News Release

Assessing Some Key Trends of 1998


Two of the most important trends during the past year seem certain to have major impacts in 1999 and beyond — the momentum of “merger mania” and the unraveling of America’s safety net. Experts critical of these developments can be contacted directly by editors, reporters and producers:

** Merger Mania **
Co-director of Essential Action, a Ralph Nader-founded corporate accountability group, Weissman points out that “1998 has witnessed an unprecedented merger spree.” He adds: “Exxon plans to gobble Mobil for nearly $80 billion. BP is taking over Amoco for $58 billion. In telecommunications, Bell Atlantic and GTE plan to combine in a $70 billion-plus deal, SBC (Southern Bell) is buying Ameritech for nearly $70 billion, WorldCom acquired MCI for $37 billion and AT&T is merging with TCI in a $33 billion deal. Merger mania in financial services manifested itself in the form of the NationsBank-BankAmerica merger ($42 billion), the Citicorp-Travelers Group marriage ($37 billion, even though existing law does not permit such a merger), a Wells Fargo-Norwest deal ($32 billion) and many others. While these mergers may be good for Wall Street, they are a bad deal for everyone else. They mean less competition, higher prices, corporate downsizing, less consumer choice and concentrated economic power that gives rise to a dangerous concentration of political power.”
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** Unraveling of the Safety Net **
Piven is a Distinguished Professor of Political Science and Sociology at the graduate school of the City University of New York. Her books include “The Breaking of the American Social Compact.” She comments: “In 1998, many of the poorest Americans did worse, as the safety net created during the New Deal continued to unravel. The new welfare law gives the states a lump sum, no matter the number of people they aid, creating a financial incentive for the states to slash the rolls. This they are doing by simply `diverting’ or denying applicants, or dropping families from the rolls for transgressing one or another of a tangle of new rules. Early reports on what has happened to the families dropped from the rolls are ominous… Whether they actually find work or not, the policy of pushing hundreds of thousands of desperate mothers into the search for work is certain to drive down wages at the bottom of the labor market where wage recovery has just begun.”

For more information, contact the Institute for Public Accuracy: Sam Husseini, (202) 347-0020; Norman Solomon, (415) 552-5378