Globalization

As the American government struggles with what to do with its new ownership stake in storied corporate brands like AIG, Chrysler, Citigroup and General Motors, one of the fundamental questions that must be asked now is, can these brands - after months of stories about their insolvency - be saved?

I'm not so sure. 

Consider this passage from a NYTimes piece by Keith Bradsher about AIG's struggle with their damaged global brand:

Less than two months after changing its name, the biggest and best-known unit of American International Group is preparing to change its name again, in the latest sign of damage to one of the world’s most famous brands.

A.I.G. changed the name of the worldwide holding company for its property and casualty unit to American International Underwriters in early March.

The renamed A.I.U. quickly began issuing new business cards to employees and printing promotional materials, particularly in Asia. But A.I.G. has now decided that the A.I.U. name does not represent enough of a change, and is in the final stages of choosing a new one, said Leslie J. Mouat, A.I.U.’s regional president for Southeast Asia.

“The advice we’ve received is A.I.U. may be a bit close to A.I.G. — we don’t want to appear as the same leopard with different spots,” Mr. Mouat said in an interview, adding that he was told only Saturday of the decision to change the name again, which has not been publicly announced.

The question facing the Obama Administration now has to be not whether these companies can be saved, but what is the best way for valuable parts of the company to succeed and provide return to their investors (in this case the government).   One way is to prop up the companies, as we are doing now.  But there is a strong argument that these companies are so damaged now that their brand itself is permanently insolvent, and that the best course would be to break the companies up and sell their parts off to other stronger less damaged brands. 

AIG may be changing its name, but I think it will have to do much more than that to convince future customers that this not the same enterprise which made some of the greatest corporate blunders in the history of commerce.   All things being equal, would you buy a car from General Motors now, or or insurance from that company formally known as AIG, or open a new account with Citigroup?

The answer to this question needs to be an important part of what comes next in this difficult debate.

The Times has a story running in tomorrow's edition which is a very important window into what is happening in America today:

In its report Wednesday, the Census Bureau said that Americans’ mobility rate, which has been declining for decades, fell to 11.9 percent in 2008, down from 13.2 percent the year before and setting a post-World War II record low. Moves between states plunged the most, to half the rate recorded at the beginning of this decade.

In addition, immigration from overseas was the lowest in more than a decade, which experts attributed to the lack of jobs.

Overall, movers were more likely to be unemployed, renters, poor and black than non-movers.

For decades, several trends have driven a decline in American wanderlust.

Home ownership rates have risen and owners are typically less likely to move than renters. Two-earner families have become more common and finding employment for both spouses in a new location can be challenging. Americans’ median age has been climbing, while younger people usually move most often.

“It does show that the U.S. population, often thought of as the most mobile in the developed world, seems to have been stopped dead in its tracks due a confluence of constraints posed by a tough economic spell,” said William H. Frey, a demographer with the Brookings Institution.

He predicted that the foreclosure crisis might spur more local mobility, within or between counties, as families shift to rented quarters or move in with relatives.

In the wake of President Obama's explanatory and well-received speech on the new foundations for the economy, but also worsening news on the housing sector, NDN presents some background materials on a wide range of issues in the economy.

• The Housing Crisis and Our National Attititudes Toward Saving by Dr. Robert Shapiro, 4/17/2009 – Shapiro observes that, as a result of the burst of the housing bubble, the Millennial generation will likely be more interested in saving than investing in homes.

• Time to Face the Facts: The Economy Probably Won’t Get Better For Quite a While by Dr. Robert Shapiro, 4/9/2009 – Shapiro's most recent economic analysis says that the economy could be stuck in the Great Recession for long period of time, and that a v-shaped recovery is unlikely.

• Thoughts on Wall Street 2.0 by Simon Rosenberg, 4/9/2009 - Roseberg explored the crisis of trust between the American people, the world, and Wall Street.

• Friedman on a Carbon Tax by Michael Moynihan, 4/8/2009 - Moynihan discusses Thomas Friedman's column calling for a carbon tax and delves into the politics of pricing carbon.

• Carbonomics by Michael Moynihan, 4/2/2009 - Moynihan looks at the connection between pricing carbon and the future of the American automobile industry.

• Spend? Save? The debate continues by Simon Rosenberg, 2/11/2009 - Building on a previous post, Rosenberg follows the growing debate about whether American families should be focusing on saving.

