Jaws, the Bank Sequel

Too-big-to-fail is morphing into bigger-than-ever swallowing up failing-faster-than-ever.

The nation's largest banks, infused with taxpayer billions, are feasting on the weak as the Washington Post reports that "no consequence of the crisis alarms top regulators more than having banks that were already too big to fail grow even larger and more interconnected."

FDIC chair Sheila Bair sums it up succinctly: "It is at the top of the list of things that need to be fixed. It fed the crisis, and it has gotten worse because of the crisis."

This alarm follows news that her agency's insurance fund, which guarantees deposits, shrank another 20 percent in the second quarter, down to $10.4 billion, the lowest level since the savings and loan crisis in the early 1990s.

So far this year 81 banks have failed with another 416 on the FDIC'S "problem list."

Meanwhile, the bailout-bloated sharks are flourishing. J.P. Morgan Chase, Bank of America and Wells Fargo each now holds more than $1 of every $10 on deposit in the country. "Those three banks, plus government-rescued and -owned Citigroup," the Post reports, "now issue one of every two mortgages and about two of every three credit cards, federal data show."

As politicians debate socialized medicine, the country has moved toward a bastardized form of socialized banking, fed by the government for the ballooning profit of the few, who are squeezing out struggling smaller competitors by being able to borrow at lower interest rates while doing little to ease the consumer credit crunch, the original object of the bailout.

Now that the President has reappointed Fed chairman Ben Bernanke, the Obama economic team can get to work trying to undo some of its unintended consequences by starting to rein in superbanks with much tougher regulation.