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Competition or Collusion?
Competition or Collusion?
In recent years we've seen and heard those who extol the virtues of pure capitalism, who fly flags threatening the government with the revolutionary catch phrase, “Don’t Tread on Me,” and warn of increasing governmental power and the suspension of basic liberties. Yet these same people enable—even support-- a so-called free market economy which allows banks, insurance companies, energy companies, and virtually every other behemoth enterprise to reap billions at our expense while conveniently disregarding the basic premise of capitalism, the very principle that theoretically makes it a more appealing system for consumers, that of competition.
Granted, there is competition for some products. We are free to shop around for groceries, clothing, cars and other durable goods we need for survival.
However, there are other necessities—those that require other significant outlays by consumers—where competition and variety in price rarely exists.
Gasoline is a prime example. Rarely is it possible to drive around a community and find a station with lower prices than its competitors. They are all priced exactly the same. The only recourse for a lower price might be driving 30 or more miles and even then there is no guarantee the price would be any different.
We are regularly schooled on how oil is priced. For the most part, the fundamental concept of supply and demand doesn’t apply, particularly in recent years. Now, commodity traders drive up the price based on speculation that might be more accurate if they had consulted Nostradamus or some religious fanatic predicting the end of the world. They unearth every conceivable—and some inconceivable—excuse to drive up prices. Then when their dire forecasts never materialize, the prices drop. For a while, until the next contrived possible catastrophe.
Another industry that not only treads on us but steamrolls us is health care--from drug companies, hospitals, doctors, and the insurance companies. Health care amounts to 17% of the gross national product in the US, and the costs rise like a Himalayan peak. The so-called Obamacare bill sought to reduce the prices by implementing some measures to try to slow the escalating costs, but only time will tell. Here again, the industry works in concert, continuing to drive up prices leaving consumers little, if any, choice. The spirit behind the new bill is admirable, but no one really embraces it as a solution. The Republicans favor free markets—true competition—but they do nothing to compel the insurance stakeholders to make any fundamental changes guaranteeing that. Many Democrats favor a single payer system, similar to Canada and many European countries. Whenever that suggestion is raised in this country, opponents scream that it’s socialized medicine and we’re doomed to become Communists in a matter of days. They conveniently forget that Medicare, the most popular health care program in the nation, is government run. And it’s going broke because it is almost too good, providing the kind of coverage for seniors that everyone should receive, but the revenue doesn’t keep up with expenses. All of this results in a health care system that's number one in the world in costs, but number 37 in quality. That’s unacceptable and directly the result of the greed that collusion fosters.
Ever notice that when driving into almost any city in America what types of companies boast the most opulent and ostentatious buildings? In almost all instances, it’s banks and insurance companies. The reason why should be obvious—and a source of outrage. I don’t begrudge them the ability to earn money, but they’re reaping obscene gobs of cash and reprehensively paying their top employees bonuses in the hundreds of millions or billions, particularly when many of them were responsible for the financial catastrophe in 2008. And when the government attempts to put some restraints on this unbridled avarice, it’s portrayed as interfering with the free enterprise system, threatening capitalism, and undermining the ability of these unconscionable scoundrels to be rewarded for their unique talents. I’m not sure these talents are akin to those of athletes, actors, or musicians unless swindling billions of out hard-working Americans qualifies as a talent. It should be sufficient enough to earn them a role in the pokey.
Those who blur the line between competition and collusion need a vision check because the two concepts are as different as Obama and Romney. One represents the theoretical paradigm of the American economic system: how it should work. The other represents the hideous reality with which we must contend. And as long as politicians remain money-stringed puppets to the masters of this economic deception, the rest of us will be helpless victims of a capitalist masquerade.