Fed bails out AIG, blame game begins

The government took control of AIG in a $85 billion deal to prevent total chaos in the world financial markets. This came somewhat as a surprise as most people expected the Fed to let capitalism work as it did in dealing with Lehman Brothers which had to file for bankruptcy. The bailout gives the Fed 80% of ownership of AIG and is secured by AIG's assets.

Now the blame game really begins. When asked whether Congress bears any responsibility in the current financial crisis, Speaker Nancy Pelosi said "no." She blames the Bush administration (of course).

The root of the problem is the subprime mortgage market. This type of mortgage allowed people without the financial means to buy a house instead of what they should be doing: renting. Fannie Mae was established in 1938 as part of President Franklin Roosevelt's (D-N.Y.) New Deal, to provide liquidity in the secondary mortgage market, help the poor, and recover from the Great Depression. The New Deal was the beginning of a trend in big government, wealth redistribution, and government intervention in America. Whether you like it or not, it started with Democratic ideas bordering socialism.

And the rest is history.