UP Moving Up

Episode Transcript

Speaker 1 (00:00):
They're a great, big, rolling railroad that everybody knows, a
million miles of history, a shining in the sun. They're
the Union Pacific, and their story's just begun. You could
say that again. The Omaha corporate giant, five thousand employees
just here with an annual payroll of eight hundred and
fifty million, is chasing history with its purchase of the

(00:21):
Norfolk Southern Railroad. UP is out to become the first
railroad to connect both the Atlantic and Pacific Ocean. Soh
that Golden Spike connected the coasts in eighteen sixty nine,
but never before has one company owned the line. The
new UP will be fifty two thousand miles forty five states,

(00:42):
but first it needs to cross a rickety railroad bridge.
The Surface Transportation Board, a federal agency, gets to decide
four members, two appointed by Trump, two by Biden. The
fifth and perhaps deciding vote has yet to be confirmed
by the Senate. Has big The STB has a pesky

(01:03):
law to follow, the two thousand and one Merger Regulation Act,
which requires every merger to enhance, not squelch, competition, and
serve the public interest. Get back to you on that one,
if it happens we go from six big railroads to
five and will assuredly accelerate. Warren Buffett's Berkshire Hathaway bid

(01:23):
to buy another big boy CSX, and then we go
from five to four. As late as the nineteen eighties
we had thirty. The STB will worry about decreased competition,
which leads to price hikes, service disruptions, relaxed to safety improvements,
big layoffs. All of that happened plus bottlenecks at major

(01:45):
railroad interchanges the last time UP swallowed up a big competitor.
The labor unions are not supportive, as is the chemical
manufacturing industry. It is the railroad's biggest customer. Cut down
on competitors may go UP. The big four railroads already
controlled ninety percent of the freight traffic in this country.

(02:07):
Of course, UP says this will save us money and
make railroading more efficient. Lumber and plastics in the Northwest,
steel and cold in the Northeast will now reach their
destinations sooner. No more handoffs in Chicago, Saint Louis, and Memphis.
It'll be great for Omaha, the company, its employees and shareholders.
But are mergers like these good for the country, concentrating

(02:32):
wealth and power in the name of efficiency and value.
We've been through this before, just a handful of individuals
amassing more wealth than entire countries. Corporate monopolies crushing the
little guy. Worker benefits and wages stagnating or slashed, while
the few executives reap massive salaries and stock options. It

(02:53):
was known as the Gilded Age, a run of forty
years between eighteen seventy and nineteen ten staggering economic, industrial,
and technological growth in everything from transportation to manufacturing, energy,
and finance. The Gilded Age produced monopolies, massive concentration of wealth,

(03:13):
political corruption, great social disparity, all one hundred percent unregulated
by the government. If the ghosts of those early economic
barons Rockefeller, Carnegie, Vanderbilt, and Morgan we're in today's boardrooms,
they might look at each other and wonder has anything changed?
Have we entered a second Gilded Age? Today? It's data

(03:37):
instead of steel. Big tech has replaced oil, finance instead
of railroads, social media instead of raw materials. The names
now are Bezos, Gates, Musk, Zuckerberg, Buffett. We don't have
children working on factory floors, but we do have giggle
workers with no benefits. The top one percent now owns

(03:58):
more wealth than the bottom knighte combined. In the Gilded Age,
a standard oil controlled ninety percent of refining. US Deal
was the first billion dollar corporation. Today, Google controls ninety
percent of the search engine market, Amazon forty percent of
all e commerce. Apple and Microsoft have a combined market

(04:20):
cap of five trillion dollars. Tammany haul. The US Senate
and its political corruption of that day looks a lot
like today's lobbyists and super packs. Now a lot isn't
the same. Today there are social safety nets, the minimum wage,
labor laws, regulations. Unions still have power and influence. But
it took the brink of a social revolution, two World wars,

(04:44):
and a depression to grow the middle class, which doesn't
give a hoot how much billionaires have, so long as
it can afford a house, a car, healthcare, take a vacation,
and save for retirement. Is history repeating itself? Don't know,
but it sure rhymes.