It may have been lost yesterday as a line in a long, long post on how crooked the political establishment is. At one point I listed the Hillary donors funding a crap candidate for Pete Sessions' seat in Dallas, Ed Meier. Meier is scooping up lots of cash from Hillary world for his primary against a real populist and progressive, former Obama Under Secretary of Agriculture, Lillian Salerno. Ed Meier has $438,414.21 in cash on hand, and reported, as part of his $585,951.45 haul, personal donations from the establishment, such as former Clinton campaign manager Robby Mook, former Clinton campaign chairman John Podesta, former Clinton aide Neera Tanden, former Biden chief of staff Ron Klain, former Treasury Secretary Jack Lew, longtime Clinton loyalist Minyon Moore (a slimy payday lender lobbyist), Monsanto lobbyist Jerry Crawford, former Clinton spokesman Philippe Reines, former U.S. Sen. Ken Salazar (Blue Dog) of Colorado, Clinton adviser Jake Sullivan, former Rep. Ellen Tauscher (New Dem) of California and the leadership PAC of conservative Virginia Senator Mark Warner.
Jerry Crawford, the Monsanto lobbyist, ran Hillary's Iowa operation last year. When I researched him a bit, I noticed that this cycle Crawford didn't just give money to defeat Salerno in Dallas, he also gave money to defeat the other prominent progressive anti-monopoly candidate, Austin Frerick in Crawford's home district, IA-03 (Des Moines and southwest Iowa).
Early in the cycle, Monsanto, through their lobbyist, made a maximum contribution to Republican David Young. Monsanto really wants to prevent Frerick from getting into Congress and they also contributed a maxed out donation to the corporate Democrat opposing him too! In the last quarter, Crawford has made only 2 reportable federal contributions: $2,700 to DCCC shill Theresa Greenfield, who doesn't list a single policy position on her website and, as we mentioned yesterday, to corporate Democrat Ed Meier in Texas. As far as I know, Lillian Salerno and Austin Frerick are the only Democrats speaking up against the Monsanto-Bayer merger.
The Monsanto Company Citizenship Fund has made no contributions to federal candidates in Iowa this cycle except $5,000 to Young. Last month David Dayen looked at how Salerno and Frerick are running on the kind of anti-monopoly platforms driving corporations and their lobbyists and the politicians they own up the wall. As a Treasury economist Frerick looked into "excess profits" that corporations make from monopolistic activities. In a paper for the Obama administration he noted with alarm that "outsized profits have been rising across virtually all sectors of the economy [and] "that too much wealth and power has been concentrated in the hands of a few giant corporations." He told Dayen that "It’s the issue of our time. It’s everywhere." Dayen:
It’s difficult to translate a wonkish concept like excess returns into something bite-sized for voters. And it’s difficult to revive a long-dormant anti-monopoly movement to explain why corporate concentration is not only bad because of potential consumer price increases, but because of reduced entrepreneurship, abandoned communities, poor quality of service, and a diminished democracy.
But Frerick is willing to try. He left the Treasury for his native Iowa, where he’s running for the House of Representatives in the 3rd Congressional District, a swing seat occupied by two-term Republican David Young. And Frerick has made the fight against corporate monopolies the centerpiece of his campaign. He’s probably the only congressional candidate in history who lists among his heroes RuPaul and Thurman Arnold, the head of the Justice Department’s antitrust division during Franklin Roosevelt’s presidency.
Frerick and another anti-monopoly candidate in Texas, Lillian Salerno, represent a new school of thought in the Democratic Party, criticized in the past for too much coziness with corporate donors. A populist challenge to corporate power and growing monopolization is part of the party’s “Better Deal” midterm campaign platform. Newer members of Congress, like Ro Khanna, D-Calif., have foregrounded market concentration as a threat; with some colleagues, he is building a Congressional Monopoly Caucus to develop policies to counter the trend.
In 2018, we’ll see if this interest in monopoly politics can play on the campaign trail.
Frerick talks about running a Teddy Roosevelt-style campaign. In rural towns in southwest Iowa, he has challenged the merger between Monsanto and Bayer, which would give two companies (the other is Dow/DuPont) control of 75 percent of the U.S. corn seed supply. Add the company created by the merger of ChemChina and Syngenta, and three companies would sell 80 percent of all seeds. Farmers have no ability to bargain for corn seed, which has doubled in price over the last decade, even while crop prices have dropped.
Free market theory says that in a mature market, profits should be low as a result of competition. It’s hard to think of a mature market than that for seeds, a business that is roughly 14,000 years old, give or take a millennium.
Monsanto also has a foothold in fertilizers and pesticides, a dominance that will grow as they get bundled with seed purchases, Frerick believes. This makes it difficult for rural America to survive. In Red Oak, where Frerick called me from last week, over 60 percent of children qualify for free or reduced lunch, according to the state Department of Education.
“Debt levels in these communities are as high as the farm crisis” of the 1980s, Frerick said. “The land’s the most productive it’s ever been, and none of the money ever stays here. These little towns are hollowed out, and you get lack of hope.”
Beyond advocating to block the Monsanto-Bayer merger, Frerick wants to break up Monsanto and other Big Ag corporations. As a young, gay Democrat-- three marks against him for some voters-- Frerick believes this straight talk gives him a chance with rural voters. “Democrats are an urban party, especially in Iowa,” he said. “The fact that I’m young and can talk corn prices and crop insurance, that makes people happy.”
[Dayen didn't mention it, but David Young is well-known in DC as a typical Republican closet case, running around with males in Washington while pretending to be straight back in Iowa. The IA-03 race could be the first in history between a proud, out-front gay man and a homosexual hiding in the closet and lying about it.]
