Thursday, June 16, 2011

Just what is a Monopoly?

We have laws against monopolies. But we still seem to have them.

They're just not your Father's monopolies anymore. Examples are the ten largest banks in America now. They were consolidated into these banks recently because of the huge economic issues we've had that have lead us to the current situation in America and around the world.

The Dutch ING bank has just been forced by their home country to sell off their American assets so that Holland wouldn't have to pay so much to straighten out the bank's situation. Seems Holland, regardless of their reputation and orientation on drugs (regardless of how functional it is there), has their act together.

The American banks, it would seem, were too big to let fail and rather than sell off, we added to them.

So perhaps we need to reexamine at what a monopoly is?

It used to be that a monopoly (as in AT&T in the old days, "Ma Bell" had America literally by the privates), needed at some point, to be broken up to allow the fresh air of capitalism and free market to allow motivations for lower pricing and innovations.

But it's starting to look, and it may have been this way for a while (or forever), that even having more than one, is not enough. It's a good possibility that in only having about ten major banks in the country, as we've seen, if one goes down they can all go down.
I know many people who live within ten miles of me have pulled their money from Bank of America and other large banks, some of these people having lost jobs when Washington Mutual went under, and have put their money in the local county bank, which actually had higher rates on things like CDs and lower costs on bank accounts.

We may have consolidated America's major banks in order to avoid a catastrophe, but perhaps we now need to start looking at solidifying them, and breaking them down into smaller institutions. These banks have been fighting the idea of limiting compensations (salaries, bonuses, etc.) since the beginning of "The Troubles" here.

So listening to them, may be problematic as a drowning person is when you are trying to save them. Or once you get someone out of trouble and they learn nothing and simply want to continue making money as before in a broken fashion that is bound to lead them back into debt yet again at some future point.

But perhaps now a days, a monopoly isn't just one, but more than one, to make a dysfunctional failure capable system of economy and perhaps, we need to protect that economy. Maybe, just regulation is needed, or maybe something more, like looking at a monopoly as a small group that can fail and bring down the country. It seems to me we need to break up these banks as soon as they are healthy enough to be split up. Multi-National companies have also become a nightmare management consideration both internally and externally in recent years.

Let me say here, that I'm no financial expert. I got a degree in Psychology in order to avoid math. Then I found I had to take a year of the hardest math or Algebra that I'd ever experienced, that of Psychology Statistics. And I learned a lot, though my other classes all suffered gradewise because of it. But I learned how you can say one thing, when something else is true. Or how one thing can look to be true, when something else really is. Or, how something that is counter-intuitive is what needs to be done, when everyone is doing something completely different.

Either way, I don't think this is what was originally intended by the country's Founders. They didn't want people to be oppressed by either Lords of Royalty, or Lords of Banking.

Still, the brilliant minds of economy can't even agree on what needs to be done. So aside from the fact that some fixes are counter-intuitive, it does seem reasonable that to have all your eggs in one basket, is a formula for catastrophe.

It's only a matter of time. Deregulation has allowed some very bad things to happen. And in fixing those bad things, to consolidate those who have done this, is if not insane, severely unwise.

I had always dreamed of retiring at 50, but at this rate, we may all retire when we drop dead. But even then, the banks will probably find a way to charge us for our lengthy stay.

Then again, there is good news in that, as it will finally be over. For those who will be reincarnated, welcome back, you may have to work longer hours, and thanks to advances in health care and genetics in life extension, maybe even later in life next time, if something isn't done to stop this continual and ever increasing crawling into the pockets of the banks and corporations.

1 comment:

  1. Hello,

    We came across your blog while we were searching for a picture to make a label for our homemade beer. The beer is called "Dutchess" (purposefully spelled wrong!) and that is how we found that glorious "holland cartoon" you posted above. She is perfect, sassy and Dutch! The only problem is the file size is son small that when we blow it up to make a label out of it, it gets too pixel-y and doesnt look good anymore. Would you happen to have a larger sized version that you would be willing to share with us? It is strictly for our own use and woundnlt be sold or anything. PLease let me know -Thanks! -Konrad and Valerie