The credit crunch, "two cows" style

There was a parody, some years back, of the examples used to introduce first-year undergraduates to the rigours of economic thinking. Perhaps you remember them? They all began "You have two cows" (or an appropriate variation on the theme), and featured gems such as:

THEORETICAL COMMUNISM: The government has two cows. Everyone shares the milk equally.

PRACTICAL COMMUNISM: You have two cows. The government seizes both. Milk is banned.

FASCISM: You have two cows. The government seizes both and sells you the milk. You join the underground and start a campaign of sabotage.

COMMON AGRICULTURAL POLICY: You have two cows. The government takes them both, shoots one, milks the other, pays you for the milk, then pours the milk down the drain.

(Adapted from about.com)

Well, here is the credit crunch—specifically, the AIG mess—in "two cows" mode. Enjoy. (Thanks to Netsmith of the ASI blog.)