As I write this the furor of the AIG bonuses is working its way through whatever it will work its way through. The more interesting question being asked is whether populist furor over the bonuses will interfere with the government's ability to deal with the current crisis?
Thomas Friedman thinks so:
Let me be specific: If you didn’t like reading about A.I.G. brokers getting millions in bonuses after their company — 80 percent of which is owned by U.S. taxpayers — racked up the biggest quarterly loss in the history of the Milky Way Galaxy, you’re really not going to like the bank bailout plan to be rolled out soon by the Obama team. That plan will begin by using up the $250 billion or so left in TARP funds to start removing the toxic assets from the banks. But ultimately, to get the scale of bank repair we need, it will likely require some $750 billion more.
The plan makes sense, and, if done right, it might even make profits for U.S. taxpayers. But in this climate of anger, it will take every bit of political capital in Barack Obama’s piggy bank — as well as Michelle’s, Sasha’s and Malia’s — to sell it to Congress and the public.
Recall that the authors of the Constitution did not have a high opinion of the mass public and designed government institutions in order to limit their direct involvement. The passions of the public were to be removed from policymaking. The instability infused into government by mass hatred was to be prevented. I think this is a great example of what they were talking about.
