5 ms·

Stop propping up firms, and the sustainable sizes will emerge. "Too big to fail" is just an excuse for government to Do Something (be it break 'em up or bail '

• mfringel 14y ago
  At a large enough scale, you can't handwave away the eggs you'll break on the way to your omelet.
  • akkartik 14y ago
    Another metaphor: you can let large trees fall, sure, but they cause a lot more collateral damage on the way down.
  • ataggart 14y ago
    The passivity of your analogy doesn't apply. If you're concerned about exposure, then avoid doing business with risky firms. It's entirely possible that a smaller firm is more risky than a larger firm; it's the risk that you choose to take on that matters, not some arbitrary measure of "bigness". But let's set that aside: if many people think "big" firms are more risky on that basis alone, and they choose to avoid them, then smaller firms will emerge from the market process.