One of my favorite TV personalities is John Stossel who has a show on Fox that highlights current consumer issues with his libertarian bent. He usually takes a look at a current issue and then breaks down how that issue is being handled by the free market and how the government is handling that issue through its regulatory arm.
In his previous life as a reporter for ABC, John Stossel would go around looking at how business owners would try to take advantage of the little guy and then do a report on the damage being wrought by this business. His main aim was to heighten a concern in the hopes that the politicians would take note and create a new law to stop this type of abuse. He has since repented of his ways, and he understands the damage he wrought by continually asking the government for new laws. He know believes that the free market will eventually regulate these endeavors and for the most part government intervention is not needed.
For example, one of the many cries during the financial crisis that occurred in 2008 was that the financial crisis took place was because there was not enough regulations in the financial industry. The media critics and the pundits all declared that our financial institutions had gotten so large they were deemed “Too Big To Fail” and because of that, these institutions had to be bailed out or else the whole economy would have collapsed. Subsequently, many banks were taken over, shut down and merged (Bear Stearns, Lehman Brothers, Wachovia, etc.) The result of these closings has made the existing banks bigger than ever. In addition, the banks have had to deal with a tremendous amount of new regulations. Believe it or not, the existing banks like these new regulations because they know that the smaller banks don’t have the time or the money to comply with these new laws and are then forced to get out of the business. Which in turn, has made the largest banks bigger than they were before the crisis.
The ideal situation would have been to break up all the bigger financial institutions and then lessened the regulatory burdens so that smaller institutions could have gotten into the business. It would have been a good way to disperse risk as money would have moved out of some of the major money centers and into smaller regional banks- which would have reduced some of the concentration of wealth. Instead, what we have now are super huge banks and now they really are “too big to fail”.
Maybe that was the intention of the government all along to concentrate the wealth and power in a few hands. It is easier for the government to monitor and regulate a handful of institutions than a smorgasbord of banks dispersed throughout the country. I believe the following is happening not only in banking but in all industries- the move to burden the small operator so much that they are forced to merge or sell to bigger companies or close shop altogether. In my opinion, the federal government is engaged in a deliberate scheme to force consolidation in the business sector so that it only has a handful of companies to monitor and regulate, rather than deal with the millions of small , tough minded entrepreneurs. The big business heavy regulated economy is how Europe and socialist states are run and it is the direction we are heading.
For example take a look at Obamacare. “The number of medical codes that must be used to document patients and secure payments for insurers will go from 45,000 to 160,000.”(Dan Kennedy) I would gather that the very large medical centers that have large staffs will be able to process the additional work flow at a lower costs because they can transfer the work to a greater percentage of people. The small practice will have to endure 4x the amount of work and complexity, compliance and related costs which they will not be able to pass down to their patients thus drain the compensation of the doctors and their practice. As a result of this, expect to see a wave of mergers and mega hospitals come into being. This will remove choice and retard access for people looking for medical care.
Part of the reason we have not seen the bounce back in the economy since 2008 has been the difficulties that the entrepreneur has faced and Obama’s move to consolidate the business sector. However, America has always been a resilient country and the entrepreneur has always been the backbone of this country, all we need now is a political class to empower these people and not hinder them.