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Repaying the Favor

October 24, 2010 - by Donny Shaw

The real problem with too-big-to-fail is that in a post-Citizens United world there is virtually no limit to the amount of money these enormous companies can spend on making sure their favorite lawmakers get elected. Too big to fail is primarily a political problem. It's a self-perpetuating cycle whereby huge companies are allowed to grow indefinitely (i.e. not fail organically) because they have the financial muscle to buy-off the lawmakers in a position to protect them from regulation and bail them out when they get into trouble.

Not surprisingly, in this election cycle, companies that have taken money from the 2008 TARP bailout are focusing their political giving on candidates who support the bailout, oppose new financial regulations, and are most likely to be in positions of power in the next session of Congress.

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