Competition Takes It on the Chin in the Rental Car Market

Hertz to buy car hire rival Dollar Thrifty for $2.3 billion | Reuters

Hertz Global Holdings (HTZ.N) agreed to buy rival Dollar Thrifty Automotive Group (DTG.N) for about $2.3 billion in a deal that puts about 95 percent of the U.S. car rental market in the hands of three companies.

The sale ends more than two years of on-off takeover talks for Dollar Thrifty involving Hertz, the No. 2. U.S. car rental company, and third-ranked Avis Group Inc (CAR.O) that have been plagued by disagreements over price and doubts about regulatory approval.

Avis could still make a further bid. The deal has no break-up fee and Dollar Thrifty is allowed to solicit another offer for 30 days, a person familiar with the matter told Reuters.

If it is confirmed, the deal will cement Hertz’s position as the number two and leaves Avis far behind in third. Privately held Enterprise Holdings, with its Alamo, National and Enterprise brands, is far and away the market leader.

Hertz to buy car hire rival Dollar Thrifty for $2.3 billion | Reuters

Isn’t buying out your competition and controlling most of the market moving toward a monopoly? Is that the free market in operation. No, but there will be many that claim it is. “Creative Destruction” is the rule – if you are a free market fundamentalist – religion without a God unless you can consider the filthy green, a deity.

Is it ethical? Well, it’s legal. For our corporate world that is quite enough.

Competing in terms of product or price or service is hard. Buying them out, easy.

James Pilant

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Wall Street Protests Picking Up Speed

The Wall Street Protests are starting to catch on in the media. One major factor is that the protests have spread to 250 cities.

Old story? I don’t think so. I’m seeing a lot more serious articles. The one at the bottom of the page is from the venerable publication, Reuters.

The early coverage suggested that the protesters were crazed lefty’s with no vision and no ideas beside the bizarre. This suggests that much of the national media are effete snobs who don’t know anybody that make less than 250k a year. Unfortunately that is probably true. Here is a quote from Jane Hamsher at Firedoglake. –

Unsurprisingly, the corporate media continue to ignore and deride this movement. It will take independent outlets like Firedoglake and citizen journalists like yourself to give these protests the attention they deserve.

FDL has been covering Occupy Wall Street since day one, and the Dissenter’s intrepid Kevin Gosztola has been the premier source of information for those following the protest. He’s in Washington D.C. right now and will be heading to New York to report live from Occupy Wall Street.

Here’s a quote from Glen Greenwald

But for those who believe that protests are only worthwhile if they translate into quantifiable impact: the lack of organizational sophistication or messaging efficacy on the part of the Wall Street protest is a reason to support it and get involved in it, not turn one’s nose up at it and join in the media demonization. That’s what one actually sympathetic to its messaging (rather than pretending to be in order more effectively to discredit it) would do. Anyone who looks at mostly young citizens marching in the street protesting the corruption of Wall Street and the harm it spawns, and decides that what is warranted is mockery and scorn rather than support, is either not seeing things clearly or is motivated by objectives other than the ones being presented.

Well, they’re not laughing quite so much in the corporate media. They are less amused in the 24 hour news programs that long ago abandoned any attempt to inform the population resorting to popcorn for the mind – “If it bleeds it leads.” The moral bankruptcy of the journalist class is more and more evident every day.

I want change. The bottom 50% of this nation’s citizens have been shorn like sheep over and over again. It’s time for fairness and above all justice, long prison sentences for the malefactors who destroyed our economy, were bailed out by the government, and now enjoy huge profits. This is the antithesis of justice, a Bizarro society in which up is down and justice is for the “little people” (the ones that build and maintain this country by their hard work and honesty).

Here is Jack Shafer discussing his views of demonstrations. I suggest you go to Reuters and read the whole thing. Shafer is sort of a dinosaur from a different era but he does appear to be willing to learn from experience.

How to cover a demonstration. Or not. By Jack Shafer from Reuters –

The organizers of Occupy Wall Street (or non-organizers, as they would prefer it) have shown real media savvy by staging their demo where the network cameras and the New York Times are. Anything that happens in New York (especially Brooklyn!) is considered by New York media operations to be 100 times more interesting than anything that happens anywhere on the other side of the Hudson River. So what if the Occupy Wall Street message is muddled? The OWS pictures and energy are fresh, mostly because a mass, ongoing demo in New York is a relative novelty. How else to explain the New York Daily News‘ fevered blog coverage today: “Here’s the scene at Zuccotti Park. It is packed. There are about 3,000 people here.” No kidding?! 3,000?! That’s like the attendance at a Midwest high school football championship game!

