1. Author: 8trackdisco Date: 01/16/2009 08:29 PM Reply
Have always been a deregulation fan. But I'm changing my tune.
With all these billions going to companies that have been deemed "too large to fail", there has to be a change made.
Maybe it's time for the government to put a cap on the size of a business. Not sure how I'd do it (by assets, number of employees, something else), but handing people loads of cash with failed business plan is plain stupid.
Businesses shouldn't be allowed to get "too large to fail".
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The businesses you don't like have become "too large to fail" because of consolidation.
Many businesses consolidate for various reasons, however, a major driver these days is the cost of doing business in the first place. A MAJOR factyor in the cost of doing business is the regulations imposed on those industries by government.
In the automotive sector, there are a dizzying number of regulations - many of which make absolutely no sense - that FORCE companies to implement technologies that drive up the price of a car. CAFE standards literally force automakers to take stonger structural components out of the vehicle chassis, making the car deadlier to drive even at lower speeds.
The costs of these regulations make it nearly impossible for new start-up companies to gain a foothold in the market AND meet government regulations. If you take a look at the auto industry (both foreign and domestic) over the last 30 years, you'll find virtually no new start-up companies over that period of time. This is unprecidented, and a bellweather for the present condition the auto market finds itself.
On the other hand, if you take a look at an industry with little to no government regulation, you'll find not only vigrous growth and innovation, but the money of that sector spread out over a larger number of companies. A prime example is the personal computer market. There are literally hundreds of cpmpanies that manufacture and sell personal computers of all makes and types. If dell were to fall by the wayside, HP, ACER, and any number of PC producers would be able to fill its ranks. Consequently, the price of PCs have fallen over the course of their history (especially when compared against inflation).
So, what you're advocating is that the same people who created this probloem in the first place step in and do more of what f**ked things up from the get-go.
Not convinced? Take a look at the industries that are flagging in our present economy: energy, automotive, transportation, banking, finance. All of these are HEAVILY regulated.
The more money consolidated into fewer entites basically makes de facto monopolies. The government is nothing but one big monopoly, and look at how f**ked up they are at doing just about everything.
Markets work. Competition is a good thing. We should try it sometime.
