Phil for Humanity Phil for Humanity
A Guide for the Survival of Humankind and Helping the World, Society, and Yourself.

Too Big to Fail is Too Big to Exist

We have been hearing a lot lately about companies being "too big to fail". Well, if the government believes that a particular company is too big to fail, then what the government is really saying is that the company is too important to be allowed to go into bankruptcy. Letting any of these mega-companies go bankrupt may cause an unnecessary collapse or destabilize the supposedly free market. As a result, the government gives these almost collapsing companies a lot of money to stay operational to promote the continued stability of the entire country and possibly the world.

For the sake of future stability, it would be safer if these too big to fail companies were broken into smaller companies that the government could allow some of these future smaller companies to go bankrupt without possibly endangering the health of the entire nation. It is common sense to not allow monopolies have a strangle hold on the free market; so with similar logic, it is also common sense to not allow a single company to be so large and important that is can become dangerous for the entire nation and even world if the company becomes bankrupt.

Even though the logic for this argument is very straightforward, politicians are basically refusing to force these mega-corporations to break up into several smaller companies. I believe this is because companies and their lobbyists now control most of economic and political policies of this nation, and these companies do not have any incentive to change if the government is willing to support them with corporate socialism when they need help. Only if citizens, in very large numbers, demand change will the government possibly make any changes.

by Phil for Humanity
on 07/17/2010

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