Friday, December 23, 2011
Charles Gasparino: Break up the big banks
Chalres Gasparino calls for a break-up of the Too Big Too Fail banks. He’s right. But here are the obstacles preventing such action:
1.) The big banks own Washington. They don’t want to be broken up. Therefore Washington won’t act. Both Democrats and Republicans are at fault here.
2.) A break-up would require empowering government to take action. Can Republicans philosophically bring themselves to admit this? I doubt it. They’ve embraced a quasi-utopian economic notion that the private sector is always perfect and the public sector is always imperfect – and therefore an imperfect government can’t possibly intervene to fix something that’s already theoretically perfect. It would blow their minds – and blow up their perfect ideological world view – to admit this.
So, in the name of keeping government out of the financial markets, we're going to guarantee government intervention in the financial markets on a far vaster scale, i.e. future massive bailouts of Too Big Too Fail banks. ... As I've said before, you can have a little government intervention now, or a lot of government intervention later. It's a simple choice.
Chalres Gasparino calls for a break-up of the Too Big Too Fail banks. He’s right. But here are the obstacles preventing such action:
1.) The big banks own Washington. They don’t want to be broken up. Therefore Washington won’t act. Both Democrats and Republicans are at fault here.
2.) A break-up would require empowering government to take action. Can Republicans philosophically bring themselves to admit this? I doubt it. They’ve embraced a quasi-utopian economic notion that the private sector is always perfect and the public sector is always imperfect – and therefore an imperfect government can’t possibly intervene to fix something that’s already theoretically perfect. It would blow their minds – and blow up their perfect ideological world view – to admit this.
So, in the name of keeping government out of the financial markets, we're going to guarantee government intervention in the financial markets on a far vaster scale, i.e. future massive bailouts of Too Big Too Fail banks. ... As I've said before, you can have a little government intervention now, or a lot of government intervention later. It's a simple choice.
