In the midst of our worst economic crisis since The Great Depression, everyone is eager to choose one target as the scapegoat for the entire financial mess. Not surprisingly, most are pinning a good part of the blame on American International Group.

But that's too easy.

The real culprit–the individual truly responsible for allowing greed, incompetence and corporate malfeasance to seep into AIG's fabric and bring it to near collapse–is obviously…Eliot Spitzer!

Now, before you defend the man, it is true that despite his personal faults, New York's former governor and crusading attorney general was prohibited by federal law from regulating the subprime mortgages and credit default swaps that got AIG and the rest of us in this horrific state.

So how can he be to blame?

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

This conclusion is self-evident. Mr. Spitzer's aggressive tactics to unearth corporate corruption and his zealous pursuit of justice led to the ouster of the one person who might have forestalled AIG's coming to the brink of ruin–the company's former CEO, Mr. Greenberg.

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

In multiple interviews, Mr. Greenberg proclaimed that if he had been left in charge, he would not have allowed AIG to get as deeply involved as it did in credit default swaps covering shaky securitizations of toxic subprime mortgages.

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

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

As for those notorious retention bonuses making AIG look ridiculously greedy and out of touch, Mr. Greenberg–who had a reputation for being stingy with expenditures, with stories abounding about him calling executives at odd hours to browbeat them about some expense–says he wouldn't have offered such bonus deals, and has stated they shouldn't be paid, period.

If Mr. Greenberg were still in charge, it seems plausible that we taxpayers–now AIG's chief shareholders following the federal bailout–would not be victims of the ongoing soap opera at the company, where it seems executives who nearly traded the company into oblivion are now routinely being rewarded despite their apparent incompetence.

Taking it a step further, if Mr. Greenberg remained at the helm of AIG, and he was good to his word by keeping the company from being swept up in the credit default swap trap, he might have prevented the systemic failure and fear that now threatens to strangle our entire economy.

The reason, one could surmise, is that if AIG had not so aggressively offered credit default swaps on subprime mortgage-backed securities, the absence of such "guarantees" might have reduced the confidence fueling the lucrative credit securitization binge.

The absence of what turned out to be a false sense of security might have been enough to make giddy traders step back and stop pouring so much capital into such risky derivatives, thus avoiding the 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 the fine mess we are in today.

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

If he leaves, there is only one person who should be called upon to replace him and correct the errors of this troubled corporation.

The obvious choice is…Eliot Spitzer!

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