A few hours ago The New York Times breathlessly reported that insurance giant A.I.G.–recipient of $170 billion in bailout funds (so much money that taxpayers actually own about 80 percent of the firm)–will soon pay out $100 million in bonuses to the very executives who bungled the company’s finances to the point that it needed rescue.
I’m sorry, but did any of us expect A.I.G. corporate officials to behave with anything other than arrogant contempt towards the very taxpayers who saved their very sorry asses? I mean, look at the government that bailed out them out. Specifically, look at Larry Summers, President Obama’s director of the National Economic Council.
He’s one of the principle government officials who got us all into this financial mess in the first place. Back in 1998, when Summers was President Clinton’s Deputy Secretary of the Treasury, he backed repealing the Glass-Steagall Act (one of the strongest bank reform laws that came out of the Great Depression) and he helped sack Brooksley Born, the chair of the Commodities Future Trading Commission, whose only crime seems to have been vocalizing her desire that the government regulate derivatives.
If Summers’ punishment for helping engineer the greatest economic disaster since the Great Depression is a critical post in the Obama Administration, then why shouldn’t expect the same kind of behavior from the fools who run A.I.G.?