This American Life: The Watchmen
June 18, 2009
Who was regulating AIG? Last week’s episode of This American Life in cooperation with Planet Money [here] tries to track down the regulator responsible for AIG’s ship sinking activities. (The second section, about ratings agencies is interesting, but considerably less amusing and informative than the first.)
June 18, 2009 at 10:01 pm
I listened to it on the treadmill and found it terrific. Initially, the story seems to be one of regulatory holes. No-one seemed to be regulating AIG.
Then it becomes one of inadequacies and conflicts of interest. It was the Office of Thrift Supervision that had over-arching responsibility for the AIG holding, and missed the boat.
I wonder, however, if the simple agency-theory stories of conflicts of interest hold water. I would be interested to speak to someone in the OTS. What tools did they use, for example, to decide whether to allow AIG the use of CDS?
June 18, 2009 at 10:47 pm
I agree that the narrative takes a particular form and does not dig into the technical places we would be more curious about. What I loved about the piece, however, was it’s ability to put humor and narrative into a factual piece of empirical research. It takes a simple question – who was the regulator? – and makes the act of tracking down the answer interesting and engaging. The radio format, the way the interviews are used, is also such a powerful way of telling a story. It makes me wonder if something similar would be possible for a conference presentation…