Tuesday a Congressional committee cross-examined the former CEOs of AIG which received an $80 billion bailout from the government in September. One Congressman made an important observation. Rhetorically, he wondered how it is possible for such large financial institutions to be competently overseen by any CEO. Further to that, he asked, why should a private entity be allowed to become so large that its failure becomes a public -- not a private -- responsibility?
It is an important question to ask at a time when some of the biggest banks are buying out smaller failing banks. In other words, one apparent solution to the financial crisis may be making part of the underlying problem worse.
On today's Wall Street risk is socialized, the gains privatized.