Still too big to fail, AIG is expected to report a $60,000,000,000.00 loss tomorrow morning. So, of course we know that Uncle Sam is on the white horse riding to rescue the Damn-Fools in distress. We stand beside the notion that if it is too big to fail, it is too big.
Giving more money to failing institutions that are too big to fail should come with the requirement that the corporation be split into smaller corporations. Otherwise, the American taxpayers are hanging not by a single hook, but by multiple hooks. We are setting ourselves up for failure over and over again. And, whether the term nationalization comes to mind or not, any time a company is guaranteed existence by the government it is essentially nationalized. Of course, that isn’t the definition of nationalization. But, the nation is being held responsible for irresponsible acts.
At the very least we are acting as enablers. Parents are described as enablers when they continue to fund an adult child’s philandering ways. Psychologists insist that by continuing to bail out the child who continues along a path of destruction will do nothing to alter the behavior. So, as long as the taxpayers continue to fund AIG we can expect nothing to change. The damage has been done. AIG knows that they are safe as long as the government can print money… or complete an e-transfer.
And so it seems that the tail is wagging the great American dog.
AIG’s board on Sunday approved a broad revision of the U.S. government’s $150 billion rescue. It was the third time the government has reached out to the struggling insurer and the latest rescue is expected to put greater funds at AIG’s disposal to keep it afloat as it readies to report a roughly $60 billion loss early on Monday.
While putting more taxpayer money at risk is unlikely to be palatable in the current economic environment, analysts said the U.S. government had little choice. Without government intervention, AIG’s expected losses would prompt credit ratings downgrades — triggering even more debilitating losses for the insurer, and its trading partners.
The world did not end when Lehman Brothers failed. Although it is reasonable to assume that the failure did thrust us into further economic chaos, the world did not end. If we are going to continue to keep AIG, Citigroup, and others afloat, let’s just hope that we are getting something in return. And, let’s hope that someone forces the too big to fail corporations to subdivide into companies that can stand alone without taxpayer intervention.
While I’m on a rant, let me add that for those who were opposed to the stimulus package and stand in opposition to President Obama’s budget plan should reconsider their positions. The government should invest at the very least as much into America and Americans as it has given to the too big to fail banks and insurance companies. After all, without creating new jobs and rebuilding our nation there will be no one to foot the bill for the bailouts.