The execs at AIG wouldn't have received the bonuses if not for the Federal gov't.

Indeed, it's entirely possible that AIG may have gone belly-up and filed for bankruptcy, thereby making the distribution of whatever monies available to pay contractual obligations a job of bankruptcy court and lawyers. Yes, it's possible. We don't know.

But the thought of that alternate reality is not proper grounds for saying it's OK to do it now....legally speaking. After all, the provision for safeguarding the clause to pay these bonuses was put in the bill.

We can discuss why that provision was put in but I don't think it's a very fruitful discusision. Some will point to conspiracy theories, some will say it's typical corporatist corruption, some will say it was the right thing to do based on obligation of prior contracts.

The snag in arguing any of those points is that the people who received bonuses, to my understanding, are not some uniform group that we can paint with a corrupt brush. It was a very diverse group whose bonuses were not all promised under the same pretenses. One could find that many of those bonuses were going to very deserving people who fulfilled a very reasonable milestone in their work to get that bonus...or who were contractually promised a bonus to work on sorting out this mess.

All that said, I'm not talking about my personal reactions to bonuses outside of the context of law and govenrment. I think it partly stinks. But I don't think that matters in a policy debate.

*My point is that it's  a very complicated and convoluted to passing flimsily based judgement on from the outside and that the reasoning and blunt clumsy actions to seek "retribution" on those bonuses are surly going to get a lot of things wrong while setting very precedents on how public policy logic can be twisted and what it can be used on.

But I would imagine that even you would appreciate the fact that Obama has shown that he has limits to the amount of government intervention that he is willing to undertake...

Yes, I can appreciate that in the abstract and without context. However, The TYPE of intervention he is supporting (and Bush Co. before him) simply represents a departure from what I consider to be prudent and responsible...in accordance with MY view of the trade-offs and implications. My unvarnished view is grounded in probable results along with an appreciation for the limits and hazards of these kinds of interventions. I do not consider his intended aim to be a feasible result from all this.

That is in stark contrast to technocrats steeped in far too much admiration for their own ideas and an inversely related lack of respect for the realities that will almost surly scuttle their intentions.

It's also in stark contrast to politicians who are NOT looking at this is in politicking-free environment and have public choice-related issues that taint the decisions...such an observation is straight out of Public Choice Theory 101. IOW, Obama is not looking at this in a pure, dispassionate results-oriented fashion. His position in all of this is sadly controlled by the fact that the office he holds is "political" and subject to short-sighted spin and opportunism from all sides if doesn't take action. That prior, of course, is not his fault. It plagues any politician. It's the nature of beast. I know he doesn't have the luxury of ignoring the effects of posturing from morons in the peanut gallery. But it is exacerbated by the fact that many of his advisors have priors about economic thinking that make such action all the more inevitable.

The last politician to resist action was Warren Harding...of all people....back in the Panic of 1921. The reason most people aren't aware of the fact that there was a panic in 1921 is because Harding did nothing to interfere to with the correction. It's resolution was painful...yet very swift...so swift that it falls off the radar of most discussions of American economic history.