If they’re too big to fail, they’re too big

2 Feb

How did our economy come so close to collapse? How did we lose jobs, homes and retirement funds? Ordinary people are angry that they are suffering the grievous effects of the worst economic downturn since the Great Depression — and they want an explanation about how it happened.

“They aren’t getting answers from the big banks that created this mess, the ones that were bailed out with taxpayer dollars, and they aren’t getting it from the government officials who were supposed to be guarding against this very disaster that has befallen us,” MidSouth Bank President and CEO C.R. “Rusty” Cloutier writes on the book jacket in Big Bad Banks. “That’s why I decided to write Big Bad Banks.”

However, just weeks before Big Bad Banks hit bookstore shelves, former Federal Reserve Chairman Alan Greenspan did an about face. Speaking before the Council of Foreign Relations in New York on Oct. 15, Greenspan actually suggested breaking up big banks:

“If they’re too big to fail, they’re too big,” Greenspan said, according to Bloomberg. “In 1911 we broke up Standard Oil — so what happened? The individual parts became more valuable than the whole. Maybe that’s what we need to do.”

But where has America’s “Economic Dictator,” as Cloutier refers to him in Big Bad Banks, been for the past two decades? “It was pretty obvious to me from the get-go that Alan Greenspan had never met a big-time banker who he didn’t like and had never met a small-time banker who he did like,” Cloutier writes in Big Bad Banks. “With his deregulatory mindset he went about the business of making it easier and easier for his beloved big bankers to expand their franchises and become even bigger while making it more and more difficult for small banks to thrive and prosper.”

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