Mar 24 2009
When is BIG just TOO BIG?
I am not an economist, or accountant, or banker or financier, financial analyst or securities analyst. Those professions get paid for making decisions (or at least recommendations) that involve money–lots and lots of money.
When I ask the question of “Bigness” being “too big,” I am coming from a position of ignorance. I saw an article today wherein a U.S. government official has stated something to the effect that:
AIG is a globally interconnected colossus, with 74 million customers worldwide and operations in more than 130 countries. The government decided it was simply too big to let fail.
There are CORPORATIONS with assets and annual revenues that are bigger than the gross domestic product of some COUNTRIES!
A financial crisis in a small country can be bailed out more easily than these huge “conglomerates.”
I don’t know a great deal about American history, but there were so many problems with monopolies during the early years of the Industrial Revolution, I thought the U.S. Government had put measures in place to control these “giants.”
I think the problem may now be that the “giants” have become so BIG and so POWERFUL that the CEOs or Presidents wield more power in the World than many–(yes MANY)–government leaders. Corporate CEOs fly around the World in private jets that put many a country’s elected leaders to shame. Corporate CEO’s and other top officials earn salaries (oh yes, and bonuses too) that FAR exceed the incomes of all but the most corrupt World dictators.
I just hope it isn’t TOO late to put the Brakes on and exert some Control over these “TOO-BIG-for-their-own-good” corporations.
SPIDER superstitions:
Spider Webs can be seen as traps that ensnare people, like flies that become stuck fast. Spiders in history have often represented human fragility as well as enticement for evil. In Africa spiders are often associated with tricksters.
(In all fairness to the world’s spiders, most spider superstition is actually favorable and they are often associated with good luck.)
I agree, good article here. Too big to fail = too big period.