Recently, Dealscape noted that a number of Wall Street chiefs
supported Democrats in the primary season through campaign contributions, so a post about possible antitrust changes under the next administration
from Deal Journal caught us by surprise.
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Deal Journal poses the question "Will M&A Die under Obama or Clinton?" Deal Journal's short answer -- based on the candidates' rhetoric -- is yes. However, it seems more like a gray area for both Sen. Barack Obama and Sen. Hillary Clinton. For example, the quote from Obama that Deal Journal highlights is rather open ended:
"We live in a globalized economy and we probably have to update how we approach antitrust to figure out what is truly uncompetitive behavior on the part of monopolies or oligopolies and what are just big successful companies that need to be big in order to compete internationally. ... Some of the consolidations that have been taking place, I think, may be anticompetitive. ... We're going to have an antitrust division in the Justice Department that actually believes in antitrust law. We haven't had that for the last seven, eight years."
Other than the swipe against the current administration's antitrust policies, Obama's not offering a lot of meat here; he's certainly not offering any theories that would suggest that most deals are uncompetitive. In fact, if you try to read between the lines, you might conclude that Boeing Co. is a "good" monopoly because it competes on an international stage. But, despite the fact that Obama is probably gesturing toward energy consolidation as a problem, you could (he probably wouldn't) make a similar argument in favor of the Exxon-Mobil merger. After all, the oil industry isn't just about selling gasoline at retail, but is also securing access to oil fields around the world, and the market to secure contracts is highly competitive on an international scale. Without Obama telling us what mergers over the last eight years have been bad -- or without offering a broader theory of antitrust -- we really can't conclude much from his comments except the Bushies have been lax.
While Deal Journal concludes that it's harder to read Clinton's antitrust policies, she in fact has offered more substantive targets. For instance, Clinton supports the so-called NOPEC bill, an effort to apply U.S. antitrust law to OPEC, which most experts scoff at as a pipe dream. Despite the broadening of antitrust to include entire nations as targets, which is what NOPEC tries to do, Clinton has a history of being anything but a trustbuster. Even Deal Journal highlights her history of attempting to lower antitrust rules to help hospitals share data. And as one of Wall Street's "home" senators, she has kept an eye on their interests, no matter the increasingly populist campaign rhetoric.
In short, its not clear how either would affect antitrust enforcement as president. The only thing certain is that Wall Street chiefs don't seem too concerned -- yet. - Matthew Wurtzel
Comments
God I swear the dumbest people I am subjected to are you supposed financial elites.
Oh thats right, only the republicans are financially responsible, they never create ponzi schemes, they never create deficits, they only always and forever create cogent businesses!
I work around a bunch of sycophantic republicans, it is sickening to see this group of dull white guys espouse perpetual stupidities. Yes, yes, all M & A deals return fabulous returns. . . always, especially those created by republicans.