Thoughts on AIG bonuses

There's been a furor over the AIG bonuses. Apparently they paid 165million in bonuses to the people who ran AIG with "greed" and played a part in the current crisis. Almost every single US politician is voicing their anger at the payments.

It seems like everyone is furious over the payments - so much so, that Congress actually passed a law taxing 90% of these bonuses. Retrospectively, after the payments were made. The speed at which the bill passed is also astonishing: the bonuses were paid just a few days ago and this tax is now legislation...

But lets put everything in perspective. The government has pledged like what, 165 billion in aid? The bonuses are just 0.1% of this aid package. So they have recouped 90% of this. But at what cost?

1. Destruction of their credibility. They have put in doubt all legally binding contracts. Who would want to do business in the USA, knowing that the government might just, due to some populism frenzy, CHANGE the law and rescind on agreements.

2. Corporations and banks will no longer be willing to take government aid. This exactly undermines the very aid stimulus they have been trying to revive the economy with. I would imagine a bank would rather seek help from one of the middle eastern soveriegn funds than help from their own government.

3. The very corporations and banks that they have injected money with... well, its predictable what's going to happen. Their most talented people are going to leave, they'll be left as a poorly run, horribly unmotivated organisation. It will be a spiral of rot and disposal. These banks will never return to profitability and the American people will never get their money back.

Man, I thought the UK government was hopeless. The USA is just appalling. Goodbye corporate america!