Bigger Is Not Better: How the Death of Glass-Steagall Killed Real Capitalism

The Lie Wall Street Sold You

When my brothers and I built Markowski Investments, we made a deliberate choice early on: be the best, not the biggest. We turned down plenty of opportunities that would have made us larger. We walked away from the Robinhood model because, quite simply, it was wrong. And I will stand by that.

But I want to talk about something bigger than one firm’s philosophy. I want to talk about what happened to American capitalism itself, and why the financial system you think exists today is not the one that actually serves you.

The Word Nobody Uses Correctly Anymore

I am an Adam Smith capitalist. I believe in real, functioning markets, competition, price discovery, and accountability. But here is the problem: when people say we live in a capitalist country, I push back hard. Are there pockets of capitalism in the United States? Absolutely. But in many respects, we have drifted far from that ideal.

Like Inigo Montoya said, you keep using that word. I do not think it means what you think it means.

The Repeal That Changed Everything

To understand where things went wrong, you have to go back to around 2000. Clinton was on his way out, and Republicans and Democrats had been scheming together for years to dismantle the Glass-Steagall Act. This was Depression-era legislation that worked. It kept commercial banking separate from investment banking. It kept the gambling away from your savings.

When they repealed it, they opened the door for financial supermarkets, and that is exactly where Too Big to Fail kicked into high gear. The banks knew it. They were already conducting themselves as if the bailout was a foregone conclusion before the ink was even dry.

What followed was a wave of mergers, acquisitions, and consolidation. Swiss banks poured into the United States. The dynamic, messy, competitive landscape of New York investment firms began to collapse into a handful of massive institutions:

• JPMorgan
• Goldman Sachs
• Morgan Stanley
• Merrill Lynch, eventually swallowed by Bank of America

The New York Stock Exchange Is a Movie Set

I used to live on Broad Street, right across from the New York Stock Exchange. I took clients on tours of the floor back when specialists actually worked there, when there was real price discovery happening. I watched them dismantle it.

Today, the NYSE is essentially a sound set. It is a museum with a few computers and traders walking around to give the place atmosphere. In my honest opinion, they are not that different from the characters walking around Disney World. The real trading happens in data centers and algorithms far removed from that famous facade.

What Consolidation Killed

Here is what the death of competition and the rise of mega-banks actually cost everyday investors:

• IPO access at reasonable valuations is essentially gone. The opportunity to get into early-stage companies before they were picked over, that pipeline has been effectively closed off to regular people.
• Market dynamism has been replaced by a system where a handful of institutions are too important to be allowed to fail, which means they are also too important to be disciplined by the market.
• Real price discovery has been undermined by the consolidation of exchanges and the dominance of algorithmic trading.

And every time markets get volatile or things go sideways, the response is to pile on more legislation, which conveniently tends to protect the big players and squeeze out the smaller competitors who might actually serve you better.

What This Means for Your Money

The financial system you interact with today was not designed with your best interests as the primary objective. It was designed around the survival and profitability of institutions that became so large they required government protection to exist.

Bigger has not been better. It has been more fragile, less competitive, and more dependent on bailouts and regulatory favoritism than any honest capitalist should tolerate.

Understanding this history is not just academic. It should shape how you think about where you keep your money, who you trust with your investments, and whether the advice you are getting comes from someone who chose to be the best or just another arm of the machine that chose to be the biggest.