Front page article on 3-29-13 quotes the new chairman of the House financial services committee responding to a questioner during his first campaign years ago. The question was whether he was pro-business:
His reply?
“No,” the candidate replied, drawing curious stares from local business leaders who had gathered to hear him speak, a former Hensarling aide recalled. “I’m not pro-business. I’m pro-free enterprise.”
The article’s title, Texan’s Plans Put Wall Street on Edge, covers the story quite well.
I’ll not go into much detail, since I stay away from the details of politics. Suffice it to say that the chairman is concerned that the Too Big To Fail banks are too big. That size, along with legislation that is structured to protect them and make sure they never fail, creates risks of its own.
His concern over the problems cause by the big bank’s size is why Wall Street is concerned over him.
The special benefits TBTF banks get is a defacto subsidy. Thus, with TBTF we are in the range of crony capitalism, not free enterprise. That transition away from free enterprise happens when special privileges for the large or connected matter more for sucess than developing better products and hustling to please customers.
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