What Central Control Do You Favor?
Being too big to fail highlights the third leg of a three legged stool that supports a thriving society and government. That leg is Free Markets and in our country they are becoming less and less free. Without free markets goods and services cost more, there is less innovation, resources are allocated inappropriately, income disparity rises and society deteriorates over all.
Conservatives in this country lambaste a central government, like China, having too much control over its industry and economic markets. They sight history saying when power gets too centralized, it is too far removed from the marketplace and citizens to make decisions in the best interest of society as a whole. Their personal self interest overrides the country that they are serving.
In our country, we have centralized control over markets and industries; however, it is in the hands of a few large companies in a significant number of markets. Banking is one of those industries. In a recent trip to Minneapolis I heard a report on the radio that 80% of the savings deposits held by financial institutions were controlled by two banks; U.S. Bank and Wells Fargo. 80% is control of a market!
In our society, if major industries, like banking, can be controlled by a single company, or a small number of companies, the stewards of those companies, their Board of Directors, are in a better position to fulfill their duties of Maximizing the wealth of its shareholders. This objective of wealth maximization can get out of sync with the objective of providing the best products and services to the public at the lowest possible price
Instead of the stewards focusing on providing the best products and services at the lowest cost possible, it focuses on gaining and controlling markets. It is willing to pay executives handsomely to make this happen. This in turn causes the executives to do just that; gain control of markets.
So let's stop pretending that we are against central control of major portions of our country. Instead let's consciously decide whether we want government to enforce rules to keep markets free or private companies looking out for their personal welfare without an umpire to keep free markets alive? As an associate of that great philosopher Indiana Jones once said; choose, choose wisely".
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