By: Mark W Adams

While I (and Paul Krugman) enjoyed a temporary exile from Blogtopia (ysctp!), there's been one thing running the news cycled every day for the past week -- those AIG bonuses.

Honestly I haven't seen this much confusion, disinformation, political grandstanding and media posturing since election season.  I don't buy for one minute that this "distraction" is indicative of some sort of systemic problem with our economic mindset.  (Of course, I haven't bought into much of anything Armando says about, well ... anything, since his purpose in life seems to be proving he's a different, purer kind of progressive/Democrat who disagrees with everyone on the left -- whatev.)

Now mind you, I haven't scratched the surface of what is a horribly complex situation, but I'm weary of hearing even some of my favorite libs perpetuate a fundamentally flawed talking point.  It goes like this: Bobblehead notes everyone is up in arms over the AIG bonuses, opining that the idea that people would get paid extra for incompetence fuels the outrage.  Bobblehead repeates this meme, thus fueling the outrage.  Bobblehead is silent over the all too complicated fact that the bonuses were paid to the folks trying to fix the mess, not the dunderheads who were sacked and got no bonuses.

I watched the hearings with AIG's CEO, and while hardly changing my mind about the whole turgid affair, a couple of things were cleared up for me that have been systematically ignored by the punditry of the left and right as the politicians position themselves to be in front of the pitchfork wielding mob and the media fans the flames with simplistic soundbytes designed to push a story-line rather than inform the public.

Those bonuses.  "Retention" bonuses paid to people who no longer work at AIG and therefore weren't "retained." Outrageous!  And false.  Whether this was merely the result of an unfortunate choice of words or an accurate descriptor, an otherwise trivial point has been lost in the shuffle.  From what I understand, these payments were were made to people, (skilled professionals with intrinsic knowledge of the transactions they were handling) so they could dispose of a specific "book" of AIG''s business -- and if they did so they would get paid, handsomely, for services rendered.  They were "retained" only so long as it took to get the job done.  Job done, bonus paid as contracted.

Quibble if you will about the amount of the payments.  A million dollar bonus or more is an obscene amount of cash, and if that's your beef fine.  That's another argument entirely, however.  I don't begrudge ball players making millions if they are skilled enough that they can plant enough people in the stands and attract high enough TV contracts their bosses can expect hundreds of millions of dollars.  When a trader can help AIG reduce a $2.7 Trillion liability down to $1.6 Trillion, saving the company (and potentially the taxpayers who lent the company tens of billions) over a Trillion Dollars ... maybe, just maybe that service is worthy of a tenth of one percent of the action. 

These bonuses were not a backdoor theft by the incompetents responsible for the company's initial collapse.  None of the people dealing with credit-default swaps and the derivative nonsense are even working there anymore according to CEO Ed Liddy -- a guy brought in by the government to clean up this disaster for a dollar a year.  I'm not talking about any other company and I'm only talking about the retention bonuses that spurred Congress to pass what looks in part to be a draconian ex-post-facto bill of retainer in direct contradiction of Constitutional mandate.

Seriously, after a decade of no-bid contracts handing billions over to the likes of Halliburton and KBR and Blackwater so Exxon and Shell could divy up Iraq while feeding our soldiers poison and turning their bathrooms into electocution chambers, I'm more than a little leary when the GOP gins up some populist outrage.

The problem is going to be, as noted by Stewart Barney on the Bill Press Show this morning, there is enough outrage between the folks on the left who hate all forms of corporate greed and the Tea Baggers on the right lighting torches from the stock exchange floor that if and when the next bailout is needed, really needed, it won't happen.