More "Too big to fail nonsense"

[Black Wolf]

http://www.democracynow.org/2010/3/25/will...erhaul_actually

JUAN GONZALEZ: And most people don’t realize how big the derivatives market is, compared to the regular banking system.

ROBERT JOHNSON: Yes.

JUAN GONZALEZ: Could you give our viewers and listeners a sense of the proportionality we’re talking about?

ROBERT JOHNSON: Yeah, the notional value of derivatives by the top twenty-five banks is about thirty—no, excuse me, $300 trillion. American GDP is $15 trillion. So I think that’s roughly twenty times the size of the American economy. It is the biggest dimension of the balance sheets of all the major banks.

JUAN GONZALEZ: And it’s largely unregulated.

ROBERT JOHNSON: And it’s largely unregulated. And if they were going to tolerate these so-called end-user exemptions, they should pay a huge capital surcharge for the right to put the system at risk. And that’s not what’s happening.

Okay. So let's say you're capable of lifting 400 pounds. But before you can enjoy your life, the government decides that they can hit you on the legs with a sledgehammer. This is basically the concern here: That banks are "largely" unregulated if they're 20 times the size of the US economy.

They're right, it's probably not regulated. It's more like "protected". They're too big to fail, because we've decided that they were. When you decide that a certain thing is a right, you have decided they're "too big to fail", and thus, they can never fail. They can never learn from their mistakes.