"Too Big to Fail" Fails

"The implications of one of the 'too big to fail' institutions being allowed to fail is incredibly difficult to grasp, but suffice to say that a huge number of firms and securities are going to get affected."

-- Bloomberg News, Sept. 15

On CNBC overnight, European financial wizards actually were wondering, "how much money does the FED have left?" As much as half the Federal Reserve's $700 billion financial cushion was eaten up saving Wall Street from its own excesses, they say, before today's news that Merrill Lynch is disappearing, Lehman Brothers is filing for the biggest bankruptcy in U.S. history, mega-insurance company A.I.G. is begging the FED for a $40 billion loan, and the FED has announced that for the first time ever it will take just about any ol' common stock as loan collateral from shaky financial institutions.

Of the five largest investment banks on Wall Street at the start of the year, two are left. Commercial bank consolidations have been going on for some time. Insurance company mergers, too. Given the Bush administration's negligent enforcement of anti-monopoly laws, it's not too fanciful to imagine that soon we'll wind up with one gigantic Financial Corporation, Inc. financed by the taxpayers for the profit of a few owners.

"We're all communists now," says Duncan Black. Funny, but not quite true.

Not yet, anyway. What the Bush administration is doing isn't socializing the economy. It's doling out our money in welfare payments to Wall Street gamblers who lost big, stupid bets; it's accelerating the anti-competitive merger of financial institutions; and it's wrecking the already anemic dollar.

It will take a generation or longer to clean up the economic mess left by the Bush administration. Which reminds us of a bit of darkly funnny dialogue in the latest Coen brothers movie, Burn After Reading, a film one reviewer accurately describes as "a crazy-quilt comic thriller that takes on our growing national stupidity in the form of a sex farce."

"What have we learned?" a befuddled CIA desk man asks his equally befuddled boss near the end of a long chain of improbable disasters.

"What we have learned is not to do it again," the boss replies.

What makes that funny is the certainty you feel that they will do it again.