Can AIG's problems be traced back to former NY AG and Governor Elliot Spizer's witch hunt against former CEO Maurice 'Hank' Greenberg ?

Certainly. Where have you been?

Actually, on second thought, all this recent stuff by Hanky Panky Paulsen and Hanky Panky Greenberg can be traced right back to Bill Clinton starting the housing act in 1994 saying that everyone should own a home. Nice idea, but not everyone can keep paying the mortgage when they got the place for zero money down and no income verification necessary. This is the greatest scam of the century going on now. Or should I say the Greatest Bank Robbery in the history of man.

Paulson is a longtime friend of Chuck Schumer ;another winner from a long list of corrupt NY politicians .He appointed a major Democrat fundraiser ;Eric Mindich ;into the powerful position of head of the Asset Managers' Committee of the President's Working Group on Financial Markets.Mindich is a top-level Democratic fundraiser. He was in Kerry's inner circle for the 2004 presidential campaign and backs Obama for 2008.
Why he is in the Bush Adm. Is beyond me.

You are correct about the Democrat connections to the financial collapse .
This video is a great summary presentation that says a lot.
YouTube - Burning Down The House: What Caused Our Economic Crisis?

But I just wonder if Spitzer's hunt and ouster of Greenberg was warranted .I spoke to a prosecutor from the case and he said that if anything Greenberg took the fall for his sons actions. But with Greenberg at the helm ,perhaps AIG could've weathered the storm.

I thought Greenberg did a lot of fraudulent accounting on the AIG books and that was the cause of his stepping out of AIG.

I don't know, I wasn't there so I can't be 100% correct on this one.