With the failure of General Growth Properties(GGP) “sound business model;” We are faced once again with a huge company falling, because it was over capitalized. How many small businesses were driven out of business, because this company had millions, no wait, billions of dollars behind it? For decades we have allowed banks to make loans to companies like this and ignore smaller companies. This has caused a slow degrading of; working conditions to employees, and customer service to consumers. Are we supposed to feel sorry for these people? Is our government going to once again bail these heartless millionaires out? If they do, no small businesses can take their place.
For decades many of us have been pointing out the vulnerability of huge malls and the destruction they do to main street USA. The ironic thing about this is; the same greedy fools whole funded the unlimited expansion, are the ones who are going to cause them to collapse. They stand to lose billions of dollars, for not being long sited enough to change their payout polices, for the bad loans they made. Perhaps there is justice in the world after all.
There are very few better examples of what went wrong with out economy then GGP. Lazy Hedge fund mangers realized it is far easier to fund one large company and make money off of it, than it is to fund several small businesses. After all if you can write one large check to GGP, you can invest your entire fund by lunch time. Then you get to spend the afternoon at the golf course, with the guys you just made millionaires. That is so much easier than spending all day at the office, researching several companies, and reading boring business plans. Slowly this attitude has caused our best companies to fall, under the weight of competition from huge companies, with millions of dollars in advertising budgets, coupled with the ability to buy goods in quantities so large, they can sell them cheaper than the small companies can buy them. For decades we have heard, from the high priests of market forces, how this is just the way the free market system works. Now that the shoe is on the other foot how long will it be before they start begging for government intervention? I am actuality wondering of I can complete this blog before they do.
When you look at the history of most large businesses, you will eventually find a small business. That small business received funding from a bank, or some other source. Over the last few decades we have forgotten this. Those small businesses that might have grown to become the pillars of capitalism are abandoned so the huge companies can get bigger. Many people at the local level have fought this attitude to no avail. Along the way the people fighting for common sense have been labeled everything from idealistic liberals to uneducated fools. Unfortunately us idealistic liberals were right. Now we are trapped under a collapsing economy. The millions of tiny little companies, that have saved us in the past, are no longer there. Those little companies were deemed to be a drag on prosperity. Who were they to think they could hire five or ten employees and compete with the Macy’s or the Dayton’s? Lets all pray we can find a way to bring back those little companies. While we are at it maybe we can start replacing those manufacturing jobs nobody wanted.