The news that AIG executives were to receive hundreds of millions of dollars in bonuses (maybe as high as $450 million!), even after a $170 billion dollar bailout, has fueled a populist revolt not seen since the initial shock of the economic crisis hit Americans last October. When Obama Treasury Secretary Timothy Geithner told American Insurance Group CEO, Edward M. Liddy, that government loans to AIG might be renegotiated as a result, Liddy responded with “grave concern” over the firm’s ability to retain “talented staff.”
Talented in rip-off, that is. But former New York governor and supposed scourge of Wall Street, Elliot Spitzer, is reporting over at Slate that the outrage in the media over the bonuses is a diversion. (H/T Inky99 at Daily Kos.) Not that they aren’t an outrage, the scandal misses the larger crime: the siphoning off of billions of taxpayer dollars to a handful of companies, who insured their highly risky investments with AIG. These companies have received hundreds of billions of dollars in bailout money. Now they are to receive 100% on the dollar reimbursement for their losses from AIG. Spitzer comments: