Moral Hazard and Corporate Restructuring

The problem with our global economy is moral hazard. Our corporations have become too big to allow them to fail. The belief in the bigger the better has shown itself to be unresponsive and producing a parasitic relationship upon the society that they were designed to serve.

What is needed is more competition and what is required is a dismantling of the corporate oligopolies that dominate the economy. Only new ideas will allow us to create the kind of corporate system that we will need to meet the challenges of our future.

If the public is to be stuck with buying up the mega-corporations, then lets break them up into more efficient and innovative smaller corporations and companies. What we need is a Teddy Roosevelt, someone that would make many new corporations out of the few mega-corporations that now dominate our economy.

Comments

5 Responses to “Moral Hazard and Corporate Restructuring”
  1. Thomas Burlew says:

    Brilliant! Breaking the bigger corporations up into smaller, more efficient, companies that can respond to the subtle changes a society goes through. I argue that the big companies that are being bailed out, should not be helped. instead, they should be allowed to fail The rule of Capitalism is that competition is the medium and if those companies couldn’t foresee the market shifting, than they should suffer and lose. The car companies kept selling cars with poor fuel efficiency, even though they know that we needed to produce more energy efficient vehicles so that we would not rely on foreign oil. But they wanted to sell their gas cars as long as they would sell and refused to provide the consumer what they wanted and needed. Well, now its’ too late, they failed to compete, let them fall. But, I suspect that the tricle effect those companies falling would have on the economy might hinder the average citizens ability to eat a good meal and hold a job. So, unless we as a people are willing to take the hardship that filtering out the failed companies will cause, I suggest we don’t compare our times to Teddy Rosevelt and The Great Depression. I don’t think we want any part of that. And so the big bad companies will get bailed out, and nothing will change.

  2. Kevin Tan says:

    At times, corporate evils don’t stop on issues such as workplace saftey, tax evasion, insider trading, and so forth. One instance that comes to mind is the Opium Wars waged by the British Empire against the Qing dynasty at the behest of private traders. And who can forget the coup in Guatemala instigated so that the United Fruit Company could continue to make a profit on formerly nationalized plantations? Just as you said, we must also think outside of the effect such large corporations have on our economies due to their sheer scale and consider the impact they have on sovereign nations as well.

  3. Jamie Eustice says:

    I agree with this concept for a few reasons. It is apparent and has been for a while now that big corporations are not as helpful as they seem. Within big corporations, corners can be cut, fraud is displayed, and the consumer is no longer the center of importance, rather we become more of the lab rat. What i mean by lab rat is that at one time businesses and corporations were made so serve the consumer but now with money being the top priority you never know what your going to get. Take food for instance. The mass production of different types of food seem to be leading to disease, new health issues, and end up not being beneficial at all. By breaking these corporations down into smaller businesses it will help reinsure the safety and quality of the product being produced. Smaller means less employees in one place therefore being easier to maintain and correct mistakes. I also propose that there be a better system of accounting for the care taken in each manufacturer. I think these days the smaller the better, because we went big and look where we are now a constant competition for quantity. It should always be quality over quantity in my opinion.

  4. Osama Shahzad says:

    These mega corporations have also created a system where the few have the most. There is a statistic I believe that states only a few percent of the world population holds the most wealth. Corporations no longer care for anything but cash inflow. They grow their wealth thruough war, poverty, hunger and delirium. This is also why I believe is is important to educate ourselves as human beings. Knowledge truly is power. It looks a bit difficult for instant change however. These corporations have become ingrained in their current system, and like anything that has grown accustomed to a way of life, change is extremely difficult. Difficult, but neccesary.

  5. calvin montano says:

    The mega corporations seem to basically run our world nowadays. It’s pretty much like a monopoly. They just want to get bigger and bigger. The more money they have; the more greedy they get, then they just wanna try and elimnate any of their competiton. In must cases; they just destroy and break down many small companies. They end up buying the company or forcing them to sell or just give up because the mega corporations might be too much compeitiiton. The mega corporations should learn the very important word “share.” They should learn to share and try not to become the mega corporations they wish to be. They could just divide up the corporations and in doing this it would become a better thing for the rest of the companies and corporations. It would help out the world if they just decide to do a great thing and share.

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