Matt Taibbi's latest Rolling Stones piece gives the best accounting of AIG's role in the economic shit storm I have seen thus far. I love Taibbi's writing, but it seems not even he can make this thing funny, imagery of the Pope going on a meth binge and losing his job notwithstanding. The best tl;dr summary I can copy/paste:
As complex as all the finances are, the politics aren't hard to follow. By creating an urgent crisis that can only be solved by those fluent in a language too complex for ordinary people to understand, the Wall Street crowd has turned the vast majority of Americans into non-participants in their own political future. There is a reason it used to be a crime in the Confederate states to teach a slave to read: Literacy is power. In the age of the CDS and CDO, most of us are financial illiterates. By making an already too-complex economy even more complex, Wall Street has used the crisis to effect a historic, revolutionary change in our political system — transforming a democracy into a two-tiered state, one with plugged-in financial bureaucrats above and clueless customers below.
By the bye, I just acquired a copy of the Get Your War On collection, for which Taibbi wrote the introduction. It's well worth the $11, and I recommend you buy it. Reading the first few pages really brought me back to the "WTF are we doing?" period of '02-'03. Operation Enduring Freedom in the motherfucking house!