but it was not a handout. It was an investment.
Have you been following the actual proceedings? The details are not exactly a secret:
On the evening of September 16, 2008, the Federal Reserve Bank's Board of Governors announced that the Federal Reserve Bank of New York had been authorized to create a 24-month credit-liquidity facility from which AIG may draw up to $85 billion. The loan is collateralized by the assets of AIG, including its non-regulated subsidiaries and the stock of "substantially all" its regulated subsidiaries, and has an interest rate of 850 basis points over the three-month London Interbank Offered Rate (LIBOR) (i.e., LIBOR plus 8.5%). In exchange for the credit facility, the U.S. government will receive warrants for a 79.9 percent equity stake in AIG, and has the right to suspend the payment of dividends to AIG common and preferred shareholders.
1, 4 1Andrews, Edmund L.; Michael J. de la Merced and Mary Williams Walsh (2008-09-16). "Fed’s $85 Billion Loan Rescues Insurer". New York times. http://www.nytimes.com/2008/09/17/business/17insure.html?hp. Retrieved on 2008-09-17.
4United States Federal Reserve Board of Governors, Press release: Federal Reserve Board, met with full support of the Treasury Department, authorizes the Federal Reserve Bank of New York to lend up to $85 billion to the American International Group (AIG), September 16, 2008
http://en.wikipedia.org/wiki/AIG#Federal_Reserve_bailout What that means is that the Federal government owns 80% of AIG. It is effectively nationalized. If it goes bankrupt, it will not only disrupt the financial sector (the investment was made to prevent that), but the initial investment will be worthless. That is what Bernanke was saying.