It is not every day that a billionaire is sentences to jail time. The list is short, but it includes metro Detroit’s Martha Stewart and Alfred Taubman. According to the article by Susan Berfield, trucking and logistics magnate Matty Moroun is now part of that doubtful club of billionaire inmates. On January 12, 2012 Matty Moroun had to face sentencing on contempt of court charges in an ongoing dispute between the Ambassador Bridge company and the Michigan Department of Transportation.
In 1979 Matty Moroun bought the Ambassador Bridge - the only privately managed Border crossing between U.S. and Canada. “I can’t imagine a more secure investment than that bridge” says Moroun. It is understandable from Moroun’s side because the Ambassador Bridge is the busiest Border crossing in North America and there are no close substitutes for a bridge. That is a great example of the monopoly - a firm that is the only seller of a good or service that does not have a close substitute.
Eight years ago the Michigan Department of Transportation worked out an agreement with the Morouns to share the costs of building new access roads and ramps to the Ambassador Bridge in order to ease congestion. Instead of working on the Gateway Project, Moroun built a roadway that took traffic past his company’s profitable duty-free store and gas station. This move didn’t ease the congestion, but only made it worse because cars were stuck on expressway. “His first interest is to line his pockets,” says Rashida Tlaib, the Democratic representative from Southwest Detroit. In 2009, Michigan accused the company of breach of contract, and in 2012 Moroun and Detroit International Bridge Company’s President Dan Stamper were both imprisoned.
“It’s very difficult for a firm to remain the only provider of a good or service because usually in a market system, whenever a firm earns economic profits, other firms will enter its market.” It is understandable that people don’t want social money to go to the...