TBTF is an end-run around this verdict by politicians who are nothing more than calculating socialists. They seek to replace the individual subjectivity of market participants about a given institution’s value to society, with their own ‘objective’ considerations of the value or worth to these same market participants. When market participants say, “It’s not worth it,” the calculating socialist says, “Yes, it is.” This is economic chauvanism. But because TBTF is financial suicide, there is some point where even the calculating socialist must change their mind and agree with the market. Until that point is reached, market participants can only sit and wonder how much of the rest of the economy the calculating socialist will deem worthy of sacrifice to the institution which is TBTF. And when that point is reached, the question remains, how did the calculating socialist calculate it?
In its latest incarnation, TBTF has already cost the private economy hundreds of billions of dollars. And as we’re in the early innings of this sick game, before it is all through it will surely cost the private economy hundreds of billions more.
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