by Joshua Pantalleresco

Created on: May 21, 2009

Dog eat dog capitalism has become a taboo, and was a solution overlooked when Obama signed that monstrosity of a stimulus package. Competition would have in the long run been a better solution to the problem. There are a number of reasons for this.

Among them, the nature of wealth, which is the only real way to measure how strong an economy really is. Wealth by its very nature forces people to compete against each other. The strong companies thrive and the weaker ones go by the wayside. This may seem heartless and ruthless, but it also maintains a certain level of strength in the market. Strong companies are in no danger of going out of business. Even in lean times, there is a margin of error with the stronger companies. Weaker ones or financially unsound ones tend to be the ones in danger for a number of reasons. But that is the nature of competition. There is risk to the reward. Sometimes you fail.

Right now there are a lot of companies on the verge of going under. Most of them in danger due to their own bad diligence. Letting them go under at first would be a huge blow to the system, however things always move in the market. If one company falls, another picks up the pieces. There's no denying that right now if all these companies went under, we'd feel the impact. That said, we'd recover faster as newer and stronger companies would take their places.

The market has a tendency to check and balance itself. It is the nature of wealth - provided there is an element of risk. Demand for a product drives a market to create it. Consequently, a company cannot grow without the wealth to back up its growth. Otherwise, the company will over expand and collapse. Without much in regulation, the market tends to take care of itself.

We forget the limitations government has, and why government cannot or should not be big or have a huge say in markets. First, we need to understand that in order to produce a strong economy wealth must be created. Wealth being products that can be used, sold, or manufactured. This cannot be done by any government. Government by its very nature cannot create wealth; it can only extract it through taxation, whether that be direct taxation, or something more indirect like printing more money. So we either extract wealth from people who produce it now, or we create more money.

Wealth is not created by money. Money created through printing isn't worth the paper it's printed on. Constant spending over a period of time devalues your dollar. We may never hit the levels of Germany in the 1920s, but it can very easily head in that direction. And if that happens, we'll wish we were in this recession.

Government is also more inefficient when it comes to giving out money to those in need. A lot of what Obama has done has fantastic broad outlines, but tends to fall short when you get to the details. People still haven't recieved money that need it. Something a charity or a church would have done much more efficiently.

Finally, we're going to take a hit no matter what. Our choice is losing companies that should be put out of business as a whole, or go through periods of high or even hyper inflation. Cushioning the blow now does not fix the real problem. It will only make things worse until finally things go rock bottom. So I say let competition take care of itself. It will hurt now, but in the long run we'll have a stronger more independent economy than we did before. As long as we keep risk in the equation - no federal reserves or organizations that protect companies from the consequences of their actions, there will be growth and maybe a little more wealth spread around.

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