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A Job-and-Pony Sideshow on the ATT/T-Mobile Merger

September 9, 2011 , , , ,

Just before the Justice Department announced that it was suing to block AT&T’s acquisition of T-Mobile, AT&T promised regulators that it would bring 5,000 call center jobs back into the country, if only the merger were approved. Amazon, facing the prospect of paying sales tax in California, promised it would bring 7,000 jobs if only they didn’t have to pay those taxes. After noting these parallel promises, Marketplace host Jeremy Hobson quipped, that he promised to create 10,000 jobs if he could be exempted from taxes—honest!

A quick analogy: the promise of jobs is to a policymaker as the promise of a pony is to a five-year-old. It may be literally possible to follow through on it, but the odds really aren’t that good. More likely than not, the promise is offered to get a Pavlovian response and agreement. After all, what representative wouldn’t jump at the change to generate more jobs in her district?

But the real question for a politician isn’t whether or not we want more jobs (hint: we do); it’s whether or not those promises will actually materialize. Once the desired concession is gained, how would the now-distracted child (Candy! Scary dog! Passing firetruck!) or Congressman (Budget vote! Intern scandal! Reelection campaign!) actually enforce the promise? And how realistic is that promise in the first place? As Martyn pointed out in his latest blog post, AT&T’s promised jobs numbers don’t add up.

For the Justice Department and the courts, though, the real question is an altogether different one. Ultimately, these discussions have no bearing on the legal question of whether or not the merger violates the antitrust laws or the Communications Act’s competition protections. Instead, all the jobs rhetoric is an effort to sway legal decisions politically. Ideally, a promise of ponies would be regarded by courts and litigants as irrelevant. But an elected official is much more likely to be focused on the economy than the black-letter law. And with concern about employment high and rising, a conditional jobs promise sounds a lot less like AT&T is promising to buy America pony than a threat to slaughter a few if it doesn’t get its way.