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Will Uncle Sam Expand “Too Big to Fail?”

Posted by Larry Doyle on February 20, 2013 9:45 AM |

There is not even one credible individual in the world today who would believe that we do not still operate under a “too big to fail” model for our banking industry.

We now know that “too big to fail”also means “too big to regulate” and “too big to prosecute.” Free market capitalism is dying a slow and steady death in the process.

Might we ever get out from under the heavy burden of this model? We can only hope. Yet I awaken this morning and vomited my coffee as I read in the WSJ,

Should the government backstop even more of the financial system than it already does?

Sure, if you love a mix of crony capitalism and socialism, wave it in, right? 

Who is running this up the flagpole? Must be some crackpot down and out and pissed off at America, right? Gotta be. Let’s navigate and serve this knucklehead a healthy dose of ‘sense on cents’. So who is it and to whom might he be spreading his crony socialist propaganda?

Rut – ro….the “too big to fail, regulate, prosecute” mantra is viewed as . . .

 . . . a possibility being debated within regulatory circles in regard to nonbank financing activity and was recently raised by the head of the Federal Reserve Bank of New York.

Folks, here we go.

The mere fact that the head of the most powerful branch of the Federal Reserve and his cohorts within the financial regulatory system would view an expansion of the “tbtf” model as even a possibility is an indication of a number of very troubling realities including:

1. “Too big to fail” defines our current banking system.

2. The Federal Reserve is not only running our banking system but in turn our country.

3. Free market capitalism is fading.

4. The power of crony capitalism is becoming more deeply ingrained.

5. Uncle Sam is gaining power and private enterprise is losing power.

6. The American dream suffers under the “too big to fail” model and will continue to suffer until that model is DEAD AND BURIED for good.

New York Fed President William Dudley may believe that some degree of short term gains can be produced by expanding Uncel Sam’s backstop. He is wrong.

We need to embrace free market capitalism in conjunction with robust (that does not mean excessive folks) regulation and aggressive regulators so the cronyism is exorcised.

Capitalism did not fail. Our government failed by allowing corrupt cronyism to infiltrate our economy. Get rid of the cronyism, provide proper protection of private capital, prosecute the miscreants appropriately and WATCH AMERICA SOAR.

I guess I should now go back and clean up the kitchen floor.

Navigate accordingly.

Larry Doyle

Isn’t  it time or overtime to subscribe to all my work via e-mail, an RSS feed, on Twitter or Facebook.

I have no business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

  • Peter Scannell
  • Ed Pefferman

    Wrong again Larry,
    Too Big to Fail is what happens to Capitalismm when
    left to self-regulate. It was Phil Gramm that lead that
    charge. The previous twenty years was nothing but
    mergers and acquisitions on Wall Street. Unfettered
    capitalism at it’s best.

    You have a very selective memory Larry

    Ed

    • LD

      Ed,

      We are in agreement here. To whom do you think the self-regulatory organizations report? The SEC.

      To whom does the SEC report?

      Congress.

      Ed and Larry agree.

      Wahoo!!

  • Russ

    Amen, Amen, Amen.

  • Ed Pefferman

    Larry.
    The trouble with blaming “Congress” which couldn’t
    “control” a light switch, is that the Bank lobyists are
    paying for their reelection.

    Ed

    • LD

      Ed,

      We agree again. That lobbyist $$ is all part and parcel of the crony Wall Street-Washington Incest I have railed about for so long.

      We agree again.

      I knew I liked you.

  • GMA

    So, Larry…please tell us there are some other people out there who have your understanding and a bit of political clout and are concerned about this state of affairs. Thank you for your efforts to shed some light on the cronyism…now, what can be done about it?

    • LD

      GMA,

      Regrettably the few politicos who may care about these topics are drowned out by the multitude who do not get it or do not care or are in the tank.

      I welcome sharing with you and others that I am working on a book to be released later this year. I hope that is able to make a necessary splash and create a stir on a host of these topics.

      • Obsvr-1

        LD,

        wahoo … I can’t wait to read it … I hope you hit the NY Best Sellers List …

        perhaps you should Title the book “Killing Capitalism” and have Bill O’Reilly co-author so you can take advantage of his national stage… just thinking of marketing.

  • Eddie

    Amen, government is too big, the solution to every little speedbump is for it to grow. There is no difference democrats or republicans, branches of states or federal, they only ever resolve to intervene further.

    Just say no to big government. Gary Johnson got 1.1mm votes in the last election, a lot of people are getting the memo…

  • MG

    Not socialism but corporatism, facism lite if you will.

    • LD

      Interesting point you make.

      I would counter that the cronyism is the “corporatism or fascism-lite as you might define it, while the socialism comes in with all the government redistribution programs on the other side of the coin.

      Whether it is a mix of cronyism, corporatism, fascism-lite, and/or socialism, I will tell you what it is not . . . and that is free-market capitalism.

      Thanks for your thoughtful insight.

      • Obsvr-1

        LD,

        I add the adjective competitive to the phrase so it becomes

        Competitive Free Market Capitalism

        as we can not achieve the capitalism ideal without competition (ie. TBTF is a result of monopoly and oligarchy)






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