If a company is too big to fail, why did we let it get so big?

[Xipe Totec]

If a company can get so large, that it's failure presents a clear and present danger to the nation, then perhaps it is too big to be allowed to exist.

Isn't this what anti-trust laws are all about?

Isn't this why monopolies need to be broken?

Are there other companies out there that are have become threats to the nation?

Should they be busted up into smaller pieces now?

If we can preemptively invade other countries to neutralize a national security threat, then why should we wait until mega-large companies collapse before taking care of the problem?

Companies that control energy, telecommunications, banking, automobile manufacture, food processing, agriculture, print media...

Just saying...

[Parche]

1. we need Jack Ryan

For that clear and present danger

[wtmusic]

2. Excellent point.

Wow. Kind of sums it up. :thumbsup:

[Mojambo]

3. Cause big daddy wanted another new boat.

Greeeeeeeeeeeeeeeeeeeeeeeeeeeeeeed.

[deadmessengers]

4. Here's the question

How do you establish an objective measure (or set of objective measures) by which a single corporate entity is seen to be too large to exist any longer? Would you look at the number of employees? Annual revenue? Market capitalization? Where is the line drawn? Or, would the decision be made on a case-by-case basis, to be argued over by battalions of lawyers from both the private sector and the government?

Although I certainly agree with the Sanders doctrine - that any company too big to fail is also too big to exist - I think that the legal hurdles involved in effectively passing and then implementing something like that as law might very well be insurmountable.

[Xipe Totec]

5. I think the antitrust laws already covered this

The question is, why haven't they been enforced?

Start with banking...

[Xipe Totec]

9. A more considered response,

If you look at any public company's annual financial statement, one of the things they list is who their largest customers are.

Companies go to great pains to emphasize that they have no customers that account for 10% of their total revenue.

This is a sign of strength and stability because there is no customer so large, that it would put the company at risk, should that customer walk away.

Well then, perhaps, no company should be allowed to control more than 10% of the market in any venue.

This would be a sign of strength and stability for the country because there would be no company so large, that it would put the nation at risk, should that company go under.

[TahitiNut]

14. That used to be the "Hewlett-Packard Rule" ... No customer that's "too big to lose."

Hewlett-Packard once enforced that rule for themselves obsessively. They were adamant that no customer could be enough of their business that the customer could dictate terms.

[AndyA]

18. Why...your post actually makes...sense.

Why do you hate America? :shrug:

Don't you know that bigger is better? Just ask George Bush. (Bush = big ego, no brain.)

:rofl:

[specimenfred1984]

6. Darn you and your ability to think and ask questions!

Just who do you think you are formulating questions that cover a broad rage of topics and stating them clearly? I sentence you to 6 months of watching YouTube and yapping about "fat" people.

[Donnachaidh]

7. Could someone post WHEN the monopoly laws had their teeth pulled?

Seriously -- when exactly was legislation put through to stop monopoly laws from being used? I'd also like to know WHO was behind it in Congress.

Yeah, yeah -- I know Reagan was the big push, but who ELSE was involved.

[Xipe Totec]

10. Dubya pulled them

Right in the middle of busting up Microsoft & RJ Reynolds Tobacco.

One of the first things he did as President.

[Eric J in MN]

19. With regard to financial organizations, The Gramm-Leach-Bliley Act of 1999...

...allowed savings banks, investment banks, and insurance companies to merge with each other:

http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act

[supernova]

8. We need a round of old-fashioned trust-busting

a la Teddy Roosevelt.

"Too Big to Fail" my ass.

They're called Monopolies. And they are supposed to be broken up to allow for competition. Remember competition, you moron capitalists at all costs?

There is no such thing as too big to fail. That is a Myth.

[HamdenRice]

11. It's not illegal to be big; it's illegal to be anticompetitive

The anti-trust laws do not forbid being big; they forbid size or other behavior that makes the markets anti competitive.

Because there are still many banks competing, the argument goes, the anti trust laws didn't apply.

[Xipe Totec]

13. True, but the question is why do we care about competitiveness?

Because lack of competition poses a threat to stability.

Edit to add, what is legal or illegal is what we as a country decide is legal or illegal.

Laws can change, for the good of the nation.

[HamdenRice]

20. I was just stating what is, not what should be

I agree these financial companies were too big and should not have been allowed to get this big.

[Xipe Totec]

21. We're on the same page then!

Peace! :hi:

[Eric J in MN]

15. That's true regarding existing law.

We need new anti-trust laws based on the principle that if a company is so big that the government wouldn't let it fail in the future then it should be broken up now.

[TahitiNut]

12. Exactly. Any company "too big to fail" should be BUSTED UP immediately.

Can you spell Microsoft? Can you spell AT&T? Citibank? You got it.

[Xipe Totec]

22. Microsoft was the first one that came to mind!

That behemoth has done so much harm to the software industry, it isn't funny.

Microsoft has single handedly set the US software industry back two decades.

Google is the first software company to establish an ascendancy since the Microsoft hegemony.

They failed to cut off their oxygen, like they did to Netscape.

[Deja Q]

16. Or it wasn't large enough in the first place. It's also like the IT field...

No skilled laborers, which usually means wages would go up... except they're going down.

[chromotone]

17. That's the "$7,400,000,000,000" question...(nt)