New Rules

When we eventually find our way out of the current financial quagmire, we are going to need new regulations on the amount of leverage a bank can take on, reinstituting some form of Glass-Steigel, etc. But the single most important principle governing these new rules must be that if an institution is too big to fail, then it is too big. No single entity ought to have the power to essentially hold the US economy hostage. Thanks to Phil Gramm and his deregulation crusade in the late 90’s, we now have a financial landscape littered with firms whose only reason for surviving is that they have loaded guns pointed our collective economic head. That must change.