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We Need to Break Up the Mega Corporations

By       Message Dave Lefcourt       (Page 1 of 1 pages)     Permalink    (# of views)   3 comments

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Just what are the big mega corporations good for, besides themselves?

Whether it's the Wall Street behemoths that got bailed out with taxpayer funds aka raiding the treasury in the TARP rescue of 2008 or now with Microsoft, IBM, Dupont, Hertz, Pepsico or the other mega corporations able to borrow from the FED at rates near zero who then sell their own bonds to pay off their other debts, use the borrowed cash for new mergers and acquisitions or just hoard the cash, one thing seems perfectly clear, they are not expanding by buying new plant and equipment and hiring new people.

The latter is supposedly the reason the FED has kept interest rates so low, so the "big" boys would start hiring again.

At the same time home owners and "small" businesses are barely able to secure loans for themselves, the banks remaining fearful of lending to those most in need. For many small businesses, these loans are part of their lifeblood and provide needed cash flow that helps keeps them afloat. These small business entities provide the majority of jobs in this country, but they certainly can't be expanding and hiring in this environment if they can't get the necessary credit to underwrite their expansion.

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So again, just what are the big corporations good for?

Other than lining their own pockets and keeping their investors happy, it is hard to see the societal benefit of these huge corporate firms.

As to the giant financial institutions on Wall Street, the question of whether they are too big to fail seems a given. But they were bailed out and made whole again two years ago. Meanwhile the financial overhaul and regulations recently enacted by Congress won't (according to the economists this writer reads) prevent the next financial meltdown the financial wizards create by their excesses and reckless casino type risk taking. They know, after the next bubble they create bursts, they'll be able to go to the public trough once again.

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We are in a new "gilded age", in many ways similar to the time of Teddy Roosevelt, who during his time took on the "trusts" i.e., Standard Oil of New Jersey, Union Pacific Railroad et al that were the monopolies that prevented competition or took over their smaller competitors. In the case of Standard Oil it was broken up into several separate companies. Why doesn't this happen today?

Of the big financial firms shouldn't the likes of Citigroup, Bank of America, Goldman Sachs, Morgan Stanley, J.P. Morgan Chase, Wells Fargo and AIG be broken up into smaller separate entities (no longer too big to fail)? What about the giant health insurance companies, Aetna, Cigna, Humana et al that act as health insurance monopolies in the areas they operate. What of Home Depot and Lowes that have crippled most of the locally owned and operated hardware and lumber companies (forcing most into bankruptcy) while carving up and controlling the market between themselves.

The same can be said of Wal-mart and other big box operators that have essentially destroyed local businesses and small towns throughout the country.

The original idea of a corporation in the U.S. [i] was such that it was supposed to have a social welfare requirement i.e. be a benefit to the public. Corporations could be terminated if they caused public harm.

In today's corporate environment such ideas seem quaint and antiquated. But has the public not been harmed by corporate malfeasance? Why is BP allowed to continue to exist? In what ways have the public "benefitted" from the financial titans that perpetrated our present economic crisis?

Our own history provides a guide as to what we need to do, what our law makers need to do today regarding our present day "trusts" that need to be cut down to size and broken up into smaller companies.

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The corporate titans are doing nothing to benefit the public and are certainly causing public harm.

[i] "Our Hidden History of Corporations in the United States", by "", February, 2000


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