I have a simple way to figure out what to do with the mini-scandal over some bonus money being paid at AIG. Do wha't best for our economy.
As I understand it, much of AIG is profitable and is in the process of being sold as separate units, while the rest will be wound down and taken out of business.
If so, then the company and the government caretakers should do whatever is necessary to maximize the value of the company in a free-market.
I would suspect that this means keeping up business, and as many top level employees as possible. If bonuses are apart of this, then fine.
If bonus money is being paid to people who were a part of the problem and will be (or should be) leaving soon then I think as a matter of equity the government should stop that.
This is the problem with the government involved in private business. You have public outcry and nagging public officials always looking to make political points rather than a profit.
It's a good incentive to those in the business world not to need a bailout.