Warren Buffett has famously said that “It takes 20 years to build a reputation and 5 minutes to ruin it.” Buffett’s wise words rate prominent mention in light of a disturbing pattern of corporate abuse from the Biden administration.
U.S. senators including Tom Cotton and Mitch McConnell have recently written a letter to the inspectors general at the Department of Justice (DOJ) and the Federal Trade Commission (FTC) regarding leaks from both entities against corporations thought to be too big, monopolistic, or both. The letter addressed how,
“Since 2023, Bloomberg News has broken the news in at least twelve instances that DOJ or FTC was “preparing” or “poised” to take legal action before a lawsuit was filed. Indeed, the same journalist reported on eleven of these cases. This pattern strongly suggests that certain officials at DOJ and FTC are intentionally publicizing legal action days or weeks before filing.”
About the leaks, it has to be stressed right away that there’s no such thing as a “monopoly” in the private sector as is given the dynamism that defines private enterprise, and the historical certainty in all commercial sectors that the team picture of top corporations is constantly in flux. Which is just a hint that the idea of “monopoly,” no matter how fanciful in relation to the real world, is a good thing.
“Monopoly” signals the discovery of a new way of serving customers that either was never happened upon before, or that was discovered previously only to be dismissed as an unrealistic challenger to the existing commercial order. Translated for those who need it, the impossibility that is “monopoly” or the reality that is near-term corporate dominance, can only reveal itself in either instance insofar as the “monopoly” or dominant corporation has knocked what was formerly dominant (or thought to be monopolistic) off of its proverbial perch. Yes, “monopoly” or corporate dominance signals progress.
At the same time, what’s undeniably true about the impossibility that is “monopoly” or corporate dominance has yet to catch up with the pejoratives associated with both. Changing minds is a lengthy, years-long process too, which means that the mere allegation of “monopoly” or “too big” corporation can sap the reputation of the corporation accused of being one or both.
This matters as highly successful and big corporations like Google, Live Nation and Visa unexpectedly find themselves under attack by the DOJ and FTC. Both federal entities apparently leak to a business media understandably eager to break stories about what’s ahead, only for years and decades of work by America’s best corporations being erased within minutes. Think about what that means.
While it’s easy to show how corporate dominance is a brilliant effect of businesses inventing an all-new and much better way of meeting and leading the needs of customers, for now the previous truth is not accepted in monolithic fashion. And since it’s not, the leaking by the DOJ and FTC amounts to governments with realistically unlimited resources using those same resources to sully the reputations of businesses without warning, and as such, before they can mount a public relations response.
It should be pointed out that even if businesses could plan a response to governmental allegations, the damage is already done. See Buffett. Still, they’d at least have a chance to make their case ahead of time. Instead, the best businesses in the world who got that way by seeing what their competition did not find themselves spending their rather limited resources to defend their good names, or better yet, their most precious and hard-won asset that was won through painstaking work and innovation over a very long time.
