Taxpayers Lose When Colleges Are Too Big to Fail
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Oct. 1 (Bloomberg) -- Many Americans opposed federalbailouts of financial institutions and large corporations. Bypromoting a “too big to fail” policy, favored businesses canengage in risky, undesirable behavior, while deriving unfairadvantages over competitors, all financed by the taxpayer.
Too-big-to-fail thinking saved huge financial institutionssuch as Citigroup Inc., American International Group Inc. andFannie Mae, not to mention an industrial giant, General MotorsCo. Critics argue that market conditions should have led thesebusinesses to fail, sending a powerful lesson to others to actmore prudently.