rh13

Are Some Companies Too Big to Let Fail?

The writer was right to admit the limitations of his analysis. I am afraid, though, that the limitations are even more serious than he appreciated.
Certainly when a big company fails there is some pain. The impact on the government is not the worst of it. The impact on the lives of the employees is far greater and more personal.
Nevertheless, failure of companies (and contraction of companies) plays such an important part in the welfare of us all that we cannot afford to prevent it. When companies face failure, there are reasons for it. It happens because they are inefficient or ineffective. They are not getting the goods and services to people at prices people want to pay. Preventing their failure preserves inefficiency and ineffectiveness.
If we had done enough to prevent failure of stagecoach companies, we would never have had trains and planes.
What if Chrysler had failed? What would have happened? Chrysler customers would have bought cars and trucks from other companies. Displaced Chrysler workers would have found work in other companies, not necessarily car companies. Other companies would have bought the usable assets of Chrysler and put them to use. That is what happens when companies fail.
There have been more than a thousand car manufacturers in the U.S. All but a few failed, and the cars today are much better.