I don’t usually disagree with George Will, but alas the time has come when I must. He writes here – opaquely but nonetheless positively – about Sherrod Brown’s proposal to break up the big banks, the banks deemed too big to fail.
The problem, Will correctly notes, is that these banks, by virtue of their size, have been implicitly (and explicitly in the case of many during the recent financial crisis and bailout) granted special government protection and privilege. This crony capitalism is indeed a problem. But the solution is not to destroy the banks. The solution is to prevent government from making bailouts. The solution is not to keep a system of private gain and public pain (which is what the bailout was) but prevent companies from becoming large enough to benefit from that system. The solution is to get rid of that system. The solution is to shackle government – completely and fully restrict government’s ability to influence, control, and grant favors to private companies.
Now, Will may be obliquely correct about this: it is probably easier legislatively to break up the banks than it is to properly end the policy of too big to fail. But the right thing to do is, in the case, not the easy thing to do, and Will should be advocating for the right thing.
There’s an analogy to Evolve here: it is not until Advanced Genetic Research is taken over by the government that it starts to grow and eventually becomes too big to fail. It becomes the sprawling Center for the Advancement of Genetic Engineering. Once AGR has metamorphisized into the CAGE it is too big to fail and once too big to fail it does fail. The government made AGR into CAGE and made it too big. It failed. The solution was not to break up the CAGE; the solution was to never have let government meddle with AGR in the first place.