It's pretty simple, the larger government... or any institution or group for that matter gets... the less accountable it becomes.

Government is one of the few institutions that are directly and publicly accountable.

If a private company acts unethically who holds them accountable? Is it their consumers (who really just want the lowest price/best product)? Is it their shareholders (who really just want the greatest profits)?

If a government acts unethically they are held accountable at the next election.

Except when they aren't.  Which is pretty much all the time.

Italy, Greece and Japan are all pretty good examples of countries with longstanding well known corruption that went rampant.  Russia is another great example.

Or hell, the United States.  20% or less aproval ratings for congress... 85-90% retention rates.  They can do whatever they want and not be held accoutnable.

Drone strikes that kill more civilians then actual terrorist targets, nobody really cares.

Congress insider trading for god knows how long... a lot of people just assume that most if not all of congress is in the pockets of some special interest or another... Ie corruption... yet, nothing.

Companies actually tend to be influenced MORE by actual public opinion... not happy with Nike, there are plenty of other shoe companys out there.

Not happy with your political party?  Your lucky if you have two other shitty choices out there who are for the same things... live in a place like most places in the US where lines are gerrymandered to assure one party wins?   Your representiative can do whatever the hell he wants and get elected, not unless someone credible from the same party runs against him in a primary.

Outside which.

Lets say a corporation can't be held accountable by it's customers because all they want is the cheapest/best product.

How exactly does government solve that problem? Those customers are the EXACT same people voting politicians into office.

So the people would be against said regulations to hold them in check right?

So then, due to this oversite we have, those polticians get remvoed?

Not so much worried about corporations as much as banks using everyone's money, taking risky  bets and betting more money then they even have. So when they take these risky bets and win it big, they keep the money and all good but when they lose and lose big they did. They drive down the whole ecconomy and us tax payers need to bail them out. It's called removal of glass steagal. It worked for over 50 years to stop great depressions and massive collapse. Look chase just proved it. If nothing is down we will collapse again. Regulation is a way for them to not gamble all our money away on bad wall st investments.

I don't quite see the connnection with the topic at hand....

I'd suggest reading about the great depression... the great depression wasn't caused by speculation by banks. 

Additionally, Europe has never had a Glass-Steagal act... in fact Clinton repealed Glass Steagal to better compete with Europeon banks as international investment rose

Worth noting of course.  Europe has also gone 50 years without a "Great Depression."

So to claim Glass Steagal is what stopped it is a lot like saying that a specific rock repels tiger attacks.

Sure banks should of been allowed to fail most recently, but it's not worth rewriting history for... and the last financial crisis would of happened with glass stegal in place.

All the first banks that collapsed had no connnection to commercial banks.

Worth noting from a more liberal economist. (who wants glass Steagal back but realizes it had no ability to stop what happened, even under liberal definitions of the crisis.)

http://dealbook.nytimes.com/2012/05/21/reinstating-an-old-rule-is-not-a-cure-for-crisis/

It seems to happen that the larger the scale is, the less relevant the individual decisions of individeuals are.  With markets, you get bubbles, and bad practies become norms.  The markets get so complicated, and with derivatives no one understands them, that you have a hard time for oversight.  With government, the regulations get more and more complex, .  And companies and industries now run large scale PR campaigns to spin the issue their way (fracking is one example of this, as was offshore drilling.  Yes, had issues with BP mucking up, and then the push to drill, baby, drill goes on again).  

The thing about markets, is that people will buy the cheapest item, when possible.  People are driven by this.  The end result is an effect you will see conservatives like Lou Dobbs rail against, which is the demise of American jobs.  You end up also with Walmart still being huge, and as much as people have issue with them, they still roll on.  It took actually the political route using zoning, to get Walmart to reconsider.

The reality seems to be that it isn't markets alone which can solve all answers, but an involved public that can tamper excesses and having government oversight.  But then, there is the issue with government on the federal level that needs to be figured out.  Maybe having many more representatives would fix things.  But it seems now that even the political realm is nothing more than just another market where money is spent and public opinion is bought.

And hating congress seems to be a fun thing to do.  It doesn't really do anything.  It seems people are happy with how their local guy milks it, but they don't like the system as a whole.

I'd agree with larger scale in the terms of goverments and individual companies...

not in terms of an overall market though.

