The story of huge bonuses paid by insurance giant AIG got major attention on the Sunday gab fests. AIG, which received $173 billion in U.S. bailout funds, paid $163 million in bonuses to officials in its financial products unit -- the unit that caused the $62 billion in losses for AIG. Now, calls for firing AIG executives are mounting, including House Financial Services Committee chair Barney Frank who said,
"This is an example of people at the commanding heights of the economy misbehaving, abusing the system."
AIG Chairman Edward "Don't Call Me Gordon" Liddy huffily explained that the bonuses represent "contracts" that are legally binding. Fine. Then AIG should pay the bonuses out of whatever assets it has, or can sell. And then the Government should insist on a change in leadership at AIG before any more public funds are spent.
UPDATE: President Obama said today he intends to stop AIG from paying out these bonuses, calling the situation an "outrage."
UPDATE 2: Four experts tell us how the U.S. government can short-circuit the AIG executives' money grab.
