There is a very popular phrase that has sprung from the bailouts of the New Depression: “They are too big to fail.”

That phrase has a naive, implicit vote of certainty that I find offensive.  For one thing, many of those bail beneficiaries have already decided to split up their businesses or exfoliate major divisions to save the main corpus.  If they are too big to fail, wouldn’t it be worse to go on such a diet and become smaller?  If nothing else, it lowers the chances of securing more bailout money.  Surely this might impact the CEOs bonus structure in a few years.

Taken to the other extreme, I guess very small businesses and startups are “Too small to succeed.”  Trouble is, the media and pundits have addressed this end of the business spectrum.  They think startups are all the rage, the panacea for unemployment.  You see, several amazingly successful tech companies were founded during recessions!  Just think of it.  Come up with the next great idea and you are certainly well on the way to prosperity.  In fact, you don’t really need an idea.  There are lots of businesses out there that will help you start a business.  In fact I think unemployed, homeless people in bankruptcy should go to the head of the line and start a business that helps other unemployed, homeless people start their new business.

Perhaps we are just hopeful when it comes to cute little startups or behemoth businesses that can’t get out of their own way.  Perhaps the current wisdom that unemployed people should start their own business because some great companies have emerged from hard time births, or huge multinational corporations are too big to fail is entirely accurate.  If the odds of success are best at the ends of the spectrum of size, then we really need to talk about a new bailout for losers.  We need a new phrase to illustrate where the pain is going to be when the bailout money is all passed out and all the unemployed people are operating successful apple stands on every street corner.

Those average businesses, the ones that have been around a while, why “they are just too mediocre to succeed.”  Serve them right if we tax them out of existence.

-- Walter Lounsbery, 2-19-2009