Cisco's use of pooling is also crushing smaller competitors and leading to a more stagnant technology sector. As a result, many significant innovations are now occurring outside the United States. Pooling also causes most other company's stock prices that do not use this technique those that pay wages to employees who develop new products and services to decline correspondingly. As capital in the form of stock dries up, most companies are forced to take excessive cost-cutting measures including job and benefit reductions, in order to compete for interest in their stock in the capital markets. The result is an accelerating destabilization of the stock market and the American economy.
Mergers can be an effective way to improve business prospects and stimulate the economy.
Mergers using the pooling method, however, lead to a watering down of the company's stock, significant job reductions, inflation due to a lack of competition and a general undermining of the economy. Even Ralph Nader, an icon of consumer protection, has been swept into this financial scandal. Recently Nader disclosed that one-third of his entire investment portfolio is invested in Cisco Systems stock. Nader failed to mention any of the companies he invested in. The SEC is scheduled to outlaw pooling this year.