Marketplace

Yikes!!!

Will we start hearing about that ‘giant sucking sound’ again?

Perhaps, since we are pumping all this money into these corporate giants, that we start breaking these companies apart. Giant does not mean better. While they can do many operations more cheaply, it doesn’t translate into savings for the average person (see skyrocketing interest rates and ever increasing bank fees) and the additional security risks. Companies have been merging like mad for the past decade at the peril of consumers. The market needs to rediversify and keep financial operations a little more segregated and allow poorly functioning entities to fail without destroying a whole economy.

Double yikes.

I have to give props to RC for raising the economies of scale issue- I haven’t heard anyone bring that up yet, and we do appear to be taking it on faith that Citigroup and the like are just too big to let burst (rather than, say, just big enough to start breaking down for spares).

But I think the point you make, while excellent, misses the current mark. Sure, consol-o-mania has helped us into this barrel, but unconsolodating won’t necessarily help us out of it. It would be awesome to be able to cut off a tumor that’s not attached to a vital organ- yeah, I’m lookin’ at you, AIG!- but it’s too late for that in the current crisis.

I sure hope Obama has some latent trust busting instincts that he’s just dying to unload on the financial industry come January. Until then, I personally think our best bet is to immediately channel FDR and adopt as our collective crisis mantra: “Create jobs. Create jobs. Create jobs.”