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Too Big to Fail?

The Bush administration loved bigness. Big Gas (Exxon), Enron, Halliburton, Big Banks, AIG, JP Morgan Chase, and a host of other Bigs. Enron should have been the canary in the coal mine, but it was treated as a solitary aberration.

And then came the financial meltdown last fall, chronicled by Frontline in their February program, "Inside the Meltdown," examined how, in just six months, the U.S. financial system unraveled. For FRONTLINE’s season finale, they’ve produced "Breaking the Bank," an inside story of the government’s massive, ongoing intervention to save the financial system.

But bigness was allowed to get out of hand elsewhere, too. STEPHEN LABATON wrote in the New York Times on July 25, 2009 that

President Obama’s top antitrust official and some senior Democratic lawmakers are preparing to rein in a host of major industries, including airline and railroad giants, moving so aggressively that they are finding some resistance from officials within the administration.

[Antitrust Chief Hits Resistance in Crackdown]

According to Labaton,

It is a major policy reversal from the Bush administration, which did not prosecute cases in which some dominant companies engaged in potentially anticompetitive behavior, often because those officials maintained such behavior was not harmful to consumers.

But it is no surprise that these antitrust efforts are encountering pushback from some "officials":

Other officials embrace the Bush administration’s view that larger companies and industry alliances can provide consumer benefits by making their businesses more efficient.

Is there any actual evidence for this, or is it another one of those allegations that is supposed to be self-evidently true?

Furthermore, some have argued that the middle of a recession is not the best time to be pulling big companies apart.

This is not just a Republican hobby horse. Since Terry McAuliffe led the Democratic Leadership Council down the road to K-street, Democrats have been wooing, and have been wooed by, Big Business, and lobbying money has poured in.

In a third area, a White House effort to overhaul financial regulation, officials weighed but rejected a significant antitrust role as a way to reduce the size of large companies considered too big to be allowed to fail.

This is the part that really bugs me. Geithner & Summers seem to think that Big isn’t Bad if you regulate it enough.

The antitrust efforts are being led by Christine A. Varney, who is the head of the Justice Department’s antitrust division. This is one part of the DOJ that really does not look or sound like the Bush admninstration.

Bob in HI

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Too Big to Fail?

The Bush administration loved bigness. Big Gas (Exxon), Enron, Halliburton, Big Banks, AIG, JP Morgan Chase, and a host of other Bigs. Enron should have been the canary in the coal mine, but it was treated as a solitary aberration.

And then came the financial meltdown last fall, chronicled by Frontline in their February program, "Inside the Meltdown," examined how, in just six months, the U.S. financial system unraveled. For FRONTLINE’s season finale, they’ve produced "Breaking the Bank," an inside story of the government’s massive, ongoing intervention to save the financial system.

But bigness was allowed to get out of hand elsewhere, too. STEPHEN LABATON wrote in the New York Times on July 25, 2009 that

President Obama’s top antitrust official and some senior Democratic lawmakers are preparing to rein in a host of major industries, including airline and railroad giants, moving so aggressively that they are finding some resistance from officials within the administration.

[Antitrust Chief Hits Resistance in Crackdown]

According to Labaton: 

It is a major policy reversal from the Bush administration, which did not prosecute cases in which some dominant companies engaged in potentially anticompetitive behavior, often because those officials maintained such behavior was not harmful to consumers.

But it is no surprise that these antitrust efforts are encountering pushback from some "officials":

Other officials embrace the Bush administration’s view that larger companies and industry alliances can provide consumer benefits by making their businesses more efficient.

Is there any actual evidence for this, or is it another one of those allegations that is supposed to be self-evidently true?

Furthermore, some have argued that the middle of a recession is not the best time to be pulling big companies apart.
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bobschacht

bobschacht

Joined the Dean Democrats in 2004 in Arizona; became Organizer, Democracy for America, Honolulu Meetup, after moving to Hawaii;
Secretary, Progressive Democrats of Hawaii. Moved back to Arizona, 2009

I grew up in the Midwest, taught Anthropology at the University of Maryland, Wayne State University, Rice University, Colorado State University, and the College of Ganado; Moved to Arizona in 1987 and worked for the American Indian Rehabilitation Research and Training Center until 2004, when the Center went out of business. Retired in 2009 from my job in Hawaii, moved back to Arizona, and am temporarily teaching anthropology at Northern Arizona University

Hobbies: Family History; also, I play bluegrass music on bass & guitar.

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