• The Utter Bankruptcy of Today's Republican Party by Simon Rosenberg, 1/28/09 - Rosenberg argues that Republican opposition to the economic recovery package represents the ideological bankruptcy of the party.

• The Global Economic Crisis and Future Ambassadorial Appointments by Simon Rosenberg, 11/26/2008 - With the mammoth task of rebuilding international financial architecture and recovering from a global recession awaiting the new President, Rosenberg points out the the ambassadors to the G20 nations will be key members of the economic team.

• A Stimulus for the Long Run by Simon Rosenberg and Dr. Robert Shapiro, 11/14/2008 – This important essay lays out the now widely agreed-upon argument that the upcoming economic stimulus package must include investments in the basic elements of growth for the next decade, including elements that create a low-carbon, energy-efficient economy.

• Accelerating the Development of a 21st Century Economy: Investing in Clean Infrastructure by Michael Moynihan, 10/18/2008 – NDN Green Project Director Michael Moynihan outlines a strategy for investing in clean infrastructure that will help create long-term prosperity.

• Back to Basics: The Treasury Plan Won't Work by Dr. Robert Shapiro, 9/24/2008 - As the financial crisis unfolded and the Bush Administration offered its response, Shapiro argued that, while major action was needed, the Treasury's plan would be ineffective.

• Keep People in Their Homes by Simon Rosenberg and Dr. Robert Shapiro, 9/23/2008 – At the beginning of the financial collapse, NDN offered this narrative-shaping essay and campaign on the economic need to stabilize the housing market.

• Making the Struggle of Every Day People the Central Focus of the National Debate by Simon Rosenberg, 8/17/2008 - As the 2008 presidential campaign entered a crucial phase, Rosenberg argued that political leaders must focus on raising the wages and incomes of Americans.

Check out the following passage.  Is it from the Onion?

No, amazingly, it is from the NY Times today:

During World War I, Americans were exhorted to buy Liberty Bonds to help their soldiers on the front.

Now, it seems, they will be asked to come to the aid of their banks - with the added inducement of possibly making some money for themselves.

As part of its sweeping plan to purge banks of troublesome assets, the Obama administration is encouraging several large investment companies to create the financial-crisis equivalent of war bonds: bailout funds.

The idea is that these investments, akin to mutual funds that buy stocks and bonds, would give ordinary Americans a chance to profit from the bailouts that are being financed by their tax dollars. But there is another, deeply political motivation as well: to quiet accusations that all of these giant bailouts will benefit only Wall Street plutocrats.

The potential risks - politically for the administration, and financially for would-be investors - are considerable.

The funds, the thinking goes, would buy troubled mortgage securities from banks, enabling the lenders to make the loans that are needed to rekindle the economy. Many of the loans that back these securities were made during the subprime era. If all goes well, the funds will eventually sell the investments at a profit.

But, as with any investment, there are risks. If, as some analysts suspect, the banks' assets are worth even less than believed, the funds' investors could suffer significant losses. Nonetheless, the administration and executives in the financial industry are pushing to establish the investment funds, in part to counter swelling hostility against the financial industry.

Many Americans are outraged that companies like the American International Group paid out many millions in bonuses despite crippling losses and multibillion-dollar rescues from Washington.

The embrace of smaller investors underscores the concern in Washington and on Wall Street that Americans' anger could imperil further efforts to stimulate the economy with vast amounts of government spending. Many Americans say they believe the bailout programs - and the potentially rich profits they could yield - will benefit only a golden few, including some of the institutions that helped push the economy to the brink.

"This is an opportunity to forge an alliance between Main Street, Wall Street and K Street," said Steven A. Baffico, an executive at BlackRock, referring to the Washington address of many lobbying firms. BlackRock, a giant money management firm, is playing a central role in the government's efforts and is considering creating a bailout fund. "It's giving the guy on Main Street an equal seat at the table next to the big guys," he said.

The new funds are still under discussion, and they are unlikely to be established for several months, if indeed the plans go through at all.

Throughout this financial and economic crisis there has been this lingering sense that those close to Wall Street believe a "recovery" is possible, that our economy and our behaviors will snap back to the pre-crash boom years when cash flowed, government regulators looked the other way and profits were extraordinary.  That those in charge need to channel this "populist" anger towards the Street, calm it down and things will settle back down to normal. 

I just don't think this is going to happen. 

