AIG appears to be a pretty badly run company. They insured mortgages and badly miscalculated the risk of default. When the risk was realized they found themselves on the brink of collapse.
Our government has stepped in with our tax dollars as well as billions borrowed in our children's names and given AIG a few multi-billion dollar blank checks. What is this poorly run company doing with the money? Among other things they are passing out multi-million dollar bonuses, some of which are to people that no longer work for the company.
Everyone is ticked. But where are they directing their anger? AIG. Not so much the government. As Stossel would say, give me a break.
What do you expect wasteful companies to do when you don't allow the market to punish them for their wasteful practices? They'll keep doing what they've been doing. If the government offered the company I work for billions in bail out money and the company offered me a million a month to keep doing what I'm doing, guess what I'd do? I'd take the money.
If you're looking for a place to invest billions of dollars and you find a poorly managed company that has a history of making decisions that lead to bankruptcy and you give them your billions and they continue to make poor decisions, who is to blame? This is like blaming a heroine addict for getting high after you've provided him with all the drugs he wants.
What your so-called conservatives might say at this point is "We need to pay these bonuses because we need to retain the talent required to get us out of this mess. You want crappy executives running the company? That will make things worse."
My response, as a person that sees the value of truly free markets, is that you don't know that. You don't know that you are really getting millions of dollars in value from these executives. That's the whole point of a free market. If these executives bring value, then the market will reward them, and if not the market will punish them.
Now we've decided we will not let the market punish them. So Obama and the rest of the central planners will step in and decide what their wages should be. But he cannot do this successfully. He cannot know if these high salaries really bring this kind of value. A market can. But a market has to be allowed to punish failure. And in America we don't do that. At least we don't do it for companies that are large and have people lobbying Washington on their behalf.