Why should A.I.G. employees get their bonuses?

Because they have a contractual right to them.

As I mentioned in a previous post, I'm as frustrated by the concept of taxpayer funded bonuses for employees at a failing company as anyone. But I don't direct my ire at A.I.G. I am angry with the government for short circuiting the market and bailing out these losers in the first place.

That said, I can't stomach the concept of the feds telling A.I.G. how it may or may not compensate its employees, especially in light of the fact that the payouts arise via contractual obligations.

The sanctity of contacts create a bulwark which supports the whole economy, and as smelly as the bonuses may seem, it strikes me as far more nefarious to give the government the power to willy-nilly void valid contracts that they don't happen to like.

New York Times writer Andrew Ross Sorkin makes the best case I've seen for leaving A.I.G. alone.