This is a rush transcript from "Your World With Neil Cavuto," December 2, 2008. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: Well, you know, everyone is still talking about this column: "The role of government is to help a company stay in business." Those are the words of former AIG chairman Hank Greenberg in this latest op-ed that is still causing ripples throughout the financial world.

He's calling for a new rescue deal for the company he headed. Back then, the company was making money. Right now, it's on the brink.

He joins me now in an exclusive chat.

You know what I read which said, is this the same Hank I know? You said: "The role of government should not be to force a company out of business, but, rather, to help it stay in business, so that it can continue to be a taxpayer and an employer."

(CROSSTALK)

CAVUTO: That is you asking for the government to effectively play the role of bailing out?

• Video: Watch Neil Cavuto's interview

HANK GREENBERG, FORMER CEO, AMERICA INTERNATIONAL GROUP: No. I am saying, when you bail out, the terms of the bailout should not be so draconian that it puts you out of business. The bailout should be thoughtful and not have such interest-rate — high interest rate charges that you can't possibly make.

And look at the first bailout plan AIG was offered: $85 billion at 14.5 percent interest. That's a three-ball operation.

(LAUGHTER)

CAVUTO: That was a Tony Soprano contract, right?

GREENBERG: Yes. Yes.

(LAUGHTER)

CAVUTO: All right.

But, you know, the view across Washington is that that is not the case, that AIG and that the financial bailouts we have seen have almost gotten special treatment.

When I was at the White House a couple of weeks ago, covering the president's big summit with financial leaders, Congressman Elijah Cummings joined me, of course, no friend of this new management of AIG. And I know you're not either.

But here is what he had to say about their request for more money. This is from a couple weeks ago.

(BEGIN VIDEO CLIP)

REP. ELIJAH CUMMINGS, D-MD.: We have AIG, that has come to the Congress not once, but twice, cashmere hat in hand, begging for money to save itself.

(END VIDEO CLIP)

CAVUTO: Reinforce that argument at the time. I know you had nothing to do with this, but I will just say of the new management, they were getting bonuses. Some were getting massages.

GREENBERG: Yes.

CAVUTO: Corporate retreats. It did not look good.

GREENBERG: I agree with that.

CAVUTO: So, what do we do with this team that is in there?

GREENBERG: Well, it is a demolition team. I mean, read today's paper. This Paula Reynolds, who was hired as a vice chair in charge of restructuring, said, if we have to disassemble AIG, so be it.

Now, that is directly contrary to what Liddy has been saying, that we're going to keep the property casualty business.

CAVUTO: Liddy, the present chairman...

GREENBERG: Yes. Yes.

CAVUTO: ... who was brought in from another insurance concern.

CAVUTO: But you see what I mean about what happens, Hank, when you give money or the government steps in? It can only complicate things, because whatever requests or demands of that money only makes the wound deeper. You know what I mean, that maybe the better part of valor would be never to give any money at all?

(CROSSTALK)

GREENBERG: Well, look, the first deal that was offered, AIG would have been better off in Chapter 11.

(CROSSTALK)

CAVUTO: Why was that never pursued?

GREENBERG: Because the board did not pursue it. The board was more concerned...

(CROSSTALK)

CAVUTO: Well, if you were running things there, would you have done that?

GREENBERG: I never would have accepted the — I never would have accepted the deal that was offered, never, never would have accepted that...

(CROSSTALK)

CAVUTO: Well, it's fair to say — I'm not blowing smoke your way — you never would have gotten into the crazy nonsense they got into it.

(CROSSTALK)

CAVUTO: But they did.

GREENBERG: Yes.

CAVUTO: And, you know, there is this old expression that you taught me, that you have got to live and — and take responsibility for your mistakes.

GREENBERG: Yes.

CAVUTO: Now we could be bailing out the auto industry to correct mistakes many argue it made.

Do you keep giving money to AIG for mistakes it makes and keeps making?

GREENBERG: Look, I think what they're doing with AIG, at least from my observation, they are funneling money to — through AIG to the counterparties. The counterparties are the ones getting the money.

CAVUTO: Explain what that means.

