Size Matters

Size, it seems, has always mattered for Americans. Instilled into our psyche is the notion that bigger is indeed better. A place of honor is bestowed on the largest--the largest state, the largest city, the largest budget, the largest skyscraper, the largest corn crop, the largest salary, the largest university, etc., etc. In fact, our Constitution itself rewards those states with the largest populations with more political power. We even treat the undesireable aspects of life with more respect  depending on the size -- the largest natural catastophe, the largest terrorist attack, etc. If it's big, Americans are impressed. The Madoff scandal generates more significance beacuse it is the largest rip-off that we know about.

Perhaps, 2009 will go down in history as the year that Americans came to the realization that "big is not better"; for it is this year that the citizens have had to rescue  institutions deemed "too big to fail." In an atmosphere in which it was considered "un-American" to question or limit the size of a business or institution, these "too-big-to-fail" companies were permitted and even encouraged to expand. Then, when they self-destructed, it was declared that they are "too big to fail" -- meaning that they have a death-grip on the citizenry's genitals -- and the government, which they had been condemning, had to step in and save their sorry behinds.

In the financial industry, for years now the large banks have been permitted to devour the small with impunity;  but when the bottom fell out, it was the large ones who needed a bailout while the smaller ones who had been vigilant and cautious were able to survive on their own. Similar events occurred in the investment industry. Since 1987, the local, small investment company that I was doing business with has changed hands five times, each time being bought out by a larger company. And, once again, it was the large, "too-big-to-fail" institutions that needed government assistance.

Perhaps, the classic example of excssive size being a detriment is General Motors, the slow-moving goliath of the automotive industry. Its very size was part of its problem; it was apparently unable to make the tough decisions and implement the changes  that a smaller and more focused company like Ford was able to do. It is  only now that GM, on the brink of bancruptcy, is downsizing, eliminating product lines, closing dealerships and rethinking its future in the world of transportation. And, of course, it is GM, not Ford, that needs government assistance.

The list of over-sized failures could go on and on, but there is one other area that deserves mention. In the 1950's and 60's , days of "the larger-the-better" mentality, the educational gurus were promoting school consolidation, combining several smaller districts into one large district based on the theory that increased size means increased efficiencies. By the 1990's we found that large schools are neither more efficient nor productive. Every state that measures student performance has discovered that students in small school districts consistently outperform those in large districts, and to make matters worse, the cost per student is usually less in the smaller districts. Parents instinctively know this and, if possible, search out smaller schools, whether they be public, private or chartered.

Unfortunately, the health-care industry appears determined to follow the same failed paradigm. Although the industry is not known for its transparency, independent sources indicate that patients rate quality of care higher in smaller community hospitals than in larger metropolitan hospitals. Infection rates are lower in small community hospitals, and these same facilities have a higher rate of compliance with the recommended policies for preventing infection.

Perhaps, in 2009, Americans will hesitate before automatically buying into the "bigger-is-better" philosophy. Perhaps, we will be wary of anything that is "too big to fail." If it's too big to fail; it's too big and should be down-sized.