Evidence of the problem is everywhere. Just look at banking. For years, banks have been in a feeding frenzy, swallowing up smaller compe ors 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.
In the last decade, the number of major U.S. airlines has
dropped from nine to four. The four that are left standing—American, Delta, United, and Southwest—
control over 80% of all domestic airline seats in the country. And man, are they are hitting the jackpot now. Last year those four big airlines raked in a record
$22 billion in profits.. Eighteen billion alone came from fees for baggage and legroom and pay toilets. Ok, the last one was a joke, but what have passengers received in return for their higher costs?
Fewer flights and
worse service. Airline
complaints rose 30 percentjust from 2014 to 2015.
The list goes on. A handful of health insurance giants—including Anthem, Blue Cross Blue Shield, United Healthcare, Aetna, and Cigna—
control over 83 percent of the country’s health insurance market.
Three drug stores—CVS, Walgreen’s, and Rite Aid—
control 99% of the drug stores in the country.
Four companies control nearly 85% of the U.S. beef market, and three produce
almost half of all chicken.