Today's Outrage: AIG, MetLife Contradict Obama

Today's Outrage is published weekdays at 9:30 a.m. EDT and is available as an RSS feed.

I don't get it.

I don't understand the blatant contradiction between the Obama administration's clear desire to dismantle large, systemically risky financial institutions and the talks by AIG to sell its sizable foreign life insurance unit to MetLife.

MetLife ( MET) is already the largest U.S. life insurer and AIG's American Life Insurance unit, aka Alico, operates in more than 50 countries outside the U.S. and may be worth between $11 billion and $20 billion, depending on whether you ask AIG or MetLife.

While that may help the Obama team dismantle AIG, it sounds like the exact opposite of dismantling for MetLife.

Considering that AIG is controlled by the government, this whole on-again, off-again thing between these two insurers seems pointless. Didn't anyone over there get the memo that Obama doesn't like big financial companies?

I'd love to believe that AIG officials and MetLife management are just being defiant and exercising their rights in a free market, but that's too bold for an industry on the ropes.

So it begs the question: how does Obama define "too big"?

Maybe if the Alico unit is sold in a fire sale - because apparently no one but MetLife is showing any interest - it won't seem so big in the end.

This also may be an acknowledgement that the previously discussed plan for an IPO may not bring in much cash either - how much will investors be willing to pay in the current depressed market for a unit of the most disgraced insurer on the planet?

One conclusion is that the contradiction between political policy and the government's actions reveals how urgently the administration would like to start seeing AIG repay some of the $80 billion in taxpayer loans.

That's actually the most legitimate of the government's motives.

Frankly, the whole business of rewriting the rules of capitalism and law of free markets seems like overkill.

Glenn Hall is the editor of TheStreet.com. Previously, he served as deputy editor and chief innovation officer at The Orange County Register and as a news manager at Bloomberg News in Frankfurt, Amsterdam and Washington, D.C. As a reporter, he covered business and financial markets, worked in both print and television in the U.S. and Europe, and conducted in-depth investigative coverage at The Journal-Gazette in Fort Wayne, Ind. His work also has been published in a variety of newspapers including The Wall Street Journal, The New York Times and International Herald Tribune. Hall received a bachelor's degree in journalism and political science from The Ohio State University and a certificate in project and program management from Boston University.

More from Opinion

3 Warren Buffett Stock Picks That Could Be Perfect for Your Retirement Portfolio

3 Warren Buffett Stock Picks That Could Be Perfect for Your Retirement Portfolio

Wednesday Wrap-Up: GE and Facebook

Wednesday Wrap-Up: GE and Facebook

PayPal Strikes Again, Facebook, and AT&T -- 3 Tech Stories You Must Know

PayPal Strikes Again, Facebook, and AT&T -- 3 Tech Stories You Must Know

How to Invest Like Warren Buffett

How to Invest Like Warren Buffett

50 Stocks That Could Be Shredded If a U.S. Trade War With China Ignites

50 Stocks That Could Be Shredded If a U.S. Trade War With China Ignites