GREENBERG: AIG had a subsidiary called AIG Financial Products, that wrote a bunch of these credit default swaps, which was underlying — which was on top of the CDOs.

CAVUTO: Collateralized debt obligations. But go ahead.

(CROSSTALK)

GREENBERG: As, so, they — as AIG was downgraded, they had to come up with more collateral to the counterparties. So, the Fed gave AIG these loans. It went right out of AIG to the counterparties. The counterparties have all been made whole. Who are the counterparties? Banks.

CAVUTO: So, the beasts who fed the beast are OK.

GREENBERG: Yes.

CAVUTO: The beast is not OK.

GREENBERG: Yes. Yes.

CAVUTO: So, if you were to step in now...

GREENBERG: Yes.

CAVUTO: ... and many have argued, please bring Hank back — what would you do? What would be the first thing you would do?

GREENBERG: Well, the main thing I would do — that list is very long.

(LAUGHTER)

CAVUTO: But the first thing? I guess you would fire a lot of people, and after you're done there.

GREENBERG: There would be a lot of people changed very quickly.

(CROSSTALK)

CAVUTO: Do you think that, by the way, should be a stipulation? If you ask the government for aid, the first thing you should offer is your resignation?

GREENBERG: Absolutely. Absolutely. Absolutely.

CAVUTO: So, the Big Three auto guys coming to Washington for...

GREENBERG: They ought to offer their resignation.

CAVUTO: And if not?

GREENBERG: Well, I think then Congress has to make a decision whether they would insist on them.

And, actually, what happened in AIG, the last CEO, Willumstad, was asked to step down. And they put in Ed Liddy.

(CROSSTALK)

CAVUTO: Yes, these guys have gone through CEOs like the tissue paper lately.

GREENBERG: Boards and CEOs.

CAVUTO: I always tell people, if you're not CEO yet there, wait. You will get your shot.

GREENBERG: You will get a shot at it.

CAVUTO: All right.

So, let's step back from this, because we have to go to break here.

GREENBERG: Yes.

CAVUTO: But this propensity to bail out sick companies, sick industries, with money we apparently do not have...

GREENBERG: Right.

CAVUTO: ... is it your concern that there's going to be a big financial hell to pay, that either taxes go up, or budgets get so constrained — we had a fellow predicting a $1.5 trillion deficit next year — that this country is going to be hurting for a while?

GREENBERG: There is no question about it.

We are in — we are in a situation which we have never confronted. Who would have thought, a year ago, six months ago, that we would be a social democracy, where what we have now is the government owning interests in almost every major bank, nationalized AIG, and they are essentially deciding what they are going to do next with the company or any of these?

I mean, it is totally alien to anything we believed in.

CAVUTO: Someone said it's like the government is involved in the car you take to the bank. It runs the bank you're going to, and it insures you on the way out if you get in a crash.

GREENBERG: Yes. Yes, if they keep it alive, if they don't disassemble it.

CAVUTO: But you have serious doubts they can?

GREENBERG: Well, I think it — I think you can save AIG.

You have got to bring — you have to bring private capital in. The government owns 79.9 percent. How do you raise capital?

CAVUTO: That's what a fellow billionaire, Wilbur Ross, warned.

Are — by the way, are you still in billionaire?

GREENBERG: No.

CAVUTO: Really?

GREENBERG: No.

CAVUTO: Like, what a multi-hundred millionaire?

GREENBERG: I'm not sure.

(CROSSTALK)

CAVUTO: You're not down at my level, are you? I mean, we don't want that to happen.

GREENBERG: I may come looking for a job here.

CAVUTO: You may be going to Tad's Steak House here afterwards.

(LAUGHTER)

CAVUTO: You're better than that, I would think.

All right, Hank Greenberg, very good seeing you.

GREENBERG: Good to see you.

CAVUTO: Thank you very much.

GREENBERG: Thank you.

CAVUTO: Hank Greenberg, trying to help the very company he all but put on the map.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

Copy: Content and Programming Copyright 2008 Fox News Network, LLC. ALL RIGHTS RESERVED. Transcription Copyright 2008 ASC LLC (www.ascllc.net), which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon Fox News Network, LLC'S and ASC LLC's copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.