I've Got a Hotel on AIG, and 4 Houses on GM

Companies that are too big to fail are, when they are failing, too big. The profound ignorance of GM and the profound arrogance of AIG are due in large part to being too large to support themselves. It is clear that the organization's leaders recognize that both companies are unlikely to profit without serious changes.

So why can those changes not be cutting them into new, separate companies? What is the harm? I would think that by separating the companies the increase in competition will drive them all to be more technologically savvy, and while some of these small companies will fail, they can be re-taken over by the ones that succeed.

The the car companies in particular, it is clearly their fault that they are failing. And letting them die is still not really a viable option. But continually funding them is obviously a problem as well - not because they piss money like a drunken frat boy, but also because it is unfair to the car companies that are succeeding. They are giving 48 billion to GM to help it succeed, but if there are car companies that are doing better, they are not going to be getting the same funding.

Quick example: If Ford starts to be really profitable, they will not get a bailout, but GM still will, giving GM an unfair financial advantage to make inferior cars.

At least breaking up these companies should at least stir the pot, and certainly cannot bleed these companies any drier. Plus they would start to go out of business at different paces, meaning that 5 million people are not going to suddenly be without a job.