In a reply to a comment from F.A. contributor Nanny G on Deconstruction of Cruz and Ryan I realized, after writing it, my too casual use of the term, “Too-Big-To-Fail.” Too-Big-To-Fail is a label that has gathered much deceptive moss. Used with some regularity since the economic panic that started in 2007 and accelerated at full throttle in September of 2008, it has been principally used to reference massive banks and many very large international corporations. It has also collected other significance in our lexicon. In comment #6, I attached an additional dismissive, even disparagingly sarcastic sense to the term. As in most things, perspective on this term is all over the place.
The term Too-Big-To-Fail crystallized in September 2008 when the government allowed Lehman Brothers to slide into bankruptcy. This event was used by senior banks to very effectively instill fear in the American taxpayer that the global economy was on the brink of utter collapse. Lehman was simply a sacrificial lamb, a most critical piece in the larger play. That collapse cemented into our collective mindset that there was such an animal as a Too-Big-To-Fail.
Years of rash lending on derelict mortgages, aggregated into questionable packages to be flipped, created trillions in unsecured financial derivatives with fancy names, which were sold to banks, funds, governments and anyone else convinced of borrowing at low interest rates to acquire promises of high returns — sellers and buyers convinced by confused and confusing, but supposedly intelligent concepts. A gigantic musical chairs game run amok, comes to mind. The game was in full swing.
Senseless minds like Paulson scrambled for microphones, conveying such dismay and agitation, even sweating, that we felt their anxiety. Suddenly, our world was about to completely collapse. Surely these titans of Wall Street and of international banking knew something most of us didn’t. Didn’t they? No? Really?
And so, beyond our control, but in full view and without a single moment of questioning doubt from our illustrious media, senior bankers acting as one, turned on the printing presses through The Fed and its associate central banks in Europe, lavishing massive amounts of dollars on themselves. First, billions in gifts, and then trillions with distribution tactics such as Quantitative Easing. Yup, you figure out what that term really means and perhaps you too will get a seat at that table.
To this day the well coordinated and unforgiving monopoly maintains a stranglehold on much of our national and our international economy, and on most of our lives. And from the taxpayers? Silence. We were desensitized by the noise of those printing presses. So much so, that we became lulled into a dream-state, authorizing, even encouraging, through that silence, the creation of trillions of dollars. Trillions not for ourselves, not for our economy, not for our small to medium sized businesses, not for small banks, but for the biggest few. Trillions for the Too-Big-To-Fails.
Were all these bankers really been trouble? If any had been, should they have been “bailed out?” Absolutely not. They were able to hide their actions and even within their own ranks, the “lemmings” bought into the fear — bought into the bailout concept. In this age of crony-capitalism, the largest players decide who is Too-Big-To-Fail and who should be squeezed into dismemberment. With a DOJ like the one America has been subjected to, there is nothing to fear if you are Too-Big-To-Fail. The rest of you, pay-up, or succumb to retribution. The biggest fraud ever perpetrated on a Nation began well before 2008, but in all the years since, the payoff has been more remunerative to its perpetrators than any of them had dared to fantasize.
Too-Big-To-Fail is a deceit. Bankers may employ it with artful cunning, but we should deride it and its meaning. There is no bank or other corporation that should be considered Too-Big-To-Fail. There is no such thing in a system daring to call itself Capitalist. But then, we do not have a Capitalist system. Failure, whether large or small is part of the growth of a healthy and productive nation. The fact that any sector is in fact deemed by its largest members and senior politicians to be Too-Big-To-Fail, is evidence that the system is corrupted and diseased.
We need leadership capable of ending the notion of Too-Big-To-Fail.
A constituent of the vast baby boomer generation with a career which has been fortunate to know the ponderous corporate worlds, as well as the intimately pressurized, and invigorating entrepreneurial domains of high tech and venture capital, I have harvested my share of mistakes meandering through corridors of enterprise from Silicon Valley, to London and endless, colourful, sometimes praetorian points in between. The voyage has provided an abundance of fodder for a pen yielding to an inquisitive keyboard, a foraging mind, and a passionate spirit.
Whether political or business or social or economic or personal, is it not all political? It is a privilege to write, and an even greater privilege to be read by anyone, and sometimes with the wind at my back the writing may occasionally be legible. I do not write to invite scorn, nor to invite respect, but if I get really lucky the writing can stimulate thinking. I also write for the very selfish purpose of animating my own processes, and engaging the best of what life offers. Above all, whether biting fire or swatting shadows, I am grateful to be gifted the freedom to write and publish whatever flows down to the keyboard. To all those who enabled this freedom, and to all those standing guard to preserve it, I am indebted.
Failure is how the Cosmic Muffin tells us that we are on the wrong track and need to try something else.
When we artificially prevent failure, then we maintain behavior that is less than optimal, and we prevent evolution in thought and action that would lead to better, more efficient ways of doing things.
Failure, for example, is why I am as successful as I am. If I had refused to allow myself to fail, injecting my savings (beyond my pre-planned budget) into a small business to keep it afloat, I would have eventually found myself the owner of a small photography studio that would have failed anyway as soon as I finally ran out of money.
Instead I gave it up, and used my remaining funds to try other things until eventually I found a plan that worked.
The same goes for the too-big-to-fails, as long as we continue to prop them up, we will never have anything better.
James, you are correct that most people have no idea how the construct, ”too big to fail,” cost them personally and all of us internationally.
What is great about your post here is that you caught yourself using a relatively new phrase in a newer way and wanted to stop yourself and clarify.
Our language, in recent years, has been racing out of control.
One writer I read just yesterday noted how emotion-based people’s political views are becoming while – at the same time – they are politicizing their opinions on personal, even sexual, preferences!
(If you take a position against, say, gay marriage, they might say you hurt their feelings.)
There’s a much older phrase than, ”too big to fail.”
It’s, ”if the shoe fits, wear it.”
Sometimes a new language construct is ”just right” for the point you are trying to convey.
Yes, using that particular phrase as the Left intended it to be used means ripping off the actual bad consequences tied inside the policy that ”too big to fail” covered over, however, the phrase is now a part of our lexicon.
I wish that more people were as careful as you are about their choice of words, James.
It is refreshing to read a carefully crafted essay.
@Petercat: #1,
Great perspective, Petercat, and one achieved through experience.
As we witness, O/J are taking their 8 years in the Oval Office to institutionalize the promotion of failure (dependence on government), throughout the government bureaucracy.
This systemic drenching of all government departments with divisive ideology will take years to unravel, if ever.
@Nanny G: #2,
Thanks, Nanny G. The term is fraught with hypocrisy, but in its use is a general acceptance of an existence in our midst (Too-Big-To-Fails) that the most senior bankers use to guarantee themselves dominance, and permanence — permanence of multi-billion dollar incomes, regardless what failures they impose on our society.