A very good MSNBC interview with former NY gov. Spitzer and a former Soros fund manager, who both think the banking system is out of control predatory, wobbling, and dangerous. Both ask the same question I have been asking: why was nothing asked of the banks when they were given (and still are given) the bailouts?

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Meanwhile, Greenspan has actually said the unthinkable: the U.S. Should Consider Breaking Up Large Banks.

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Of course now that he's no longer working, he can afford to be honest.

The administration is actually maintaining a read guard (not avant guard) position. Who would have thought? Blame Madison Avenue or its political equivalent. What an empty suit.

And not just banks, by the way.

Break 'em up, is what I say.

I imagine Phil will disagree with this, since he sees 'bigness' as being a virtue.

Well, I think competition is not a virtue. That does not translate directly to bigness. In some cases, that will be the truth. However, in the case of the big so-called banks, and many other large problem corporations, they are conglomerates. When partitioning them, the same sort of care must be taken as when cutting up a large diamond. There are natural fracture planes in a conglomerate. I never suggested dividing them into a bunch of smaller conglomerates since that would only create a larger number of smaller problem companies. I suggested that the commercial banks, ordinary (I am not sure what the appropriate designation is) insurance companies, stock brokers, business advisors, and the frank gambling operations be separated from each other. I would go further and suggest that in some cases it would be appropriate to merge similar entities from a number of different conglomerate sources, just as the FDIC does when a bank becomes insolvent.

So, you see, I am agreeing with you, except as to where to cut.

An associate of mine is on TLC. We knew it was screwed up when Citi ate Travelers. Or the opposite maybe. Wasn't it an outgrowth of American Can and Tsai? It came from the mania of a tiny insurance co. where Tsai's lunacy became contagious.

Fat chance of cutting them up! They re-united Standard Oil!

Are antitrust laws enforced?

My associate was in a small TLC minority.

Tri-Lateral Commission or The Learning Channel?

The newly recreated Standard Oil isn't exactly what it was back in the day. XOM although large isn't quite the world striding Colossus it was when the oil reserves that now belong to state run oil companies, or have been added to atmospheric carbon were Standard Oil's to be exploited

I don't recall which car company made it, but a few decades ago there was a car commercial that was bragging about the 'smoothness' of their ride. And to demonstrate it, they showed a guy cutting diamonds in the back of a moving car.

And then Saturday Night Live did a deliciously funny parody of that ad, in which they showed a man performing circumcisions in the back of a moving car. Yikes!

Be careful where to cut? Yes. We agree on that.

But I don't necessarily agree with your opinion that "competition is not a virtue". There are, of course, many people in America these days who agree with you. They are busying themselves with going around and forcing schools to abolish chess clubs and cancel spelling bees, on the grounds that competition is bad for children (and other living things, presumably). Seems odd that they haven't gotten around to banning football, yet. [Thankfully.]

I have always said (and indeed taught) that competition and cooperation are the yin and the yang of the human race. The paradox of humanity is that we are, at once, both the most competitive and the most cooperative of all the higher animals. The real problem, for every society, is in finding the right and judicious mixture of competition and cooperation. We compete in many areas or arenas in which we should be cooperating; and we cooperate in some arenas where we should be competing.

I don't think I would care to eat at a government-sponsored fast-food restaurant that had no competition.

Would you??

I always wondered why so many diamond cutters are (from what I hear) Jewish. I won't speculate on the connection between that and circumcision. I'm sure Sov will be able to supply one or more pertinent jokes.

As you well know, I don't equate people with corporate entities, or their close analogues. I was referring specifically to competing businesses. I really have nothing against chess clubs or spelling bees (at which I was perpetually the winner). I just don't equate them with any structure peculiar to business.

I think that anybody who constructs a non-ideologically drive economic model of a small town and keeps adding gas stations will find results which confirm my opinion. Maybe, without price controls, there is a minimum number of competing suppliers needed: my intuition suggests that, if they are co-located, two is probably enough. I believe that the small town model may be arbitrarily extended, although it gets harder to model.

I am forced to agree with his efficiency doctrines inasmuch as multiple offices for the same purpose create conflict, waste and duplicity in general. However the 800 pound gorilla in the room is the concept of monopoly along with all of the attendant mechanics of control, price fixing and the destruction of healthy competition. I'd say that living with numerous smaller interests is probably more of a sure thing even though it is inherently wasteful I daresay it is not as wasteful as purposeful theft.

jo

The obvious alternative to forcing competition (and that is probably the case more often than is allowing it) is some form of margin control. It would, of course, have to include some mechanism which would prevent phoney expense expansion. The tradeoff would be "we won't force you to accept competition if you don't force us to accept unjustifiable pricing."

I think the proof of the basic efficiency concept is inherent in the almost universal complaint that some larger competitor has an unfair advantage because it can be profitable at lower prices. I don't know why there is so little willingness to accept the fact that competition is inefficient. Perhaps it is because people fear having to drop the other shoe.