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The One Thing That Should Be Too Big To Fail

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Integrity is the key to true success

Over the last half-decade or so, the term “too big to fail” has been ingrained into our cultural mindset.

For many, the term is a synonym for the protection that Wall Street enjoys from the government for its greedy and dangerous financial activities. The big banks and Wall Street firms know that they can engage in risky financial trading and bets with depositor’s money because, ultimately, the government guarantees the deposits with taxpayer dollars.

When you’re too big to fail, you can take reckless risks with other people’s money. And, if you fail, others bail you out. If all you care about is money, it’s nice work if you can get it.

J.P. Morgan makes a bad bet

Over the weekend, yet another massive financial bet by a firm too big to fail—J.P. Morgan—went south. According to the Wall Street Journal, “On Thursday, the bank disclosed a massive trading bet that resulted in the $2 billion-plus loss… The firm is prepared for a total loss of more than $4 billion over the next year, though the positions could rebound, reducing any loss, the person said.”

Morgan CEO, James Dimon, has been a leading spokesman in Washington, D.C. on keeping the government out of banking trading activities and calling for the repeal of trading reforms, including fighting hard against the Volcker rule, which restricts banks from making speculative bets that don’t benefit their customers.

The actions of Dimon’s firm disclosed last week don’t help his case.

Life isn’t fair

The reality is that even if Morgan’s trading losses were to reach into the $4 billion range and begin to affect its viability, the taxpayers are the ones who will bail out the firm. J.P. Morgan is too big to fail and doesn’t have to worry. They’ll receive a slap on the hand, lose the fight in regulations, and a few executives will fall on their swords (and resurrect somewhere else on Wall Street), but that’s about it.

Meanwhile, your hard-earned tax dollars will go towards protecting and propping up firms like J.P. Morgan who make such extravagant and irresponsible financial bets.

To many average people, this seems unfair. And it is. As I’ve written before, life isn’t fair.

In a perfect world, there shouldn’t be companies that are too big to fail. All companies, big or small, should suffer the consequences of their decisions, just as all people should too. But we don’t live in a perfect world and we have to operate in an imperfect one.

Life is complicated

Life is more complicated than our ideals. There are companies—and individuals—that don’t have to pay the consequences for their actions, at least not in this life.

Given this reality, you’re faced with two choices: Ignore them and focus on your life or obsess over them and focus on their life. The best choice is the former.

Is your integrity failing?

You may never be in a position where you lead a company that’s too big to fail. But you can learn from those who are. And the one thing you should learn first and foremost is the importance of integrity.

It takes a significant lack of integrity to waste people’s money because you can’t fail if it goes wrong, to ruin whole economies, and to destroy the lives of countless people in your pursuit of greed. Yet, there are many people who would do so without a thought—and who have done so already. We’ve experienced the effects of such actions for over five years now.

But you and I can’t control the actions of others. At the end of the day, we only have control over our own actions – and that’s more than enough struggle each day.

In your life, if you want to be successful and sleep at night, you must be a person of integrity. Make the right decision, even when it costs you. The one thing that should be too big to fail is your integrity.

Original publish date: May 16, 2012

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