theobannion

A Company Is Too Big to Fail? Make It Smaller

Dear Thadeus,

As the oldest man in the world (woke up feeling that way today - gotta replace that mattress) I reluctantly agree w/ you both, which I suppose is technically impossible because you disagree on size. Well, my wife cast the final vote: size matters.

For example, how would more regulation have changed things at GM, GE, Chrysler, Fanny & Freddie? What would our corrupt government have regulated? The kinds of cars they produce? Who would have stood still for that? They were all - as well as those companies you mentioned + XOM + IBM + T & others - just too big to be allowed to fail. And their failure would have compounded the problems more of their workers than of their executive suites & all the other Champagne Shirleys milking those companies for all they were worth. And now there's no milk left! (I guess I should be talking about geese & golden eggs, a favorite w/ right wing apologists, but somehow I got going w/ cows.)

And with regard to regulation in a system in which Government & business were partners before FDR & again partners after the dismantling of the New Deal - which dealt very specifically with the problem of size as well as control of the monopolies that needed to be monopolies - the regulators can't be trusted! Look at the FDA: their top bureaucrats function w/ one eye on their paper work (they have nothing to do w/ test tubes; that's all outsourced to private companies BY THOSE APPLYING FOR APPROVALS! If they don't get the results they want, they're free to apply to another "independent" lab; [guess which labs get the most business]), the other on their careers, & the third on what position they'll fill in the very companies they're paid to regulate, once they retire! No wonder there are so many dangerous drugs being prescribed that function in the system no one knows how. Just read the flyers that comes with the prescriptions.

The whole system has to be restructured. And there really isn't any way to do that short of a revolution. And we, as a people, are no more revolutionary today than we were in the 1770's. I think as most of us know, the American Revolution was not a majority uprising. Tories, their sympathizers, & those who sought accomodation with King George rather than rebellion, far outnumbered the revolutionaries. Happily for the first two groups, there was Canada, but they didn't escape expropriation by the "revolutionary riff-raff."

Maybe some very serious demonstrations by the disenchanted will help move the machine.

Best,
SOB.


On Feb 11 08:55 AM Thadeus Thornton III wrote:

> @ Filonov
> Interesting perspective. So then, if GE,GM, and Boeing are "too big",
> what about foreign companies such as Toyota, Honda, Fuji Heavy Industries,
> etc? Try this. Maybe it's not the size but related to one of your
> other statements:
> "--> I am usually not a big fan of regulation. In most cases it's
> wrong. But in some cases we need regulation and in some cases we
> need to increase it, otherwise we have situation like now <---"<br/>
>
> You look young enough to not have been around in the 1950's or even
> 1960's. That era had it's problems too, but growth and prosperity
> were the norm, even with occasional inflation. The thing that we
> had then was much more regulation. Look what deregulation has done
> for the airline industry, energy business (oil), as well as Wall
> ST. and banking/finance/invest... businesses.
> We even have problems with bacterial toxins in our food ( peanut
> butter) because FDA manpower and regulations were reduced a great
> deal starting mainly in about 1980. This continued over several administrations
> over the years. Indeed, look at where it got us. It is usually businesses
> that are shady or trying to be unscrupulously opportunistic to maximize
> their in-pocket profits that are concerned with regulations. With
> no too little ( like now) or no regulations society pays a much heavier
> toll later. Unfortunately , a portion of mankind is always unscrupulous,
> greedy, shady, or worse. Throw in garden variety stupidity and ignorance
> and regulations are needed. Much more so then we have now for sure
> IMO.