Too big to fail

I've been waiting for CJR's Ryan Chittum to weigh in on the latest mess - and he's re-emerged with a list of questions for the press.

My favorite of the bunch:

4. Why have politicians and regulators let institutions get “too big to fail, and why not put such firms on a diet?

The press should ask why companies whose collapse would threaten economic apocalypse aren’t being slimmed down and split up until they’re not so scary. Instead, we have Bank of America, the nation’s biggest commercial bank, swallowing Merrill Lynch, the second biggest investment bank with nary a peep from the press about whether this is a good idea. B of A was already too big to fail. Now it’s something worse.

Why isn’t anyone writing about slimming these companies down? Bigger is not better here.

Exactly. The government has had to step in to save institutions that have grown to sizes where their every sniff and cough is a matter of (inter)national concern. I would think the government has an interest in ensuring a certain amount of redundancy exists on Wall Street.

We want to get to a point where we say "Oh, your investment bank just imploded? - too bad for you - but another one will spring up to take over your office space tomorrow."

Bank of America getting huger may make Merrill feel better, but I don't see why you and I should feel relieved.

Read the whole list.