Roosevelt’s Spinning in His Grave

I noticed the banner headline on the cover of today’s Wall Street Journal. “Why does the government even bother?”

The headline that angered me so greatly this morning was “A Reborn AT&T to Buy BellSouth.”

Don’t get me wrong. I am all for increased efficiency, stiffer competition, and aggressive cost cutting, but this news should never have been news. Nobody is placing blame where blame is due. Nobody is questioning why the government broke these companies up in the first place.

Over the last few years the federal government has done well to leave businesses alone. Some businesses have used the leniency to prosper while others have abused it. (I am sure Enron’s Lay and Skilling will be paying a great price for it too.) We are, however, better off overall.

It frustrates me so much that throughout American history, successful businesses have paid the price for being “too successful.” Dominating a given market usually leads to anti-trust action. Anti-trust litigation has impacted Microsoft, Oracle, and dozens of other companies when they did not deserve it.

People revere Teddy Roosevelt for his trust-busting activities. In fact, it is tough to think of Teddy Roosevelt without trust-busting. He made taking on evil “big business” politically fashionable.

Roosevelt is credited with starting the charge to break up businesses that were “too successful.” He started the break-up of the greatest oil company in history, the Standard Oil Trust. After all, who would stand idly by while well-stocked shelves of reasonably priced kerosene were ruining the country?

Let’s not forget that ExxonMobil is a combination of a large part Rockefeller’s empire. Exxon was Standard Oil of New Jersey and Mobil was Standard Oil of New York.

When the Commerce Department authorized the ExxonMobil merger, was it saying Teddy was wrong? Of course it was, it’s just nobody noticed it.

But the latest telecommunications mega-merger is finally causing people to think. The proposed merger of AT&T is a combination of half the former AT&T monopoly. Every major newspaper is talking about how the “baby bells” are finally back together. But no one is questioning why the “baby bells” were ever separated from AT&T in the first place.

Nobody is calling on former Department of Justice officials to ask what they think about the merger. I would ask them, “Why is it good now and bad then?”

I firmly believe the United States communication system would be even more advanced if AT&T had not been broken up in 1984.

If AT&T was allowed to stay together, the United States could already be totally wireless. We would already be watching on-demand Internet Protocol Television (IPTV). There would be no customers in towns with less 10,000 citizens wondering when they will get broadband Internet connections.

Either AT&T would have provided us with these now essential parts of life or someone else would have come along and done it. Either way we would be a lot farther along if AT&T would have been forced to meet customer demands or suffer the consequences. The government just broke the company up so it could survive longer and allow smaller companies (the “baby bells”) to fiercely defend their local territories.

Who can deny that the world would be better off if the pacifist Rockefeller family controlled the world’s oil supply or our communication system would be significantly more advanced if AT&T would have been forced to survive or die?

The entire free world’s market economy is based on someone building better mousetraps -- Not governments divvying up markets to protect inefficient businesses and distribute their inadequate versions of mouse catching devices.

Government intervention in business should be considered thoroughly before implementation. The free-market ideologies are really gaining hold around the world and will keep the global economy growing for years.