Questions

If AIG needs to be bailed out because it was over-leveraged on its insurance policies and, with our money, paid on those policies due to losses the financial industries hedged against, why do the financial institutions also require our money? Their losses, on the riskier investments, were covered by the insurance they bought. Their other losses should have been covered by reserve requirements. Why haven't I heard this question asked?

Also, as to the notion of "too big to fail," doesn't that point to a direct failure of the Federal Trade Commission, whose mission, among other things, is to protect consumers against any one firm accumulating too much market power and thus jeopardizing the open market? Prevention of market failure is one of the (few) legitimate roles of the government in the free market.

Here is a good opinion piece from the Wall Street Journal that describes well the role of the Federal Reserve in creating the current mess.