Greatest "risk-free" wealth making strategy ever?

Simon Johnson has this brilliant description of the evolution of the too-big-to-fail (TBTF) financial institutions in the US,

Persuade the government to let you build a big bank; take a great deal of risk in that bank (particularly by increasing leverage, i.e., debt relative to equity); pay yourself based on the return on equity, unadjusted for risk; get cash payouts while times are good; and when events turn against you, the central bank can bail you out — and keep you in place because you are regarded as indispensable. This is the history of modern America.

This is not all. You could also, like Jaime Dimon of JP Morgan Chase, place yourself at the top of the regulatory table so as to guide the entire aforementioned process without even once blinking about the shocking conflicts of interest it begets.

In sophisticated modern democracies, the elite increase their control over the economic engine through such subtle forms of "extractive institutions". As economic wealth gets concentrated in the hands of a small sliver of the population, it is only a matter of time before political power too follows suit. This trend, which is increasingly evident across societies and which has gradually and systematically chipped away at countervailing checks, is surprisingly less discussed. So much so that, as Simon Johnson writes, even Daron Acemoglu and James Robinson "underemphasize" them in their magisterial recent book.

I find the position of libertarian free-marketers in such debates perplexing. Was it not one Adam Smith who said, "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices"?