isn't "too big too fail" by definition an antitrust violation?

i'm not an antitrust expert (not too many people truly are, actually), and i believe the proper antitrust term is something like "excessive market power".

but how can you be "too big to fail", while still having merely acceptable market power? the arguments for bailing out the big banks were all about the disastrous knock-on effects, meaning that the remaining market was incapable of adequately replacing the failing bank -- leaving the failing bank in a position of excessive market power.

now, that power may or may not mean the power to extract unreasonable profits. perhaps that would normally apply only in good times. in bad times, perhaps they lose some of that power (maybe) but they obviously still have the power to screw over many constituents and innocent bystanders.


seems to me any company that asks for or accepts a bailout is admitting to being in violation of antitrust laws (at least the way they OUGHT to be written, i can't speak to the way they're ACTUALLY written). even if companies had a bailouot foisted on them unwillingly, the government's actions speak strongly to the unacceptable power of that entity.


phase 1: bailout the company to stabilize it
phase 2: break it up into "small enough to fail" entities.
phase 3: monitor and regulate to prevent companies from becoming "too big to fail".

finally, on the off chance that some company (inevitably) slips through the cracks and does need a bailout, start a bailout fund when times are GOOD so that the bailout is PREPAID by the companies who will eventually benefit, rather than the taxpayers.

That bad medicine from long ago . HURT AMERICA!

Geez, do you want us to turn into Russia?

:evilgrin:

EDIT: But there should be some additions to our laws, outlawing "too big to fail".

Although for the last 12 years, with the erasure of boundaries, the banks are starting to look more like non-manufacturing vertical trusts.

Also, our "too big to fail" institutions are about the same size as those in other countries, and it is a global market.

Without big institutions, we could not compete.

Besides, the Federal Reserv and US Treasury are also in the too big to fail category, and therefore also have to be monitored for financial prudence and soundness.

and the fact that other companies might have big monopolies, trusts, or "too big to fail" companies doesn't mean we smaller u.s. companies can't compete -- size isn't everything -- but to the extent it is, wouldn't it be better to negotiate and/or legislate away other coutries' unfair advantage based on their unfair willingness to permit such companies?

i have no problem with the idea of greater transparancy as to the fiscal soundness of the government.

It's hard to make Federal laws that are appropriate for everything, everywhere.

Regional needs are different and should be funded differently.

The government created the corporate monsters with federal funding. Nobody buys as big as the government. A economy the served the needs of the public would look entirely different than our current model, which serves the needs of the biggest customers, the federal government.