Failure is absolutely necessary in a free market economy. It is the essential reallocation of resources that economist Schumpeter termed "creative destruction." It is the reason most music is no longer sold on CDs. It is the reason most phone calls are now via cell phones, its is etc etc etc.
By keeping these behemoths alive Congress, George Bush and Barack Obama have assured us a financial market dominated by quasi-governmental anachronisms that will be as arrogant as the most power hungry bureaucracy and just as inefficient.
Today, the biggest of those banks are even bigger.
The crisis may be turning out very well for many of the behemoths that dominate U.S. finance. A series of federally arranged mergers safely landed troubled banks on the decks of more stable firms. And it allowed the survivors to emerge from the turmoil with strengthened market positions, giving them even greater control over consumer lending and more potential to profit.
J.P. Morgan Chase, an amalgam of some of Wall Street's most storied institutions, now holds more than $1 of every $10 on deposit in this country. So does Bank of America, scarred by its acquisition of Merrill Lynch and partly government-owned as a result of the crisis, as does Wells Fargo, the biggest West Coast bank. Those three banks, plus government-rescued and -owned Citigroup, now issue one of every two mortgages and about two of every three credit cards, federal data show.