Why Did the Feds Bail Out AIG but Not Lehman?

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this is the dumbest bunch of useless analogies ever. Will someone take a few moments to actually clear up why bailing out all of these banks and financial institutions is important? We need the big picture: why is the economy being bailed out from the supply side through financial institutions rather than from the demand side by buying all the home loans? Why do I, as an American citizen have a stake in the success of AIG?

John of IA 2:43PM March 03, 2009

Is it true A I G insures the pension fund for the U S Congress? If this is true it is plain to see why they were bailed out so fast.

Ronald Coleman of OH 3:04AM February 04, 2009

The public questioning of Ex-AIG executives today is interesting. The House dug out some really senseless appropriation of Cash by the executives, including the half million spent on exectives' retreat ONE WEEK after the bail-out. They also pointed out that AIG has already used up 65 billion dollars out of the bail-out money. I wonder how is this hearing going to strengthen investors' and customers' faith in AIG, and how is this going to show that our government has made a right decision. What is going on with the corporate system of USA!!!

Lee Chen of PA 4:47PM October 07, 2008

Hank Paulson? I smell a rat in Hank Paulson.. and a conflict of interest
the bailout is it a loan or a sale?

Jane Doe of FL 7:27PM September 30, 2008

It was the Democrats with their ant redlining zeal, that got us in this mess. they were in the pocket of Freddie and Fannie. and had them buy the bad loans from the banks.

jake of AR 5:04PM September 28, 2008

so why can a crook go to jail for robbing $500 dollars from a 7/11, yet my congressmen wants to give 700 billion to a crook who just stole 700 billion from all of us?

carlos generic of DC 4:59PM September 28, 2008

How can you get your money back... wasn't it FdIC insured or soemething?

Terri of CA 1:39PM September 26, 2008

...that there is a quote (paraphrasing) that 'a nation will get the worst government that it deserves.'
I agree with Bill of NC. The Republican party has long been noted for their efforts to 'deregulate' business oversight, notably in this case, the banking/lending industry. It is this deregulation that has allowed the industry to make all these bad loans, designed, as I see it, to bite the usually unwitting borrowers from behind when their payments suddenly start ballooning, with the intention of making large profits for the lenders at the expense of the borrowers' ignorance. One can put part of the blame on the borrowers for signing contracts that they didn't fully understand, but from the news media I've seen reporting on it, the borrowers are often deliberately misled by not explaining the details, and leading them to believe that they do, in fact, understand their agreement. So I believe the blame falls on both sides; or, rather, in this case, on all three sides, the government included. I believe that regulation is important to protect the borrowers; that loan contracts are difficult enough to understand, without making the lending industry into a 'let the buyer beware' pool of hungry sharks.
Now that these inadvisable loans have failed en masse, from what I understand, we're going to give huge amounts of money, not to buy the failing mortgages which have created this crisis, and allow people to keep their homes, but to buy off the poorly-supported loans that these loan sharks have taken on, while they most likely keep the houses they have foreclosed on.
So, if you are a citizen in financial difficulty, this government has made it MUCH more difficult to declare bankruptcy on your (relatively) small debts; but if you are a wealthy corporate mover and shaker, hey, the Pres is on your side, ready to try to drum up some cash to keep you flush.
The Republicans are clearly not against Welfare, just against welfare for the common citizen. Corporate Welfare is still alive and well, thank goodness!

Geof of OR 4:51PM September 25, 2008

Yeah and government is the one who give the kid matches and give the other child the vials to go play with.
While the lenders are partly to blame as well as the irresponsible borrowers....you can't leave government out of the equation with their "no homeowner left behind" policies.
But as we all know their is no accountability in a government thats main objective is to obtain power.
God help you people that are so blind they can't see the true culprit.
Punish the Government, punish the lender and punish the borrower.
Don't punish those who live within their means and pay their bills each and every month.

Bill of NC 3:33PM September 25, 2008

Yeah and government is the one who give the kid matches and give the other child the vials to go play with.
While the lenders are partly to blame as well as the irresponsible borrowers....you can't leave government out of the equation with their "no homeowner left behind" policies.
But as we all know their is no accountability in a government thats main objective is to obtain power.
God help you people that are so blind they can't see the true culprit.
Punish the Government, punish the lender and punish the borrower.
Don't punish those who live within their means and pay their bills each and every month.

Bill of NC 3:31PM September 25, 2008