• This is a rush transcript from "The Journal Editorial Report," March 21, 2009. This copy may not be in its final form and may be updated.

    STUART VARNEY, GUEST HOST: Coming up next on "The Journal Editorial Report," Obama's AIG outrage. The president stirs a political panic that threatens to undermine his own recovery agenda.

    Plus, the week's biggest losers. Will Tim Geithner and Chris Dodd be the first victims of the populist pitch-fork brigade?

    March madness is here and it's a cash cow for colleges. But should the student athletes see more of the green?

    "The Journal Editorial Report" begins right now.

    VARNEY: Welcome to "The Journal Editorial Report." I'm Stuart Varney, in for Paul Gigot.

    First up, Barack Obama's AIG panic. Calling the bonuses paid to executives outrageous, the president stoked the beltway bon fire over AIG this week and helped turned it into a full-blown political panic. But will the populist furies that have been unleashed derail his plans to repair the financial system and revive the struggling economy?

    Joining the panel this week, Wall Street Journal columnist and deputy editor, Dan Henninger; columnist, Mary Anastasia O'Grady; assistant editorial page editor, James Freeman; and senior economics writer, Steve Moore.

    Dan, what a political brawl.

    DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: A brawl? Usually with brawl you need two sides fighting. I only saw one side fighting in this thing.

    VARNEY: I saw three or four.

    HENNINGER: No, I just saw the public sector, the Democrats and the White House piling up on the private sector. and it culminated at the end of the week with the passage in the House of this bill to claw back 90 percent of the bonuses being received by these companies. And with the president, as you suggested, piling on and sort of leading this mob scene.

    What is happening here I think is that politics, Washington politics, is beginning to simply overwhelm the subject of the financial credit crisis. And it's going to make it difficult going forward for the people who are trying to execute these policies to get them done.

    VARNEY: Mary, was this an anti-Wall Street, was it an anti-market populist revolt?

    MARY ANASTASIA O'GRADY, COLUMNIST: It looks a little like, as Dan said, piling on. But I think the public has some, you know, righteousness here. It has been watching the politician mishandle this crisis going back to last fall. The officials, the government officials were supposed to know what the books of AIG looked like, which includes having known about the bonuses. So the very fact that they didn't — that this was a surprise to them, I think people are reacting as kind of in a confidence crisis. They feel like, look, if you didn't know that, what do you know about this company?

    HENNINGER: But, Mary, Tim Geithner admitted earlier in the week he had known about the bonuses. And Liddy told the Congress the Federal Reserve and Treasury were walking in lock step with them from last year. They too knew about the bonuses. They left this guy hang out to dry.

    O'GRADY: Precisely. But this is why the politicians are, as you say, jumping on AIG, because if they don't, they are going to be the ones that get attacked. They are going to be the ones held responsible.

    JAMES FREEMAN, ASSISTANT EDITORIAL PAGE EDITOR: That's right. I think if you can see a silver lining to all this, it is causing the lack of confidence in government management. And that's a good thing. I mean, if you think about all this talk lately of nationalizing banks, here's your example of what happens when the government nationalizes a financial firm.

    Going back to last fall, shareholders never voted for this. The largest shareholders said the firm would have been better off in bankruptcy, Chapter 11, than this government rescue. Amazingly, blown $173 billion and the company is still limping along.

    VARNEY: Steve, what do you make of this?