“The Treasury will use a $30 billion infusion into AIG to force the company to repay all of the bonuses promised to employees of its Financial Products group, a White House official said.”
This is a political magic trick, the same one used in the UK with RBS. Here’s how it works:
AIG agree to repay bonuses to prevent the $30 billion being stalled. But the bonus payments already went out on Friday and can’t be recouped.
The money to return to the government comes from AIG, not the bonus recipients, and therefore creates a cost which in turn comes from the government which potentially plugs the hole in the books by handing the money back.
The sleight of hand is that everyone is so fixated on the name AIG as the villain, that they don’t see that AIG is largely nationalized and therefore themselves, whereas ‘bonus recipient’ is the real target.
it’s criminal