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AIG and Citigroup: Obama's Problem Children

Not every child is the same. When you are a mother cooking dinner and you run out of a certain ingredient, this is important to know. There are some children you can send to the grocery store, give them cash, and they’ll come back with what you wanted and your exact change.

Some children will come back with what you wanted and will make some excuse about the change being short, such as “I lost some quarters in the storm drain.”

Some children will not only come back without what you wanted but will also make some excuse about why they don’t have the money, either, such as “I was robbed on the way to the store.”

Mothers, being mothers, know which kids to send to the store and which ones should, well, just continue watching Star Trek until dinner is done.

President Obama needs to start thinking like a mom, because Citigroup and AIG are most like the third type of child – you can’t send them to the store to accomplish a mission and you damn sure can’t give them cash with which to do it. You’ll just get some excuse like, “We were contractually obligated to pay bonuses.”

They are Obama's problem children.

AIG’s latest bonus debacle is not a testament to their lack of judgment – if they had any judgment, they wouldn’t be in the mess they’re in – but to the lack of judgment displayed by the Obama administration. Why would the Obama administration give huge sums of money to failing corporations that have already shown their hubris and sense of entitlement without having any strings attached to the money? Did anyone in the Obama administration actually review AIG’s contractual obligations to give bonuses – or even ask about them – before handing them yet another wad of cash?

Or better yet, why not structure the payment of cash to the issuance of loans or other appropriate economic stimulus activities such that the government pays out the money on behalf of AIG directly to the intended recipient?

The larger issue is, why did we allow corporations such as Citigroup and AIG to become “too big to fail” in the first place? Isn’t that the point of antitrust law – to maintain competition in the marketplace such that no one corporation can dominate and, as a result, become “too big to fail”?

The American people will give President Obama and his administration a pass on this one, but if it happens again, their anger won’t be directed toward the Citigroups and the AIGs of the world, but towards him and his administration. Hope got President Obama into the White House, but strategy (or, if you’re President Bush, “strategery”) will keep him there.


VwsRMyLife said…
my solution at this point if for the parent president Obama to offer up some tough love to these errant children and allow them to learn their lessons the hard way.

to hell with being too big to fail. that sounds like a child that is too big for their britches.

let them burn and learn like the rest of us did and are now doing financially because these 'kids' dropped OUR money down the flippin drain.

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