But Frerick has a broader case to make on monopolies. In urban areas of Des Moines with less connection to farm life, he’s talked about cable companies who take hours to answer customer service calls, or shrinking local newspapers due to Facebook and Google capturing prized eyeballs for advertisers. In older communities, he’s condemned pharmaceutical companies that funnel patients to expensive drugs with little or no competition. A separate 2016 paper Frerick wrote while at the Treasury explained how drug companies use corporate charity as a profit center, by paying discounts for individuals so insurers and government plans have to pay exorbitant rates for medications.
Frerick believes focusing on corporate power can reach voters who have backed away from Democrats in recent years. “When we were putting together the campaign, every consultant said nobody understands antitrust,” Frerick said. “They take people for dummies. You just have to build the bridge for people.”
Lillian Salerno has the same idea. She recently announced her candidacy for Texas’s 32nd Congressional District, which Pete Sessions has represented for 11 terms. Hillary Clinton beat Donald Trump in this suburban Dallas district in 2016, but Democrats inexplicably didn’t run a candidate. This year several Democrats are vying to challenge Sessions, including Clinton-world favorite Ed Meier, and former NFL linebacker–turned–civil rights attorney Colin Allred.
But Salerno believes her story will resonate. “I had a front-row seat on the game being rigged,” she said.
In the late 1980s, Salerno and an engineer friend, Thomas Shaw, became disturbed by news reports about surging HIV and hepatitis C contractions among health care workers. When treating patients, hospital personnel would accidentally stick themselves with used needles, with hundreds of thousands of accidents annually.
Shaw spent years tinkering with syringes until perfecting a design that worked like a ballpoint pen: Once you fully depressed the needle into the patient, a ring would snap and retract the needle, allowing workers to safely pull out the implement. Shaw and Salerno formed a company, Retractable Technologies, to sell this lifesaving syringe to hospitals. They even received a $650,000 grant from the National Institutes of Health to bring it to market. But that’s when they found out about Becton, Dickinson & Co., which sells 80 percent of all syringes in America.
Most hospitals buy supplies in bulk through group purchasing organizations, or GPOs, which carry a “90/10” requirement. Hospitals must continue to purchase at least 90 percent of their supplies from inside the GPO to qualify for discounts and avoid millions of dollars in penalties. This contractual obligation fortified BD’s monopoly, despite selling a more dangerous, more expensive product.
Even after a federal law, the 2000 Needlestick Safety and Prevention Act, mandating that hospitals work to prevent needle-stick injuries, and after two successful lawsuits forcing BD to pay over $400 million for violating anti-monopoly statutes, Retractable has been unable to penetrate the U.S. market, doing most of its business overseas. In 2000, the Centers for Disease Control estimated 380,000 needle-sticks at hospitals every year. Today, they estimate 385,000.
“When you have something as a small business and try to sell it, and the big guys don’t want that done, there’s no opportunity,” said Salerno, who served as Retractable’s COO for over a decade. She added that BD’s control of the halls of Congress and hospital wards mattered more than the safety their product provided. “I don’t advise [entrepreneurs] to do this anymore, and that makes me really sad.”
Salerno worked with the World Health Organization on global HIV prevention, and joined the Obama administration as deputy undersecretary for rural development in the Department of Agriculture. But she never forgot the plight of startups that run into buzzsaws of market concentration. “When they were talking about TPP, I would say, what about the markets in this country, why not open them up?” Salerno said. “They thought I was kidding, I said no. Why are we worrying about the Pacific Rim when companies can’t sell into Dallas?”
Salerno, who just joined her race in mid-September, believes antitrust policy can make the economy more dynamic. New business creation has fallen dramatically in recent years, stifled by incumbent behemoths who either buy out or cripple the competition. “I have eight siblings, four are entrepreneurs,” Salerno said. “I have 26 nieces and nephews, and one is an entrepreneur. And he was unsuccessful, though he tried like hell. Innovation, people should be really worried about that one. That is our competitive edge.”
As a small businessperson in the health care sector, Salerno brings a fresh perspective about how the system really works. She supports a single-payer system but believes that it must be paired with changing how market structures raise costs. And the way medical supply giants bundle their products and force providers into all-or-nothing deals make those costs hard to see. “I’ve talked to politicians. If you just put engineers around a table, with devices used in a hospital, and figure out what it costs to make and what it would cost to buy, it would change everything,” she said.
Though voters may be unfamiliar with the terminology of antitrust enforcement, Salerno thinks she can sell its importance to exurban Dallas voters. “There’s not a Texan that doesn’t have a rural connection. They remember when Walmart came to town, when the storefronts shut on Main Street,” Salerno said. “They get that there’s something wrong with the fact that they’re walking in to buy something for a phone, and they have only two companies to choose from. They get it.”
Both Salerno and Frerick believe that concrete examples of how workers, businesses, and consumers have been damaged by corporate monopolies can resonate. And they believe that America cannot respond to income inequality or a captured political system without taking on the economic royalists who have consolidated wealth and power.
Lillian Salerno and Austin Frerick are the two newest Blue America-endorsed candidates. If you'd like to help make sure they can get their free market, anti-monopoly message out in their Iowa and Texas districts, please consider contributing to their campaigns by tapping on the ActBlue Blue America congressional thermometer on the right. And remember, there's no such thing as a contribution too small. Both are running grassroots campaigns based on small contributions, while fighting heavily-funded corporate opponents, in both their respective primaries and, if they win them, in the general election as well. These are two important races that will take more than just a national wave to win. These are the kinds of races where the Democratic Party has to put up exemplary candidates, not run-of-the-mill careerist shills for the DC establishment.
Labels: 2018 congressional races, anti-trust, Austin Frerick, David Dayen, IA-03, Iowa, Lillian Salerno, Texas, TX-32
