The argument raging in America over the AIG bonuses is basically the same as the one in Britain over Fred Goodwin’s pension. Those responsible for dragging their companies down and forcing the taxpayer to bail them out are receiving huge sums of money. To add insult to injury, the government could—and should—have done something to stop it.
There are two schools of thought on where we go from here. One is that these case are a distraction from bigger, more important issues. The other holds that if public support is to be maintained for the unpalatable steps that are necessary to restore the economy to health, then the wrongdoers must be punished. In the case of AIG, Greg Mankiw of Harvard and James Surowiecki of the New Yorker put these respective cases best.
Mankiw: “The AIG bonuses now being debated in Congress and everywhere else represent about .001
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