Kmart and Sears sitting in a tree...

So, yes. Kmart is buying Sears. Or, rather, one investment manager (Mr. Edward Lampert), whose hedge fund bought Kmart out of bankrupcy and who owns the largest share in Sears, is merging the two companies. The big plan is to start moving Sears out of the so-20th Century mall setting and into big-boxes. I'm inspired!

You might think that this merger would create some kind of anti-trust issues. Nope. The FTC is looking into it but probably won't do anything. Why? One word: Wal-Mart. If there is a big enough competitor, in market-share terms, then it seems that mergers of competitors are not so suspect. I guess this is on the theory that oligopoly is better than monopoly.

And, of course, the idea that our anti-trust law requires breaking up Wal-mart... "in-con-ceiv-able" in the Princess Bride sense of the word. Totally impossible?

In corporations class in law school, we were all told that ownership of American companies is very diffuse. Bill Gates, who owns some tiny fraction of Microsoft, is supposed to be a notable exception. That's the line.

Of course, our professors were aware of pension fund holdings and the like. But they still downplay the increasing move toward financial blockholding. These days, it seems like hedge funds and similar investment vehicles are becoming increasingly popular ways of holding controlling stakes that can result in major realignments like this. Could this merger have taken place, we have to wonder, if both companies had not been strategically purchased with investment funds ahead of time?

My buddy Micah was blogging today about how the Montana governer's winning rhetoric about "small businesses" and "independence" could be the buzzwords for rejuvenating the Democrats. To me that would be heading in the wrong direction. We have to confront the truth about how our economy is composed and in what direction its moving.