“The best historical model for solving this problem is probably Theodore Roosevelt’s take-down of John D. Rockefeller.”

The problem is that the TBTF’s have nothing in common with Standard Oil- Rockefeller built his business from the ground up and did not take handouts from the government to stay in business or correct his mistakes. TR erred on the populist side by waging war on a company that was unfairly (but highly visibly) vilified by the Muckraker Ida Tarbell in her “expose” on Standard Oil. TBTFs would never have been TBTFs without the government’s largesse. You could absolutely apply the same logic to Jackson who in many ways was a populist rabble-rouse himself. His feelings about the BOTUS reflected his own prejudices and those of his constituents much more than they represented any serious malfeasance by the bank itself.

That said, RPJ, you raise an interesting issue. But are we sure as conservatives that we really want to argue for government takedown of industries? We need to stop subsidizing their failures absolutely, but I am not convinced we need Jackson or TR style big government as the answer to the size of their holdings.

The problem with approach, though, was seen in the Great Depression, where the branch banking laws you refer to resulted in tons of bank failures. That might not be as much of an issue in places with diversified economies, but banks ought to be able to run across state lines to diversify their assets in case a particular industry or sector goes belly up.

A possible solution along the lines you suggest would be to allow banks to operate across state lines, with the branches subject to the regulations of each state? That might be a bigger mess than just trying to go back to state level banking only.

Disqus’ vote system is no worse than a CHicago, IL voter register.

The TBTFs are forced into dealing with the Federal Reserve, because by law the Fed tells them how they can do business. The Fed sets the short-term interest rates, the discount rate, the reserve requirements, the capital requirements, and so on.

So my fellow conservatives need not worry that breaking up the TBTFs is interfering in the free market. Thanks to the Fed, we haven’t had a truly free market in banking for a very long time. Now it’s just a question of what public-private mix we want our banking system to be.

Well though Rockefeller built his company from the ground up, with no govt assistance, I still think corporations should not be be allowed to grow to such size, that they could impair the entire economy should they fail for some reason or another.

Monopolies aren’t good for an economy. I hate to place limitations on how companies can grow, but the the big picture has to be looked at here. When a company gets to such size that it limits both choice, stifles competition, and has the potential to seriously jeopardize the economy, that’s simply to much. Standard Oil controlled somewhere around 80+% of refined oil in the US, that’s insanity. And I think we’re at the point with the TBTF’s on Wall Street. I mean AIG by itself failing, and being so big and diversified, that it could throw the world market into a tailspin if it pulled a Lehman Brothers is just to big.

I’m not sure what the solution is, if not govt intervention in cases like this.. What is the free market solution here? I don’t see one.

I understand where you’re coming from, but what TR did, and what we don’t want to do is punish potential bad behavior. Standard Oil could have done all those things, but didn’t. It stifled competition basically by being the best, and delivered a product cheaper and more efficiently than anyone else. Those that wanted choice still had a few, but they paid more the choice. I think at its peak it was about 90% of all the refining in the country! It didn’t fail and take the economy down with it, and probably would not have as long as Rockefeller was alive. That said, the concern is real, not sure how you have a free market and then turn around and place government limits on it- the two work against one another as principles. It’s a tough one . .

No one is too big to fail. That’s an excuse the government made up for bailing out their monied and connected cronies. They all should be allowed to go bust when they screw up. That’s what bankruptcy is for. It allows the markets to heal themselves instead of kicking the stupid cans down the road. The last thing we should be doing is getting all afraid of something big going down and losing our sense of principle – and using that as an excuse for big government; you know, like “abandoning free market principles to save the free market.” Kind of stupid when I think about it – because all it does is prolong the misery by creating all kinds of uncertainty that lasts forever. Bailing out the banks and AIG was really stupid because no one knows who is worth doing business with.

‘Too Big to Fail’ is a myth. Period.

There was ONE large bank that seriously was at risk. Citibank.

JP Morgan, Wells Fargo, and BoA were more-or-less OK. BoA came close to the danger- point due to poor post-crash merger decisions, but that’s another story.

The fact is, the danger is not in ‘big’ banks, but rather in the obnoxiously weak & vulnerable SMALL ones – which accounted for most of the near-failures (since the FDIC essentially decided there would be NO bank failures, and siezed/auctioned-off any bank that they deemed ‘vulnerable’, BEFORE it could actually fail & start a panic)…

The fact is, the ‘big’ banks pretty much contained the crisis themselves, through mergers & proprietary trading…

Yes, that’s right – the 2 things MOST responsible for preventing a crisis were (A) really big banks, and (B) the repeal of Glass-Stegall ((C) was TARP, if you care).

Which is ironic, because if you listen to the media spin, they’ll tell you that’s what CAUSED the crisis, not what stopped it…

Banks should be national, not state-level.

And there was much LESS resillience in the state-banks.

It makes no sense to have a national currency (as mandated by the Constitution – states are forbidden from operating monetary systems of any kind) & state banks….

And what exactly was wrong with Mr Dimon?

Don’t tell me you bought into the leftie-line that it’s any of our business what JPMC does with it’s own corporate money….

The Federal Reserve supplies an appropriate amount of money to a private-sector economy that does not believe in saving money.

The government is a minor consumer of money-supply compared to the private-sector, and the market-choices of the private sector clearly indicate a preference for inflation (and the accompanying rising asset/equity/labor-market valuations).

The fact that you may not share that preference, does not justify ignoring the free market choice of 98% of Americans, who consume rather than save.

Interesting. Citing the first Progressive President (T. Roosevelt), and “trust busting” at the behest of the Muckrakers, as an example to Conservatives is not exactly what I would call adhering to Conservative principles. Jackson was no gem either.