This morning my email brought me a thoughtful article that referenced an eye-popping article, “The Quiet Coup” by Simon Johnson, I read back in May in the Atlantic Monthly. This morning’s email referenced a section critiquing the “too big to fail” argument for the bailout. Too big to fail. Isn’t that the corporate version of not knowing when enough is enough, when smaller might be better and less might increase well being? Challenging our own attachment to “more-is-better” gives us a front row seatin the economy stadium where we can actually watch the power plays, and argue knowledgeably with the umpire who strikes out bit players. Johnson says:
Oversize institutions disproportionately influence public policy; the major banks we have today draw much of their power from being too big to fail. Nationalization and re-privatization would not change that; while the replacement of the bank executives who got us into this crisis would be just and sensible, ultimately, the swapping-out of one set of powerful managers for another would change only the names of the oligarchs.
Ideally, big banks should be sold in medium-size pieces, divided regionally or by type of business. Where this proves impractical—since we’ll want to sell the banks quickly—they could be sold whole, but with the requirement of being broken up within a short time. Banks that remain in private hands should also be subject to size limitations.
Don Shaeffer, President and CEO of RSF Social Finance, author of the email/article, goes on to say:
Wall Street will live on. Large-scale capital markets will exist, for good reason, for companies and industries that require centralized R&D, manufacturing, and distribution. Think airplane engines, pharmaceuticals, semiconductors. Hopefully investors will reward only the most transparent and honest of the remaining players.
As important, I think we will also see the growth of diversified, capital markets, not dependent at all on Wall Street, and designed to support small- and medium-sized, triple bottom-line companies in sectors such as food, energy, clothing, building materials, and a whole range of household products. With this approach, people will save more, spend a higher percentage of their overall income on basic needs, keep their investment strategies simple, and their money closer to home.
We need to personally investigate “how much is enough?” so we can investigate “too big to fail” from experience. Are our appetites too big to fail? What happens when we bring attention to any flow of stuff through our lives and ask no “Does it work for the economy?” but “Does it work for me?” Personal responsibility not only matters to one’s own integrity – it allows you to de-code messages from the culture and form opinions and take actions that foster “enough” rather than acquiesce to “more.”
Wall Street will live on. Large-scale
capital markets will exist, for good reason, for companies and
industries that require centralized R&D, manufacturing, and
distribution. Think airplane engines, pharmaceuticals,
semiconductors. Hopefully investors will reward only the most
transparent and honest of the remaining players.
As important, I think we will also see the growth of diversified,
capital markets, not dependent at all on Wall Street, and designed to
support small- and medium-sized, triple bottom-line companies in
sectors such as food, energy, clothing, building materials, and a
whole range of household products. With this approach, people will
save more, spend a higher percentage of their overall income on basic
needs, keep their investment strategies simple, and their money
closer to home.