Too Big to Fail Viewing Guide Key
- The story of the East India Company highlights how easy it is to divert public resources for private gain.
- It was East India Company tea that was thrown into the harbor at Boston.
- Now, it might be too much of an exaggeration to say that the East India Company's monopoly caused the American Revolution, but it was definitely a factor.
- Lobbying pays very well. And not just for the lobbyists. The real payoffs go to the corporations they represent.
- But now almost 40% of the nation’s corn crop goes into making ethanol, which has driven the price of corn way up.
- It makes corn farmers and processors happy because it gives them a guaranteed profit. But all of us have to pay more for foods that use corn, especially meat and poultry.
- This is Adam Smith’s key insight: Competition is not a way of giving power to companies. It’s a way of giving us power over them.
Read the entire passage first. Then fill in the blanks with words from the table above:
Eighteenth-century ____________ didn’t have cars or buses, but it was a huge, vibrant ____________________; and the center of important __________________ debates. The problems of Smith’s day were very similar to ours: poverty and unemployment, political pork, foreign conflict, runaway spending, and a burgeoning ________________ debt. Some of that debt can be blamed on the monopolistic East India Company. The company had its own army and navy and ________________ ships, and accounted for much of the world’s __________. The company even minted its own coins. But the East India Company was not very ____________________, in part because of its military __________________ in India. As a result, the British government stepped in to help. The British government allowed the company to sell tea to the American ________________ at a lower tax rate than local merchants could. This led to the Boston Tea Party. Governments still give breaks to some businesses, usually the ones that __________ government officials for help or protection from competitors. Sometimes governments give companies tax breaks, other times they help them by limiting ______________________. Often, government claims these businesses are too big to ________. But helping certain businesses is done at the expense of other businesses and __________________. This is called crony ____________________. Nearly 250 years ago, ________ __________ pointed out the problems that resulted from such behavior. Yet today, the behavior continues.
- What was the most important lesson you learned after watching this video?