Tax Loopholes

US Taxpayers Should Not Be Subsidizing Harmful Big Oil Mergers

Chevron and ExxonMobil claim their announced mergers with Hess and Pioneer take advantage of market efficiencies, but a closer look reveals an antiquated tax provision likely sweetening these dangerous deals. Antitrust authorities must carefully review the serious risks entailed in these proposed mergers. In parallel, the United States federal government needs to end large tax-free reorganizations—the most egregious way in which American taxpayers are subsidizing monopolistic practices, writes Niko Lusiani.

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Regulation

Why Have Uninsured Depositors Become De Facto Insured?

Michael Ohlrogge

Due to a change in how the FDIC resolves failed banks, uninsured deposits have become de facto insured. Not only is this dangerous for risk in the banking system, it is not what Congress intends the FDIC to do, writes Michael Ohlrogge.

Antitrust and Competition

Merger Law Reaches Acquirer Incentives and Private Equity Strategies

Steven Salop

Steven C. Salop argues that Section 7 of the Clayton Act prohibits mergers in which the acquiring firm’s unilateral incentives and business strategy are likely to lessen market competition.

Antitrust and Competition

Tim Wu Responds to Letter by Former Agency Chief Economists

Tim Wu

Former special assistant to the president for technology and competition policy Tim Wu responds to the November 27 letter signed by former chief economists at the Federal Trade Commission and Justice Department Antitrust Division calling for a separation of the legal and economic analysis in the draft Merger Guidelines.

Book Reviews

Can the Public Moderate Social Media?

Surya Gowda

ProMarket student editor Surya Gowda reviews the arguments made by Paul Gowder in his new book, The Networked Leviathan: For Democratic Platforms.

Income Inequality

Uninhibited Campaign Donations Risks Creating Oligarchy

Valentino Larcinese, Alberto Parmigiani

In new research, Valentino Larcinese and Alberto Parmigiani find that the 1986 Reagan tax cuts led to greater campaign spending from wealthy individuals, who benefited the most from this policy. The authors argue that a very permissive system of political finance, combined with the erosion of tax progressivity, created the conditions for the mutual reinforcement of economic and political disparities. The result was an inequality spiral hardly compatible with democratic ideals.