Relationship of Big Business and Government

One aspect of Big Brother Government that is being ignored is huge corporations. Once a business reaches a certain size it becomes a bureaucracy with no resemblance to a capitalistic enterprise. By necessity, it needs to be administered like a government agency. The people in charge operate without entrepreneurish type risk. Its size makes it almost impossible to react to business changes in a timely manner. Rules and regulations are set in concrete. Individual incentive is stifled and replaced by adherence to dictated policies and procedures.

It begins to operate like a government agency and relates better to the government than to other business. Its goals change from operating on a profit basis to a basis of self perpetuation. It becomes more of a consuming entity rather than a producing one. The motivation is not producing a competitive product or service but to feed itself. The result is more blotted growth, less efficiency, and a dying dinosaur.

This is what happened to our auto industry and the real-estate and financial markets. Our auto industry (in general; GMC and Chrysler in particular) were producing cars that people were not buying and were not able to change the products they were selling fast enough. The real-estate and financial companies were being run by administrators with little or no practical experience of real estate or banking. Banks were making loans that no true banker would ever approve.

To survive, a company needs to increase its market share. But there is a saturation point where growth becomes a detriment, especially growth by acquisition of competition. This has been especially true in banking. Acquiring failing banks just postpones the inevitable, failure. The liabilities eventually erode the profitability of the acquiring banks. In a competitive market some succeed while others fail. Forced sharing of liabilities is just as debilitating to the economy as redistribution of wealth from the producers to those who only consume