NATURAL SELECTION

The recent discovery of a remarkably well-preserved, mummified baby mammoth reminded me of the gargantuan banks, insurance companies, and auto companies that are slowly dragging the balance sheet of the U.S. Government toward the bottom of the sea.

I am reminded how the mammoths, once the largest land mammals to walk the earth, are no more. There is debate as to what brought about the end of the reign of the woolly mammoth, but one fact is clear: whatever stresses befell this massive animal, the species could not flee or adapt quickly enough and perished in its entirety.

What parallels exist between the extinction of the mammoth and the taxpayer support of Citigroup? For one, Citigroup is a bank that is doomed to failure by its over-burdened corporate structure that permits far too many inefficiencies to creep in at all levels. Secondly, the massive size of Citi, and the sheer weight of its balance sheet, makes it impossible for the company to rapidly adjust to the finanical tsunami by, for example, merging with another bank, or spinning off business units, and thereby effectively getting to higher ground.

Not only is it preferable to let outsized banks like Citigroup collapse under their own weight, it is absolutely necessary in order to preserve the ecological balance for all other banks and financial institutions. While Citi is kept on life support, it continues, like a zombie mammoth, to trample the shoots of smaller, more agile banks that are looking to advance their own business models. The taxpayer funding of these privately-held banks is also setting a precedent of government intervention into private enterprise that will encourage the same kind of consolidation and risk-taking that led to this crisis.

In order to restore balance in the system, the public must begin immediately to extricate itself from the process of nationalization of the financial sector and refuse to re-engage, no matter how scary it gets. At the same time, we must formally establish a hands-off policy with regard to the success or failure of any individual private business enterprise, backed by the force of law if necessary. At the end of the day, the core constitutional obligation of the federal government is to protect us from famine, war and natural disaster. Restoring the central government to its core function, and allowing the free market to heal itself, will preserve the innovation and diversity that is the hallmark of U.S. enterprise.