What will Edward Liddy say on Wednesday?

AIG CEO Edward Liddy is being hauled out in front of the House capital markets subcommittee. No doubt they will grill him about the $165 million in bonuses AIG will payout, despite being 80 percent owned by the government and being on the receiving end of the $180 billion in bailout commitments. A lot of people in Congress look at this firm and guffaw, but it is one of those systematically significant firms, so it can't just be killed off.

We might hear talk of outright nationalization. That would have put a stop to the bonus issue before it began. The firm will no doubt argue that it is the only firm that has the talent to manage all those toxic CDSs. Which may or may not be a good point, depending on your perspective. In any case, the hearing is likely to get heated. This is where government/public relations earns its keep. I wonder how much they are being paid. 

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