AIG Stampede Will Scare Away Other Investors

The Administration is suddenly realizing that the public outrage stampede they created against the AIG bonuses may well backfire on them:

WASHINGTON -- AIG outrage is genuine, but be careful about the fallout, said the head of the president's Council of Economic Advisers, noting that private investors are "kind of doing us a favor" in buying toxic assets and should be recognized for their contribution.

Adviser Cristina Romer told "FOX News Sunday" that private firms not getting federal bailout money should not be intimidated by Congress' decision to tax executive bonuses by 90 percent because they understand that this is a new culture of doing business.

"We've got banks with a lot of toxic assets, what 'toxic' means is they are highly uncertain ... so that is certainly the big picture, and that is going to be the main reason for doing this ... We simply -- we simply need them. We need them -- you know, we've got a limited amount of money that the government has to go in here, so we need to partner, not just with private firms, but with the FDIC, with the Fed, to leverage the money that we have," she said.

After the spectacle we've seen this week with congressmen acting like fools and ACORN protesters being bussed to AIG executive's homes, why would any solvent private business want to have anything to do working with the government? If I ran a firm in a position to help the government with their toxic asset problem, I'd run the other way as fast as I could. I don't care how much upside there might be financially, the downside of becoming a pawn in some congressman or "community organizer's" game wouldn't be worth it.