In the midst of our worst economic crisis since The GreatDepression, everyone is eager to choose one target as the scapegoatfor the entire financial mess. Not surprisingly, most are pinning agood part of the blame on American International Group.

But that's too easy.

The real culprit–the individual truly responsible for allowinggreed, incompetence and corporate malfeasance to seep into AIG'sfabric and bring it to near collapse–is obviously…EliotSpitzer!

Now, before you defend the man, it is true that despite hispersonal faults, New York's former governor and crusading attorneygeneral was prohibited by federal law from regulating the subprimemortgages and credit default swaps that got AIG and the rest of usin this horrific state.

So how can he be to blame?

It's simple. Mr. Spitzer's probes and the negative publicitythey generated forced AIG to jettison its guiding light anddisciplinarian–Maurice "Hank" Greenberg.

This conclusion is self-evident. Mr. Spitzer's aggressivetactics to unearth corporate corruption and his zealous pursuit ofjustice led to the ouster of the one person who might haveforestalled AIG's coming to the brink of ruin–the company's formerCEO, Mr. Greenberg.

Notwithstanding the fact Mr. Greenberg left following thediscovery of a sham reinsurance deal that inflated AIG's balancesheet (resulting in the conviction of five executives–one withAIG–in a federal trial), this industry titan has been tellinganyone and everyone who will listen that the company'sself-destruction would never have occurred under his watch.

In multiple interviews, Mr. Greenberg proclaimed that if he hadbeen left in charge, he would not have allowed AIG to get as deeplyinvolved as it did in credit default swaps covering shakysecuritizations of toxic subprime mortgages.

While he admitted the company dabbled in these derivatives underhis watch, he insists he would have avoided getting in so deep asto nearly bury the company–and the economy along with it.

While Mr. Greenberg confesses that he did allow the company toget its foot in the derivatives door, he asserts he would havereined in those overly ambitious and greedy executives at theFinancial Products unit who have made a shambles of AIG.

As for those notorious retention bonuses making AIG lookridiculously greedy and out of touch, Mr. Greenberg–who had areputation for being stingy with expenditures, with storiesabounding about him calling executives at odd hours to browbeatthem about some expense–says he wouldn't have offered such bonusdeals, and has stated they shouldn't be paid, period.

If Mr. Greenberg were still in charge, it seems plausible thatwe taxpayers–now AIG's chief shareholders following the federalbailout–would not be victims of the ongoing soap opera at thecompany, where it seems executives who nearly traded the companyinto oblivion are now routinely being rewarded despite theirapparent incompetence.

Taking it a step further, if Mr. Greenberg remained at the helmof AIG, and he was good to his word by keeping the company frombeing swept up in the credit default swap trap, he might haveprevented the systemic failure and fear that now threatens tostrangle our entire economy.

The reason, one could surmise, is that if AIG had not soaggressively offered credit default swaps on subprimemortgage-backed securities, the absence of such "guarantees" mighthave reduced the confidence fueling the lucrative creditsecuritization binge.

The absence of what turned out to be a false sense of securitymight have been enough to make giddy traders step back and stoppouring so much capital into such risky derivatives, thus avoidingthe worst of our current economic crisis.

We're rewriting history, but if Mr. Spitzer hadn't pushed Mr.Greenberg out the door at AIG, then maybe we wouldn't be in thefine mess we are in today.

It is not fair that Ed Liddy–the former chief executive atAllstate, who came out of a comfortable retirement to help thegovernment salvage AIG for $1 per year in pay–should be taking allthe heat for his predecessors' reckless behavior. Perhaps it's timefor Mr. Liddy to retire again. No one could blame him if he wantedto walk away in disgust from the rubble he did not create and thethankless pounding he is taking while trying to right a sinkingship.

If he leaves, there is only one person who should be called uponto replace him and correct the errors of this troubledcorporation.

The obvious choice is…Eliot Spitzer!

To respond to this column e-mail NU Associate Editor Mark E.Ruquet at [email protected].