Q&A – U.S. Senate candidate Dave Domina on his antitrust platform
(Reuters) – Consolidation among banks, meatpackers and other businesses means that U.S. markets are less free and fair than they used to be, said Nebraska Democrat Dave Domina, the rare candidate for the U.S. Senate who has an antitrust platform.
Domina is not a stranger to competition laws. As a lawyer, he represented cattlemen in a 2004 antitrust trial in which a jury found that Tyson Foods Inc should pay $1.28 billion for price manipulation. A judge threw out the verdict as unlawful.
Tyson, the largest U.S. meat processor by sales, is in the news again with plans to buy sausage-maker Hillshire Brands Co for $8.55 billion, outbidding an offer this month from a unit of Brazilian giant JBS SA. Domina wants to block the deal.
Domina faces an uphill fight on Nov. 4 in an agricultural state that rarely sends Democrats to Congress. His opponent, Republican Ben Sasse, has not spoken about antitrust policy. The president of Midland University in Fremont, Sasse said in a written statement that Nebraskans want to shrink government.
Reuters spoke to Domina by phone. The questions and answers have been edited for brevity and clarity.
Reuters: You’ve been talking about how few meatpackers there are left and how few banks there are left. How did you come to that as an issue?
Domina: My opponent, and generally the opposing political party, have come to a point of view that opposes competition and favors increasing barriers to entry to business. They do that through ever-increasing consolidations and mergers, and each time that happens, the people of Nebraska get hurt. First, students have fewer places to send their resumes. Second, producers of our food have fewer outlets to market their meat or meat-bearing animals and their crops. And third, students and producers alike have fewer places to go for credit. Those things in turn drive consumer prices up, employment opportunities and business opportunities down and are completely inconsistent with what is really a free or a fair market.
Reuters: Defenders of consolidation say it leads to lower consumer prices. Is that not correct?
Domina: I’m not aware of any economic study by any objective organization that supports that conclusion. None. All consolidations and mergers are promoted in the name of efficiency, and that efficiency means lowering the cost of production.
When a cotton consolidation occurs, there may be a marginal cost-saving in operations, but management soaks it up or ownership soaks it up. Consumers don’t get it. The whole program is designed to fail for prospective employees, actual employees, and consumers and producers. Only the owners win.
Reuters: If you’re elected to the Senate, what would you do?
Domina: First and foremost, it’s essential to realize that all of the consolidation activity involves money, and the financial system starts with banks. I just don’t see a reason why, for the safety and soundness of the United States and its financial system, we don’t limit our banks so that their aggregate individual bank deposits can never exceed 5 percent of all of the money in the nation.
Reuters: Back to the agriculture sector, you’ve probably heard the news of Hillshire. Do you support or oppose that acquisition?
Domina: I oppose the Hillshire acquisition by Tyson or JBS. The Justice Department should be driven by the simple, raw mathematics of the merger calculation that has been a part of the DOJ regulations for decades. It’s the Herfindahl-Hirschman Index for evaluating concentration. Every time a proposed consolidation or merger fails the test of that index, the Justice Department should say, categorically, “No.”
Reuters: Since the 1960s, antitrust law has moved away from talking about small-versus-big to talking about consumer welfare. It sounds like you want to shift the discussion back.
Domina: In my humble opinion, there is no way to talk about consumer welfare without talking about small-versus-big. When you abandon the conversation about small versus big, you abandon the concept of antitrust law: the core, foundational concept.
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