In the wake of insurance giant AIG announcing today that they lost $61.7 billion dollars in the fourth quarter alone, the DOW closed at below 7,000 points. What I never quite got was why the government should bail them out. ABC World News reported tonight that it’s simply because AIG has so many customers worldwide: 74 million to be precise. Apparently us tax payers own 80% of the company. But, perhaps the best analogy I’ve heard yet is that AIG is like a casino. AIG took too big of a gamble on the housing market and when the bubble burst, the house lost. The company simply did not have enough money to pay out, hence the government bailout.
On a lighter note, check out the irony of this AIG advertisement from September of ’08.