AIG bonuses are not the problem. Democrats' policies are the problem.

By Steven Zak

Conservatives railing against AIG bonuses paid to its employees are playing right into Obama's hands, as he too lashes out at AIG in an attempt to deflect attention from his lack of effective action on the economy.

In typical fashion, Obama prefers appearances over substance, for if the survival of AIG for the benefit of the general economy is the substance, then one focused on that might think it better to have AIG execs making business decisions -- such as what sort of bonuses to pay employees -- than to have politicians making same. Dems, of course, covet increased government control over business. Conservatives going along with Obama's feigned rage over AIG bonuses merely help support his charge that greedy "Wall Street" needs more regulation.

It is true, of course, that if AIG went into Chapter 11, a bankruptcy judge would be forcing on the company such decisions as what sort of bonuses the company may pay. But a judge -- both in terms of competency and of good intentions -- is more trustworthy than Obama or the Democrats in Congress. Further, there is a fairness issue: if AIG were to enter into bankruptcy, the company would be willingly submitting to the known standards of those proceedings, as compared to being pressured to accept the made-up-as-they-go rules of the grandstanding Democrats.

But what galls even more than Obama's attempt to deflect from his own incompetence by trying to redirect public rage at AIG is his feigned moral indignation at the idea that taxpayer dollars would go to pay large bonuses to employees whom the company clearly believes warrant the investment.

"This is not just a matter of dollars and cents," Obama railed, "it’s about our fundamental values." Translation: As a matter of economic substance, this pittance doesn't really matter, but why not grab yet another opportunity to bash greedy Wall Street, in the hopes that people might not start reflecting on the roles Messrs. Frank and Dodd played in the economic collapse and on the role of the Obama administration in prolonging it.

The AIG bonus money -- about $165 million -- is, by the way, less than a fifth of the $900 million of taxpayer bailout money Obama has allotted for Hamas (and less than a thousandth of the $173 billion in bailout money received by AIG). If morality dictates that AIG employees should be made to stew in the results of their own mistakes, then surely that reasoning would apply in spades to entities like Fatah, Hamas, and the terror-supporting Palestinians generally.

Why does allowing AIG to make its own business decision -- as it struggles in an economic environment that politicians who feign moral indignation had a huge hand in creating -- offend our "fundamental values," but giving taxpayer support to terrorists does not?