Some charge President Obama favors socialism. But this charge is fundamentally false and obscures the really dangerous drift of the U.S. economy — away from competition toward big business and the government conspiring to seriously undermine competition by the mergers and acquisitions of big corporations. Facilitating this big-business, government monopolist are campaign contributions and lobbyists.
Competition forces producers to constantly seek more efficient ways to produce goods and services. To survive, producers must improve how they are using land, labor and capital through better machines, technology, organization and training. Constant improvement raises productivity (the output of one worker in one hour), leading to lower consumer prices, higher wages and profits and improvement in product quality.
Sadly, for our economy in recent decades, we have seen major corporations succumb to the trashing of robust competition. Often, instead of competing against their competitors, they merge with them and buy them out. These big corporations span many and diverse industries in the U.S. economy.
Big corporations dole out money for campaign contributions and lobbyists in exchange for laws and regulations allowing mergers and buyouts. Businesses retreat from the rigors of competition. For consumers, it means higher prices. For workers, lower or stagnant wages. And for the economy in the long run, a lower standard of living.
In the past, the engine of our prosperity was robust competition. Now the engine is breaking down.