The elevator explanation for the Great Recession is that it came about because the financial industry speculated too much through the housing bubble, brought about the housing crisis and then was bailed out because they were too big to fail. This begs the question, have we addressed “too big to fail”?
Watch MIT professor Simon Johnson speak about the vexing issue of too big to fail at the Atlanta Fed’s 2011 Financial Markets Conference. According to Johnson, actions taken during the financial crisis have made the problem even worse:
Virginians are still dealing with the consequences of these “too big to fail” institutions. Right now Virginia’s families are still struggling through fraudclosure and could be thrown under the bus with federal budget cuts that gut funding that supports housing counseling and foreclosure prevention. Budgets reveal priorities and our elected officials are not prioritizing middle class families who are forced to pay the price for the financial industry’s excess.