-inch carrots marketed as juveniles are actually pieces of regular sized carrots that are cut off and shaved into a “baby carrot” shape. So, there’s no reason to expect the babies to be fresher, more tender, or sweeter. (Sorry, baby carrot lovers.)
But revealing how baby carrots are made is only Part I of the answer to the question of where they come from. Who had the idea to make “baby carrots” and for what reason?
It turns out the idea came from a grower named Mike Yurosek. According to Douglas McGray at Fast Company, it was grocery stores that pushed Yurosek to invent the baby carrot. McGray writes:
…Yurosek had become frustrated with all the waste in the carrot business. Supermarkets expected carrots to be a particular size, shape, and color. Anything else had to be sold for juice or processing or animal feed, or just thrown away. Yurosek wondered what would happen if he peeled the skin off the gnarly carrots, cut them into pieces, and sold them in bags.
He whipped up two prototypes: the baby carrot with which we’re all familiar and “bunny balls,” 1-inch round carrot bites. Somehow the latter didn’t catch on. The rest is history.