Iowa’s third congressional district may be Iowa’s most diverse. Containing Des Moines, the state’s most populous city and capital, and rural counties in the southwest part of Iowa, IA-03 has been targeted by the progressive organization Swing Left as one of 65 districts to focus on in 2018. Currently held by Rep. David Young (R-IA), who won the seat in 2014, a number of Democrats have decided to challenge Young in 2018.
Austin Frerick is an Iowa native who attended Grinnell College in Grinnell, Iowa, and earned a Master’s degree from the University of Wisconsin’s La Follette School of Public Affairs. Frerick worked as an economist for the U.S. Department of Treasury, Office of Tax Policy, and at the Congressional Research Service in the Domestic Social Policy Division, and his research analyzed executive compensation, pharmaceutical corporate charity abuses, and the growth of monopolies in the U.S. economy.
After seeing evidence of corporate consolidation firsthand, Frerick decided to run for the U.S. House of Representatives in Iowa’s Third District and made anti-monopoly legislation a key pillar of his platform. With the Democratic Party’s “Better Deal” agenda including an emphasis on combating monopolies, Frerick has made headlines for being a key proponent of such a message, including a popular profile in The Intercept.
Frerick joined us for an interview on September 20th, where we discussed topics ranging from Iowa’s water quality program to tech monopolies, and universal basic income to the role of progressivism in the Democratic Party.
This interview has been edited for length and clarity.
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Josh Martin (JM): At age 27, you are the youngest Democrat running for the House seat in Iowa’s 3rd district. In a crowded field of seven candidates, what led to your decision to run?
Austin Frerick (AF): Deciding to run for Iowa’s Third District was definitely a process, but the conversation started the day after the Trump’s election. I really enjoyed my job working for the U.S. Department of the Treasury and I liked visiting in Washington D.C., but I didn’t like living in D.C. The writing was on the wall that all these agencies would be captured by industries within the next four years, so I gave my 100 days notice and moved home. After moving back to Iowa, I kept hearing people talk about ills of monopolies but no one actually talked about the monopolies themselves, and that helped convince me to run.
There is an illusion of choice right now in business. For example, when you go to a local mall–like Jordan Creek in West Des Moines–you see Sunglass Hut and Target Optical and LensCrafters, and it looks like real competition. But it’s actually all one company with different price points. I knew that the economy had become much more monopolistic, but what surprised me is that we are seeing consolidation in industries where it normally would not exist. We are left with modern day robber-barons in these under-regulated industries. We have to tackle this issue, and the issue resonates with progressive democrats as well as populist, blue-collar Trump voters.
JM: Economic concentration paired with the Citizen’s United ruling on campaign finance has granted corporations unprecedented influence on Congress. How can Congress ramp up regulations on companies like Monsanto when they rely on such companies for campaign funding?
AF: You can’t take the money from these companies and claim you’re going to push for campaign finance reform. Think of my opponent, Congressman David Young. He’s a nice man but he is hollow and he is bought and paid for. Last fundraising quarter he raised $400,000; one check was for less than $100 and only three percent of donations were from Iowans. You look at his finances in the FEC report and he has a fundraiser at a fancy D.C. steakhouse and collects a bunch of $2,000 corporate checks. It’s easy to do. To quote Upton Sinclair, “It is difficult to get a man to understand something when his salary depends upon his not understanding it.” You have to be David vs Goliath because accepting those contributions is so corrupting.
I knew that the economy had become much more monopolistic, but what surprised me is that we are seeing consolidation in industries where it normally would not exist.
Sam Wettach (SW): Did Bernie’s ability to spread his message of progressive policies and small donations help convince you that not accepting large campaign contributions was morally correct and a strategy for success?
AF: Oh yeah. After the 2016 election, everything that was considered political campaign common sense has to be rethought. The old Democrat model is broken. The old model has Democrats sitting in a cube for sixty hours a week and fundraising off of upper-class white people all day. It is a screwy system and you lose touch with voters.
SW: One of the arguments within the Democratic House Leadership is that Nancy Pelosi has to be the House Minority Leader because she raises so much money for the party. Does 2016 prove that’s no longer justification?
AF: This fundraising justification and disconnect from voters outside the coasts is definitely a problem. The Democratic House leader is from California (Nancy Pelosi), the Senate leader is from Brooklyn (Chuck Schumer), and the Democratic Party leader (Tom Perez) is from the richest suburb in D.C. We are an elite coastal party in Democratic leadership. Iowa Democrats have to be different. I was happy to see Pelosi and Schumer talk about monopolies, but that rings hollow until you name names. You need to call out monopolies because they directly affect everyday Americans, especially in rural areas.
