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Let’s Try This: It Worked for American Express

Posted November 12, 2008

The Whiner is always looking for a way out of our current financial mess. We know that you are, too. So here’s some good news — we’ve come up a strategy that you very well may have overlooked.

Actually, we didn’t come up with this strategy: American Express did. (Okay, they weren’t exactly the trailblazers either, but there’s so much mayhem right now in the financial markets that it’s hard, even for EconoWhiner, to keep straight who carried out which sneaky maneuver first.)

Here’s the idea. Let’s all become banks!

That’s what American Express has just done. (To be completely clear about this, the company has become a bank holding company. But that shouldn’t be much of an obstacle for the rest of us since the main qualifications seem to include losing money, needing money, and writing off the consequences of bad decisions like crazy.) Thanks to this nifty little strategy, the onetime-independent-credit-card-company-turned-bank may just be able to get its hands on up to $3.6 billion in government funds.

That’s enough to make The Whiner drool. Still doubt the wisdom of this strategy? Then consider this statement from Kenneth I. Chenault, American Express’s Chairman and Chief Executive. “Given the continued volatility in the financial markets, we want to be best positioned to take advantage of the various programs the federal government has introduced or may introduce to support U.S. financial institutions.”

That’s the real bottom line. Who knows what bailout programs the government may introduce next. Don’t you want to get on line for them nice and early?

The Whiner wants to know: How do you feel about companies like American Express jockeying for government funds? Is there any end to this mad scramble?

Reader Comments

  1. NYC whiner

    It’s outrageous and gives me no confidence that there will be intelligent use of the bailout money. This money is meant to save the American economy, it’s not an opportunity for financial institutions to grab as large a slice of the bailout pie as they can. Intelligent, impartial, enlightened regulatory oversight is a must here — wherever that might come from! I’ve now nicknamed Amex American Excess. Finally, I’d love to become a financial institution, or else my finances will put me in an institution.

  2. Richard Ballerand

    Not quite ready to become a bank holding company yet …

  3. Jack Jr.

    I’m wondering if your problem is, you’re just thinking too small. After all, American Express probably never thought of being a bank either until it decided to stick out its hand for whatever it could get. What are the odds it will KEEP adding on late-payment charges and other fees so that it can make as much money from us in other ways too?

  4. Ed

    Here is what burns me about this bailout. Paulsen et all are “disappointed” that the banks were siitting on the money and weren’t using the money to stimulate lending, right? Now you tell me, if you were giving, loaning, bestowing billions of dollars for a particular reason, wouldn’t you have some sort of signed agreement with the recipient? What the hell is going on here? Are Congress and Paulsen as stupid as they appear to be or are we being looted?

  5. Holly Clark

    I feel as though Paulsen has been incredibly cynical throughout this whole process. He says one thing, does another, and never looks back. We’re supposed to just trust his judgment about what does and doesn’t need to get done. How does it make sense that we’re bailing out American Express and not doing anything to more directly help people stay out of foreclosure? Or, bailing out banks but not auto manufacturers?

  6. GetReal

    Why would you bring up the auto manufacturers? Haven’t we had enough of these bailouts already? Maybe it’s a sign that Paulsen & Co. are finally waking up to reality. These bailouts aren’t working. I don’t want car manufacturers to go out of business, but why should I -or any taxpayer – be responsible for saving their butts?