A basic business principle, fundamental to capitalism, and for hundreds of years the main driving force behind innovation and wide availability of goods and services, has increasingly been eliminated by governments worldwide, led by the US.  That principle is competition.  In the traditional model, a company that saw their income level off, or decline, had to find more efficient ways to operate, or a new or better product.  In the past decade or two, an easier short-term solution has been to find a competitor with the same issues, and merge with them.  Once difficult, due to anti-trust laws, these mergers have been almost universally approved in recent years.

Many of those businesses should never have been allowed to merge.  Some would have failed, and other new ones would have taken their place.  However, the rubber-stamp government approval of mergers, has resulted in domination of many industries by a small number of corporations.  In particular banking, media, telecom/internet, energy, and auto manufacturing corporations have grown to a size where no new startup can expect to succeed.  Many of these corporations no longer know the meaning of competition.  The bureaucratic incompetent management withdraws into their own world, where they lose touch with reality, assuming their “superior intellect” will always keep them successful. 

Then suddenly - what if there is a rude awakening?  They are losing money?  What to do?  Ask for government help.  So why should corporate welfare be given to them?  Because the very government irresponsibility which allowed them to get so big has created huge dependencies that cannot be ignored – both on the supply side, and the employment side.  The “Too big to fail” principle.  The alternative to a handout is to turn over the failing company to one their few remaining competitors, making future problems worse. 

This cannot be blamed only on Democrats, Republicans, Liberals, or Conservatives.  It is not restricted to the US.  Is there an easy solution?  No.  But there are possibilities.  Obviously future merger approvals should be approved with extreme caution.  What about current corporations?  One start would be tax changes that would offer big breaks to any corporation that separated into independent businesses.  Is this really likely to happen?  Unfortunately, no.  That is the E-reality.