Who is running the U.S.? Is it Treasury Secretary Tim Geithner or American International Group (AIG) CEO Ed Liddy? Geithner knew about the $165 million in AIG bonuses to reward the people who put AIG at death's door and waited to tell President Obama. And Liddy has been blundering through one scandal after another -- from the corporate blowouts at resorts in California and Phoenix to this latest bonus outrage.
But the anger surrounding the AIG bonus situation is a political sideshow. As I told USA Today on Tuesday and posted about here a couple of weeks ago, the real issue is that Hank Paulson used $12.9 billion in taxpayer money to bail himself out -- as a major Goldman Sachs (GS) shareholder -- and installed Ed Liddy, a Goldman board member, to keep secret the fact that Goldman and a slew of European banks got $105 billion in taxpayer money -- 636 times more than the bonuses -- to compensate the banks for their bad bets.