Lay of the Land: Taxpayers to the rescue: Too little too late?

All things local may keep our blood pumping each morning as we scan the doppler for clouds over our heads, but the national scene never ceases to prod our ponderings as we chew the cud of the day. With that in mind, we thought to start the morning—along with our roundup of other local media leads—with a look at which stories are quickening the collective pulse of the nation.

Here's what we found inciting the editorial finger to wag this morning (feel free to talk amongst yourselves):

Bloomberg reports that "we the people" will back the loan to bail out yet another private Wall Street institution:

The U.S. government took control of American International Group Inc. in an $85 billion bailout to prevent the bankruptcy of the nation's biggest insurer and the worst financial collapse in history.

The Federal Reserve will provide a two-year loan, take 79.9 percent of the New York-based company's stock and replace its management because "a disorderly failure of AIG could add to already significant levels of financial market fragility," according to a statement by the central bank late yesterday.

This quote in the Bloomberg article is especially revealing:

"Nobody really knows what it would have meant if they would have been allowed to fail, but there was an enormous amount of systemic risk," said David Havens, a credit analyst at UBS AG in Stamford, Connecticut. "It's an enormous relief."

Nobody really knows. In an NPR account of the bailout broadcast this morning, commentators were heard to say that if AIG had been allowed to fail, the "already delicate" economy would have been hurt even further, "confidence in the economy" would have been weakened even more and it would become even more difficult for borrowers to get loans from banks. Even more, even further—there's a good reason they call these moves bailouts. The ship is sinking, folks. All hands off deck. Worst financial collapse in history, according to Bloomberg—and they're not the only one to say it.

What do you think? Does a government bailout help staunch the blood flow from an already profusely wounded economy? What does this matter to the everyday John and Jane down the block? I asked my six-year-old niece yesterday if she thought the economy was doomed or if we might get done with this backslide and start climbing back up soon, and she was doom and gloom all the way. She's a smart kid. Should we believe her?

Any financial gurus out there who can give us a better idea of what's going on and what to expect?

Here's some more coverage:

• Waiter, there's a banker in my soup, Asia Times
• Fed in AIG rescue, CNNMoney.com
• After AIG rescue, Fed may find more at its door, Reuters