QUESTION: WHAT do the letters in AIG mean?

Answer: America Is Gullible.

That dig above at American International Group (AIG) is just a small spark in the rage that is flaming across the US.

The company is giving executives US$165million ($253m) in bonuses after being bailed out to the tune of US$170 billion. The money is going to the very same executives who got it into trouble in the first place.

Everyone from President Barack Obama, Congress, the media and the man in the street is hopping mad.

Iowa Senator Charles Grassley vented his anger on radio yesterday by saying that AIG executives who accept bonuses should commit hara-kiri (Japanese ritual suicide) or resign.

The Republican lawmaker's harsh comments came during an interview with a US radio station. They echo remarks he has made in the past about corporate executives and public apologies, but went further in suggesting suicide, reported AP.

'I suggest, you know, obviously, maybe they ought to be removed,' Mr Grassley said.

'But I would suggest the first thing that would make me feel a little bit better towards them if they'd follow the Japanese example and come before the American people and take that deep bow and say, I'm sorry, and then either do one of two things: resign or go commit suicide.

'And in the case of the Japanese, they usually commit suicide before they make any apology.'

Mr Grassley's spokesman Casey Mills said the senator is not calling for AIG executives to kill themselves, but said those who accept tax dollars and spend them on travel and bonuses do so irresponsibly.

'Senator Grassley has said for some time now that generally speaking, executives who make a mess of their companies should apologise, as Japanese executives do,' Mr Mills said.

'He says the Japanese might even go so far as to commit suicide but he doesn't want US executives to do that.'

President Obama lambasted the insurance giant for 'recklessness and greed' on Monday and pledged to try to block payment of the bonuses.

The Washington Post reported a 'tidal wave of public outrage' swamping the firm, to the extent that armed guards were posted outside the Connecticut offices of AIG's Financial Products division.

'Inside, death threats and angry letters flooded e-mail inboxes.

'Irate callers lit up the phone lines. Senior managers submitted their resignations. Some employees didn't show up at all,' the newspaper reported.

The AIG Financial Products is the division whose exotic derivatives brought the insurance giant to the brink of collapse last year.

'It's a mob effect,' one senior executive said.

'It's putting people's lives in danger.'

An unnamed AIG official said this anger is scaring away the very employees who understand AIG Financial Products' complex trades and who are trying to dismantle the division before it further endangers the world's economy.

Exploding?

'It's going to blow up,' said a senior Financial Products manager, who spoke on condition of anonymity because he was not authorised to speak for the company.

'I have a horrible, horrible, horrible feeling that this is going to end badly.'

Others agree, saying though they are angry, an emotional approach is not the right way.

New York Times business writer Andrew Ross Sorkin says in its Dealbook blog that while 'it sure does sting' to see AIG executives get their bonuses, taxpayers may have to 'swallow hard and pay up, partly for our own good'.

His reasoning? If US businesses start worrying that the government will force them to break inconvenient contracts, it will set the financial system on an even more slippery slope.

He also said it may be in taxpayers' best interests to keep the firm's 'brainiacs' in their seats simply because 'AIG built this bomb, and it may be the only outfit that really knows how to defuse it'.

The Wall Street Journal said this issue has put Mr Obama in a bind.

'Mr Obama needs to convince Americans he shares their mounting fury over the hundreds of billions of taxpayer dollars being pumped into companies like AIG,' the report said.

'At the same time, he needs the executives and employees of those companies to help the government untangle the current financial mess.'

The issue 'has become a critical political test', the report said because 'anger over the bonuses could make it harder for the administration to extract any additional funds it needs from Congress' for the bailout of the financial sector.

This article was first published in The New Paper.