First, economic elites have been deeply and dangerously out of touch with the American middle class this decade. For elites it was a time of boom, appreciating assets, cheap money, and a radical reduction in their taxes.  For those struggling to make it the Bush years were a very different experience - declining incomes, more without health insurance and in poverty, exploding debt and a sense of falling further and further behind. 

Both the intensity of the anger towards the banks and the steepness of our Great Recession can only be understood if one understands that the typical family was already in distress before the Recession began; that for them the economy turned tough years ago and those in power were unconcerned, did nothing about it and if anything told them in a terribly Orwellian fashion that contrary to their experience things were actually good.  This "anger" is not therefore ephemeral, and will not quickly dissipate.  It has built up over a long time, a time when those in power enriched themselves and offered to everyone else a modern version of "let them eat cake."  

Second, what ails the American financial system today is not a crisis in confidence but a crisis of trust; and I agree with Barack Obama that because our families were already in such distress, and have such unsustainable levels of debt the "voracious American consumer" is not coming back soon.  What this means in policy terms is that the Obama Administration should not be focused on saving discredited financial institutions and going back to the good ole days.  Brands like AIG and Citigroup cannot be saved.  Who in their right mind will do business with them given what has happened? What leaders in the developing world, so harmed by this American-led global economic crisis, will allow their citizens or their governments to put money in these wildly irresponsible American institutions?  The government should immediately begin dismembering these companies, selling off whatever valuable parts remain for like Chrysler they are no longer capable of surviving as independent brands. 

For our financial system to regain the trust of Americans and those abroad a much serious effort will have to be made to show that the lax regulatory system has been fixed and consumers better protected; those at the center of the global crisis expunged and damaged brands shut down (and not put in charge of fixing the system itself); and if in any way in this process of fixing everything a small number of elites get super wealthy all these reforms, this effort to build back global trust, may be for naught. 

As I wrote when I returned from my recent trip to Chile, I think the American financial community is in deep denial about the global loss of trust that has come from their reckless behavior.  To many the Masters of the Universe have now become reckless, greedy exporters of economic contagion.  Salvaging the once highly successful American global financial sector will require much more than the firing of a few CEOs or a few slap on the wrists while floating these very same companies trillions of dollars.  It will require first and foremost a rejection of the concept of "recovery;" and it will require a fundamental transformation of Wall Street, a Wall Street 2.0, a new, improved, different and chastened Wall Street, and the sooner we get there the better for all of us.

This morning I reflected on the emerging economic debate.  In doing research over the past few days I was struck by this passage from a paper Dr. Rob Shapiro authored back in 2007, The New Landscape of Globalization: How America Can Reap Its Rewards and Reduce Its Costs, which I still feel is fresh and very pertinent: 

Where We Go from Here

We cannot entirely avoid these hidden costs of globalization, but we can outsmart and outrun them. There are many proposals to cushion their effects, through measures such as wage insurance. Those measures may help for a while, but by themselves they tacitly accept the underlying dynamics as inevitable and inalterable. A better approach focuses directly on affecting those dynamics. To begin, we will have to relieve some of the cost pressures on businesses, which in the more intensely-competitive environment of globalization hold down wages and job creation even as growth and productivity increase. Reforming our health care and energy practices, in short, is now the number one jobs and incomes issue, and one on which American workers and American businesses have real common cause. Both areas are already major public policy issues. Recognizing how the enormous increases in health care and energy costs of recent years directly and substantially affect wages and jobs should give greater sense of urgency to finally addressing both areas, in specific ways that will slow those increases.

In addition, we also should expand our public investments and other commitments in those areas in which American workers and businesses have advantages in the global economy. In an increasingly idea-based economy, the education of every American child should specifically include advanced skills in information technologies. Every child can and should have continuing access to a personal laptop computer in the school for 21st century instruction and at home for their homework. A recent proposal by Alec Ross of One Economy and NDN, "A Laptop in Every Backpack," is a sound and innovative start. Every worker in America also should have access to training in these technologies. Nearly half of our current workers cannot operate a basic computer, principally those workers with relatively few other skills. We can and should create a federal grant program for the country's 1,200 community colleges to use their existing computer labs and personnel to offer free computer training several nights a week to anyone who walks in and asks for it. Finally, Congress should look at ways to give workers more and better tools to prosper in this more competitive world, such as portable pensions and the passage of the Employee Free Choice Act.

