President Obama is huffy about AIG employees receiving $165 Million in (contractually obliged) bonus money. The bonus payments amount to 1/1000 (.1%) of the money going to AIG, but the White House and Congress are enraged by the thought of people getting paid. The New Leader of the Republican Party, CNBC’s Rick Santelli, is especially numerate, and would like people to consider objecting the the other 999/1000 of the bailout rather than just the AIG bonus.

Our Dennis Byrne consults his brother, who speaks with much wisdom saying “to make a blanket demand that all AIG bonuses are bogus might make the public feel better, but might in fact be detrimental to future performance”. Our Tom Roeser goes after the childish behavior of Christopher Dodd, and the blatantly unconsitutional ways that Dodd has proposed to punish AIG employees.

In the New York Times, a shadowy “administration official” (remember when the Obama administration was going to be the most open administration in US history?) has blamed Sen. Dodd for providing for the bonus. Bloomberg notes that Obama’s prickly attacks on AIG employees may backfire, “as Republicans try to redirect that anger toward his administration”. Well sort of, but also in Bloomberg, Sen. Dodd has blamed the Obama Administration for the Bonus Amendmen, so it is actually a Democrat who is redirecting the public anger at the Obama Administration. Keeping both sides happy, AIG donated $101,000 to Barack Obama in 2008, just a bit less than the $103,000 AIG sent to Christopher Dodd also in 2008.

The ever sensible Larry Kudlow takes a high level view:

What it really shows is how the government has completely bungled the AIG takeover. Blame the Bush administration and the Obama administration. It also shows, once again, why the government shouldn’t run anything, because it cannot run anything. AIG should have been placed in bankruptcy last fall under some sort of government sponsorship. While in bankruptcy, all the salary contracts (and every other AIG contract) would have been nullified and voided.

then moves on to explain how the hint of mark to market accounting reform is generating a recovery while Washington whittles away at AIG.

Take those fictitious write-downs away and you are left with a much healthier banking picture. This is huge in terms of solving the credit crisis.

I think we are on to something. Let’s keep Washington DC busy pointing fingers at one another long enough to let the markets recover, businesses hire, and people start buying houses again.

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John Powers is the President of the Chicago Daily Observer