Another word for this is oligarchy. This is so obvious it’s hard to believe it has to be pointed out.

Felix Salmon also has a smart rejoinder to Krugman’s assertion:

There will always be too-big-to-fail banks, no matter where the current debate leads us. When I say that banks’ balance sheets should be capped at $300 billion, I’m not for a minute saying that $300 billion is small enough to fail; I’m just saying that such banks are small enough to rescue. Too big to fail we can cope with, by rescuing banks rather than letting them fail. Too big to rescue we can’t cope with. And right now, the big four banks in the US are too big to rescue. Which is scary.

Another point that’s little discussed is that these economy-endangering corporations got that way with the help of lax regulation and antitrust enforcement. Most giant American corporations didn’t get huge through organic growth—Wall Street speak for growing by acquiring more customers rather than through mergers and acquisitions. Certainly, no American banks got that way organically.

Nouriel Roubini gets it, too:

Banks that are too big to fail are simply too big, he said, and regulators should “clamp down on them much more strongly” with greater liquidity and capital requirements and rules on leverage, to make sure they are going to be broken up, he added….

“These banks that were already huge have become even bigger and now we have to figure out how to slim them down,” Roubini said. “I don’t think we have addressed this big problem.”

Nicole Gelinas of the Manhattan Institute does too, over at National Review.

Morgenson’s common-sense rebuttal to Krugman and his emphasis on regulation of the status quo is as effective as any:

More than two years after the crisis began, “too big to fail” remains “too problematic to address” with anything other than more souped-up regulation. Given that earlier efforts at policing these entities failed so miserably, why should anyone think that a new-and-improved regulatory approach will fare better?

And this makes sense:

Rather than propose ways to shrink these companies and the risks they pose, the Geithner plan argues instead for enhanced regulatory oversight of the behemoths. This suggests the taxpayer safety net will be larger after our national financial train wreck, not smaller.

It’s good to see this discussion finally bubbling to the surface, and it’ll happen whether Krugman wants it to or not. It’s too important.

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.