AIG “has become a money pit for the United States government,” said Breakingview’s Lauren Silva Fiona Maharg-Bravoin in The New York Times. Its newly restructured $150 billion bailout replaces an earlier $123 billion package, and “Bailout 2.0 looks like an improvement.” But it still puts all the risk on taxpayers while leaving private shareholders “a slice of any upside.” That’s too generous, and it makes “a persuasive Exhibit A” for better regulation of companies deemed “too big to fail.”
The U.S. bears some blame for having to bail out its “draconian” and counterproductive first bailout, said The Wall Street Journal in an editorial, and now that it has replaced the “‘rescue’ medicine,” it needs to “allow private capital to replace government control.” Kudos to the Treasury—“AIG lives.” Now, release it from the hospital.
Actually, it might be time to just kill off “the walking-dead insurance giant,” said Willem Buiter in The Financial Times online. It’s already burned through $81 billion of the original bailout, and counting, and the U.S. either needs to fully nationalize AIG—a bad option—or put it into receivership immediately and sell it off piecemeal. It deserves no less.
AIG promised a week ago to “pay off much of its borrowings by selling off pieces of itself,” said Nanette Byrnes in BusinessWeek online, and we’re still waiting for “a single major asset sale.” At this rate, we may be waiting for a long time.
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
- How to be the most productive person in your office — and still get home by 5:30 p.m.
- How our botched understanding of 'science' ruins everything
- 43 TV shows to watch in 2014
- The science of sex: 4 harsh truths about dating and mating
- 6 things the happiest families all have in common
- Why does Fareed Zakaria still have a job?
- 4 simple steaks you can cook in a pan
- Save the world... by changing how you pee
- Does solar energy have a battery problem?
- How U2 became the new Nickelback
Subscribe to the Week