As global competition increases, we also can and should expand public investments in the factors that foster innovation and help all industries grow and become more efficient. The federal government has long supported the nation's infrastructure, basic research and development, and education and training, all of which are essential to creating new business and spreading technological innovation. In recent years, however, our commitments in these areas have contracted sharply. For example, new commuter rail systems in the nation's larger metropolitan areas can not only bring more workers to more jobs, but also help reduce congestion and dependence on fossil fuels and consequent production of greenhouse gases. In addition, greater support for basic R&D in nanotechnologies for energy and health care, and the human genome for health care, can help to develop new business and over time address some of the long-term cost pressures in health care and energy.

Serious commitment to basic health care and energy policy reforms and meaningful new investments in education, training, infrastructure and basic R&D will be costly, especially at the outset. In the meantime, we can finance these necessary investments in many ways. Wasteful spending in other areas, including tax and spending subsidies for some well-connected companies and industries, can be pared back. Recent tax cuts for very high-income individuals, whose incomes have soared as those of average people have stalled, also can be pared back. Given the economy's basic strengths in this period, such steps will not slow down or hamper its growth in any meaningful way.

There are sound reasons to be wary of deficit spending, especially the prospect of sharply-rising federal expenditures for retirement and Medicare benefits as the baby boom begins to retire just a few years from now. These concerns, however, need not preclude our undertaking these commitments and investments. They will create substantial dividends for both the economy and government revenues over time, by bolstering those specific economic areas where the United States either has real advantages or needs real change. In so doing, they should help generate stronger growth and higher incomes, producing the revenues needed to sustain them. In this sense, these commitments and investments will operate like a sound investment that a good business makes, and often borrows to finance.

In addition, globalization itself can reduce some of the traditional costs associated with budget deficits, especially for the United States. As recently as the 1980s and early 1990s, when global capital markets were smaller and less efficient than today, large deficits in a growing economy claimed domestic savings that otherwise would have gone for business investments. As capital markets have gone truly global, the sheer volume and variety of financial assets flowing through the world's economies have blunted those effects because productive American businesses have direct access to the world's savings.

For some time, global capital has been growing faster than world GDP, faster than global trade, and faster than worldwide saving.17 A fair estimate of the global capital pool today is more than $150 trillion, more than three times world GDP and more than three its size less than 15 years ago.18 Moreover, the rate at which dollars, yen and euros move from one country to another (and often one currency to another) is accelerating even faster than their quantities, tripling in just the last 10 years and reaching more $5 trillion a year in 2006.

The fact that global financial assets today are growing faster than global GDP is meaningful. Since these assets are claims on the future, this rapid growth signals that overall, the world's rich people and rich businesses that hold them most of them are bullish about the future - certainly more so than in 1980, when the world's financial assets were growing much more slowly and totaled just 10 percent more than world GDP.

The unprecedented size of both the global capital pool and capital flows from country to country ultimately reflect the new prosperity of much of the developing world, along with the revolution in information technologies. After the last 15 years of massive transfers of Western investment, technologies and expertise to many countries that had stagnated for decade or centuries - China, India, Malaysia, and Mexico, for instance -their businesses and people are amassing large amounts of new saving and wealth. Modern finance exchanges much of this wealth for corporate bonds, bank deposits, stocks and other kinds of financial assets - economists call this process "securitization" - so that much of this new prosperity ends up in local or national capital pools.

Information technologies play a special role in moving these local and national pools of financial assets into the global capital system, because most of these financial assets now exist in the form of the bytes created, stored and transmitted by those technologies. And no sector has more thoroughly globalized itself than banking and finance. These technologies allow banking and financial institutions to not only link up and manage global operations, but turn physical wealth into securities and financial deposits that unlike paper or gold, can move from account to account and country to country in a nanosecond with no shipping costs. So, while there are relatively limited numbers of businesses in Chile or Indonesia - or even China - that can profitably use all the capital they create and save, firms and wealthy people in Santiago, Jakarta and Shanghai can easily and seamlessly invest their profits and savings in companies in Raleigh, North Carolina and San Jose, California, or lend it to the U.S. government.

