The uneven playing field, created by Washington, distorts the economy and handicaps a healthy recovery
- The targeted "pay czar" approach gives select financial firms even more insulation from market discipline.
- The marketplace understands that the more intricately entwined the government becomes with these firms, the more the government will support the same firms in the future.
- Lenders, then, will continue to offer firms like Citigroup and A.I.G. money at artificially low interest rates, as they did in the years leading up to the credit crunch, when "too big to fail" was already part of the landscape.
- The firms will continue to have an advantage over other companies and industries, and government-guaranteed failures will crowd out entrepreneurial start-ups.
Washington should be working to make large or complex financial firms more accountable to market discipline by creating a way in which big, complex financial institutions can fail in an orderly fashion...
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