Thanks to that monstrous wad of gunk in the Gulf of Mexico, it’s been easy to forget another disgrace, a kind of financial wad of gunk that’s also floating around out there. It’s comparable in wretchedness to the big mess in the Gulf, except that cleanup hasn’t even begun. I refer to the oily, wildlife-killing, marsh-polluting, stinks-to-high-heaven $182 billion taxpayer bailout of American International Group.

We’ve had a reminder in recent days of just how horrific that unplugged money spill surely is, and how poorly it has been handled by the Obama administration. The giant reinsurer, whose crazy ventures in subprime derivatives led to its near collapse, has just made another goofy decision. AIG had a deal to sell one of its subsidiaries, the Hong Kong-based American International Assurance, to Prudential PLC for $35.5 billion. Had the deal gone through, $16 billion would have gone to the Federal Reserve, which owns AIG preferred shares.

Prudential balked at the price and came back with a counteroffer of $30.4 billion when it became plain that the deal would be rejected by shareholders. Pru wasn’t playing hardball. It had a legitimate reason to seek to renegotiate the deal, and its counteroffer was hardly lowball. But AIG refused to budge, and the deal collapsed. So Prudential is stuck with AIA, and the taxpayers aren’t any closer to getting back even a small amount of their money. To hell with us! Why, you’d think that we owned 80 percent of the company or something (which we do).

It’s not at all amazing that AIG made a dumb move. If it didn’t have a history of making dumb moves, it wouldn’t have needed a bailout. This was what is known as a “negotiation.” AIG executives need to look up that word in a dictionary. In a negotiation, there is give and take. If the parties want to make a deal, and the market isn’t all that hot—and to my knowledge, the market in insurance companies is not exactly hopping—the seller needs to show flexibility. Sometimes deals need to be negotiated. It happens all the time.

But keep in mind that this is not any ordinary company. This is the same AIG that set up a secretive unit called AIG Financial Products, run out of offices in London and Connecticut. It was accountable to no one, operating as a kind of “black box” within the AIG organization. In the financial crisis, AIG nearly collapsed when that goofy hedge-fund-like operation incurred billions in losses.