The real AIG outrage

The real outrage in the AIG fiasco isn’t the struggling insurance giant‘s $165 million in bonus payments, said Larry Kudlow in National Review. It’s the way the Bush and Obama administration’s bungled the whole AIG bailout. This disgraceful episode “shows, once again, why the government shouldn't run anything, because it cannot run anything."

Obama's team has "made a complete shambles of the AIG bailout," no doubt, said Tim Rutten in the Los Angeles Times. But the real outrage here is that the contracts guaranteeing bonuses to a bunch of "cowboy securities traders living in Connecticut" are being talked about like they're sacred, while the "employment contracts involving hardworking men and women on Detroit's assembly lines are somehow less legally binding," and an impediment to economic progress.

The bonuses are obscuring the real scandal at AIG, said former New York governor Eliot Spitzer in Slate. The real disgrace is "AIG's counterparties getting paid back in full, to the tune of tens of billions of taxpayer dollars." This just allows shameless double-dipping by the same group of big banks—Goldman Sachs, Bank of America, Merrill Lynch, UBS, JPMorgan Chase, Morgan Stanley, Deutsche Bank, Barclays—that already received TARP money.

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