Why "Too big to fail?"

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I have always been fascinated with the connotation, the associated or suggested meanings behind words.

First we heard that mainstream banks were “too big to fail” and we handed them $700 million of our money (well we didn’t hand it to them; our elected representatives did). Now we hear that “Big Auto” is “too big to fail.” What does that mean?

It seems it means the corporations are so big that failure would create such financial hardships for people which would segue into political hardships for the very politicians who have the ability to hand out our money.

Has anyone considered that perhaps these companies are just simply “too big?”

Why not force a managed restructuring in which the Big Three auto makers would be split up? Remember when AT&T was broken up because it was too big? Each share holder received shares of all the new companies which were created in the breakup, and then free market forces went to work on the components.

What if GM for example was broken into its parts (Chevrolet, Cadillac, GMC, etc,) and each smaller entity then would succeed or fail according to normal forces in the free market. If they were competitive they would succeed; if not, they would fail as they should. The same could be said for any company, like GE which also surfaces from time to time in the “too big to fail” argument.

Maybe when a company gets so big that its failure produces national political implications, it is just too big to operate under normal free market rules.

When government becomes the insurer of bad choices by the jet set corporate executives of the “too big to fail” companies, and when it becomes the safety valve for rescuing those companies from bad choices, poor strategic plans, and their market-driven accountability for failure, then government becomes too expensive.