The U.S. government—using taxpayer dollars—rushed to the aid of America’s largest insurance company, AIG, with an $85 billion bailout.

AIG, which besides insuring people and homes, has—or had—the leading and very lucrative practice issuing insurance on those various and sundry Wall Street financial weapons of mass destruction—as Warren Buffet calls them—known as derivatives.

That’s great when the market is riding high.

But it isn’t anymore and AIG was looking at billions in losses.

So “We the People” stepped in.

AIG was happy. Some ex...