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26 Oct 2009 01:36 pm
Too Big To Fail Is Too Big
Robert Reich is momentarily in agreement with Alan Greenspan:
The Street obviously detests the notion that its behemoths should be
broken up. That's why the idea isn't even on the table. But it should
be. No important public interest is served by allowing giant banks to
grow too big to fail. Winding them down after they get into trouble is
no answer. By then the damage will already have been done.
Whether
it's using the antitrust laws or enacting a new Glass-Steagall Act, the
Wall Street giants should be split up -- and soon.
It seems to me that this should not be an ideological matter. It's an empirical one: how do we prevent Wall Street from repeating its recklessness of the past decade? How do we ensure that no single entity can hold the rest of us to ransom as these banks did? If Obama's reform measures are milque-toast, then he will have missed a critical moment to help capitalism help itself.
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