Could Corporate Abuse be a Way of Life?
Americans live in a time of systemic business bailout. Is this approach really in the nation’s best interest?
Big Corporate Business wants to paint itself as an angel of propriety, innocence and decent decisions. If AIG had not been recently bailed it, there is not a doubt that a number of meetings and even the spa meeting of executives would never have taken place. Naturally, corporate officianados could argue that deposits had already been rendered and that a cancellation would mean a possible loss of any deposit should one have been required. The reality is that decadent meetings don’t look good after a forced major bailout by American taxpayers through the Bush administration. Appearances indicate that Republican policy coupled with Congressional self-interest are responsible for the systemic blight that binds America. In a time of national crisis, American International Group Inc. spent $440,000 (nearly half-a million dollars) on a conference at a California resort less than a week after the $85 billion government takeover.
AIG’s failures was derived from its insurance of mortgage backed securities. Now AIG has flown through the $85.0 billion borrowed from the United States government last month and is now securing an additional $37.8 billion line of credit from the Federal Reserve. Naturally, AIG will be exchanging investment grade securities for those billions. The Federal Reserve Act requires evidence that AIG is unable to secure adequate credit from other banking institutions. Considering their spending habits, the interbank lending lockdown and burgeoning credit crisis, this comes as little surprise. Yet, more and more Americans, including this writer are skeptical about the real value of securities that are being used as collateral for loans that we are expected to support. There is no transparency to the American taxpayer.
After less than a month since September 16, why does AIG need more taxpayer funding? Do we have the makings of a new Enron or Worldcom at government expense? AIG is required to sell corporate divisions to raise funds to pay off the original loan. It’s no surprise that executives blame everyone but themselves. America has become a den of bipolar business rhetoric and excuse making. How sad that now the taxpayer is directly involved.
While a fire sale isn’t to the benefit of American taxpayers, the idea that AIG is planning to sell off segments of business truly rings hollow when little visible actions have been made to do so. With more cheap bailout money from the Federal Reserve, the increasing pattern of American bailout in Corporate America despite bad risks taken and poor investments made is even raising the brows of some lawmakers.
Despite the risks to the nation and the world, the concept of business failure is a necessary component of life in the business world. Continually rescuing hurting Big Business while small business and the American taxpayer suffer economic devastation is an immoral act that debases the values of a nation. Bad apples of business continue to spoil the barrel. Bailing them out make the rot systemic and keeps systemic rot active and alive.
Like small business, if Big Business cannot react creatively or overcome bad decisions, they must pay the cost. For example, if Big Three Automakers cannot decide how to deal with life successfully in the business world, they must close their doors. Borrowing through the government must not be an option. Yes, Americans will lose jobs. Other options exist. Continually rewarding overeducated executives and boards that make poor decisions and fail to show any business acumen has become a new way of life that Americans cannot continue to tolerate. Fear is a great motivator. Unfortunately, America has learned too late what this really means.
American politics continually fails to look after the real values of America: small business and the individual. The Bush administration has accepted fear as a perceived lack of security that Americans must cover for the world. ~ E. Manning