Big business. It isn’t easy to stay “big.”


If one listens to the progressive/statist/altruists one hears that “big business” is a blight on the common man. That is why they demand innumerable regulations to curtail “the power” of “big business.”

In a competitive, price controlled market, the notion that “big business” is a permanent group of massive enterprises controlling everything in our lives is ridiculous. One only need look at the component companies in the Dow Jones Average (the top 30 US industries).

As the Dow Jones Average approaches 20,000 (thank you Mr. Trump) it behooves us to look back at the past 20 years. When we do, we find that it is very difficult for a “big business” to stay “big.” More than half of the Dow “industrials” have been kicked off the “list” in a mere 20 years.

[Source: Today’s Dow is a lot different from just 20 years ago, by Paul R. LaMonica]

Let’s take a walk down memory lane. Not only have the names on the list changed markedly, but many of these business behemoths do not even exist today.

  1. AlliedSignal merged with Honeywell in 1999. The merger did not manage to keep either major business in the Dow Average. It was removed from the Dow in 2008.
  2. Alcoa or Aluminum Company of America was a huge company. Every American with a television knew its name. It got kicked like an aluminum can out of the Dow in 2013. It was replaced by Nike.
  3. AT&T or American Telephone and Telegraph was the nation’s telephone company. But it’s no longer a Dow stock. After the Bell System was “broken up.” AT&T, the original parent company, was ultimately purchased by one of its spinoffs, SBC. SBC renamed itself AT&T and regained a position in the Dow 30. But the Dow hung up on AT&T again in 2015 and replaced it with Apple.
  4. Bethlehem Steel was removed from the Dow in 1997 and went bankrupt in 2001. Needless to say, there are no more steel companies in the Dow. (Footnote)
  5. Eastman Kodak was the premier photographic film company in the world. As a radiologist (we used to take all x-rays on film) one of our biggest expenses was Kodak film. It disappeared from the Dow like a faded photograph in 2004. It also went bankrupt.
  6. It’s almost inconceivable to imagine the Dow without General Motors in it. GM was added to the Dow in 1925, but it was removed in 2009 following its bankruptcy filing and was replaced by Cisco Systems.
  7. Goodyear was famous for its tires and blimp. One saw the Goodyear name flying over every televised football game. It was kicked out of the Dow in 1999.
  8. International Paper has actually been removed from the Dow twice. The most recent time was in 2004, ending a 48-year stay in the index.
  9. Philip Morris, the famous cigarette company, changed its name to Altria in 2004. But Altria’s status as a Dow component went up in smoke in 2008.
  10. Sears, of course, is still around, but is a shell of its former self. It also was kicked out of the Dow in 1999 after a 75-year stay in the index.
  11. Texaco was a huge company and everyone my age remembers the Texaco service station commercials where three attendants would race to your car when you pulled up to the pump. Boy, are those days ever gone. Texaco was removed in 1997. But, Texaco, merged with Chevron, and in that sense stayed in the Dow. But Chevron also, was kicked out before the merger. Afterward, Chevron was added back in 2008.
  12. Union Carbide was bought in 1999 by Dow Chemical. Interestingly and despite having Dow in its name and a ticker symbol of DOW, Dow Chemical is not in the Dow.
  13. Westinghouse Electric merged with TV giant CBS in 1995 and was thusly removed from the Dow.
  14. Many of my younger readers will not remember Woolworth. They probably have never heard of a “five-and-dime store” or a “soda fountain.”  Oh, well. Woolworth was once one of America’s most popular retailers. It closed all its stores in 1997 and was removed from the Dow that year.
  15. AIG, the insurance giant, was added in 2004 and kicked out in 2008 following the financial crisis. It required a massive government bailout to stay afloat.
  16. Kraft (which is now Kraft Heinz) replaced AIG — only to be removed in 2012. Sorry Secretary Kerry (his wife owns it)!
  17. Travelers Group changed its name to Citigroup in 1999 but was unceremoniously kicked out of the Dow in 2009.
  18. Hewlett-Packard and Bank of America were added to the Dow in 1997 and 2008 respectively. And both were shown the Dow door in 2013.

Competition is a powerful force for good. Unneeded over-regulation is a powerful force FOR BAD. And the over-regulators always use the same excuse – big business must be reined in.

Roy Filly

Footnote:

It used to be said, “As United States Steel goes, so goes the country.” United States Steel was both the largest steel company and, simply, the largest company in the world. It no longer exists. The only remnant is the logo on the helmets of the Pittsburg Steelers helmets.

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About Roy Filly

Please read my first blog in which I describe myself and my goals.
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2 Responses to Big business. It isn’t easy to stay “big.”

  1. Flayer says:

    The crony capitalists (not real capitalists) aim to ensure they are never removed from the DOW.

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