Obama: A War on Big Business?

 Fortune's profile on the changes to economic policy that the Obama administration will be making has several interesting tidbits.  One of them is the suggestion that Obama could shift away from policies that bail out big businesses and policies that encourage or allow them to consolidate--as in the case of J.P. Morgan and WaMu, Wells Fargo and Wachovia, etc:

Obama will bring to the White House a view endorsed by some of his advisors that bigness itself is a source of risk. It was a Republican administration that imposed a policy of "too big to fail" for the rescue of banks and insurance giants, and for loans to the auto industry. As a candidate, Obama issued cautious support for the Bush administration's bailout of AIG (AIG, Fortune 500), the world's biggest insurance firm. Any future decisions on corporate bailouts - including ailing automakers - would be determined by how "interconnected you are to the rest of the economy, both here and abroad," said Bernstein.

But some Obama advisors argue that the government should use its antitrust stick to prevent the formation of big business in the first place. "Pardon me for asking," Obama advisor and former Clinton Labor Secretary Robert Reich wrote on his blog last month, "but if a company is too big to fail, maybe - just maybe - it's too big, period."

It's not clear to me, however, how the "too big to fail" argument is any different than the "interconnectedness" argument.  The calls for a bailout--be it for Wall Street or Detroit--have been based on the premise that too much of the U.S. economy depends on these sectors for them to decline. It's a presumed Domino effect. The bigness matters, in terms of the argument for a bailout, because these companies play an important role in the interconnectedness of the economy.  So would this "shift" in an Obama administration be more rhetorical than anything?

Perhaps one difference is that "interconnectedness" is something that smaller businesses can harp on. They can't see they are "too big to fail," obviously, but they can say that they point to strength in numbers. That's when things like small-business tax breaks--perhaps with the capital gains tax--can enter the discussion as a type of stimulus.