Dallasfed scores one!

**SmokenScion** · 03-21-12, 05:05 PM

Dallas Fed Calls For Breakup Of Big Banks

TBTF: A Perversion of Capitalism

A n unfortunate side effect of the government’s massive aid to TBTF banks has been an erosion of faith in American capitalism. Ordinary workers and consumers who might usually thank capitalism for their higher living standards have seen a perverse side of the system, where they see that normal rules of markets don’t apply to the rich, powerful and well-connected.

Here are some ways TBTF has violated basic tenets of a capitalist system:

Capitalism requires the freedom to succeed and the freedom to fail.
Hard work and good decisions should be rewarded. Perhaps more important, bad decisions should lead to failure openly and publicly. Economist Allan Meltzer put it this way:“Capitalism without failure is like religion without sin.”

Capitalism requires government to enforce the rule of law. This requires maintaining a level playing field.The privatization of profits and socialization of losses is completely unacceptable. TBTF undermines equal treatment, reinforcing the perception of a system tilted in favor of the rich and powerful.

Capitalism requires businesses and individuals be held accountable for the consequences of their actions. Accountability is a key ingredient for maintaining public faith in the economic system.The perception--and the reality—is that virtually nobody has been punished or held accountable for their roles in the financial crisis.

Read more:

They're all Perverts! I told you!

**AetheLove** · 03-21-12, 06:21 PM

Thanks for that link.

The chart at the end is a little weak. The proportions are real (at least, I have no reason to doubt them), but the story is missing. For example, I wonder how much shift in those pie-slices happened during the S&L crisis.

A lot of things happened between 1970 and 2010. A stacked-graphic might have been more useful.

Even so, good to hear this part of the story getting more press.

Cheers,

AetheLove