The press corps would probably be doing more toe-dipping than immersion in its Occupy Wall Street coverage if not for the way it underestimated the rise of the Tea Party over the past couple of years. Just because a group’s message skews toward the inchoate and the emotional doesn’t mean that it doesn’t represent a worthy point of view. The non-organizers of the Occupy Wall Street have deliberately embraced this thought. As long as cameras are counting bodies and recording slogans, the harder work of defining the message can be postponed. The more important task is to introduce people who share frustrations to one another. One measure of OWS’s successful strategy is that labor unions are now joining the “movement.”

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Wall Street plunges after S&P downgrade (via Reuters)

Stocks plunged on Monday, with the S&P down more than 6 percent for its largest drop in nearly three years on rising fears of a recession exacerbated by the United States’ loss of its triple-A credit rating.

I wonder what would have happened if we had actually defaulted. I guess it would have been very entertaining from a news standpoint. Of course, from the point of view of an American trying to get by, it would have been less entertaining.

How bad is this going to be? I expected this to be the kind of response an actual default would have caused. So, I’m not that good a guide. Apparently these financial gurus bear more resemblance to an overpopulation of lemmings than to coldly analytical Ivy League grads.

The next shoe to drop will be the reaction of the overseas markets especially the Asian ones. If there is a sell off there. We may continue the sell off here.

Great fun. I tell my students we are in the midst of history being made. This history does not seem to me to be fairly similar to other historical eras. I think the self destructive tendencies of the Congress are worse then at any other time besides the Civil War. We could be creating a fiscal situation unprecedented in all of world history, a great power literally committing financial suicide – a great power giving up its planetary pre-eminence to avoid raising taxes on the rich.

James Pilant


Economic Inequality and Global Elites

What do the global elites think about the issue of inequality (economic disparity)? One clue might be the Global Risks 2011, Sixth Edition. This report is issued by the World Economic Forum –

From Wikipedia

The World Economic Forum (WEF) is a Geneva-based non-profit foundation best known for its annual meeting in Davos, Switzerland, which brings together top business leaders, international political leaders, selected intellectuals and journalists to discuss the most pressing issues facing the world, including health and the environment. Beside meetings, the WEF produces a series of research reports and engages its members in sector specific initiatives

 James Ledbetter writing for Reuters has some thoughts on the subject –

This year’s report makes a big deal about “economic disparity,” which it helpfully defines as “wealth and income disparities, both within countries and between countries.” We used to call this “inequality.” The WEF report rightly points to OECD data indicating real income growth of the top income quintiles in wealthy countries (Finland, Sweden, the United Kingdom, Germany, Italy and the United States) was twice as large as that of the bottom quintiles between the mid-1980s to mid-2000s. The poor may not be getting poorer, but the rich are getting richer at a much faster pace than everyone else. That situation is not only immoral, but dangerous, as it can lead to open conflict between nations and internal political turmoil.

But wait — why is this happening? The WEF report cites “the erosion of employment culture, the decline of organized labor, and failures of education systems to keep pace with the increasing demands of the workplace.” That all sounds plausible, but the time frame cited marks the heyday of the very global governance institutions the WEF seeks to support. You don’t have to accept a causal relationship — though it certainly suggests itself — but at a minimum, global governance institutions have been demonstrably ineffective in addressing the economic structural issues that the WEF now worries about.

I have to disagree on one point. Mr. Ledbetter points out that “the poor may not be getting poorer.” While in these other countries, finland, etc., the poor, the lower classes have kept pace with their previous income. That is not the case in the United States. The middle class here has lost ground, their wages stagnant for three decades and their manufacturing jobs being outsourced as a deliberate policy of the United States government.

I am aware that in an article of that length, he hardly has an opportunity to break it down by country. But I am more local.

To summarize, James Ledbetter’s conclusion, they don’t know what to do about inequality and institutions like theirs do not have the influence to make changes should they suddenly discover the secret of income equality.

When you erode national sovereignty to build international trade and finance, there is no one to deal with issues like income distribution. Now, you might argue that international organizations like the United Nations or the World Economic Forum might fill in the gap. It’s a weak argument. The huge international corporate and financial combines have no intention of yeilding one iota of money or authority to anyone anywhere. And I am cynical enough to believe that military and judicial power trumps economic. If you want to take on an international organization be it organized crime or another kind of organization, use real power, not moral persuasion, not an argument that they should honor stakeholders, you put them in prison, you take their buildings and facilities, you confiscate their money, you leave them no where to hide and you never ever stop chasing them.

Of course, I am not referring to any American corporation.

James Pilant

P.S. The World Economic Forum’s report has been downloaded about 6,000 times. Considering the number of people online, that is not a large number. So I am flying in a high intellectual circles today.