In 2018, Democrats ran and won on a platform to hold President Trump and his cronies accountable. Many observers expected to be treated to a full schedule of oversight programming in the succeeding Congress, with a nearly endless stream of smug incompetents being caught in their lies and obfuscations. Some even dared to hope that the oversight fervor might spill over to another breed of smug incompetents: corporate CEOs. But, alas, the promised enthusiasm for oversight never seemed to materialize, let alone spread to new targets. (As usual, House Financial Services Committee chairwoman Maxine Waters, who confronted big bank CEOs within months of assuming control of her committee, stands out as a rare exception).
This general dearth of accountability made the House Judiciary Antitrust Subcommittee’s hearings last week with Big Tech CEOs all the more refreshing. Through incisive questioning, lawmakers were able to coax out consequential admissions of wrongdoing and bring to public attention the myriad harms these companies have perpetrated and then worked hard to obscure. Perhaps most critically, the information they uncovered and put into the public record lays a solid foundation for future legislative and executive action.
Arguably just as important as the policy substance, however, is the fact that the hearings were engaging and frankly satisfying to watch. As they have grown more powerful, the Big Four tech firms have slipped further and further from the grip of democratic accountability. Like private governments, they have set rules that dictate the terms of the livelihoods, social engagements, and media consumption of billions of people around the globe. But as much as they like to pretend to be sovereigns, Big Tech companies are ultimately subject to the rules and regulations our government democratically (at least in theory) sets forth. It’s good to see them reminded of that fact periodically.
As inspiring as the hearings were, however, they were also frustrating, as they begged the question: Why stop with Big Tech? Although Silicon Valley giants may be the most widely-recognized examples of corporate power run amok, they are far from the only ones. In other words, last Wednesday’s success can and should be widely replicated.
The possibilities are endless, and potentially overwhelming. Given the current crisis, committees would be well-advised to start by challenging the corporate giants who have made the pandemic worse.
That includes the private equity firms whose mismanagement of nursing home conglomerates left them particularly vulnerable to COVID-19 outbreaks. In their heartless pursuit of profits, private equity firms loaded the nursing homes under their control with unsustainable debt, forcing them to cut staff, cut pay, and cut corners. Even before the pandemic, researchers documented how this led to worse outcomes and higher fatalities for patients in private equity-backed homes. And when COVID-19 hit, these facilities were particularly ill-prepared to respond.
The House Ways and Means Committee should make the heads of these private equity firms—behemoths like Carlyle Group, Blackstone, and Warburg Pincus—answer for their actions. With jurisdiction over the Centers for Medicare and Medicaid Services (CMS), which sets standards of care for nursing facilities, Ways and Means is well-positioned to not only get answers, but ensure that those answers lead to action.
Many of these same private equity titans are long overdue for an appearance before the Energy and Commerce Committee as well. When they weren’t snapping up nursing home chains, private equity firms were quietly constructing an empire of hospital chains. Just as with long-term care facilities, the aggressive pursuit of profit and mounds of debt left hospitals with little cushion to absorb unexpected blows. Sure enough, when the pandemic put lucrative elective surgeries on hold, some private equity-backed hospitals were quick to crumble. At least one leveraged its collapse into a bailout, holding healthcare amid a pandemic hostage in exchange for relief.
Given these and other bad outcomes, it’s time that Energy and Commerce put private equity CEOs under the microscope and consider the implications for the agencies under its jurisdiction like the Federal Trade Commission and the Department of Health and Human Services.
Meanwhile, the Education and Labor committee would do well to put another set of corporate villains—meatpacking companies—in the hot seat. Meatpacking plants quickly became coronavirus hotspots in the U.S. The experience in other countries shows that this was not just an inevitable function of poor working conditions, but a result of distinct choices from meatpacking companies and policymakers. Rather than working to protect their employees, meatpackers turned their attention to warding off health officials and regulation. That choice has had fatal consequences and they should be asked to account for it. A close examination of the breakdowns in the enforcement of occupational safety standards and the processes by which regulators are supposed to respond in an emergency, will also be a prerequisite to getting the response better next time.
Moreover, meatpackers appear to have claimed shortages in product from their plants as a pretense to charge groceries more for beef and pork, which resulted in higher prices for consumers. Yet at the same time, these companies were shipping record amounts of meat abroad, suggesting that they were creating the shortages themselves, and pocketing the profits. The Education and Labor Committee could join Sens. Cory Booker (D-NJ) and Elizabeth Warren (D-MA) in exploring that as well.
Furthermore, to the extent that all of these industries are highly concentrated, the House Antitrust Subcommittee itself could haul in these corporate leaders to ask them about their businesses. Big Tech isn’t the only industry requiring a second look through an antitrust lens.
As the success of last week’s hearing makes clear, House Democrats’ choice to largely spurn corporate oversight has been a big missed opportunity. Confrontations with the country’s ever more powerful corporate giants not only make for good policy but also good politics. If House Democrats are serious about either, they will fill the coming months with such clashes.
Source: CEPR
