03-27-2009, 10:05 PM
Quote:I just don't like the sound of Congressmen saying things like, "We need to do something about these corporations that are too big to fail".
Like what? Make them smaller? That way, only other nations will have the big corporations. Yeah, that will show them! Well, just trade "too big to fail" for "too small to succeed".
The thesis being that market power is an essential part of their business model? Or that the optimal cost-efficient size for a financial corporation is such that its collapse would bring down large chunks of the real economy with it?
If the first is true, I'm not sure it's in society's interest to have them that large anyway. Market power in the hands of corporations is basically monopolistic. If the second is true, then countries have to weigh the benefits against the risks, and I'm not sure that calculation is particularly obvious. Did allowing financial corporations to grow to the size they did really help out the US, given the enormous impact their collapse has had?
I'm fairly certain there's plenty of room for competitive businesses in between "too big to fail" and "too small to succeed".
-Jester