Another word than “oligarchy” springs to mind :

A Plutocracy is a government controlled by a minuscule proportion of extremely wealthy individuals found in most societies. In many forms of government, those in power benefit financially, sometimes enough to belong to the aforementioned wealthy class.

Classically, a plutocracy was an oligarchy, which is to say a government controlled by the wealthy few. Usually this meant that these ‘plutocrats’ controlled the executive, legislative and judicial aspects of government, the armed forces, and most of the natural resources. To a certain degree, there are still some situations in which private corporations and wealthy individuals may exert such strong influence on governments, that the effect can arguably be compared to a plutocracy.

If there are no forms of control within the society, the plutocracy can easily collapse into a kleptocracy, “reign of thieves”, where the powerholders attempt to confiscate as much public funds as possible as their private property. A kleptocratic state is usually thoroughly corrupt, has very little production and its economy is unstable

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Zaibatsu (literally plutocrats or financial clique) is a Japanese term referring to industrial and financial business conglomerates in the Empire of Japan, whose influence and size allowed for control over significant parts of the Japanese economy from the Meiji period until the end of the Pacific War.
They had their origins in the activities of the seisho (‘political merchants’), who made their fortunes by exploiting business links with the newly restored Meiji government. The five major zaibatsu (Mitsubishi, Mitsui, Okura, Sumitomo, Yasuda) controlled much of Japanese industry and trade up to World War II.The zaibatsu were the heart of economic and industrial activity within the Empire of Japan, and held great influence over Japanese national and foreign policies.By the start of World War II, the Big Four zaibatsu alone had direct control over more than 30% of Japan’s mining, chemical, metals industries and almost 50% control of the machinery and equipment market, a significant part of the foreign commercial merchant fleet and 60% of the commercial stock exchange.

The zaibatsu were viewed with suspicion by both the right and left of the political spectrum in the 1920s and 1930s. Although the world was in the throes of a worldwide economic depression, the zaibatsu were prospering through currency speculation, maintenance of low labor costs and on military procurement.

In 1948 a decree limited the influence of the traditional zaibatsu families, and prevented members of these families from continuing to hold official positions in zaibatsu companies. The influence of the zaibatsu therefore declined. They are now more usually known in Japan as keiretsu.

In William Gibson’s Sprawl trilogy, ‘Zaibatsu’ is the generic term used for the megacorporations prevalent in the futuristic world in which the plot is set.

A similar use is also made in Robert Asprin’s The Cold Cash War, where megacorporations of this name, dominating the world, are not specifically Japanese.

Lewis Shiner’s 1984 novel “Frontera”, anticipating the dissolution of the USSR, depicted the transformation of what were at the time of writing state-owned Soviet companies such as Aeroflot into “Zaibatsu” – the term being used in the broad sense of “a big privately-owned corporation”.

The wildly expanding disparity between thehaves and thehavenots (which the predatorclass and the finance oligarchs perpetuate and institionalize) is the least of our problems and threats. From your lofty perch, all may be well in the land of Oz, but from our lowly perspective the oligarchs malfeasance, perfidy, and criminal conduct have wreaked havoc on our lives today and our childrens future.

Your assumption, that I’m starting with Johnson and Kwak, is not correct. I’m starting with an early 19th century English Chancellor in Equity who lamented that the corporation did not have a neck by which to be hung or a body to be flogged. I agree that penalties imposed on the derelict corpses of hideously mismanaged financial institutions would be born by a variety of difficult to identify but generally blameless stakeholders and so doesn’t serve much purpose.

If one wishes to be punative, cut through the corporate veil and go for the individual human actors responsible for the policies and decisions that led to the current mess. If one wishes to address the role of organizations too big to fail in the general economy, begin by recognizing that anything too important to fail is too significant to be left in private hands, and requires nationalization.

A regime of punative pursuit of formerly esteemed corporate leaders is in no way inconsistent with maintaining a stable financial services sector. It may actually facilitate it. The burden of proof should, perhaps, be on those arguing against social justice rather than on those who support it.

To date, we have exhausted the public appetite for further support of distressed financial institutions. One way of reviving it might be with high profile criminal proceedings against the leaders who brought those institutions into their current distressed condition. Further, if you accept the argument that the dollar and our financial markets are a significant ‘public good’ that the United States provides to (and collects a rent for from) the rest of the world, then some exemplary demonstations that involve blood on the knife would be far more persuasive to our customer/clients than endless lectures on corporate governance and nepotism.

Those are two arguments in favor of a punative approach. I’d be curious what the arguments against it might be.

So Mr. Genius Silly Things:
If the status quo is so crucial to maintain in this crisis, at what point do you pull resources because if you stop supporting these institutions the unthinkable might happen! Your argument appears circular. Please provide an exit strategy.

FYI I have studied systemic risk, and actually apply it to the real world.
BTW which investment bank do you work for again?

As for the Shapiro cite, I don’t follow. Switching costs for bank customers, at least retail customers, are almost zero. Perhaps not so much for investment banking, but deposit accounts, credit cards, consumer loans, mortgages, etc. can be switched really easily.

Its an ends justify the means argument. I respect the measured approach and the maturity to recognize that the greatest suffering from a systemic collapse will be borne by those not only least responsible but also least able to withstand severe economic turmoil. But ends justifying the means is such a slippery slope that it should only be used where future events can be accurately predicted. Any series of events involving politics and economics is by definition extremely unpredictable. So we should stick with what we know works in the here and now.

Of course the government should mitigate the damage, FDIC insurance etc., but we should have let the market render justice on solvency and the department of justice on fraud.

It is matter of fact that Roubini saw fundamental improvement to long term outlook and changed his forecast. Meredith didn’t.

Fine by me if you don’t think that is different.