This will not be a popular view on this site - I acknowledge this right up front. However - I am a long time Kos reader/poster.
The US Government MUST not allow AIG to file for bankruptcy. The impacts of it doing so will be so devastating to the Global, U.S., and NY-area economies that the reverberations will be felt by just about everybody.
I understand the general opposition to government "bailouts" - but what AIG is looking for is a loan - not a permanent free ride at the tax payers expense.
A failure of AIG will cause a domino effect with numerous firms and will drive the country into a recession.
While this MIGHT be good for Obama's election hopes, it is terrible for the country.
Both McCain and Obama are currently sticking with the populist - no corporate bailout mantra - because it is politically expedient to do so.
Now that McCain has gone on record, it is time for BUSH to ignore both candidates and push the FED to provide temporary liquidity.
It is time for BUSH to lead - otherwise, this market crash will completely finish off any hopes he had of leaving a legacy behind.
If AIG fails, the counterparties to the risky transactions will eat massive losses.
Over 100,000 employees will gradually lose their jobs.
Good employees will leave, leaving claimants to deal with leftover employees in hopes of getting their claims paid.
AIG is the largest writer of Workers' Compensation insurance in the nation. That capacity can not be absorbed overnight by its competitors. This will hurt small businesses and moderate-sized businesses who drive the economy.
The City of NY and its surrounding communities will see their tax revenues plummet. There are probably over 10,000 employees in the NY-metro area alone.
Stores will see their sales decline as employees leave.
Housing prices will have greater downward pressure as former employees need to dump houses on an already saturated market.
All of this could occur, despite the fact that the bulk of AIG's operations are both profitable and well run.
While I understand the anti-corporate position of my friends here on Kos, there comes a time when the government must do the unpopular. Now is that time.