The first move of our campaign was to not only opposing the Monsanto-Bayer merger, but to call for the breaking up of Monsanto. I was shocked no one else has spoken up against these mergers. That said, after I did this, I found myself being stalked on LinkedIn by Monsanto government affairs employees, which was clearly done to intimidate me, because they know I can see that in LinkedIn. And then, a week after I announced, a Koch-backed Iowa based think-tank attacked me in a Register op-ed saying that less choice is actually good for farmers!
I found myself being stalked on LinkedIn by Monsanto government affairs employees, which was clearly done to intimidate me, because they know I can see that in LinkedIn.
JM: I gather from your Twitter feed that you support ramping up anti-trust regulations against tech giants like Google and Amazon. How should regulations on tech giants differ from regulations on businesses like Monsanto?
AF: From World War II through the early 80s you had the conglomerate model of business with a bunch of different businesses under one roof. Next came the new “Chicago school” model of capitalism, which is do one thing and do it really well so you eventually get a monopoly.
I think the Chicago school model has run its course. The controversy surrounding the New American Foundation think tank is a good example. They have had scholars working on the topic of monopolies for a long time, and when Google was given the largest anti-monopoly fine of $2 billion this past summer, New America supported the fine. Two hours later New America pulled the statement; coincidentally, the chairman of New America is Eric Smith, the former CEO of Google. Because Google funds New America, he had those who supported the fine fired.
JM: Not to mention that tech giants donated more to Republicans than Democrats in 2016.
AF: Google was the single largest corporate lobbyist during the first six months of 2017—period–, and they need to be kicked off their pedestal. Not to mention these monopolies keep the majority of their money outside of the US in offshore accounts. The New York Times had a recent article about how back in the day you could work your way up the ladder at corporations, even as a janitor, and find professional success. Today all that work is outsourced. These companies provide great services but they bring up a lot of questions.
New America wants our economy to not use the Chicago school idea of capitalism, which has ignored antitrust enforcement. They support going back to the Teddy Roosevelt school of thought with a more holistic view of the economy. How we deal with the Silicon Valley monopolies will be the biggest question of our time.
SW: And that’s a tough question. With Roosevelt it was easy to break up the monopolies geographically as they did with Standard Oil, and you could see a potential similar approach for Monsanto. With big tech it’s a much more gray area.
AF: And with Standard Oil, Rockefeller actually made more money once the company was broken up into 7 or 8 companies. When they were forced to compete they did better. When markets aren’t competitive there is no incentive to innovate.
How we deal with the Silicon Valley monopolies will be the biggest question of our time.
SW: Water quality continues to be a point of conflict in Iowa, particularly between urban and rural areas, with the majority of water pollution resulting from nonpoint source runoff from agriculture fields. This is a great example in Iowa’s 3rd District with the Des Moines Water Works operating one of the world’s largest nitrate removal machines in order to maintain safe drinking water, costing the city millions of dollars annually. What would you see as an approach to address water quality problems, particularly in the state of Iowa?
AF: This issue has devolved to urban vs. rural Iowa, and Governor Branstad failed to lead on this issue. From the farmers’ perspective, the focus is economics. Before 2008, corn prices were around $3 a bushel. Around 2012 it shot up to $8/bushel due to demand from ethanol and drought elsewhere. This was a classic economics example: decreased supply, increased demand.
This was great for Iowa, both in terms of crops and increased development and production of ethanol. But from the environmental side, especially in southwest Iowa, there was tons of land pulled out of conservation and grazing land and put into row crops for corn. Soon corn started slowly dropping and corn seed prices eventually went up to $7. Now corn is around $3.30/bushel, and you can see where the economic problem is for farmers. In rural Iowa, seed prices are watched as intensely as milk and gas. Now, in order to break even, farmers have to plant fence to fence. Farmers want to protect the environment and preserve habitat, but they have to pay the bills and keep their farm. I believe we can look at carrot and stick approaches, but I would much rather use incentives to encourage farmers to put more land into conservation easements, which protects the land and helps their bottom line.
In rural Iowa, seed prices are watched as intensely as milk and gas.
SW: Agriculture has a natural reliance on climate and the weather and every other industry in Iowa has reliance on Ag, making climate change an imperative issue for the state. How do you convince Iowa voters that you’re the right candidate to represent them in terms of climate change and who can convince them that climate change is one of the most important issues facing the state?
AF: Most Iowans think climate change is happening and that it needs to be addressed. That heavy lift has been done. What’s left is determining the road blocks. One of the main issues is outside influence from groups like the Koch brothers and their influence on the Republican Party. Iowa has a quarter of the world’s best top soil and it can’t afford to ignore this issue.
SW: Second question. Federally, what areas would you like to continue support or expand to continue renewal energy development, particularly with Iowa’s wind energy providing roughly 34% of the state’s energy production?
