I just heard Liddy talk on C-Span... He was defending the bonuses, which I expected. But what surprised me was what I heard later in his testimony. Apparently, when pushed on exactly how many people were involved with the risky derivatives trades - trades that could have collapses the US economy - it wasn't the whole financial 400+ person side of AIG, but a sub-group, consisting of a mere 20-25 people!
Furthermore, AIG did have quite a bit of risk oversight in their company (after all, it is an insurance company, that is to be expected). But the strange thing is that the people checking for risk were not allowed to make risk assessments of the financial division-- so the types of hedging and derivates deals went unchecked! The US government had to bail them out, but I find them totally unworthy. Now I see them as just a bunch of reckless gamblers.
Also, it was clear that AIG is sitting on some landmines: besides the almost 2 trillion in "traditional" derivatives left to unwind, they have a very risky bet against long-term interest rates going up (if the congressman is correct, they would have to pay out 500 billion dollars if the long-term rate were to go up 1% and short term rates stay the same).
Anyway, this should disgust us... and the bonuses just reflect this kind of culture they have... their bubble. The bonuses don't disgust me as much as this...
It is eerily similar to Iceland-- where only a handful of people bankrupted the entire nation and almost brought down several other countries...