Mob Action Against AIG is Foolish

From the Washington Post:

A tidal wave of public outrage over bonus payments swamped American International Group yesterday. Hired guards stood watch outside the suburban Connecticut offices of AIG Financial Products, the division whose exotic derivatives brought the insurance giant to the brink of collapse last year. Inside, death threats and angry letters flooded e-mail inboxes. Irate callers lit up the phone lines. Senior managers submitted their resignations. Some employees didn't show up at all.

"It's a mob effect," one senior executive said. "It's putting people's lives in danger."

Politicians and the public spent yesterday demanding that AIG rescind payouts that they said rewarded recklessness and greed at a company being bailed out with $170 billion in taxpayer funds. But company officials contend that the uproar is scaring away the very employees who understand AIG Financial Products' complex trades and who are trying to dismantle the division before it further endangers the world's economy.

"It's going to blow up," said a senior Financial Products manager, who spoke on condition of anonymity because he was not authorized to speak for the company. "I have a horrible, horrible, horrible feeling that this is going to end badly."

Let's not forget that whatever distate we may have for the bonuses that were paid, we, the taxpayers, own 80% of AIG and bringing it down by mob rule will only serve to cost taxpayers and the economy billions or trillions more.

If I were one of those AIG execs who just got a huge bonus, I'd walk out of there in a New York minute. If the mob wants to burn down the gates to AIG, they'd have to do it without me inside.