Quiet campaign

I know I've been on an AIG kick for a while, sorry about that. Unfortunately, there's more.

Probably the most infuriating thing about the explanations of AIGs corner of this mess was the idea that....well, I'll let George Will state it himself (at the :50 second mark):


"The point of the bailout, I understand, was to keep AIG in business".

That's false. It is false in a conniving way. I think George Will knows that the vast majority of the money is going to the counter-parties that AIG insured. I also think he knows that this is a subtle point that will be lost on most people. He knows that conflating that fact with this "bonus" news makes the Democrats look bad, regardless of the possibility of a global economic collapse if the Democrats didn't support the CDS payments.

As Ezra notes, "we really didn't bail out AIG: We bailed out the Credit Default Swap market and used AIG as our point of entry". Felix Salmon carefully walks us through the rationale for the use of AIG as this "point of entry". And we shouldn't kid ourselves, it isn't as the the whole AIG intervention is clean and transparent, either (the orignal deal was brokered by the former CEO of the largest recipient of AIG/taxpayer cash). My point here, though, is beware of the right's quiet smear campaign to associate Democrats with AIG largesse.