Its not only the banks, and I remember Norwest before it was gobbled up by Wells Fargo.
Exxon-Mobil, possible Dish and DirectTV, Sirrius and XM, Microsoft gobbled up tons of small software start-ups, HP and Compaq. United Healthcare, Blue cross Wellpoint. Airlines... Not all mergers are bad, but there is less competition and lots of mega companies nowdays. I don't know what the answer is.
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Joe wrote: Its not only the banks, and I remember Norwest before it was gobbled up by Wells Fargo.
Exxon-Mobil, possible Dish and DirectTV, Sirrius and XM, Microsoft gobbled up tons of small software start-ups, HP and Compaq. United Healthcare, Blue cross Wellpoint. Airlines... Not all mergers are bad, but there is less competition and lots of mega companies nowdays. I don't know what the answer is.
I think Norwest actually bought Wells Fargo but the WF name had a better reputation so they went to it.
Mergers do have some advantages, can be a cheaper way to grab market share, and create cartels to jump prices up.
Thomas Sowell: There are no solutions, just trade-offs.
Our banks did not get too big to fail. It was our politicians who have chosen to abandon free market principles - notably the abandonment of the cardinal rule called moral hazard.
The rule of free market moral hazard stipulates that the risks and rewards of investment and ownership go hand in hand with the risks and responsibility of mis-management and fraudulant activity. If your business is sucessful- you get the rewards, if you fail- you get the responsibility for it- and you go down with your ship.
The government has invented the philosophy of "too big to fail". This is a socialist, government interventionist philosophy. It says that every citizen must support failure- and penalize success by subsidizing those who fail.
