The AIG bailout: What could $85 billion in corporate welfare buy for those who really need it?

The Federal Reserve announced Tuesday evening that it’s giving American International Group an $85 billion loan to bail out the multinational quasi-insurance and investment corporation after the company traded in unregulated credit default swaps and other risky ventures and landed at the doorstep of default. How much would that $85 billion in corporate welfare be worth to those who truly need a safety net?

MnIndy interview: Doug Henwood on Lehman, AIG, Gray Monday, and the economy

After Monday’s dramatic tumble in the financial markets–led by dire announcements about Lehman Brothers (bound for bankruptcy court), Merrill Lynch (absorbed by Bank of America) and insurance giant AIG (desperately seeking bridge loans)–I got in touch with Doug Henwood for some help in sorting out these latest developments and what they augur for the US economy on Main Street.

In a 20-minute interview taped Tuesday afternoon, Henwood–the publisher of the invaluable Left Business Observer newsletter and perhaps our most plainspoken economics journalist–took the measure of “Gray Monday” and the arc of the US economy.

Subprime casualties: 283 lenders have collapsed since 2006, and more are to come

A nation of whiners? Or a seriously decimated economy? The nation’s leading economists say it’s the latter, and the already crumbling financial sector is due for a series of crippling aftershocks that could last well into the next decade. Once-leading lenders Fannie Mae, Freddie Mac, Merrill, Lehman, and AIG have perished in only seven days, all on the heels of the IndyMac collapse and $29 billion Bear Stearns bailout. And experts say more lenders are expected to fall in the near future, some even this week.