Brokerages Violated Public Trust: We Must Rein in Large Companies
The US government is too lax when it comes to regulating large companies. Perhaps this is due to the bargaining power large companies have when it comes to lobbying politicians, but it seems obvious that the American government is for some reason very trusting of large corporations. It continuously happens over and over again where a large company commits a violation of trust and nothing is done to punish or reign in the company from committing another large unsavory mistake. This time, several companies that operate retail brokerages violated public trust by preventing people from buying stock in specific companies, including GameStop.
It’s not surprising that the United States has yet to take any serious actions against the companies that violated the trust of the American public. In fact, there have been several examples of the American government doing nothing to reign in large companies. One of the most notable examples is the US’ dealings with Facebook. During 2018, it came out that the firm Cambridge Analytica had obtained the data of over 50 million Facebook users without their consent. Many people were outraged when this news broke, including regulators and Facebook users. Politicians hauled Facebook’s CEO, Mark Zuckerberg, into congress to testify before the Senate and House of Representatives, answering a host of questions about disinformation and fake news, user privacy, and potentially monopolistic practices. However, that was it. Policy makers simply brought Zuckerberg into Congress, asked him questions, and took no further action to enact regulations that would restrain Facebook.
What’s more, the United States continues to decrease taxes for corporations while leaving regular everyday people out in the dust. Under President Trump, the corporate tax rate was cut from 35 percent to 21 percent after the passage of the Tax Cuts and Jobs Act of 2017 (TCJA). Of course when passing the TCJA the Trump administration claimed that the economic benefits given to companies would trickle down to American households, but these benefits have yet to be seen and may never be seen. Trickle down economics has been researched extensively and the research shows that trickle down economics does not work. This means that instead of helping Americans, the United States simply gave a tax break to corporations. Research even shows that these tax breaks lead to increased inequality without having “any significant effect on economic growth and unemployment.”
As mentioned earlier, many corporations decided to not allow people to invest in certain stocks. Yet another example of the power big companies have in the United States. After examining the track record the American government has with large companies, it’s likely that the United States will not really do anything about this situation. Sure, they may bring some people into congress for questioning but that’s about all that will happen.
What really needs to happen is systemic change. Corporations are seen as too important in America while citizens are seen as not important enough. Perhaps giving corporations a higher sense of importance than actual people is due to American companies’ relations with politicians and the fact that American companies fund these politicians. Isn’t an organization providing funds to the very same people that are supposed to regulate it a conflict of interest? We must prepare a better political economic system than the current system that we have if we are going to prevent inequality from growing. Inequality grew at a rate of 20 percent between 1980 and 2016 and will continue to grow if Americans allow politicians to be under the sway of large corporations.
