The New York Times had a good look yesterday at how big financial companies are lobbying Washington to not be labeled “systemically important” by regulators.

It kicks off with a nice lede:

It is not very often that business people head to Washington to explain how unimportant they are.

And reports that firms are lobbying even though the criteria for what will trigger a systemically important designation aren’t yet known, which means that these firms are almost surely lobbying to water down those criteria, not just to exempt themselves.

So what should systemically important mean? At base it’s pretty easy: If a company’s collapse would threaten to bring down the markets, then it’s systemically important. To put it another way, if the government would seriously consider bailing out a company rather than letting it go bankrupt, then it’s systemically important and should be held to much stricter standards.

Of course, most people who don’t run giant companies or rely on them for campaign donations think that if any company is too big to fail, it’s too big to exist. These firms should just be busted up until they’re small enough not to threaten everyone else and benefit from implicit government subsidies.

That’s not going to happen, but if these regulations are implemented well, they would increase TBTF companies’ cost of doing business enough to offset the massive backstop subsidies they get from taxpayers. That would incentivize companies to slim themselves down by increasing their costs and help smaller companies compete with them. Don’t hold your breath.

In part that’s because it’s harder to figure out in a non-panic situation who would be bailed out in a panic. For one, the extent of a firm’s interconnectedness, a critical component of whether it’s too big to fail, sometimes is only fully apparent after a panic begins. It’s clear that regulators should err on the side of being heavy-handed here. Better to ensnare a few big firms that wouldn’t be a problem than to let ones that would slip through. But it’s also clear that they won’t—at least if the history of the Obama administration and its current push for 2012 cash from Big Finance are reliable indicators, and I think they are.

The Times reports that some of the companies lobbying Washington on their relative unimportance are General Electric, Hartford Financial Services Group, Allstate Corporation, John Paulson’s hedge fund, Citadel, Larry Summers’ old bosses at D.E. Shaw, bond goliath PIMCO, and mutual fund companies like BlackRock and Fidelity. Companies that actually make stuff are lobbying, too, like General Electric, Caterpillar, and Boeing.

Sorry, GE, but you’re automatically systemically important because you got bailed out in the last go-round. GE was so systematically important that they bailed it out even though it wasn’t a bank and didn’t face bank-level regulation, “capitalizing on the federal safety net while avoiding more rigorous regulation” in the words of ProPublica and the Washington Post two years ago.

So, too is The Hartford:

In May, the Hartford Financial Services Group sold off a thrift it bought in 2009 to secure billions of dollars of bailout funds designated for banks. In February, the Allstate Corporation sold a similar bank that had made it eligible for aid, though it decided not to accept the cash.

The gall of that company, $300 billion in assets, is something to see.

Finally, this kicker is terrific (emphasis mine):

Meanwhile, several large financial companies are finding sympathetic ears in Washington. Barney Frank, the ranking member of the House Financial Services Committee and one of the chief architects of the new rules, said he did not believe life insurers and mutual-fund companies were risky enough to require heightened supervision.

“If you look at it, they weren’t the causes of the problems,” said Mr. Frank, the Massachusetts Democrat whose political region is home to many mutual fund and insurance companies.

Excellent.

That gets to the heart of the problem, doesn’t it? (UPDATE: See below for James comments and my responses)

The bigger you are, the more money you have, the more lobbyists you hire, the more campaign donations you give, the more revolving doors you grease, the more power you have to get bigger and threaten to bring the whole house of cards tumbling down with you.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.