Banks Too Big to Fail

One of the driving reasons for the Obama Administration’s pursuit of super financial regulation is its fear of financial institutions failing. It has produced monumental bailouts, resulting in extraordinary budget deficits. Which, in turn, are dooming our economic prospects for generations to come.

And still the Obama Administration is ready to impose layer upon additional layer of stifling regulation. Unfortunately, with no possibility Big Banks will have eliminated systemic risk.

There is a simple, free market solution that has worked in the past, but left-leaning politicians have no clue about its implementation.

Separate commercial banking operations from investment banking, as they were for decades in the past. Banks would then be smaller, less risky and less apt to fail than the risk-taking and more leveraged investment entities.

And then let bankruptcy law resolve credit problems as it successfully had before, without danger of a catastrophic financial meltdown.