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The liquidity crisis during the Great Depression shows a very strong argument why your claims are not just uneducated but ridiculous.
How exactly? My assertation was that, had banks (Bank of America specifically) under the direction of the Feds, not bought the toxic assets of other failed companies (at more than market value), they would not have been in a position that required them to take bailout money. Why would we want to throw taxpayer money at bad business models and encourage banks to be reckless simply because we've deemed them 'too big to fail.' And furthermore, the global bank crisis of the 1930's wouldn't have been so bad had we not enacted the Smoot-Hawley act, which crippled trade between the United States and other nations, and precipitated an international run on banks.
The Gov did the same thing ... sort of ... with Bell (AT&T) .. years back, thus creating a bunch of baby bells all over the place.
Companies, whether they be banks or not, should never be allowed to become so large and so intertwined that their failure would mean world monitary collapse ..
This whole business smells a bit like the Glass/Steagall Act to me ... and that's a good thing.
The Gov did the same thing ... sort of ... with Bell (AT&T) .. years back, thus creating a bunch of baby bells all over the place.
And that worked well until the Bell's convinced the Gov, that they didn't need the oversite and regulations. And now we are back to one major phone company (the former SBC now ATT)
Of course the head ringmaster of the merging of the bells is now on the New GM board.
Perhaps one of the reasons Texas isn't foundering like many other states is because, unless it's changed, banks have to be independent and don't have branches.
Too big to fail is too big and powerful by far!
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