BigCliff wrote:Agreed, but while "too big to fail" is the going phrase, "too big to fuck around" seems more apt. While reinstating Glass-Stegall would greatly reduce the chances of these mega-banks being able to put themselves in such a shitty situation, it wouldn't really reduce their size all that much.
If we're really going to talk about putting something in place that keeps them from being "too big to fail", that seems to me like it would be more like the Bell/Standard Oil break-ups of decades ago. I don't know enough about the ramifications of such a move to call it good or bad, but it would seem to fit the anti-"too big to fail" movement better.
The pure ibanks, no, but an entities like citigroup, BoA, or AIG, it would bust apart into several smaller peices. I think goldman needs special treatment, for they are an animal like no other. Your second pp has happened, several times, throughout the past few decades, mostly in the utility industries. It can be done elsewhere, such as auto or retail, but it is a very slippery slope. Reversing the tide of industry consolidation, which was fueled in large part by wholesale outsourcing, could be a very costly endeavor, both to us and our main creditor.