Reports from the Reagan Administration have then Secretary of the Treasury George Schultz being advised that some company was in trouble and was “too big to fail.” His response was: “make them smaller!” Schultz’s response was correct then and more so today. Unfortunately it went unheeded as these statistics by Jerry O’Driscoll make clear:
… since the early 1970s, the share of banking assets belonging to the five largest banks has grown from 17 percent to 52 percent of the total. These financial institutions expand in size to capture the government support available only to the largest banks.
The unholy relationship between big government and big corporations has mutual advantages for them but not for citizens. As the government has degenerated toward the rule of man instead of the rule of law, these relationships thrived. The US has become a corporatacracy, abandoning much of its free markets heritage.
Nowhere is this unholy alliance more apparent than in the financial industry. The political class is at least as smart as bank-robber Willie Sutton. Accordingly, they developed