The AIG and Automaker Bailouts Comparison Essay by Nicky
The AIG and Automaker Bailouts
An analysis and comparison of the U.S. government's bailouts of AIG and the Big Three automakers.
# 148390 | 1,702 words | 6 sources | APA | 2011 |
Published on Oct 17, 2011 in Business (Finance, Investment and Banking) , Business (Industries) , Political Science (Fiscal Policy (economy))
$19.95 Buy and instantly download this paper now
This paper analyzes the AIG bailout and the automaker bailout in an attempt to ascertain the criteria that the government used regarding these bailouts. The paper examines the rationale for each bailout and looks at the major differences between them. The paper identifies the major difference between the government's bailout of AIG and the Big Three automakers that appears to be with respect to ownership and control of the organizations. The paper reaches the conclusion that the government treatment of the auto industry as compared to the financial institutions seems reasonable.
From the Paper:"AIG was seen as "too big to fail" in large part because its operations were intertwined with financial institutions the world over. If AIG failed, a wide range of domestic and foreign financial institutions would be put on the brink of collapse. In addition, the company's 70 million policyholders and tens of thousands of employees would also suffer, creating a chain reaction that could cripple the world economy. In some respects, the global implications of an AIG failure provided much of the impetus for the original bailout. The US government may have been worried about the policyholders and other domestic players, but the mortgage-backed security market had become a source for liquidity, as foreign governments and financial institutions leaned on MBSes as a means to hold US dollars."
Sample of Sources Used:
- Langfitt, Frank. (2008). Automakers Lobby Pelosi for Bailout Cash. NPR. Retrieved April 30, 2009 from http://www.npr.org/templates/story/story.php?storyId=96713932
- Karnitschnig, Matthew; Solomon, Deborah; Pleven, Liam & Hilsenrath, Jon E. (2008). US to take over AIG in $85 Billion Bailout. Wall Street Journal. Retrieved April 30, 2009 from http://online.wsj.com/article/SB122156561931242905.html
- Mitchell, Olivia & Smetters, Kent. (2008). AIG Rescued: Was an $85 Billion Loan the Right Answer? Knowledge @ Wharton. Retrieved April 30, 2009 from http://knowledge.wharton.upenn.edu/article.cfm?articleid=2051#
- No author. (2009). Why bail out AIG? St. Petersburg Times. Retrieved April 30, 2009 from http://www.tampabay.com/opinion/editorials/article980880.ece
- Ross, Brian & Rhee, Joseph. (2008). Big Three CEOs Flew Private Jets to Plead for Public Funds. ABC News. Retrieved April 30, 2009 from http://abcnews.go.com/Blotter/WallStreet/story?id=6285739&page=1
Cite this Comparison Essay:
The AIG and Automaker Bailouts (2011, October 17) Retrieved June 05, 2023, from https://www.academon.com/comparison-essay/the-aig-and-automaker-bailouts-148390/
"The AIG and Automaker Bailouts" 17 October 2011. Web. 05 June. 2023. <https://www.academon.com/comparison-essay/the-aig-and-automaker-bailouts-148390/>