In light of the recent JPMorgan Chase $3B trading loss and the unrestrained chaos that was the Facebook IPO, I am republishing a blog post from 3/7/09. Over three years have passed…and it appears no lessons have been learned. What was trenchant then is just as relevant today.
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AIG is saved once, and then resuscitated again, because it is judged “too big to fail.” Billions are pumped into General Motors because it also is “too big to fail.”
I say step back and look at what “too big to fail” should have suggested long before the current financial cliff edge was reached: If it is too big to fail, it is too big to exist.
Capitalism rewards successful innovation and efficiency; saving what has rotted is antithetical. I realize, of course, that by the time AIG was infused, there may have been no choice. GM, on the other hand, Continue reading “Too Big to Fail? Or Too Big to Exist? [Redux]”