Break Up Bailed Out Businesses

This should be self evident: Businesses that are too large to fail should not exist in a free market economy.

A business that becomes too large to fail also becomes a liability for the rest of society.  The benefits of economies of scale for society are outweighed by the inefficient monopolistic tendencies of businesses that dominate markets.  And the implicit guarantee of a government bailout encourages too much risky behavior.  It even encourages directors and executives of companies to strategically engineer the need for bailouts.  When a business becomes that large it should be broken up into competing businesses that don’t dominate markets.

We are being told that the government bailouts are supposed to preserve our free market economy.  But the only thing the bailouts are preserving is the freedom of over-sized businesses to dominate a market economy that could otherwise be truly free.  Break up the bailed out businesses.

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One response to “Break Up Bailed Out Businesses

  1. The Big Three certainly didn’t come across as ‘Big’ on the senate floor. The reasons given to the senators did not sound convincing.

    A foreigner’s view:

    http://novice101.wordpress.com/2008/11/19/big-three-vs-senators-who-is-right/

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