Posted by Gary Howard on 11/19/09 1:30 PM   [Newer: Press Release: Audit the Fed Amendment Passes House Committee] [Older: Government is almost never the solution, but always the problem]

Today, the House Financial Services Committee (who should be busy with more important things) passed the "Too Big To Fail" amendment. Also known as the Kanjorski amendment, named for the Pennsylvania Congressman who authored it.

This awesome amendment (sarcasm) gives Congress the power to decide what constitutes "too big to fail"--decide what companies are "too big to fail"-- the power to take over those companies and dismantle them as they see fit.

A summary from the Committee press release:

 

• Objective Standards. Size is by no means the only factor to determine if a financial company is "too big to fail." The recent financial crisis has shown that many other factors can also cause a company to become a systemic risk. Rather, the amendment considers a variety of objective standards to determine if financial firms pose a threat to our financial stability, including the scope, scale, exposure, leverage, interconnectedness of financial activities, as well as size of the financial company. The Kanjorski amendment does not cap the size of financial institutions.
• Mitigatory Actions. If a financial company is deemed systemically risky, the Kanjorski amendment provides responsible preventative actions to protect our financial system and curtail those risks. These include modifying existing prudential standards, imposing conditions on or terminating activities, limiting mergers and acquisitions, and in the most extreme cases, breaking up the company.
• Protects American Competitiveness. We have learned from this financial crisis that we are all connected. The Kanjorski amendment addresses the concern that our regulatory system works in conjunction with those around the globe. Currently, the European Union is considering similar action, and harmonized regulations would benefit both economies.

Anyone else see the problems that may arise from granting the wankstas (sic) in Congress this much control over enterprise?

If you are as troubled as I am by the prospect of members of Congress having this sort of authority, please let the members of the committee know.

Posted 11/19/09 4:25 PM isuuofi Madison, WI

I think that the government is too big to fail, so perhaps we should start to dismantle it before it causes any more trouble.

Posted 11/19/09 6:38 PM TonyM Depew, NY

And this is going to be in the regulations package with 1207? Ron would normally vote NO to the whole package because of this, I would believe.

Posted 11/19/09 7:23 PM Kyle Lexington, TN

Actually, I think this law makes complete sense. Since we have already (self-evidently) granted Congress to create these financial leviathans through the corporate/welfare state, we might as well give them the power to disassemble them. Of course, it would be preferable to return to free market capitalism, but that seems unlikely.

Posted 11/19/09 9:07 PM ricquejon hatfield, PA

I once remember doing a service call in Kanjorski's district. This guy has stuff all over the place named after him. He is just "full of himself".

Posted 11/20/09 03:36 AM illuminati hater Las Vegas, NV

I love how they say, "promote competitiveness." Last I checked, bailing out a company, and taking it over was cheating. When a company fails, it's a sign that another company was serving the consumer--the main tool in giving a business productivity--in a fashion that better fit their needs. I don't understand what the government is afraid of when it comes to the markets. They're simple, smart, and organic. Everything good from the failed company (stocks, people, etc.) will be easily moved to something better. Why is that so hard to understand?

Posted 11/20/09 11:30 AM Paul S. Brighton, MI

At a park near Big Sur I took a walk up the ravine. Redwoods are amazing. Yet even they are not to big to fail. Seeing the huge hulks mouldering in the leaf litter was memorable. New seedlings were already competing for the vacant space created.