AIG bailed out by the Fed with $85 Billion Loan

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AIG bailed out by the Fed with $85 Billion Loan

September 17, 2008 – 8:40 am – No Comment

The reason for the bail out is that a failure of such a large insurer would disrupt the financial markets and could tip an already teetering economy.

AIG, American International Group Inc, will get up to $85 billion in a 2 year loan. The government will get almost 80% stake in the company and will have the right to remove any senior management they see necessary.

Strange, the government will bail out AIG but not Lehman Brothers (which filed for bankruptcy protection Monday). I would really like to know who decides what companies get bailed out by taxpayer dollars and which do not. If I were a stakeholder in Lehman Brothers, I would much rather my tax dollars go to bailing out that company than AIG.

We are however, in a free market, and any company should consider themselves lucky to be bailed out by the government at all, particularly one such as AIG, which has no federal backing prior to the bail out.