A few thoughts about AIG. Personally, I am as upset as anyone about the $160 million that AIG paid in bonuses but, I am more concerned about finding out EXACTLY what they did with the rest of the $160 billion that they got. How many foreign firms were paid from that on policies they had, etc. There are two things about the bonus money that would be interesting. One of them is from Senator Arlen Specter (R-PA), he had suggested that a great idea would have been to directed the board of AIG to NOT make the payments, thus forcing the executives to sue AIG. Now, most likely AIG would loose and the contract would have been enforced but, it would have made them go on public record asking for the money, and they would have had to suffer a little indignity.
The other thing I have heard is that Congress could pass a law implementing a 100% income tax on the bonuses. This might be unconstitutional and certainly contains a lot of "moral hazard" but, it is an interesting idea.