Too Big to Fail

Robert Reich points out the obvious result of this crisis of “too-big-to-fail” institutions:

Maybe the biggest irony today is that Washington policymakers who are funneling taxpayer dollars to these too-big-to-fail companies are simultaneously pushing them to consolidate into even bigger companies. They’ve prodded Bank of America to take over Merrill-Lynch and Countrywide. JP Morgan to acquire Washington Mutual and Bear Stearns. And now they’re urging General Motors to absorb Chrysler.

So we’re ending up with even bigger giants, with even more power over the economy and politics, subsidized by taxpayers, and guaranteed never to fail because they’re just … too big.

Reich echoes the common sense idea that has been articulated all over the United States – if they’re too big to fail, they’re too big to exist. Perhaps that should be another criteria to judge whether a monopoly should be broken up or not – whether a company is so large that any of it’s internal problems would threaten te entire financial system.

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