There is a cost: Our trade and budget deficits require that we tap into global savings to maintain our business investments, and the result is that a growing share of the U.S. economy and its assets are owned by non-Americans. At last count, 12 percent of all U.S. equities, 25 percent of all U.S. corporate bonds, and 44 percent of U.S. government securities. And the large U.S. current account deficit, comprised mainly of our trade deficit, means that every year, we have to borrow hundreds of billions of dollars more from non-Americans. All that borrowing has depressed the value of the dollar, making it more expensive for American and U.S. businesses to invest abroad. It also raises the possibility of an eventual dollar crisis that would drive up U.S. interest rates.

These are all legitimate concerns, and we should take serious steps to increase our domestic savings. With global capital markets continuing to help finance business investment in the United States, these concerns need not delay the public investments and reforms required to better prepare Americans to live and prosper in an economy shaped by globalization and new technologies.

Sam linked to it this morning, but this new essay by Martin Wolf, the first in a new series about the future of capitalism in the FT, is worth revisiting (and reading):

In the west, the pro-market ideology of the past three decades was a reaction to the perceived failure of the mixed-economy, Keynesian model of the 1950s, 1960s and 1970s. The move to the market was associated with the election of Reagan as US president in 1980 and the ascent to the British prime ministership of Margaret Thatcher the year before. Little less important was the role of Paul Volcker, then chairman of the Federal Reserve, in crushing inflation.

Yet bigger events shaped this epoch: the shift of China from the plan to the market under Deng Xiaoping, the collapse of Soviet communism between 1989 and 1991 and the end of India's inward-looking economic policies after 1991. The death of central planning, the end of the cold war and, above all, the entry of billions of new participants into the rapidly globalising world economy were the high points of this era.

Today, with a huge global financial crisis and a synchronised slump in economic activity, the world is changing again. The financial system is the brain of the market economy. If it needs so expensive a rescue, what is left of Reagan's dismissal of governments? If the financial system has failed, what remains of confidence in markets?

It is impossible at such a turning point to know where we are going. In the chaotic 1970s, few guessed that the next epoch would see the taming of inflation, the unleashing of capitalism and the death of communism. What will happen now depends on choices unmade and shocks unknown. Yet the combination of a financial collapse with a huge recession, if not something worse, will surely change the world. The legitimacy of the market will weaken. The credibility of the US will be damaged. The authority of China will rise. Globalisation itself may founder. This is a time of upheaval.

From his Washington Post column today:

Suddenly there seem to be lots of people who think our biggest economic problem is that President Obama and the Democratic Congress are about to saddle our grandchildren with a mountain of government debt so high that they -- and the U.S. economy -- will never be able to get out from under it.

Before we get to the substance of the complaint, allow me to bring a bit of old-fashioned journalistic skepticism to the rants of Republican politicians and talk-radio bullies who are trying to pass themselves off as born-again deficit hawks. These are many of the same folks who saw no problem running up record deficits in the middle of an economic boom by pushing through the biggest tax cut in history, increasing entitlement spending, and waging a terribly long and costly war. Their recent moralizing about the evils of government debt has the distinct odor of hypocrisy and political opportunism.

That's not to say there isn't good reason for people of good will to worry about the federal debt. Largely because of the profligacy of the Bush years, the debt is already too big and will only get worse unless we begin to slow the growth in spending for Social Security, Medicare and Medicaid. Let's keep our eye on that big problem -- the $66 trillion unfunded liability -- not the $2 trillion or so in additional borrowing that the government is about to take on to rescue the financial system and stimulate the economy.

What's missing in all this sudden hand-wringing over the deficit is any sense of perspective. Two trillion dollars sounds like a lot of money, but in a pinch we could pay it all back in just one year if we were willing to reduce household and government spending by about 15 percent. It would require temporary sacrifice on everyone's part but would hardly be the death of the American dream.

The more important point, however, is that by having the government borrow this extra $2 trillion, our grandchildren will be better off financially than if we did nothing and let economic nature take its course.

In anticipation of his visit to the White House today, British Prime Minister Gordon Brown offered the following op-ed in the Sunday Times of London:

Historians will look back and say this was no ordinary time but a defining moment: an unprecedented period of global change, and a time when one chapter ended and another began.

The scale and the speed of the global banking crisis has at times been almost overwhelming, and I know that in countries everywhere people who rely on their banks for savings have been feeling powerless and afraid. But it is when times become harder and challenges greater that across the world countries must show vision, leadership and courage - and, while we can do a great deal nationally, we can do even more working together internationally.

