Off With Their Heads: Samples of AIG Outrage

The American public has finally found a corporate villain for channeling its frustrations

By Phil Mintz

Watch the Video…

Since the financial crisis began, Americans have been looking to vent their anger over a situation they can't control but are going to have to pay for. It wasn't easy to find a target at first. After all, the arcane dealings in collateralized debt securities and credit default swaps made it hard to understand what was going on, much less know whom or what to blame. Bear Stearns and Lehman Brothers could have done in a pinch, but they left the playing field early on.

But in American International Group (AIG)—the largest recipient of federal bailout dollars so far and the apparent architect of so many flawed financial deals that its own magnitude of failure is ensuring its life-support—politicians, pundits, and Page One punsters have found their perfect subject. And the news that AIG execs in its financial products division were getting $165 million in bonuses while the company was taking billions from the government pushed public anger over the edge. (AIG says it has to pay the bonuses to keep talented employees.)

Here's a sampling of public discourse over AIG in recent days:

TAKE A HINT FROM THE JAPANESE: Senator Charles Grassley (R-Iowa) said that AIG execs should take responsibility by resigning or killing themselves. In a Mar. 16 interview with a Cedar Rapids radio station, he said: "I suggest, you know, obviously, maybe they ought to be removed. But I would suggest the first thing that would make me feel a little bit better toward them [is] if they'd follow the Japanese example and come before the American people and take that deep bow and say: 'I'm sorry,' and then either do one of two things: resign or go commit suicide." (A day later, Grassley clarified that he wasn't serious about the suicide part.)

AN 'ANGRY' OBAMA: President Obama has taken some criticism for his sometimes cool manner when critics say he should be hot under the collar. AIG was Obama's latest chance to unleash his inner tough guy, when he used an announcement of small business initiatives to attack the company's "recklessness and greed." "How do they justify this outrage to the taxpayers who are keeping the company afloat?" Obama said. "This isn't just a matter of dollars and cents. It's about our fundamental values."

INQUISITION: Not surprisingly, AIG took heat at a Mar. 17 Senate Banking Committee hearing on regulating the insurance industry. "One way or another, we're going to try to figure out how to get these resources back," said Christopher Dodd (D-Conn.), the panel's chairman. "This is ridiculous," exclaimed Senator Jon Tester (D-Mont.). He said AIG executives "need to understand that the only reason they even have a job is because of the taxpayers."

TAX IT BACK: Congressional Democrats vowed on Mar. 17 to pass heavy taxes on bonuses paid to employees of firms receiving federal bailout funds if AIG doesn't return some of the money given out as bonuses. "Recipients of these bonuses will not be able to keep all of their money," said Senate Majority Leader Harry Reid (D-Nev.). "If you don't return it on your own, we will do it for you," said Senator Chuck Schumer (D-N.Y.).

In the House, Representatives Steve Israel (D-N.Y.), and Tim Ryan (D-Ohio) introduced a bill that would that would tax at 100% bonuses above $100,000 paid by companies that have received federal bailout money. "We will use any means necessary," said Ryan. "It boggles my mind how these executives can be so unaware of what the American people are going through."