MORNING READ

The government bailout of American International Group and the House’s passage of an energy bill allowing some expansion of offshore oil drilling are dominating the blogosphere. The $85 billion federal loan to keep insurance giant AIG afloat appalls conservative bloggers and worries liberal ones. The House’s bill also disappoints activists on both sides, as conservatives had hoped for more oil exploration and liberals had hoped for a greater emphasis on renewable energy development.

By taking over AIG, the U.S. government is now the world’s largest insurer and has stopped holding investors accountable for their own failures, writes Hot Air’s Ed Morrissey. With the government bailing out yet another firm, previous talk by federal officals about allowing Lehman Brothers to fail in order to preserve “moral hazard” now counts for nothing, writes The Corner’s Jonah Goldberg. “The Mother of All Bailouts” was all too predictable once the government started giving stimulus checks away and taking over private companies earlier this year, according to Michelle Malkin.

But the government is right to bailout AIG because its failure would have led to a financial market meltdown, writes The Plank’s Noam Scheiber, who backs Barack Obama’s call for greater regulation. The unanswered question is how public officials will run all the big companies now owned by the government, writes Matthew Yglesias, who notes that the companies could be used to serve the public interest or could become places to reward political cronies.

The energy bill passed by the Democratic-led House is a “sham,” since it still blocks oil exploration within 50 miles of the shore, which is where experts think the oil is, writes Townhall’s Amanda Carpenter. The 15 Republican House members who voted for the bill with Democrats stabbed supporters of drilling in the back, writes RedState’s haystack. But according to liberal blogger Jerome Armstrong, Democrats lost the drilling issue by allowing a bill that may still be blocked by Republicans and by failing to frame the issue around renewable energy sources.

FROM THE BLOGS:
Mother of All Bailouts –