But look. Last year "counterparty risk" was practically crowned the phrase of the year. You couldn't swing a dead copy of the Wall Street Journal without coming across it. It's the reason we're bailing out all these guys in the first place: if a big bank goes bust and stiffs all its creditors, then there's a chance that they'll go bust too, and before long you have a cascading series of failures that's brought down the entire world. We tried letting Lehman Brothers — a relatively small bank in the grand scheme of things — go under, and all hell broke loose. That's why the Fed stepped in a few days later to save AIG.
So why is everyone suddenly acting as if we just discovered yesterday that bailout money is being used to pay off AIG's counterparties? And that this is some kind of scandal? Help me out here. I'm genuinely confused about why, after six months, this has suddenly become the populist outrage du jour.