There are not many things on which Harvard professor-turned-Massachusetts Senator Elizabeth Warren (D-MA) and I agree. Yet, to her credit she has been sounding the alarm about the threat that “Too Big To Fail” (TBTF) banks represent to our economy. However, that is where our agreement ends. Like most progressives, she vastly overestimates the efficacy and wisdom of regulatory bodies that invariably become captive to the corporations they are supposed to regulate as that great revolving door refreshes the influence of crony capitalists regardless of who is voted into office.
In fact, the regulatory policies she proposes would increase the TBTF behemoths’ threat to the economy by further entrenching the alliance of Wall Street bankers, the Fed, the Treasury Department, the White House, and Congressional enablers from both parties that brought us to this point. Until we figure out how to unravel this single biggest threat to our prosperity, the best we can hope for the next time the TBTF house of cards comes tumbling down is for the ensuing violence and privation to be contained long enough to avoid the emergence of totalitarian regimes both here and around the world.
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