So where they were? Also, why government should play entrepreneural role? Was it designed by Constitution or invented on spot for the sake of common good?

The government was not an entrepreneur. It acted reluctantly to save a failing financial system, for the good of the general citizenry. In the case of AIG it was able to secure an excellent deal- which would not have occurred had any "entrepreneur" been willing to follow market theory.

It seems to me that you slightly overestimate governmental wizdom. Does your model assign some place to the idea that government can harm or just mess up things, instead of helping? How do you know that particular government action will be helpful? It is a very relevant question because so far bailouts didn't cure situation, not even on sentimental level.

I'm afraid there is a huge gulf between our respective perceptions of the AIG rescue or the banking guarantees. Others say there would have been a financial Armageddon if not for the government's actions. The result so far may not be perfect, but it is not Armageddon either. Lets not forget that it was short-term corporate greed that led to the current crisis. Theories that rely on government (in)competence aren't particularly relevant in these circumstances.

We discuss very specific issue that cannot be judged on the basis that government is inherently wise or that future generations are inherently wiser and so on.

My position is that the government saved our bacon. Yours seems to be that this cannot be so because governments cannot be as competent as the market and/or that the market would have managed itself appropriately if government had left it alone. With respect, where are you getting this stuff? The market was failing. AIG tried desperately to find the funding it needed in the market, but failed. Only government was prepared to step in to prevent the "financial Armageddon." That government seems to have got such a good deal says a lot about the market. I'm afraid that a lot of market theories are going to be dismantled as will become evident as the dust settles. You watch.

Government has no divine power, but your scheme seemingly gives to it, and when divine power is firmly attached then any situation can be decided quickly: "God (i.e. government) willing".

Again, where are you getting this stuff? The FACT is that nobody except government was prepared to intervene to prevent an Armageddon. That does not make them divine, but it should cause re-examination about markets and how they are supposed to behave.