"Too Big To Fail" - Some basic questions

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RussB's picture
RussB
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"Too Big To Fail" - Some basic questions

After reading this morning another batch of annoying articles, I want to ask a few questions about one annoyance, "Too Big to Fail", as a phrase and a concept. It's clear the mainstream media and even the blogosphere (so far as I've seen) never question this.

1. If this is a cliche which nevertheless has actual substance, actually means something, then why can't reporters and columnists put this substance in their own words (while perhaps mentioning in passing, "This is what is often referred to by the tag line/brand name Too Big to Fail")?

(In previous posts on this board I've asked these same questions about the term "talent" and its Orwellian usage in this context.)

2. If it has no meaning and is just ideological drivel, why is any reporter or honest analyst using it at all, other than to attack it as fraudulent?

3. If (1) it has meaning, and (2) is being used in good faith by politicians and media, then two questions clearly follow:

 A. Since it is now understood (the commentary is unanimous, there seems to be no dispute) that entities which get too large are existentially a clear and present danger to social and economic stability, are in themselves a monumental moral hazard, and represent a constant direct threat to the taxpayers (they really should be seen as kidnappers or terrorists extorting ransom - that's all I hear when I hear "too big to fail"), where is the plan to diminish them, devolve them, break them up?

 B. Why is no one, not even people who are otherwise reasonable about things, asking this?

For example - we have a real debate about nationalizations*. Why is there zero debate about size itself? About how to make sure there never again exists anything which is Too Big to Fail, so that American taxpayers and Main St are never in this position again?

[* Well, maybe not a real "debate". Those opposed to nationalization, starting with the Obama crew, don't seem to have any ideas or arguments vs. it, just the bald ideological dogma "we like private banks".]

strabes's picture
strabes
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Re: "Too Big To Fail" - Some basic questions

short answer (truth): TBTF is orwellian lingo used to justify stealing from billions to payoff rich bankers.

short answer (official):  TBTF institution is one that would cause a series of other institutions to fail if it failed.   

1. there is substance, but it's duplicitous...see below.

2. media companies are part of the game...see below.

3a. the plan to diminish them is voiced only by Ron Paul.  that's why he's ostracized by politicians and media.  end the Fed, adopt a solid currency, and the whole fraudulent notion of TBTF disappears.

3b. people have been slaves to the whole TBTF big government, big media, big bank, big military, big corporation establishment their whole lives. it's hard to see reality.

More detail...

I majored in econ at a top institution and spent years thinking it was disinterested science about the way the world works.  I accepted its teaching of the Fed, Wall St institutions, the idea of "TBTF," fiat currencies, etc.  I have since learned that those are all tools of the banking oligarchy, so econ isn't a disinterested science at all.  Econ is just the professional lingo used by the controlling bankers of the world to suck smart people into learning the secret code that justifies and continues to hide their system.  In this way, econ is like law, where licensed people with "standing" are allowed to speak for you and represent you.  And these people are propped up and crammed down your throat by the mass media.  Top macroeconomists become the "professionals" with "standing" that supposedly understand the way the world works and make the world better for the masses through their work at the Fed, IMF, World Bank, etc.  What's happened in this collapse is the most blatant proof ever that all of that is BS.  Macroeconomics is a joke and the institutions that macroeconomists run are front organizations for the banking oligarchy that continues to prop them up at the expense of the little people.  

TBTF is an undefined, nontechnical term used to describe any institution with systemic exposure (which is also undefined). The failure of such an institution would create systemic risk, i.e. it would cause other institutions to fail as well.  But of course embedded in the term "systemic risk" is the idea that the "system" is something to be maintained...it assumes the current system is something worth propping up. THAT's what you'll never see questioned, debated.  People who work at the systemic level (Wall St bankers, DC politicians, macroeconomists, big media) engage in groupthink by assuming everything they're doing is of critical importance and must be kept alive.  So instead of us being a collection of states of free people working for ourselves, our families, our local communities, we become like an ant hill serving the queen, a nation of serfs working to prop up the TBTF framework.  What most of the systemic level people don't understand is that little folks working in local communities could care less whether a distant company called Lehman Brothers exists or not.  It was supposedly TBTF because if it were to fail, systemic people think it would be horrible for everyone.  But of course the little folks just keep on living their lives as if nothing happened, so those big people are clueless...they aren't as important as they think they are...the masses can get along just fine without them. Now, if enough systemic breakdown happens, it will certainly effect the lives of everyone, as everyone in the world isn't going to escape this current breakdown, but the little people, the local communities, will remake their lives and make a new society.  That would be a great thing.  We'd rebuild a society from the bottom-up while the entire TBTF infrastructure disappears.  Unfortunately the TBTF groupthink is trying to prevent that from happening, which means we're screwed because it's going to collapse regardless, but in the meantime they're stealing all of our money and burdening future generations with so much debt it guarantees that we will all be slaves for life.

End the FED!

RussB's picture
RussB
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Re: "Too Big To Fail" - Some basic questions

Yup Strabes, that's the entrenched ideology we're up against. That's why people need to relinquish whatever faith they have left in federal (and probably most state) governments, in big universities, and in the mainstream media.

These structures are no longer a constructive part of the world. At best they are stupid, insane, and/or incompetent. At worst they are malevolent. But in any case they are committed to a dinosaur ideology (the fossil fuel ideology is indeed a fossil itself, although it thinks it still breathes and bleeds) and are congenitally incapable of looking at things in any new way, let alone the necessary relocalist way.

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joe2baba
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Re: "Too Big To Fail" - Some basic questions

very good post strabes

the only thing i could add is that when the system collapses

i dont see the little people building a new society. i think the people at the top of the group think are planning for that eventuality. the universe hates a vacuum. the folks at the top have no intention of losing anything in terms of wealth and power.

i have no idea of what that will look like but reading between the lines of what they are saying it is pointing towards some form of nwo. certainly with the election of obama this country is continuing down that road

SkylightMT's picture
SkylightMT
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Re: "Too Big To Fail" - Some basic questions

I may be wrong, but I think the reason why they are too big to fail has to do with the derivatives. With OTC derivatives estimated at 600-750 trillion (over 4 times the global GDP), it would cause economic collapse to allow these "too big to fail" corps because of the resulting collapse of the derivatives market.

If it weren't for derivatives, I wonder if they wouldn't be too big to have a controlled collapse. The focus needs to be on regulating, or getting rid of, the OTC derivatives market, rather than attempting to limit the size of a business.

strabes's picture
strabes
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Re: "Too Big To Fail" - Some basic questions

joe - I think you're right nwo is coming first...they will prevent the little people from building a society.  but in the end I think that oppression fails just like it did with hitler, the soviets, the romans, etc.  maybe not.  maybe this time with technology on their side, the ability to chip us and track us, control money, etc. it will succeed in the long run.

skylight - it's not just derivatives.  that was only the latest, most effective extortion tactic used by those who really knew what was going on behind the scene to threaten us with collapse in order to justify crazy levels of taxes being paid to them. simple bigness based on market size was used to claim TBTF in the past.  the answer isn't regulation...the regulators for the last 20 years have been claiming derivatives were a wonderful method of risk mitigation/securitization.  regulators don't know what they're doing...again, they're macroeconomists trained in official lingo to sound right, but they're profoundly wrong and serve corrupt interests behind the scenes.  the answer is the elimination of the Fed and all Feds across the globe, elimination of debt-based money and fractional-reserve lending, establishment of a real currency.  things like derivatives wouldn't happen anymore. 

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