AF: It’s incredible what Iowa’s doing with wind. It produces a higher percentage of energy for Iowa than any other source, and everyone wants to build on the success of wind. I’m looking next at solar production. I believe that oil is ultimately the middleman for solar power, and whoever controls solar power controls the future. When you look at solar cells, 60% are made in China while two percent are made in America (in 2014). China wants to make solar cells so efficiently and inexpensively that they force everyone else out of the global market. Nearly all American solar cell production has gone out of business due to the lack of government assistance to help them compete on the global market with China. We can compete with China, and by focusing on renewal energy we can defund a number of questionable governments throughout the Middle East as well as Russia, whose economy is essentially just a gas station.
SW: Do you think Iowa should look to offset some of the manufacturing job loss by replacing it with solar and wind infrastructure production?
AF: Oh God yes, there is a great Des Moines Register story from this past spring noting that the poorest parts of Iowa are not in the country—they are Iowa’s midsize towns. Manufacturing job loss hollowed out those towns, and even though you get back some job growth, most of those jobs require an associate’s degree. There is no reason why more solar and wind power infrastructure cannot be manufactured right here in Iowa.
I believe that oil is ultimately the middleman for solar power, and whoever controls solar power controls the future.
JM: Your campaign website suggests you support Medicare-for-all, universal higher education, and reinstating Glass-Stegall. Are Iowans willing to embrace such progressive policies?
AF: Oh yeah, we’re not shying away from our progressiveness; I believe in a woman’s right to choose and in affirmative action. But it’s one thing to say you support single payer and it’s another thing to show how to fund it. I’m well versed in policy from my time in D.C. at the Department of Treasury and from working for the Congressional Research Service, which is essentially a think tank for the Library of Congress, and if you merge Medicaid and Medicare together, then you may offer a more affordable option than current insurance plans are offering.
JM: It seems that you are more for the idea of offering a public option for citizens to buy into Medicare than Bernie Sanders’s Medicare-for-all single payer plan, which is getting a lot of attention recently.
AF: If the votes are there, sure! I would cosponsor Bernie’s plan, but I think the public option is a more likely way forward. If we are at that perfect equilibrium where single payer can pass, then great, but our goal needs to be to get everyone health coverage as a right. We already agree as a society that K-12 education should be free for all (and I think that should extend to two years of community college as well) so we should think similarly for health care.
If we are at that perfect equilibrium where single payer can pass, then great, but our goal needs to be to get everyone health coverage as a right.
JM: How do you view international trade agreements like NAFTA and TPP and how do they affect Iowans?
AF: I’m a supporter of trade, but it has to be fair trade. NAFTA and TPP are about dominating high-end services; for example, the U.S. wants our pharmaceutical industry to be the world standard. If we are going to make such deals, then we need to pair it with additional education and investment at home in human capital. I do not think we should say we are against trade agreements, but we also cannot give away the kitchen sink in these deals.
My biggest critique of TPP is that we needed to couple it with universal higher education and other investments in key social policies. We are now in a high end service-based economy, but we forwent manufacturing and privatized higher education. This combination decimated Iowa’s midsized towns that relied so heavily on those well-paying manufacturing jobs. We need to rethink our social contract by emphasizing areas like equal pay for equal work and universal childcare.
My biggest critique of TPP is that we needed to couple it with universal higher education and other investments in key social policies.
JM: Congressman Ro Khanna from California, who endorsed you, has introduced a bill named the GAIN Act that will expand the Earned Income Tax Credit up to $12,000 for large families. Some view this bill as a first step toward a universal basic income. Hillary Clinton wrote in her book What Happened that she nearly introduced a plan for a universal basic income during the 2016 campaign, and the idea has received endorsements from Keith Ellison, Mark Zuckerberg, and Elon Musk, among others. Do you support a universal basic income?
AF: No, I do not, and I find it a little patronizing. Silicon Valley is telling Americans that they are not good enough for the labor force. At the end of the day, people want a job in a respectable profession, and a basic income tells them that such jobs are not available anymore. And while basic income advocates mention automation as a reason to supply such a benefit, such an argument has been made throughout history without ever coming to fruition, so I would rather focus on supporting folks who are trying to find and keep work.
But I do support Congressman Khanna’s legislation, because the Earned Income Tax Credit is worth expanding. The EITC exists to give poor moms with children a subsidy—the fathers get nothing because when the EITC started the chair of the finance committee was a Senator from Louisiana who did not want poor black men to receive the benefit. We rarely rethink the historical reasons for structural issues we see today, but these structures came about for a reason. I’m all for raising the minimum wage and coupling it with a worker credit like the EITC. I also support universal child credit, similar to Social Security for children that eliminates means-testing, which inevitably brings out class conflicts. This would lead to a basic income of sorts for the elderly and for children, but not for working age adults.
Silicon Valley is telling Americans that they are not good enough for the labor force.
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If you would like to learn more about Austin, visit his campaign website, follow him on Twitter, or like his Facebook page.
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