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Scott Jagow: Here's what Treasury Secretary Henry Paulson had to say about Lehman:

Clip from Henry Paulson: I never once considered that it was appropriate to put taxpayer money on the line with, in resolving Lehman Brothers.

Enough is enough. Seems to be the sentiment. But now, we have insurance company AIG teetering. AIG might classify as "too big to fail," but would the government step in after letting Lehman go? We turn to Andrew Hilton, he's the head of an economic think tank in Britain. Andrew, you buying this concept of "too big to fail?"

Andrew Hilton: It's possible that we will. After all, I think, most people did not expect the Treasury to let Lehman Brothers go under. I certainly didn't. I thought that Lehman Brothers would be bailed out. And the fact that the world hasn't come to an end after Lehman's gone to the wall, and the fact that Hank Paulson has apparently drawn a line and said no more public money, does suggest that they might be prepared to see AIG go under as well.

Jagow: But in terms of real fallout from this, what are you expecting?

Hilton: AIG is two companies. AIG is a large, but not dominant, insurance company, and it is also this sort of financial behemoth that's a major player in all sorts of sexy, very, very state-of-the-art derivatives markets. The insurance company is sound. And it will probably be hived off into a good insurance company or be taken over by somebody else. The financial behemoth, the financial engineering group, as it were, is full of toxic assets, and how that's going to be handled is going to be very, very tricky. But it need not necessarily spill over into the rest of the insurance sector. And to that extent, it may be that we can kind of quarantine it and liquidate it over a longer period.

Jagow: Andrew, finally here. Whether or not AIG survives, what good do you think is coming out of all this?

Hilton: Not much good. What we face is a prolonged period of economic retrenchment. I've been a pessimist on the macro-economic impact of what's happening for some time. People used to sort of roll their eyes when I would talk about the danger of a global recession. Now, I think, they no longer roll their eyes. They're terrified that I might be right. I think we will have a period of re-regulation, and that will inevitably mean that there's less liquidity in the system. And that inevitably will mean that people can borrow less; they'll have to pay more for their borrowings. And that too, will slow down economic activity around the world.

Jagow: OK, Andrew Hilton, the director of the Center for Study of Financial Innovation, thank you.

Hilton: OK, thank you.