Too Big To Fail

-by Juan Liberale


If you're a careful reader of the comments, you've probably run into Juan Liberale. Juan's just started his own blog and I hope you'll check it out. He just cross-posted this interesting observation that big thinkers should have been doing something about a couple decades ago. Juan:

Too big to fail is a new phrase that is costing American taxpayers dearly. When a company is too big to fail, it is so large that its failure would have a detrimental effect on the US and world economic stability.

The question we must then ask is, why are they allowed to get so god damned big? The answer is that Reagan, Clinton and Bush never met a merger that they didn't love. That is 24 solid years of gluttony gone wild. When companies merge it is almost always bad for labor. It is good for the company on many fronts. Fewer companies equal less competition. [And it's really great for the middlemen and deal makers on Wall Street and K Street.] Being large makes it easier to bribe your favorite congressman to pass laws that enhance your ability to rob people. Growing really big allows you to be a really big bully.

The Treasury should conduct a study of all large corporations and determine which are too big to fail. If you are too big to fail, well then, you are too big to exist. It is time for a little prophylactic action. Let's have some legislation that forces companies 'too big to fail' to break apart into smaller entities that are NOT too big to fail. I would also support legislation requiring them to buy failure insurance (from AIG?) so that, if they wish to remain large, their failure will not be a burden to all of us poor dumb bastards who are forced to bail them out.