Yesterday evening, the Fed eventually moved on an $85 billion bailout of giant insurer AIG (NYSE:AIG) to prevent a second major US bankruptcy in as many days. The bailout – the third this year if you include the Fed-backed buyout of Bear Stearns by JPMorgan Chase (NYSE:JPM) – is the equivalent of a $283 loan to AIG from each taxpaying American.

This from Rude Awakening:

I just loaned $283 to AIG…I and every other American. The funny thing is no one asked our permission. The Federal Reserve simply took our money and handed it to a group of individuals who have demonstrated the ability to lose billions of dollars faster than almost anyone on the planet.

I would rather have tossed the money in a wishing well… not only for the wishes, but also because the wishing well will repay the loan sooner. The Fed’s $85 billion ‘investment’ in AIG is just the latest chapter of the American financial tragedy – a sordid tale that begins with the extreme greed of a few and ends with the widespread suffering of the many.

The Fed did what it had to do. It protected the millions of individuals and institutions who relied on the insurance policies of one of the world’s largest insurance companies. But let’s hope the tragedy does not end with an $85 billion bailout. Let’s hope our sordid story contains a few more tragic chapters, like ones that feature tales of AIG’s executive officers shedding tears of remorse on their prison dungarees.

Retribution cannot return the billions of dollars that innocent individuals have lost, but it can compensate somewhat for all of our $283 loans. To quote John Lennon, “You may say I’m a dreamer, but I’m not the only one.”

Source: Did You Notice…? AIG-Whiz!