"Too big to fail" is a term that has been thrown around by the press, by politicians and by barstool philosophers for months now. As we seem to be in the midst of a national bout of amnesia mixed with impotence (meaning nobody is remembering the horror of the financial collapse and when we do we sort of shake it off because we don't know what to do or just don't think we can do anything about it...), it seemed like a good time to look at what the financial institutions themselves have to say for themselves- ok, at what one financial institution has to say for itself.

AIG. They have been bailed out by the government and paid back the bailout, now returning to business as usual, though I'm sure there are some new people around the office. Point being, they got a loan when they needed it, turned a few tricks, and are now back to the business of managing money, not even back, just continuing to manage money. Nobody really knows where else to turn or where else to go. You can see why our grandparents and their parents were putting money in the sofa- they didn't trust the idea of big companies managing their money. Most of the founding fathers were against the idea of a central bank and tried like hell to legislate against it.

But here we are. In what can only be seen as a true example of independent media, Al Jazeera interviewed Ralph Nader about the financial state of the U.S.

Nader speaks eloquently about the concept of "too big to fail" and why it will only allow the cycle of boom and bust to continue, the bust part getting bigger every time. He says that because the people who Obama has appointed to oversee the next generation of My favorite part of the interview is when he says, "...is the government control just another warmed of version of the kind of corporate control?

He then points to a powerpoint presentation that AIG gave to itself about why they are "too big to fail," a scary thing when you think about it. One of the companies that was all in with this whole scandal is telling itself why it is so important that it can't fall apart. Interesting.

The entire financial crisis and meltdown is difficult for me to understand- probably difficult for most anyone to understand. I found a great YouTube video called "Hedge Funds and the Global Economic Meltdown" does a pretty fantastic job of walking through how short selling created a glut of stock IOU's that then drove the price of stock for places like Lehman Brothers and Bear Stearns way way down, causing bankruptcy. The SEC chairman basically says that those short sales aren't technically illegal, though they at first denied they were happening at all, then denied they were strategic, and now say they can’t destroy the market. We’ll see.

James Madison said in 1822:

“A popular government without popular information or the means of acquiring it is but a Prologue to a Farce or a Tragedy or perhaps both. Knowledge will forever govern ignorance, and a people who mean to be their own Governors must arm themselves with the power knowledge gives.”

Why do I reprint that? Because whether you care about hedge funds and short sales or not, you should watch that video. Knowledge will forever govern ignorance.

Oh, by the way, Bernie Maddoff got 150 years. These guys aren’t going to get anything. Either way, the money is long gone.