The Diversion

clipped from www.powerlineblog.com As I explained on Bill Bennett's radio show this morning, I don't think there is anything wrong with the AIG bonuses, and the people who got them should keep them. This is based on the testimony of Edward Liddy, who said yesterday: * All of these payments, as to AIG's troubled financial products division, are retention bonuses, not performance bonuses. * The money is not going to anyone responsible for the implosion of AIG--those people, who were in the credit default swap area, are gone. AIG, like GM, should have been allowed to go into bankruptcy. In bankruptcy, it could have wound down its financial products division just as it is doing now. Bankruptcy would not have affected the company's international insurance businesses, distinct corporate entities which are both solvent and profitable. Those businesses could have been sold, which is what AIG now plans to do. Why wasn't that approach followed? Because of politics. Much of the money that AIG owed was due to European banks.