The best and most obvious idea is to tax the bonuses to get the money back, as Congress is already working to do. Of course, this should, in theory, only help soothe the rage against AIG if it means larger tax rebates for the people paying for the bailout of AIG.
While I agree wholeheartedly with the anger at AIG, I can’t help but wonder what the hell anybody expected from these bailouts. This is one argument in favor of Nationalization. Obviously, if Congress and the Executive make them comply with the taxpayers’ wishes, they are nationalized in in spirit if not in letter.
This is, I think, the best illustration of “Moral hazard” to come out of this crisis and response so far. The best explanation for this behavior on AIG’s part is that they think they’re going to get infinite, as needed bailouts.