Merge This!

by The Cranky Media Guy

I remember one particular Star Trek episode (the original series I'm talking about, back when Shatner's head didn't look like a Chia Pet). "If I drop a hammer on a planet that has positive gravity, it will fall," Spock said. The point Live-Long-And-Prosper Boy was trying to make was that there are some absolute rules.

Although I started out in the Honors class, I wasn't a very good student in high school. My grade point average was roughly the square root of 2. By Senior year, the school had me on what they considered a "nonacademic" track. Oddly enough, these were the classes I've gotten the most use out of over the years.

For some reason, I liked my economics class. I remember Mr. Tricario, the Mr. Spock of my high school, explaining that the Law of Supply and Demand was an absolute of the American capitalist system. It just works. Always. For those of you who were unfortunate enough to be on the academic track, the Law says that high supply with constant or decreasing demand will result in lower prices. Conversely, low supply with constant or increasing demand will result in higher prices.

So here I sit, Mr. Former C Student, scratching my head every time I hear some CEO whose mega-huge company is about to merge with another mega-huge company tell me that the resulting ultra-mega-huge company will benefit me, the consumer. Huh? Wouldn't your li'l merger mean one less supplier of your product or service? Assuming no decrease in demand, mustn't prices go UP? No? You calling Mr. Tricario a liar?

Quick Quiz:

The reason business people and government officials insist that mergers are good for consumers is:

A: They're really well-intentioned and honestly expect to pass along to the consumer the savings they will realize through economy of scale and layoffs.

B: They're a lying pack of weasels who know full well they're going to jack prices up at the earliest opportunity and realize there ain't shit you can do about it.

If you said A, stop reading. You're too stupid for me to talk to anymore.

If you drop a hammer, it will fall. If I eliminate competition, prices will go up. People who tell you differently are lying and it's almost always because they stand to benefit by lying. Resent this? You should. Messrs. Spock and Tricario would.