Three years after the initial bank bailouts and the rescue of a bunch of really crappily run companies, I think it’s fair to say that too big to fail was a myth. The intention of corporate bailouts was to prevent the financial carnage that it was believed would inevitably ensue should one of those bloated, broken, massively incompetent businesses go to the wall. The result of the bailouts however has been financial carnage of an entirely different sort.
There have been successes of course. General Motors is one such example; a company that was so saddled with the weight of years of bad decisions and bad union negotiations that it was universally considered to be doomed, has emerged from the embrace of the US government to fight again, stronger, leaner and probably with a bright future ahead of it.
The same can’t be said however, for most of the junk that governments around the world – and especially the British and United States governments – currently own, or have a big stake in.
But preventing big banks and corporations from failing might have an even worse impact in the future than the obvious financial knock-on. A culture that even considers rescuing mediocrity or worse is not a culture that believes in excellence. And a culture that does not believe in excellence gets what it deserves.
Compare too big to fail with the Silicon Valley mantra of fail more and fail faster and you get a sense of why it is that a bunch of nerds in California are consistently changing the world and have done so again and again for decades.
Their traditional cultural reticence to become emotionally attached to anything that isn’t simply wow, means that they fail one hell of a lot. And that’s a good thing. When they succeed, they end up producing the sorts of excellent products and software that you’re reading this blog post on right now.
Personally, I just can’t see how any of the rubbish that got bailed out is ever going to provide the same value.