If the problem with being Too Big To Fail is if a bank that is TBTF can wreck the entire financial market, then can't we use anti-trust and anti-monopoly laws to break them up? The power to destroy is the power to control. Not that I think anything is going to actually happen to GS, JPMorgan et al. I'm just saying we don't need more laws or new laws, we just need to enforce the ones that we already have.
Apparently, banks are large enough to wreck the whole market (or so the authors of the "rescue" package want the public to think) but they are not large enough to fall under competition laws. Also, enforcing competition laws is more tricky when the government is involved. For example, in the UK the government aquired Northern Rock, imposed aquisition of Halifax on Lloyds TSB and then became a major shareholder in Lloyds TSB/Halifax and Rayal Bank of Scotland via a rescue package. It took 2 years for European courts to rule this is an illegal monopoly. Apparently, the UK government never bothered about competition laws when going ahead with this scheme. It's very similar in the US. The biggest monopoly is not the banks but the government's participation in them.
What about the federal reserve? Thats a monopoly. We should have the option of being paid in gold & silver rather than dollars and also stores should take gold & silver as payment for goods & services. Banks should also store our wealth in gold & silver if we so choose it.
I may have it all wrong but Imo, the gov't creates monopolies, they're easier to regulate, tax and motivate to certain actions plus a monopoly is an easy target to fine for additional revenue. We're sold this bill of goods under the guise of economies of scale, bigger is better. Small business is kaput due to barriers to entry. Look around, see any mom and pop start ups, even medium size business spin off from something else. Hedge funds run business, not some generational throwback who knew the history or grew up in the business. Any family business that is left operating is quaint reminder of what never must be in todays world. One example was a family owned heating oil company, why break balls delivering oil, insuring a truck, etc, when you can just take your money and trade futures and not bother getting your hands dirty. Yea, sure you might lose it all, but ditto on one lawsuit or getting regulated out of business. Sad to say, my tax preparer may be history, he has a small part time business. Appears the state wants to license all preparers and require on going college credits, expenses that are not onerous but a tipping point to throw in the towel. Oh well....