“Those who do not study history are bound to repeat it.” We are seeing yet another evidence of the truth of this old saying. Now the dingbats are crying that the ultimate solution to all our economic problems is that we must remove all restraints on big business. The theory is that if big business is “allowed” to prosper, the resulting growth will result in new plants opening, more jobs, and a resulting “trickle down” effect that will benefit the working class. Sounds like pure Reaganomics to me. BALDERDASH! This has never worked, and will not work now.
The underlying theory is that big business will be self-regulating, if unrestrained by government regulation. Competition will force fair prices and more efficient production, resulting in more jobs and greater prosperity for all.
This theory fails for two very basic reasons. First, there is little competition. Mergers of the past 20-30 years have effectively eliminated it, especially in the financial sector. Many large financial institutions today compete only with their own subsidiaries.
Second, this theory ignores greed. We have seen too readily the effect of greed by big business on our economic situation. We have seen financial institutions go almost berserk in their quest for a share of the easy money. We have seen business practices, greedily adopted by supposedly reputable institution, that should never be tolerated by civilized countries. We have even seen bond rating companies, long viewed as a type of policemen on the industry, greedily succumb to the lure of the fast buck.
Given the freedom from any government regulation, big business would not immediately increase production, build new plants and provide new jobs. No, they would take the profits, pay huge bonuses to undeserving executives, and ship the jobs to China or India. That’s the route to quick profits, to hell with the situation in America.
So to all the dingbats out there who are loudly supporting this theory, I say: Read history, starting with the past 4 years, and then going back to the turn of the century. Pay attention! You might learn something.