NO one who saw the venom aimed at Edward Liddy by some members of the US Congressional Finance Committee last week will be surprised that the House of Representatives subsequently passed retrospective legislation to tax at 90 per cent bonuses paid to executives of companies getting “bail-out” money from the US government. Mr Liddy was brought in last September to rescue the insurer AIG from the abysmal mess it had got itself into and he is working for precisely one dollar a year. He should be treated with respect, not with abuse. Nonetheless, members of Congress probably feel that they are reflecting the views of their angry constituents when they attack someone like Mr Liddy -- the recipients of bonuses of up to four million dollars seldom appear in public. Both in Britain and the United States the main defence of such bonuses is that they enable banks and other financial institutions to retain the expert services of the people they need to unravel the complex financial deals which have gone so seriously wrong, without causing still further damage. The fact that a typical expert of this kind may well be the very same person who created the problem in the first place does not seem to bother the employers. It is a strange world in which you can benefit so spectacularly from your failure.

There is talk on Wall Street of a new brand of McCarthyism aimed at bankers and CEOs whose effect will be to destroy the US financial industry.