Tuesday, October 21, 2008

Too big to fail

"The financial crisis is forcing regulators to encourage the creation of bigger, more interconnected institutions. In the short term, this may serve a useful purpose by allowing healthier, well-capitalized banks like Wells Fargo, Bank of America and JPMorgan Chase to shore up weaker ones.
"But it also presents a serious threat to the financial system by fostering financial behemoths that are, to use Federal Reserve Chairman Ben S. Bernanke's euphemism, 'systemically critical.' Policy makers need to start thinking about how to downsize institutions that are becoming 'too big to fail' before the situation comes to that."
The point is not too big to fail, the point is too big for a democratic country.
Democratic means that the power IS NOT in one or a few, the power belongs to all.
But the economy needs big groups, because big means more power, more opportunity.
The BIG of a really democratic country is FEDERALISM.
Many small that make a big.
If one of them fails the system won't fail.
And it is a system easy to regulate, because it regulates itself.
One looks at the others.
Do you remember: Divide et Impera.
That is the best way to rule a huge Empire.
But the same rules apply also to a modern society.
Where nobody is too big, and everybody can be big.
Balance is the secret of peace and of a healthy economy.
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