Groundhog Day – The new AIG bailout, the same old messaging
This morning brought the announcement that AIG (American International Group), already the largest recipient of bailout (TARP) funding, set to receive another $30 billion dollars of Federal funding. This comes on the heels of an announcement earlier this morning that AIG announced a loss of over $61,000,000,000 (billion!!) dollars this past quarter, the largest quarterly loss ever by a corporate entity.
Why?
The answer given is the same one that was given when AIG was given $150 billion in taxpayer funding; You can read the answer here (the U.S. Treasury Press Release – a bit long) or at any one of the thousands of press accounts this morning — AIG is too big to fail, and the results of an AIG failure on the capital markets would be catastrophic.
The same message delivered in September, along with $150 billion of your money. Groundhog Day.
What does this have to do with messaging?
Based on the market’s current reaction to “Bailout, Pt.???”, down to its lowest levels in twelve years, everything!
A lot has transpired in the world of AIG between September and today — a new CEO, a lot of government intervention, and a minor scandal. Cur
Who can forget the reports of AIG executives using bailout funding for a spa trip at the St. Regis Monarch Beach Resort. (Or the answer from AIG — It wasn’t what it seemed – remember, everything you do sends a message!)
That wasn’t it.
There was the AIG executive, Joseph Cassano, who is largely blamed for much of AIG’s malaise, who was slated to be paid $1,000,000 (million) dollars A MONTH as a consultant until Congressman Waxman brought this little tidbit to the public’s attention and the contract was immediately voided by AIG (what message does it send that it took a Congressional Chairman to point out to AIG that paying the person who is largely blamed for your downfall $1 million dollars a month as a consultant probably doesn’t send a positive message, especially when you are looking for a bailout!)
Here are the statements today from both AIG and the United States Treasury and Federal Reserve.
What’s missing?
Simple — a message!
The message that “AIG is simply too important to fail” certainly sends a message. It sends a message to anyone who has lost a job, saw retirement slip away, or watched a home fall into foreclosure.
It sends a message to anyone who has been furloughed, any retailer who has been forced to close his or her doors, and any small business that simply can’t access credit.
CEO Edward Liddy’s refusal to rule out the need for another bailout in the future on CNBC earlier this morning sends a message as well.
My guess is these are not the messages that either the Treasury or AIG wants to send.
I am not disputing the facts behind the latest bailout – I personally believe that AIG is probably too important to the US economy to allow it to fail. My dispute is with the messaging, and how it is being handled.
What affect does AIG have on the life of the average person?
What would a collapse of AIG mean to the average person?
Does this new package guarantee that a collapse will not occur?
What safeguards are in place to ensure that there are no more partying on the taxpayers dime?
Why has this concept not been “sold” to the American public at all?
These are all questions that should have been addressed this morning in either press announcement, and more importantly in a prime time address.
The message being sent is that this is all too complex for the average American to understand — not a great message to send when you are spending the average American’s money.
When crafting a message, always remember the audience and the needs of the audience. Always.
3 Responses
to “Groundhog Day – The new AIG bailout, the same old messaging”
2 Trackback(s)
- Mar 2, 2009: AIG: Bailout, or No Bailout? - make in baidu…百度 is SE
- May 18, 2009: St Regis monarch beach
Very interesting article… I read an article in Emerging Markets Economy (http://www.emeconomy.com/&mod=search&searchWords=cassano&st_id_search=97278&time=0&sub=1) that explains the most recent developments on the rage against AIG. It shows a very interesting point of view. It further confirms that the rage is misplaced. Not only that, if you read this New York Magazine article (http://nymag.com/news/business/58094/) you see that people are just looking for a scapegoat. First AIG, now Goldman Sachs. All the accusations are becoming very confusing.