Editor's Letter: How stupid do they think we are?, How stupid are we?

What do AIU, Bank of America Home Loans, Ally Bank, AirTran, The Altria Group, and Xe have in common?

Some of the companies that got mucked up in the economic collapse have been making big changes aimed at moving beyond the current unpleasantness. They’re not necessarily changing how they conduct business, mind you, but rather have assumed aliases—or as they say in business-speak, “rebranded” themselves. American International Group, aka AIG, whose liquidity crisis last year threatened to bring down the entire financial system, has been rechristened American International Underwriters, or AIU. (Credit default swaps? That was some other company!) Countrywide Financial, of subprime mortgage infamy, was bought by Bank of America and quickly renamed Bank of America Home Loans. GMAC, the longtime financial arm of the bankrupt General Motors, now goes by the cheery name Ally Bank. “First came the bailout,” writes Louise Story in The New York Times. “Now comes the burnishing.”

How stupid do they think we are? Or perhaps a better question would be, How stupid are we?—because companies have been playing this name game for a long time and getting away with it. After a ValueJet airplane crashed into the Everglades in 1996, killing 110 people, the company became AirTran and soon, all was forgiven—or forgotten anyway. The Altria Group enjoys a better public image than that much-maligned tobacco giant Philip Morris—which Altria used to be called. And don’t forget the U.S. military contractor formerly known as Blackwater, which was renamed Xe (pronounced zee) soon after five former security guards pleaded not guilty in the deaths of 17 Iraqi civilians. A rose by any other name may still smell as sweet, but apparently, the same principle doesn’t apply to companies that don’t smell so hot.

Eric Effron

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