The 1929 stock market crash confirmed the US economy was in crisis, but it wasn’t the cause of the Great Depression. A Laissez-faire government allowing frivolous bank loans selling the “anyone can be a millionaire” dream, powerful monopolies, and wealth inequality collapsed the economy. Free-market capitalism nearly destroyed the country, but government intervention, reform, and regulation saved it.
Economist John Maynard Keynes and FDR, the “traitor to his class,” identified the issues and implemented the solutions to revive the US. Unfortunately, over the last forty to fifty years, corporate wealth and corrupted politicians weakened FDR’s initiatives. When the Organization of Arab Petroleum Exporting Countries declared an embargo on oil in the 1970s, opportunists used the oil crisis to claim Keynesian Economics had failed and reinstated free-market capitalism.
“The liberty of a democracy is not safe if the people tolerated the growth of private power to a point where it becomes stronger than the democratic state itself. That in its essence is fascism: ownership of government by an individual, by a group, or any controlling private power.” ― Franklin D. Roosevelt
The Greatest Generation and middle-class baby boomers could save for a home deposit, pay the mortgage, afford children, and comfortably retire — on one income. Until the 1980s, FDR’s programs and Keynes’ economic policy to increase government spending provided boomers with a quality of life the younger generations dream about. Financial security is not attainable for generations, X, Y, and Z — we can’t even afford to improve our affordability.
Today, only half of the 30-year-old workers make more than their parents, but in the 1940s, 92% of Americans made more than their parents at the same age. In the 1980s, an average person could obtain a deposit within three years, but a millennial would have to save for 19 years. The 1920s’ stagnant wages, unemployment, and rising prices unsurprisingly returned with the mid-20th century free-market capitalism, and of course, monopolies and oligopolies ride alongside. They breed when unconstrained.
It’s puzzling people who haven’t seen an increase in wage or public spending in decades are adamant they cause inflation. Market deregulation, significant market power, and eliminating price controls couldn’t possibly be the culprit for rising prices even though it has been the economic agenda since the 1970s-80s. Another mystery is the lack of inflation from the billions created to bailout corporations and the Covid ravished economy, but wages and monetary expansion to support the average American will definitely cause hyperinflation.
The Disadvantages of a Monopoly for Consumers:
- Restricting output onto the market.
- Charging a higher price than in a more competitive market.
- Reducing consumer surplus and economic welfare.
- Restricting choice for consumers.
- Reducing consumer sovereignty.
Since the 1990s, two-thirds of the corporate sectors have become more concentrated. From 2008 to 2018, anti-competitive consumer price hikes weren’t a concern when the antitrust authorities restricted less than 5% of mergers. Facebook, Google, Amazon, and Apple have been identified, and significant market power in industries include; telecommunications, funeral caskets, law services, pharmaceuticals, health care, baby formula, beer, porn, the financial sector, and many more.
Monopolies and oligopolies control our government, us, and almost everything on the planet.
- 4 corporations operate 90% of the global grain trade
- 4 companies control 90% of the media
- 4 airlines dominate over 80% of the US aviation market
- 3 hospital corporations account for 77% of American admissions
With our government’s assistance, monopolies sabotaged the factories and the jobs manufacturing low-income housing by the 1970s. Affordable housing in the US is a thing of the past. If parents can’t provide financial support, the share-economy is a great alternative, and living with parents isn’t that bad — Cubans have been doing it for generations. Plus, the price of healthcare and pharmaceuticals keeps increasing, the money saved from living with parents may cover a fraction of medical costs.
Monopolies spread misinformation and harm like an infectious disease. Replacing low-cost substitutes by driving out competition and controlling the price of goods is their signature move. The objective of a business is to generate a profit; low-wages and unemployment — who cares? As long as profits are made, businesses are happy, but production is declining and eventually, profit margins will shrink. Americans can’t afford to live, let alone buy luxury goods, and raising prices to make up the difference in lost productivity isn’t going to solve the problem.
A wage increase and monetary expansion aren’t the solutions, but they’re the best we have until our government decides we matter. Monopolies tricking the public into believing inflation is derived from the wages they’ve suppressed hurt them and us, but the addiction to greed makes it difficult to think clearly. Free-market capitalism to drive competition and decrease prices has failed the environment, 90% of Americans, and the global citizens working in dangerous, low-paying jobs.
Economic gains from the 1990s’ private-sector spending and employment dissipated by 2000, and the Roaring Twenties’ similarities are uncanny. Instead of a stock market crash, Enron warned us the economy was in danger, the 2008 global financial crisis solidified it, and Covid exposed it. The decade of deregulation, globalization, and easily attainable credit simulated wealth, and the party was quite fun while it lasted, but the comedown wasn’t worth it. We’ve been suffering the mental and physical repercussions for over twenty years, and the pain intensifies every year.
“Capitalism works better than it sounds, while socialism sounds better than it looks.” — Richard Nixon, Beyond Peace
Well, I beg to differ. A mixed, balanced economy with a government representing the people sounds better and looks better. It’s not a coincidence many Americans fear socialism; monopolies and our government planned it.