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An Institution that is too big of a risk to save. The institution is often viral and perpetuates big failures to their benefit and to their constituents detriment. Their philosophy is basically: Heads I win, Tails you loose.
The failing Institution has a neg trend, that will continue since policy changes don't achieve recovery goals even when successful. For those affected there is extreme vulnerability and risk of saving it, and little to gain.
If success occurs it benefits those that caused the failure. Those most negatively impacted continue to pay the costs, and suffer.
The group saving the institution may have little control over the outcome and benefit stream, but is responsible for all the costs and liability. However, the group saving may have an agenda and be able to transfer the cost to others. And may do so at a very high price.
The group doing the saving may be walking the fine line of being an empowerer or enabler.
Sometimes as an enabler in collusion with the institution to keep the those people affected by the institution in a constant struggle for survival.
Saving the institution creates moral hazard. Failing institutions point to the negative "domino effect", where their failure will create catastrophic failure. Others argue the "domino effect" is the solution since it destroys institutions that perpetuate disasters, and end subsidized failure.
Wall Street is is "Too big to be saved".
Why would Wall Street want to be saved anyway. By most accounts it planned the failure. And bet against it's success. It would be against their free market principles to save Big Failure. And they could grab the assets up for a few cents on the $.
Italy is not "Too big to be saved". However, the Italian gov is too big a failure to save. Italy is a beautiful country and will be easy to save when the gov that perpetuated the disater is removed.
Measures to save the institition may cause more suffering than letting it fail. Saving the institution may not save the positive attributes of the institution, which may not have any to begin with, especially when those most responsible for the failure have the most to gain, and profit.
by mlhiss November 08, 2011
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