tech and finances are a bad combination

Several new pieces of research have investigated the cause of declining dynamism among U.S. businesses. The drop in the number of startups is a real concern, since new high-growth businesses are believed to be an important driver of economic expansion....
The decreasing success of ambitious companies should be worrying, especially because influential figures in industry have been warning us about it for quite some time. Andrew Grove, former chief executive officer of Intel, has written that U.S. companies struggle to achieve large scale, especially in manufacturing. He largely blames the short-termism of the financial system and the lack of a domestic manufacturing ecosystem.
Another cause that some have suggested is rent-seeking. This is the economics term for when existing companies use regulation to block new competitors. Obviously, if new companies can’t steal business from old ones, there is less room for growth. Large corporations are more dominant today than in the past. One problem for this thesis is that some research indicates that increasing regulation hasn’t had much of an impact on dynamism. So if rent-seeking is the problem, it’s still an open question as to how, exactly, big companies are using the government to block their competitors.
Venture capitalists have been noticing the troubling rise of winner-take- all situations in the startup world. For example, here is legendary venture capitalist Marc Andreessen in 2013:

In normal markets you can have Pepsi and Coke. In technology markets in the long run you tend to only have one…The big companies, though, in technology tend to have 90 percent market share. So we think that generally these are winner-take-all markets. Generally, number one is going to get like 90 percent of the profits. Number two is going to get like 10 percent of the profits, and numbers three through 10 are going to get nothing.

If the Internet breeds natural monopolies that crowd out competition, it could spell trouble for the U.S. economy. That will lead to most new ambitious companies failing -- exactly what Guzman and Stern have seen happening in the past decade and a half. The result won’t just be a less dynamic economy, it will also be a less efficient one, as monopolies jack up prices above their efficient levels.

The stopped clock

One simple reason is that the backlash is being led, in part, by Republican presidential candidate Donald Trump and I'm disinclined to sign onto a movement of which he is a prominent leader.
But just as a stopped clock is right twice a day, there is a possibility that Trump is actually right on this issue. After all, he is basically in agreement with Democratic presidential candidate Bernie Sanders about the evils of free trade. The opposition therefore stretches across ideological boundaries. Also, many smart economists whom I respect are now breaking with the erstwhile orthodoxy and coming out against further trade agreements. For example, here is Paul Krugman:

Much of the elite defense of globalization is basically dishonest: false claims of inevitability, scare tactics (protectionism causes depressions!), vastly exaggerated claims for the benefits of trade liberalization and the costs of protection, hand-waving away the large distributional effects that are what standard models actually predict...the elite case for ever-freer trade is largely a scam, which voters probably sense...Ripping up the trade agreements we already have would, again, be a mess...But it is fair to say that the case for more trade agreements — including TPP, which hasn’t happened yet — is very, very weak.

Fed's credibility problem

"Does the Fed have a credibility problem?"
That was the first question posed to Federal Reserve Chair Janet Yellen at Wednesday's press conference following the central bank's decision to leave monetary policy unchanged, and its signal that instead of the four rate increases it anticipated implementing this year, there will be just two.
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The two increases that the Fed still anticipates this year now seem as unlikely as the four it previously saw; and while Yellen says April remains a "live meeting," traders see a less than 8 percent chance of an increase next month. With other central banks still on the path of monetary easing -- Norway drove its benchmark rate down by a quarter-point to 0.5 percent on Thursday -- the Fed's December rate increase looks increasingly like a policy mistake that may have to be unwound, rather than augmented. If there is indeed a U.S. rate cut this year, the Fed's credibility will suffer, and the reputation of forward guidance may be fatally wounded.

Turkish President goes there

Concerns about Turkish President Recep Tayyip Erdogan’s authoritarian leanings have been at the fore in the nation’s political dialogue since he assumed the presidency, and appear to have been well founded, as in a televised speech today he declared “democracy,, freedom, and the rule of law have absolutely no value any longer.”
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Erdogan has increasingly sought to charge political opponents as terrorists, and has in the past few weeks not only arrested academics as “terrorists” for their positions on his government, but nationalized the nation’s largest newspaper for publishing articles critical of his ruling party.