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The Government is NOT too Big to Fail


Shut down

October 1, 2013

To start I have to admit I didn’t think there was such a thing as the government shutting down, so much for the “too big to fail”.  Yes, this isn’t a failure it is just due to the government parties’ inability to meet each other half way and make up their minds.  This isn’t like the common situation in many households of what to eat tonight for dinner.  The typical back and forth, can’t come to agreement and each family member just decided to do their own thing.  No this is real life, real people losing money as they wait for the congress to make a decision on funding.  Not to mention these people who also work for government and are the reason why some people in America for the past 3 days haven’t been getting paid, ARE getting paid.  Well that seems weird doesn’t it?  The government is not grasping that there are people waiting to go back to work, to bring home money to feed their families.  Similar to Lehman Brothers and Enron, not thinking of the ‘smaller’ people who will be affected.

I relate the current government shutdown to the film in that there was always this sense behind Lehman Brothers that they would never fail, or they couldn’t possibly fail by all the money they were making.  Similar to the government, no ones bigger than the federal government, their huge, and maybe they aren’t failing like Lehman Brothers, but they’re pretty darn close to it.  When we see something big and powerful and this something whether it be the government or a company like Lehman Brothers who knows (knew) they were big and powerful, there is a false sense of inability to fail.  Although we may have learned a lesson from Lehman Brothers, and are learning our lesson with the government shutdown I fully believe there is and will also be the notion of “too big to fail”.  It’s as though the ‘too big’ company casts a ray of light so that it is too hard to see the failures, and all you see is this beautiful ray of light, not the fire behind it.

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3 comments on “The Government is NOT too Big to Fail

  1. I find the comparison you made between the failure of big banks, such as Lehman Brothers, and the government intriguing. I agree I think when these institutions get very big and powerful they gain a sense of invincibility. You made a good point that these massive organizations neglect to think about the “smaller” people who may be affected. Over the past five years 1400 smaller banks have been shut down, while the six biggest banks have grown even more.

    • It is amazing to think “Over the past five years 1400 smaller banks have been shut down, while the six biggest banks have grown even more.” It seems that at the same time the government has gotten bigger. The size and interconnectedness of the government and these wall street firms is exactly how the 2008 financial crisis came to be….both the government and these banks are at fault. Moral hazard seems to be the root of the problem

  2. It is an intriguing comparison. Even more so in the film where you see how close the relationships among people are across the government-business line.

    You seem to focus on the sense of legitimacy that people project on to very large institutions.

    However, I think there are limits to the comparison. For one, the government is itself a whole series of organizations. Secondly, the US government really is much larger. Finally, we have mechanisms for firms to fail (bankruptcy, etc). When governments fail it is messy and looks like the middle ages, revolutions, Somalia, etc. Not pretty.

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