I came across an article in the Harvard Business School Working Knowledge research site discussing the economic impact of large financial firms and whether or not we can afford to let these firms fail. A main point from the article states that, "The federal government should slap tough new regulations on all firms that pose 'systemic risk'—the risk that a failure of one institution could wreak havoc across the entire financial system." I wholeheartedly agree with this statement and wish that the government would "step up" and implement some new security measures to prevent firms from failing in the first place.
However, once these firms are getting to a point where they are looking like they might fail, even though this really shouldn't ever happen if management teams were smarter, the government needs to keep their hands off and let the firm fail. It is not the taxpayer's responsibility to continually bail out these gigantic organizations that keep failing time and time again. Everybody in government needs to show some respect for the hardworking American's that vote them into office and not do things that benefit the few at the expense of the many.
What do you all think? Are these large firms really "too big to fail" or should we cut the cord and let them fail and see what happens?
Here is a link to the article that got me thinking about this: "Too Big To Fail": Reining In Large Financial Firms