There has been a great deal of chatter recently about too-big-to-fail. The presidents of two regional Federal Reserve banks – in Dallas and Kansas City – are calling for the end of government support for and the breakup of systemically dangerous financial firms. The defenders of these Wall Street giants have responded by saying that our nation's economy and international competitiveness will suffer if we break up too-big-to-fail institutions.

But consolidation in the banking industry and the emergence of financial institutions with explicit government guarantees against failure haven't exactly contributed to an economic boom. It's been just the reverse—they triggered an economic collapse.

Downsizing too-big-to-fail institutions and the risks they pose to the financial system could not be worse than taxpayers spending trillions of dollars propping up these firms and federal officials, not the free market, picking winners and losers. Taxpayers should never underwrite the mismanagement or overreach of any firm. If it comes to that, the firm and all stakeholders should be wiped out—just like too-small-to-save banks are on Friday nights.

We've been down this road before.

Teddy Roosevelt understood the implications of too-big-to-fail and systemic risk in his day. In the early part of the last century, Roosevelt and Attorney General Philander Chase Knox sought to break up the "trusts," which were choking the economy, stifling innovation and competition, and hurting consumers and taxpayers. Following the breakup of industrial monopolies, the economy and job market flourished. Three decades ago, the breakup of AT&T led to a renaissance of innovation, competition and job creation in the communication sector.

The United States became the greatest nation on earth not because we had the biggest banks but because we had the most robust free markets. The Japanese learned the folly of "bigger is better" the hard way—and so did we three years ago. Oligopolies and asset concentration strangle competition and stifle innovation, job creation and free markets.

Our 10 largest banks may employ 1.1 million people today, but how many will they lay off as they struggle to maintain efficiencies in the future?

And consider how many more could be employed by the dozens of spinoffs dismantling these behemoths would create—not to mention the enhanced competition and benefits to consumers.

So I applaud those who are speaking out and working to restore balance and truly free markets to our nation's economy. They are tired, and so am I, of watching the government, instead of the free market, pick winners and losers—keeping taxpayers on the hook for a handful of firms that put us all at risk.

Camden R. Fine is the president and CEO of the Independent Community Bankers of America.