So now is the time for leaders of every country in the world to work together to agree the action that will see us through the current crisis and ensure we come out stronger. And there is no international partnership in recent history that has served the world better than the special relationship between Britain and the United States.

It is a relationship that has endured and flourished because it is based not simply on our shared history but on the enduring values that bind us together - our countries founded upon liberty, our histories forged through democracy and an unshakeable belief in the power of enterprise and opportunity.

But if it reflects our values and our histories, this special relationship is also a partnership of purpose, renewed by every generation to reflect the challenges we face. In the 1940s it found its full force defeating fascism and building the postwar international order; in the cold war era we fought the growth of nuclear weapons and when the Berlin Wall fell we saw the end of communism. In this new century, since the horrors visited on America in 2001, we have worked in partnership to defeat terrorism.

Now, in this generation, we must renew our work together once again. A new set of challenges faces the whole world, which summons forth the need for a partnership of purpose that must involve the whole world. Rebuilding global financial stability is a global challenge that needs global solutions. However, financial instability is but one of the challenges that globalisation brings. Our task in working together is to secure a high-growth, low-carbon recovery by taking seriously the global challenge of climate change. And our efforts must be to work for a more stable world where we defeat not only global terrorism but global poverty, hunger and disease.

Globalisation has brought great advances, lifting millions out of poverty as they reap the benefits of economic growth and trade. But it has also brought new insecurities, as this - the first truly global financial crisis - underlines. Globalisation is not an option, it is a fact, so the question is whether we manage it well or badly.

I believe there is no challenge so great or so difficult that it cannot be overcome by America, Britain and the world working together. That is why President Obama and I will discuss this week a global new deal, whose impact can stretch from the villages of Africa to reforming the financial institutions of London and New York- and giving security to the hard-working families in every country.

I see this global new deal as an agreement that every continent injects resources into its economy. I believe that central to this new investment is that every country backs a green recovery for the future, that every country that wishes to participate in the international financial system agrees common principles for financial regulation, coordinated internationally, and changes to their own banking system that will bring us shared prosperity once again. And that, together, we must agree to reform the mandate and governance of global institutions to recognise the changing shape of the world economy and the emergence of new players.

It is a global new deal that will lay the foundations not just fora sustainable economic recovery but for a genuinely new era of international partnership in which all countries have a part to play. This programme of internationally coordinated actions includes six elements:

First, universal action to prevent the crisis spreading, to stimulate the global economy and to help reduce the severity and length of the global recession. Second, action to kick-start lending so that families and businesses can borrow again. Third, all countries renouncing protectionism, with a transparent mechanism to monitor commitments. Fourth, reform of international regulation to close regulatory gaps so shadow banking systems have nowhere to hide. Fifth, reform of our international financial institutions and the creation of an international early warning system. And last, coordinated international action to build tomorrow today - putting the world economy on an economically, environmentally and socially sustainable path towards future growth and recovery.

I have always been an Atlanticist and a great admirer of the American spirit of enterprise and national purpose. I have visited America many times and have many friends there, and as prime minister I want to do more to strengthen even further our relationship with America.

Winston Churchill described the joint inheritance of Britain and America as not just a shared history but a shared belief in the great principles of freedom and the rights of man - what Barack Obama has described as the enduring power of our ideals - democracy, liberty, opportunity and unyielding hope. Britain and America may be separated by the thousands of miles of the Atlantic, but we are united by shared values that can never be broken. And as America stands at its own dawn of hope, I want that hope to be fulfilled through us all coming together to shape the 21st century as the first century of a truly global society.

Strongly recommend his latest, Who's Really Being Propped Up in the AIG Bailout?

I showcased his must read original piece Saturday.

What the global financial system is going to look like in a few months is anyone's guess.  From the FT:

AIG will on Monday announce a radical plan to break itself up after 90 years as a global insurance conglomerate by ceding control of its two largest divisions to the US government in exchange for a $30bn-plus lifeline.

The move, aimed at helping the stricken insurer absorb the blow of huge losses, is the third time in five months AIG has been bailed out by the authorities. Coming shortly after the third government rescue of Citigroup, the decision to save AIG could fuel mounting public anger.

Or as Jake wrote the other day, welcome to The Dukes of Moral Hazard. Be sure to read Joe Nocera's great piece about AIG from yesterday's NYTimes.

Is this now nationalization by another name?