> The solution is for the government to stop bailing out private institutions, regardless of whether they are deemed "too big to fail."

We tried that by letting Lehman go bankrupt. While your "solution" has a ton of populist appeal, it seems lack an understanding of the events of the past few years. Let's accept the fact that banks are going to fail, and ask the government work on the "too big" part. Denying that it is even possible to be "too big to fail" is only compounding the problem.