WHO’S MINDING THE STORE?

The uproar over AIG’s payment of $165 million plus in bonuses probably could have been avoided if the stewards of our country’s financial resources — Presidents Bush and Obama, Congress and assorted officials at the Treasury Department — had been paying attention before the bailouts were ever made.

The U.S. could have said: The price of the bailout? No bonuses. Alternative conditions? The American taxpayer must be reimbursed or the company must return to profitability before bonuses are paid. Certainly some contingencies should have been negotiated into the bailout of AIG. The aforementioned strategies would have eliminated the current contretemps.

As a result of the no-strings-attached policy, not only AIG but the government has suffered an image hit. To clean up its name as it undertakes to build its credibility, the government needs to answer questions about its fiscal management skills, particularly since it took over 80 percent of AIG. It needs to address what leadership knew and when it knew it.

AIG needs to confirm that only the financials products division was involved, and if so, let’s not take the whole company down with it, because the continual flogging of AIG only erodes its value and threatens our $170 billion investment. As Joe Nocera recently wrote in The New York Times, “Treating all of AIG like Public Enemy No. 1 is a pretty dumb way for a majority shareholder to act when he hopes to sell the company for top dollar.”

When you’ve got Congress expressing its shock and outrage over AIG’s distribution of bonuses that Congress itself previously chose not to prohibit … well, you’ve got to ask yourself, “Who’s minding the store?”

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