There's a massively powerful piece in the New York Times on the failure of AIG. It says:

In the case of A.I.G., the virus exploded from a freewheeling little 377-person unit in London, and flourished in a climate of opulent pay, lax oversight and blind faith in financial risk models.

There were two real issues:

1) London does not properly regulate.

2) The models of risk they used were the simplistic sort dreamed up by the type of economist who also argues for tax cuts based on wildly simplistic assumptions.

What do we learn:?

1) That the system the Tories supported so strongly caused the failure of AIG;

2) That the model of the neo-liberal economy that used limited data, simplified assumptions, and ignored short term risk was the cause of this corporate failure.

Economists designed neo-liberalism. And they've brought it down. One hopes they are now defunct economists. I fear they might not be.