Wall Street is at war with American consumers
Brad Reed weighs in on T-Mobile’s plans to pay consumers the cost of breaking their with other providers to switch to T-Mobile. The key point here is Wall Street’s deeply felt concern that actual competition in the mobile market will cause mobile stock prices to fall, implicitly affirming that anti-consumer collusion has been highly profitable for the mobile market for the financial sector parasites who feed off their high stock valuations:
Here’s how you know that T-Mobile is onto something: It’s making Wall Street very nervous for all the right reasons. Reuters recently talked with several financial analysts who all expressed fear that T-Mobile was sparking a pricing war in the wireless industry and that carriers were starting to actually compete with one another for our business. Or as Reuters puts it, “the intensifying competition is a new challenge to a U.S. industry long used to imposing its will on consumers, and analysts fear it could result in the loss of billions of dollars of revenue.”
Jefferies analyst Michael McCormack, for one, told Reuters that he found it “most disappointing” that AT&T has been reacting to T-Mobile’s “Uncarrier” moves by offering special offers of its own. After all, it’s harder to maintain sky-high margins when you’re offering T-Mobile subscribers an extra $200 bonus to switch.
Roe Equity Research analyst Kevin Roe, meanwhile, said that T-Mobile’s moves have created an “unhealthy market dynamic” that “will continue until AT&T has market-share stability,” which likely won’t be until it fights many more bloody battles with T-Mobile over wireless subscribers. And New Street Research analyst Felix Wai told Reuters that he feared the added competition would force carriers to spend more on marketing, a move that would once again eat into their margins.
Of course, the average customer should cheer all this Wall Street hand-wringing: To use some Econ 101 terminology, the loss of carrier margins will mean an increase in consumer surplus in the form of lower prices. Or put another way, what’s bad for big wireless carriers might just be good for everyone else.
One of the biggest lies of conservative economics is the notion that allowing outrageous froth in the financial sector helps enrich everyone. Wealth and income inequality, we are told, doesn’t hurt the middle class since it’s not stealing pie from everyone else, but rather growing the pie. That’s a lie.
Wall Street is directly at war with American consumers and wage earners in a bid to steal as much of the money as possible before people finally notice what is going on.
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