Off With Their Heads: Samples of AIG Outrage

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'REWARDING INCOMPETENCE': Representative Barney Frank (D-Mass.), chairman of the House Financial Services Committee, said on the Today show that paying the bonuses is "rewarding incompetence." Frank added: "These people may have a right to their bonuses. They don't have a right to their jobs forever."

BEN SLAMS THE PHONE: In an interview that aired on Mar. 16 on CBS's 60 Minutes, Federal Reserve Chairman Ben Bernanke did not address the bonuses but expressed his frustration with the AIG intervention. "It makes me angry. I slammed the phone more than a few times on discussing AIG," Bernanke said. "It's—it's just absolutely—I understand why the American people are angry. It's absolutely unfair that taxpayer dollars are going to prop up a company that made these terrible bets—that was operating out of the sight of regulators, but which we have no choice but to stabilize, or else risk enormous impact, not just in the financial system, but on the whole U.S. economy."

CONTRACT LAW: Lawrence Summers, Obama's top economic adviser, said: "The easy thing would be to just say…off with their heads, violate the contracts. But you have to think about the consequences of breaking contracts for the overall system of law, for the overall financial system."

STOKING THE FLAMES: Tabloids are finding AIG a handy bit of fodder, and the company's name fits neatly into a headline. Some examples from St. Patrick's Day: "A.IG. IS A P.I.G." (New York Daily News); "OUTR-AIG-E" (San Jose Mercury News); "BAILOUT RAGE" (Chicago RedEye); "BONUS BLOWUP" (am New York); and "OH NO YOU DON'T" (New York Post).

FULL ACCOUNTING DEMANDED: From a Dallas Morning News editorial: "As much as it pains us to consider, AIG and other companies will probably require additional financial aid from government coffers. Taxpayers deserve a full accounting of how their dollars are being spent. Companies that require a taxpayer bailout to prevent a global catastrophe don't get to dole out dollars in executive compensation without serious questions being asked and conditions imposed. We hope Congress and the President have learned this lesson well."

'BEST AND BRIGHTEST': From a New Jersey Star-Ledger editorial: "AIG officials have, understandably, been hard-pressed to defend this bonus and retention boondoggle. But that hasn't deterred them from trying." As [Edward M.] Liddy, AIG's president, told Treasury Secretary Tim Geithner, the payments are needed "to retain the best and the brightest talents" to run AIG.

Surely he jests.

"This band of 'best and brightest' just blew a $62 billion hole in the company. What's to retain? Heads should be rolling. Besides, is there really that much cutthroat competition for such an overpaid bunch of losers? Maybe there is—which would explain a lot about what passes for talent around lower New York City these days and, if so, is downright frightening."

DEFLECTING ATTENTION: The Wall Street Journal, in a Mar. 17 editorial, says that the furor over the bonuses is shifting attention from the fact that many of the AIG counterparties that received billions in payments funded by the federal government are overseas financial institutions. "Given that the government has never defined 'systemic risk,' we're also starting to wonder exactly which system American taxpayers are paying to protect. It's not capitalism, in which risk-takers suffer the consequences of bad decisions. And in some cases it's not even American. The U.S. government is now in the business of distributing foreign aid to offshore financiers, laundered through a once-great American company."

LATE NIGHT JOKES: MSNBC news show host Rachel Maddow, on Late Night With David Letterman: "Sometime in early 2008, that company signed contracts with its employees that said: 'Even if you cause the company to fail and nearly bring down the worldwide economic system, you will still get a bonus'…I mean, who writes those contracts?"\

MORE LATE NIGHT: Jon Stewart on The Daily Show: "They say angry populism is all the rage, literally. It's been building for months, simmering. But our proletarian rage was so unfocused. If only someone would step up and put on the 'kick me' sign…Any money AIG saved on bonuses they chose to give to their favorite charity—The Punch the Children Fund."

BusinessWeek staff writer Ben Levisohn contributed to this report, which was supplemented with reporting by the Associated Press.
Mintz is news editor for BusinessWeek.com in New York.