All that agitating about $180ish million worth of AIG bonuses appears to have cost a whole hell of a lot more than that, if you take a look at the public-private asset plan unveiled yesterday (“public-private” in that the public bears the losses, the private concerns stand to make the gains):

Managers of some major funds last week showed reluctance about joining government plans to rescue the economy on fears that Washington might retroactively change the terms of any deal including imposing limits on compensation or profits.

Those fears were prompted by fury in Congress over $165 million in bonus payments made to executives at failed insurance group AIG.

The U.S. Treasury Department spent the weekend encouraging big investors to get involved in a new, public-private investment plan which aims to soak up as much as $1 trillion worth of bad assets that are hindering banks from lending.

See? This big, fat one-way bet being given to institutions is all your fault, for having the audacity to question why AIG would write terrible, airtight contracts paying fat retention fees to people who caused all their problems in the first place. If only you hadn’t scared these banks away, they would have happily bought up toxic assets with nothing but a pat on the head from Timmy!

Sarcasm aside, I think there is probably some truth to the statement that the furor over AIG led to this plan being unduly a sweet deal for the investors and a shaft for the taxpayer, but less that “all that rabble-rousing spooked those poor innocent bankers” and more that everyone was distracted by some triviality so the government saw it as a fine opportunity to shovel something most people don’t understand down everyone’s throats while no one was really paying attention.