PROGRESSIVES and conservatives can debate the proper role of government, but this is one principle on which we can all agree: The government shouldnâ??t pick economic winners or losers.
In 2008, at the height of the financial crisis, the government stepped in and decided which Wall Street banks were so large and interconnected that they would receive extraordinary help from the government to enable them to survive. They were deemed, to use a now ubiquitous phrase, too big to fail. Meanwhile, smaller banks in communities across the country, including Cleveland and Covington, La., in the states we represent, were allowed to fail. They were, evidently, too small to save.
Today, the nationâ??s four largest banks â?? JPMorgan Chase, Bank of America, Citigroup and Wells Fargo â?? are nearly $2 trillion larger than they were before the crisis, with a greater market share than ever. And the federal help continues â?? not as direct bailouts, but in the form of an implicit government guarantee. The market knows that the government wonâ??t allow these institutions to fail.
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