When bonehead politicians in California follow the party line

Here is Fed member Jeffy Lacker speaking

First, many financial institution creditors feel protected by an implicit government commitment of support should the institution face financial distress. This belief dampens creditors’ attention to risk and makes debt financing artificially cheap for borrowing firms, leading to excessive leverage.

http://www.zerohedge.com/news/2013-12-04/too-big-fail-banks-are-taking-over-number-us-banks-falls-record-low

The too big to fail banks have a larger share of the U.S. banking industry than they have ever had before. So if having banks that were too big to fail was a "problem" back in 2008, what is it today? As you will read about below, the total number of banks in the United States has fallen to a brand new all-time record low and that means that the health of the too big to fail banks is now more critical to our economy than ever. In 1985, there were more than 18,000 banks in the United States. Today, there are only 6,891 left, and that number continues to drop every single year. That means that more than 10,000 U.S. banks have gone out of existence since 1985.

The subsidy that Congress gives to the Too Big To Fails comes to about .5% og growth per year, it is shaving off 15% of our growth. That cut of the ttoo big to fail comes from the small banks who have to play by the market. Hence, QE and COngress and idiots in the California political class are robbing the middle class blind, on behalf of wealthy bankers! UC Professors say they have to do this to protect our entitlements. I would rather take an entitlement cut. The basic problem here is that Californians would never go for this, but they are unaware. And if they were aware, the Califo9rnia middle class has no vote in the Senate. Remember, we get 1/5 the vote of the small states.