Wednesday, March 29, 2023

The Ad Guy and the Lawyer.

About three decades ago, maybe more, I had a brief conversation with one of the smartest people I know.  He happens to be my older brother. Who happens to be a successful lawyer in the City of Broad Shoulders and Narrow Arteries, Chicago.

Like many people, lawyers included, my brother was not enamored with the legal profession. Or, better, he was more excited by business than he was in some of the legalisms of working at a prestigious medium-sized firm.

During this particular conversation, Fred was unspooling one of his periodic schemes for acquiring private-jet-level money. During this unspooling, Fred taught me a lot about the modern, unregulated, oligopoly-controlled world of American business.

"George," Fred began, "remember those gum brands when we were little. Clove? Teaberry? Black Jack?"

I remembered them well. 

They were the gums of the cool kids. The chicle equivalent of smoking Gauloises cigarettes, when everyone else was stealing their parents' Chesterfields. They were the gums of the mastication cognoscenti.

"Yeah, so what?" I replied with my usual complete lack of perspicacity.

"The company that makes them is for sale. Some associates and I are trying to raise money to buy them. They have half-a-percent market-share now. If we can get them up to a point and a half, we'll all be rich."

The ad guy in me took over--the take-all-the-shrimp-from-the-buffet ad guy.

"Why one-and-a-half-percent? Why not three percent, five percent, ten percent."

Fred schooled me like Johnny Friendly and Charlie Malloy schooled the Waterfront commission and younger brother Terry in Elia Kazan's "On the Waterfront."

"Can't grow to more than one-and-a-half-percent," Fred said. "If you do, Wrigley's would crush you."

Amid America's current miasma of unenforced deregulation, we, the people, are wholly at the mercy of giant concentrations of capital, market-share and market power.

Everything we eat comes from one of three or four companies. Everything we fly on, drive in, talk on, watch or type on, the same. Even our political parties, Democratic or not, are essentially anti-democratic. The little guy stands as much of a chance as an independent coffee joint in an airport. Snowball, meet hell.

The same is true, naturally, in the oligopoly-controlled ad industry. Five or six multi-national conglobberants control 80-percent of the billings and the jobs. They set prices and wages and decide who works, who's too old and more. 

In healthcare advertising, for instance, though there is a shortage of creative people (IPG Health's job site lists over 100 openings) despite the "invisible hand" of market-forces and demand outweighing supply, wages are, by many measures, lower today than they were a quarter of a century ago. 

That's what monopolies and oligopolies do. They combine their power to overwhelm market-forces. In the case above, they depress wages.

The same reality that chastened my brother's ambitions in the gum business, has driven many out of the economy in general. (I have no data for the ad business.)

As twice-disgraced Steven Rattner* wrote recently in an oped in the Times, continuing the long, ruling-class tradition of blaming the victims (we're not returning to work because we're "soft." Not because wages, conditions, distribution of money and treatment make it not worthwhile):

While I am as virulently anti-fascist trump as anyone, with the possible exception of his wives and rape-and-molestation victims, I do believe he is correct in calling the system rigged.

Capital, if unregulated, will always consolidate. It will always accumulate power to the point where it destroys competition and lowers wages, standards of living and, today, life expectancy.

Freelancing and running your own business are tough enough without exogenous forces making doing so even more difficult. The only thing to do is keep fighting. And have a stick of Beemans. 

If you can find a pack.

Rattner was sued by the Securities and Exchange Commission in 2009. He "admitted no wrongdoing" but settled for $6.2 million. In 2010, Rattner paid $10 million in restitution to the New York State Attorney General, but again "admitted no wrongdoing." 

Can you imagine being so virtuous, that you pay $16 million in fines for "no wrongdoing"?



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