Absolutely right, although it doesn't help that the Indispensable Man has been so intimidated by AIG's executives. He really missed a chance to stand up for himself and the taxpayers, and instead lazily acquiesced faster than Paulson would have.
This business about how the "bonuses" must be paid because of pre-existing contracts is absurd. Breach the damned contracts and let's see these guys try to get their money through the courts. Let them try to bring lawsuits to enforce these contracts. I think it's high time America came face to face with the whizzes who have done so much to destroy our financial system, and yet continue demand their perquisites.
Reich is right that AIG and the rest of the Bailed Out are no longer within the capitalist system. They are demanding, and getting, government protection, despite that protection being ruinously expensive and deeply unpopular. AIG has spent nearly twice as much $$ as the entire Marshall Plan, but the only recipients of that largesse has been fellow members of the financial community. It is time to turn off the $pigot, but our government is too cowed to do so.