The problem with current regulations... is they invariably favor larger companies, allowing them to get bigger, by stifling competition and making smaller companies and startup companies harder to get in.

Regulations are essentially a "flat tax."

As someone with consumer psychology expierence, I STRONGLY disagree that people will always by the cheapest item by the way... there are far to many cases of it not being true.  Rarely do comapnies which produce goods try to "race to the bottom" vs their competitors for price.

Afterall, why does Coke sell so much better then generic Soda? etc.

The real issue i'd say when it comes to "social justice issues" is one of two things.

A) People care a lot less about moral outrage when the cost to them to prevent it is clearly demonstrated.

B) People feel ok taking advantage of said moral outrage because afterall it's "the government" that should be handling the problem, not them... shifting responsibility away from there own actions.  Understandable since it's pretty hard to claim anyone living in a first world country is living a "moral" life no matter how good they feel about themselves.

An interesting thing about Walmart is that is adopted a strategy of the lowest costs irregardless of everything else.  Sam Walton, when he was around, had low prices factored in with everything else.  Now Walmart decides to do low costs as its only factor.  Usually what happens in retail is that businesses start out on the low end and work their way up the food chain.  

I think the default to "let the government do it" comes from the government ending up is the solver of last resort, trying to manage the collective wishes of the public, because politicians get elected by getting votes.  End result, because of the relative insignificance of one person on all levels, is the problems end up in a collective pool, away from everyone.  You get more and more negative externalities built up, that no one can pinpoint anywhere.  It ends up systemic, and everyone seems powerless.  They expect that the government will make fair rules and enforce.  The thing is that the money on top lobbies to tip it in their favor.

A way to connect what I shared with the original post is that income inequality comes about from systemic issues that no one person is responsible for.  Yes, income goes up, but the system, as a byproduct of what happens in a country, results in the top knowing how the system works and also tweaking it in their favor.  The guy on the bottom gets subject to the whims of the fallout of globalization and ends on the short end of the stick.  And things get more and more out of hand.  Of course, in this, a few bucks will be thrown in by the powers that be to end up making people think it is fair, or chase after this rabbit or that, with issues that have some impact (like illegal immigration) ending up getting blown WAY out of proportions to distract.

I believe exploiting moral outrage is how politicians get elected, but they don't want to do anything about it really, just get reelected.

Rubio's comment here on immigration actually goes into how the game seems to work:

http://www.cnn.com/video/?hpt=hp_t2#/video/us/2012/05/24/lopez-marco-rubio-immigration.cnn

If that is true, but what you see on the GOP side is railing against abortion and gay marriage.  Idea isn't to affect change but "feel their pain".  I doubt the GOP really wants to get rid of abortion, because it gets votes.

I don't see Republicans as that smart.   I think they would get rid of abortion if they could.  I think the Democrats work that game on social issues, while the republicans do on economic issues.  Afterall republcians seem to only push abortion measures when they know they can win.  Democrats only push gay rights or women's rights issues when they know they will lose. (Or republicans will beat them to the punch in overturning a law.)

Democrats will however go along with dumb economic plans that are an issue (see healthcare "reform") and republicans will change the social issues.  (See all the ways they go out of there way to make abortion harder.)

Well some economic issues i should say.

Also, i'd disagree that income inequality is caused by the top knowing how the economy works and tweaking it to it's favor.  Actually, the group of people know as "The top" is VERY dynamic.  People make great forutnes and lose great fortunes.

What causes income inequality is simpler then that.  Expendable income.   The more money you have that you don't need, the more that can be invested in risky but likely to pay off ventures that are likely to pay off big.

Your average investor is saving up for their retirement so they invest in safe bets, something that's 85-90% to succeed and pay a sigle digit % per year.

Someone with expendable income?  They can bet on something with 40-70% to succeed but he chance to pay 20% or more.  If they lose, it was just expendable money anyway.  The error is that society only focuses on those who succeed and sees it as unfair... not focusing on those who fail.

Said group gets bigger and gets a "bigger share of the pie" because they're the ones who invested in the programs that created the extra wealth.   Not really a way to change that.  Not really sure such a thing should be changed.  Investors and those who ran the buisness naturally should be the ones to profit for creating the wealth.