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Should We Have Saved Lehman and Let AIG Fail?

Posted by: Michael Mandel on March 17

Just asking. These folks at AIG are turning out to be annoying and amateurs to boot, in the deepest sense. It looks like they were just playing out of their league, and they signed bad contracts. I would rather have bet on Lehman.

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Reader Comments

Teoh Yi Chie

March 17, 2009 11:18 AM

That's on hindsight. No guarantees that Lehman won't behave in the same way.


March 17, 2009 02:09 PM

We should have let them both fail,instead of opening the pandoras box that we find ourselves in now.However we the taxpayers now own AIG,so let's start acting as owners!!Obama and Geithner need to fire the board and management and put in people who they can trust to report to them.Don't stand there as if you are on the outside,throwing rocks at AIG,when you are in fact in charge of them!!Would you let the same management that pushed another private company into bankrupcy,stay on to run it thru restructuring?The answer is no,so let's get on with doing the job and take charge!!


March 17, 2009 02:22 PM

You guys have obviously not read No way Lehman was worthy of a penny from anybody.


March 17, 2009 03:30 PM

A choice between unbridled greed and infinite stupidity. Gee, they shoot horses don't they?


March 17, 2009 03:52 PM

No. Let both of them fail and it would have been cheaper than keep propping failures. I would have let Merrill Lynch fail than to force Bank of America to take it with all the Merrill Lynch debt and now Bank of America is dragged down by Merrill Lynch debt! Citigroup should have gone down as well!
I would rather to increase the FDIC fund and the bank deposit insurance up to 1 millions of Dollar rather than keep giving money to white collar crooks! American tax payer will pay for this!!


March 17, 2009 03:55 PM

These bail out are nothing more than theft. The institutions taking the money are holding it so they can buy everything for pennies on the dollar later. They should both fail so that the assets can be bought up by more prudent and mature players who didn't participate in these derivative shinanigans take over.


March 18, 2009 03:41 AM

Both should have been left to fail.

The notion of bailing out a company because it is 'too big to fail' is absurd.

Of course, leftists are in charge, so the worst possible path will always be the one pursued.


March 18, 2009 03:33 PM

Remember "Raiders of the Lost Ark"?

"Shoot them - shoot them both!"


March 18, 2009 04:27 PM

It was AIG's spectacularly bad behavior that lead to its rescue by being in a position to exert leverage through all these foreign governments by their counterparties. Lehman's was bad, but not nearly bad enough. Next time they will know better.

Thank you for your interest. This blog is no longer active.



Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.

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