Few people were as enraged at the terms of AIG's (NYSE:AIG) 2008 bailout as its former chairman and CEO, Hank Greenberg. Greenberg, who left AIG in 2005, is suing the government for $25 billion. "We have a Constitution in the United States, and there's a provision against unlawful taking by the government," he says, "You can take anything you want, but you have to pay for it."

I sat down with Greenberg last week, and we talked at length about the bailout and his current lawsuit. Here's what he had to say (transcript follows):

Morgan Housel: Hank Paulson talks in his book about how, in hindsight, it's easy to say, "We should have done this. We did this wrong" ... and they admit that they did things wrong, in hindsight, but they had such short time constraints -- some of these bailouts they had to put together in literally hours -- that when you're under those constraints, you're going to make big mistakes that are only visible in hindsight.

What's your response to that?

Hank Greenberg: Well, I think that's an easy statement to make. They were looking after some firms and didn't care about other firms. It's very simple.

AIG was used. Let's face it, AIG was used. The government didn't do badly. They made about $23 billion on AIG.

Morgan Housel: Your lawsuit is for $25 billion, based on the terms of the deal.

Hank Greenberg: Correct.

Morgan Housel: That goes to C.V. Starr? That goes to AIG shareholders?

Hank Greenberg: It goes to shareholders after deducting, obviously, the expense of the lawsuit.

Morgan Housel: Do you think we've learned anything over the past five years, or do you think we're doomed to keep making these mistakes again?

Hank Greenberg: I think the pendulum sometimes runs too far in one direction, has to come back to the middle. That's the way we've always been, unfortunately. Are we going to make the same mistake next time around?

Depends when next time around is. Is it going to be next month? I think we've learned. If it's about 5-10 years from now, I'm not sure we've learned.