Today I was thinking about the business impact of recessions. As I flipped through Forbes and Fortune, it seemed to me that, while the headlines weren't trumpeting the news, the sidebars sure seemed to point directly to the great struggle that small business owners are facing.
That leads me to the question: Do recessions actually benefit large corporations?
At first it seemed strange to me that, in the midst of an economic slowdown, you would still find such aggressive support for Republican monetary policy at any level. After all, everyone is losing money, that hurts. But as I go online and read headlines about struggling small and family-owned businesses, as well as the methods that large corporations are using to deal with this, and I wonder if we aren't soon to be headed into a new 80s era of super-consolidation. While it may hurt to lose money, it seems in the long run, the following benefits apply solely to those who are largest and deeply entrenched:
It seems to me that in a time of inflation at home, in the form of food and fuel, as well as rising energy (and consequently, goods) prices, any extended period of this type of economic activity will result in a field ripe for consolidation by the biggest players on the block, while making the barrier of entry (or re-entry) that much more difficult for those who want to come back after the recession has turned around. I'm not sure where to find the exact numbers on this, but has this played out as such in the past? Did the recession of the late 70s lead to the extreme corporate consolidations of the early and mid-80s?
I'm not an economist, nor do I play one on TV. So if someone with some finance or economics experience wants to chime in, I would welcome it.