Michael Mandel for the Progressive Policy Institute: It strikes me that under ordinary antitrust logic, Amazon's purchase of Whole Foods would ring no alarm bells.
Despite the name recognition of Whole Foods, the company's $16 billion in sales last year pales next to Kroger's $115 billion in sales or Albertson's roughly $60 billion in sales. If anything, the purchase would increase competition in the grocery business.
Second, what is Amazon likely to do with Whole Foods? I'm not privy to Amazon's strategic thinking, of course. But the main point of e-commerce, when done right, is to reduce the time consumers spend shopping — the drive to the store, the search for parking, the endless trudging through the aisles. In turn, e-commerce companies have been shifting those unpaid hours of household labor into the market sector, creating decent-paid jobs in fulfillment centers and electronic shopping operations.
By my calculations, the shift to e-commerce over the past nine years has saved American households roughly 64 million hours per week in reduced shopping time, the equivalent of 1.6 million full-time jobs.
Some of those hours of unpaid household labor were shifted to the market sector. Over the same period, the number of e-commerce jobs rose by almost 400,000, as fulfillment center workers and drivers took over the tasks that consumers used to do. Brick-and-mortar jobs dropped by 76,000, so that was a net plus for job creation.
If these trends continue, Amazon and other e-commerce companies will try to make shopping for meals easier and less time-consuming for American households and generate more paid jobs in the process.
End tax savings on 529 college savings plans
Richard V. Reeves for the Brookings Institution: Public money is tight. Policymakers at federal and state levels are looking for savings. Some, at least, are anxious not to hurt poor and middle-income families. How do they balance the budget without worsening inequality?
One obvious answer is to curb spending on affluent families. Americans in the top fifth of the distribution are on the winning side of the economic divide.
Half the benefits of the 10 biggest tax breaks go to families in the top quintile. The biggest ticket items are the mortgage interest deduction and breaks on employer-sponsored health insurance. But there are also tax breaks available on 529 college savings plans, a result of legislation signed by former President George W. Bush in 2001. As we show in our new paper, "A tax break for 'Dream Hoarders': What to do about 529 college savings plans," almost all of the benefits of the deductions go to families at the top of the income distribution.
The tax deductions on savings in 529 plans, primarily exemptions from capital gains tax, cost the U.S. Treasury about $2 billion a year. That is set to rise to almost $4 billion. Over the next decade, the cumulative cost will be about $30 billion, according to the Office of Tax Analysis.
There is no evidence that the 529 incentives boost savings, though they certainly encourage switching savings vehicles.
Cultural institutions harmed by lawsuits
Anna St. John for the Competitive Enterprise Institute: A New York trial court recently approved a class-action settlement in a case filed against the Metropolitan Museum of Art based on its allegedly deceptive admissions policy. The settlement requires the Met to implement meaningless changes such as referring to its admission price as "suggested" rather than "recommended" in its signs and ticket kiosks. It also requires the Met to pay $350,000 in attorneys' fees to the plaintiffs' lawyers who filed the case.
The Met's admission policy is at the heart of the litigation. The Met has long had a "recommended" price of admission but allows visitors to pay only as much as they wish before granting them entrance to the exhibit halls. This policy dates to the Met's lease with the city of New York and a 1893 law requiring the museum to admit for free all members of the general public on multiple days each week. The Met, in turn, was given free use of its building and land in Central Park as well as additional funding and expense payments by New York. The lawsuit set its sights on the way in which the Met communicated this policy to the public, claiming that the Met tried to trick visitors into believing that the "recommended" price was mandatory, even though multiple signs at the museum stated that it was simply recommended.
While it's easy to shake one's head at yet another example of plaintiffs' lawyers turning the legal system into a personal piggybank, this lawsuit and others like it do real harm to our nations' cultural institutions.
The settlement approval comes on the heels of the Met's announcement that it submitted a formal proposal to New York seeking to implement a mandatory admission charge for all out-of-state visitors. In other words, the Met wants to impose a charge on tourists, most of whom do not have regular access to the type of world class art on display there.
While the plaintiffs' attorneys professed their goal as making the Met available to everybody and disavowed any intent to harm the museum, the timing of the settlement and the Met's announcement suggest their litigation had the opposite effect.
Compiled by Joseph Lawler from reports published by the various think tanks.