The real problem with AIG

I think we should stop whining about the millions in bonuses and the billions in potential losses. There is an even bigger story here.
For a century, America has tried to rein in the power of gigantic financial and business powers. The process ironically was started by a Republican, Teddy Roosevelt.
The notion was that no single corporation should be allowed to become so big that it could corner the market in a particular product or commodity.
For a century, regulators such as the SEC were supposed to see that no firm ever got that big.
Then came Reagan. "Government is the problem". All regulation is bad.
The Bushes followed suit. W in particular emasculated the SEC.
So now we have a firm, AIG, that has gotten so big, that its collapse could threaten, not just the market for one product, not just one industry, not just the economy of one nation, but the entire international fiscal and economic system.
Somebody out there was supposed to prevent such nonsense from ever happening.
I mean, if regulating is your entire job, how do you NOT even see something that freakin' huge? For years and years and years? Who was running the SEC, Mister Magoo?
If this doesn't sound the death knell for orgiastic Republican deregulation, then the American people are too stupid to run the world anymore. Hand the baton over to the Chinese and get it over with.