Too big to fail
A lot of people are claiming that all of these bailouts are necessary because these companies are "too big to fail" which does not mean what it sounds like it means. It SOUNDS like it is saying these companies are so large and well funded that it is impossible for them to fail, but in reality what they are saying is that they are too large to be allowed to fail because of the economic damage they would cause if they did. But that begs the question: What happened to the Sherman Anti-Trust act? Wasn't the point of the commerce department ruling on mergers and acquisitions to keep companies from becoming too big and too powerful? How is it that so much money and power got concentrated in so few hands? And more importantly, how do we prevent a recurrence of this in the future?
posted by Rorschach at
11/24/2008 12:58:00 PM
2 Comments:
"...how do we prevent a recurrence of this in the future?"
It's easy. Reinstate the Glass-Steagall Act that Clinton repealed in 1999 and handed it over to Bush...yeah, that Act, that kept banks from doing what they did to cause the biggest financial crash in history. Then , we hang Barney Frank who forever pushed this (you can buy a house without a job) theory for 10 years. Then we go after Phil Gramm who put it on the desk. Yes, Phil Gramm, the Georiga Democrat who moved to Texas and became a Republican Gramm.
That is a good start for sure. Heck I can even guess what part of the human anatomy we should hand Barney FROM. but you miss the bigger issue. the whole point of the anti-trust laws were to prevent companies from getting so huge that their impact on the marketplace was controlling. If the bankruptcy of a company threatens to bring the entire market to it's knees, I would suggest that the company was too big under the anti-trust laws. Now i'm not arguing whether the anti-trust laws are right and proper, after all this is supposed to be a free market. But if they are a right and proper use of federal authority, then this should never have been able to happen. Fannie Mae and Freddy Mac and Sallie Mae should never have been allowed to become federal monopolies. Hell they should never have been formed to begin with.
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