Within the lexicon of business terminology, there is a popular phrase entitled “too big to fail” that is frequently used to describe large industry players that are kept afloat by the government when they are faced with financial ruin. The theory behind these bailout initiatives is that liquidating a major industry player will result in a total market collapse. These claims are very difficult to substantiate, since the government frequently uses this rationale to justify its arbitrary actions, but never seems to allow one of these failing ventures to go into liquidation like a normal business.
In practice, the “too big to fail” phenomenon exists to perpetuate vested interests by artificially maintaining the status quo. Unfortunately, this phenomenon also applies to political movements as well. When individuals or movements are viewed as “historic” or “symbolic,” there is frequently a sentiment that it is “too big to fail” and that any level of incompetence or power obsession must be overlooked to avoid failure for the favored parties.
What we have seen is that attempts by government to manipulate the market frequently create much larger problems than those that were originally set to be “solved.”
In these situations, there is an endless litany of excuses that serve as the convenient justification for the expansions of government power that are necessary to protect businesses and individuals that are deemed “too big to fail” by the powers-that-be. Ultimately, we will find that the price of this massive government power grab is paid by the producers that make the country run. As these initiatives compound on top of one another over time, the ranks of the producers will contract as fewer people find it profitable to engage in business. Similarly, the ranks of the idle masses will rise as the number of people seeking free entitlements expands.
It is inevitable that a “breaking point” will be reached at some time in the future where the burden foisted on the backs of the producers will be too great for them to bear. The optimal situation would be for a political reversal to happen before that point comes, so that the wanton damage being inflicted on the country by the power obsession of its leadership is stopped. In the interim, prudent investors should seek to pursue strategies that will allow them to profit from the government irresponsibility so that their wealth will not be totally destroyed before control of the government is returned to more responsible hands.