"Too big to fail?"

Most of us now agree that no bank or financial institution should become 'too big to fail.' Because that means that the government (aka taxpayers) will have to step in and bail them out to save the system. That removes the ultimate responsibility and therefore encourages excessive risk-taking with other people's money.

But that phrase could apply more broadly, perhaps. Should any human being, or any human institution, ever become too big to fail -- or perhaps more aptly -- too big to be held accountable?

I began thinking about this when reading a New York Times Op-Ed by Michael J. Burry, former head of the Scion Capital hedge fund. He challenges Alan Greenspan's now infamous claim that no one could have predicted the housing bubble. Burry says that he did -- and points out how he took advantage of the bubble up to a point when he knew it would collapse and then got out ahead of the disaster. But he knew.

How did he know?

I waited for the lenders to offer the most risky mortgages conceivable to the least qualified buyers. I knew that would mark the beginning of the end of the housing bubble.

Makes sense to me. And I only have "kitchen table" budget experience. Why didn't Alan Greenspan know? Who would ever think that you can make something out of nothing, and have it keep on giving? That's crazy.

That's the point. Greenspan was too big to fail, and he's now fighting to make stick his claim that he has no responsibility -- despite the fact that the whole financial world hung on his every word during his later years as Chairman of the Federal Reserve. He surrounded himself with people who thought like he did -- then claimed that "no one could have predicted," because no one he listened to did. But others knew.

And is Benedict XVI too big to fail? Is the pope infallible? The voice of God? Or simply surrounded only by people who think the same way and are defensively deaf to other voices?

We'll see. The biggest challenged to our financial system since the Great Depression and the biggest challenge to the Roman Catholic Church, maybe ever. And both at the same time.

The lesson to be learned: we should never again allow a human leader or an institution (religious, financial, or governmental) to become too big for accountability.

Ralph