The AIG fiasco reveals the incompetence of government when it enters the world of business. Its the ineptitude, not the lacks ability that hurts. That President Obama directs his outrage at AIG, rather than at the high level, cabinet officials that made it possible, is just the next phase in the continuing mishandling of economic affairs by Washington insiders.
Bonuses are the basis of the Wall Street remuneration system. We can be sure that the former financial tycoon, who, as Treasury Secretary, is responsible for all features of the AIG bailout, was not unfamiliar with that bonus system.
Moreover, the ongoing protests of members of Congress and of its oversight Committees reveals either their ineffectiveness or just posturing, as they now try to lock the barn door after the fact.
The financial melt down and the efforts to rescue companies too big to fail, exposes the fact that the automatic forces of capitalism and free enterprise no longer protect our society from monopoly like abuse by deal makers. Its not just a scholarly refinement to emphasize that equivalent market forces no longer exist to contain inefficiencies and con schemes in our banking/credit system. Otherwise how can one explain awarding instant bonuses for originating risky schemes, the outcomes of which could not be known for years to come? And this a standard operating procedure by the worlds major company specializing in risk analysis?
There can be no resolution of the countrys loss of confidence and is financial crisis until government makes it clear -and obligatory- that previous perquisites, even if guaranteed, will not be distributed to those, and by those, largely responsible for our current peril And not ever from government funds intended to heal this emergency.