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Too Big to Fail:..... - Andrew Ross Sorkin


boilermaker75
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Food for thought. Are we creating the same thing in other sectors of the economy?

When I read X hospital chain buying Y and see the numbers and scale of their

regional and national footprint, and then the utter mismanagement. One wonders

whether in the not too distant future we might see a cousin of “too big to fail” emerge

in the health sector.

The argument goes: “We cannot let these hospitals fail and leave 30M Americans

without access to tertiary healthcare, this is a matter of life and death”.

What’s to prevent that when we have 200+ hospital national chains being formed

and deeply indebted?

That was my biggest disappointment with Pres. Obama, I really don’t think we

effectively dealt with TBTF, and now encouraged it in other vital sectors of the

National economy, witness the huge mega mergers in multiple industries.

Had the big banks been broken up instead of take over others we likely wouldn’t

have seen these mega mergers in other sectors. The solution to TBTF can never

be even bigger!!! The American taxpayer and eventually the US economy and it’s

currency’s position is being imperiled by these actions IMHO.

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There isn't any other business that where you can have too big to fail like the banking business. I can't think of anything else where if one large enough player fails the whole industry fails or if one industry fails the whole economy fails.

 

In the case that you have mentioned with large overlevered hospitals Chapter 11 is always there for them and no disruption really occurs. In my opinion, where you've got too big to fail building up is companies with lots of employees. That's not too big to fail in the economic sense (like banks) but in a political sense. Basically politicians won't let these companies fail because the solution to the problem will mean large layoffs and that's not palatable. GM was too big to fail in this sense.

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I haven't read this book yet, but it is on my list. The kindle edition is for sale today for $1.99.

 

https://www.amazon.com/Too-Big-Fail-Washington-FinancialSystem-ebook/dp/B003XQEVUI/ref=sr_1_1?ie=UTF8&qid=1514127673&sr=8-1&keywords=too+big+to+fail

 

It is really good. Finally read it a few weeks ago. The character sketches are neat/entertaining.

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