Kai Ryssdal: How's this for the Wall Street word of the day today: Bailout.
You like that? No, not a new one, but a move toward the end of an old one. The Treasury Department's going to sell of $18 billion worth of stock in AIG that it got during the financial crisis. Assuming all goes as planned, it'll be the first time since 2008 that Washington's not a majority owner of the big insurance company.
But untangling bailouts isn't an easy thing, as our New York bureau chief Heidi Moore reports.
Heidi Moore: Ernie Patrikis got to AIG as a top lawyer in 1998. He sees some similarities to the firm’s smaller size then, and what it looks like now after four years of federal ownership.
Ernie Patrikis: It just takes AIG back to when I joined it. It’s just back to where it was.
Patrikis left before the bailout, and he’s watched as the Federal Reserve and the Treasury have bought -- and sold -- big chunks of AIG.
Patrikis: The Fed comes out of this making a ton of money, the Treasury comes out of this making a ton of money, and the AIG shareholders come out of this having lost a lot of money. But I guess that’s the nature of bailouts.
It’s not just AIG. The government still owns about a third of General Motors, and almost three-quarters of Ally Financial, which used to be GM’s lending arm. TARP, the bank bailout program, still exists.
Cornelius Hurley: This notion that we are a free-market economy is a little bit of a fantasy.
That’s Cornelius Hurley. He’s the director for Boston University’s Center for Finance, Law and Policy. He also says don’t forget housing.
Hurley: Fannie Mae and Freddie Mac are still owned by the government. Unlike with AIG there is no plan on the horizon to divest those interests.
And it won’t be easy for the government to end that bailout.
Hurley: Those two federally owned enterprises are the essential props for the entire housing industry.
Hurley says that despite efforts to end the bailouts -- in an election year -- the government will now always be expected to have a role in business.
In New York, I’m Heidi Moore for Marketplace.