Perils of Gargantuan Banks

Not persuaded by my myriad argument(s) on these pages for breaking up Too Big to Fail (“TBTF”) banks? 

See, “Drug Dealers vs. Bankers:  Top Ten Differences”; “Number of the Week:  $600 Trillion”; “THAT’S Returning to the Private Sector?!?“; “The Scorpion and the Tortoise Defense“; “Who Pardoned Wall Street?”;  “A Financial Gettysburg Address“; and many, many others.

Read George Will’s case for doing just that.

That’s right:  lefty-sympathizing, socialist George Will.  🙂

He writes:

Capitalism ” which is, as Milton Friedman tirelessly insisted, a profit and loss system ” is subverted by TBTF, which socializes losses while leaving profits private. And which enhances the profits of those whose losses it socializes. TBTF is a double moral disaster: It creates moral hazard by encouraging risky behavior, and it delegitimizes capitalism by validating public cynicism about its risk-reward ratios.

–George Will, “Too Big to Maintain?”; The Washington Post (10/12/2012).

Will’s conversion — if you can call it that — now aligns him with former Ronald Reagan Cabinet member George Schultz (“if they’re too big to fail . . . make ’em smaller“); centrist Michigan Senator Carl Levin; and many, many other influential economists, policy wonks, and government experts.   

In fact, with pundits on the left, right, and center in agreement that TBTF poses a mortal threat to our economy and democracy, exactly who’s left defending them?

Unfortunately, it would seem, just the big banks themselves — and their army of (well-paid) proxies including lobbyists, trade groups, politicians, etc.

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.
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