The administration should seize on the recent departure of Treasury Secretary Timothy Geithner, above, as an opportunity get tougher on overgrown financial institutions. (AP Photos/Jonathan Ernst.)
Editor’s Note: Each week we cross-post an excerpt from Katrina vanden Heuvel’s column at the WashingtonPost.com. Read the full text of Katrina’s column here.
George Will and I don’t agree on much. We’ve shared many a spirited debate over the years on ABC’s This Week. But on one of the key issues of our time—how to save our economy and our democracy from the reign of the big banks—it’s time for the Obama administration to listen to George Will.
In his Sunday column, “A badly needed breakup,” Will makes the conservative case for a common-sense principle: financial institutions that are Too Big to Fail are also Too Big to Exist. Will’s full-throated call to arms is welcome, and his conclusion echoes that of countless occupiers, Tea Partiers and Americans of all stripes. Here’s hoping, for the sake of the republic, that Will can bring more of his fellow conservatives along with him.
As Will notes, over two-thirds of the banking industry’s assets are now in a dozen banks with between $250 billion and $2.3 trillion to their names. Just five institutions have fully half of the industry’s assets. “There is no convincing consensus about a correlation between a bank’s size and supposed efficiencies of scale,” writes Will, “and any efficiencies must be weighed against management inefficiencies associated with complexity and opacity.”
Editor’s Note: Each week we cross-post an excerpt from Katrina vanden Heuvel’s column at the WashingtonPost.com. Read the full text of Katrina’s column here.
