The stock market made big news today, but not in a way that benefits the weak economy or nervous investors. For the first time in more than a decade, the Dow Jones industrials closed below 7,000 at 6,763.69. Today, the Dow dropped nearly 300 points! MSNBC reports the Dow has lost half of its value since hitting a record high of 14,000 in October 2007.
Stock experts are putting the blame for the market’s tumble today on fears the recession could be deepening and AIG. The struggling insurance giant announced nearly $62 billion in quarterly losses, the largest of any U.S. corporation ever. In an effort to shore up our lagging financial system, the government tossed American International Group $30 billion more of taxpayers’ money. AIG has already received $150 billion in bailout relief.
I understand the government’s plan to keep some of these huge U.S. financial firms afloat for the good of the economy. Still, it is becoming clear that AIG’s bad management has damaged its reputation to the point it is no longer viable. Some critics say the only thing to do with AIG is to break it up into smaller companies. I agree. Also, the break-up of AIG needs to happen before the bloated conglomerate gets anymore taxpayer dough.