Big is Beautiful

Paul Volcker says the administration is planning to continue the policy rationale of "too big to fail," implicitly promising future bailouts should the need arise.

I'm slightly disappointed, but that sentiment is starting to have a certain gnawing familiarity. There is an obvious public interest in keeping private institutions from becoming "too big to fail," but these megacorporations make so much money just based on scale - and spend so much of that money on Democrats - that I know I'm kidding myself to think anything would or could be done about it. By the way, donde estan Republicans on this? Where is your budget freakout about exposing taxpayers to these potential outlays? Where are your costumed nutjobs and their misspelled signs protesting government takeovers of things? You're really missing out on some out-of-power minority rock-throwing here.

On balance, I am actually okay with keeping the rationale - so long as the administration comes through on some kind of banker compensation rule such that it rewards long term growth as opposed to short-term stock price gains. Otherwise, bankers are just playing with house money.

If bringing up "excessive" banker compensation serves a polemic purpose in this fight, then fine. And if we have to ridicule the banking establishment's claims that the market is rewarding "talent," which I do find rankling, then so be it. But there's no real public interest in forestalling "objectively" high compensation, whatever that may be. If compensation is a market price arrived upon within bounds of the rule above, then great.