Bob Graham, Executive Editor

The fine folks leading American International Group seem to have failed miserably at understanding the financial markets - and now, public sentiment.

This week company officials were rightly taken to task by Congress for holding an expensive retreat in California, to the tune of $440,000, including $23,000 in spa treatments, at a posh resort. AIG officials, with the ink still wet on the $85 billion loan from the government, said the trip was for independent insurance agents for one of its subsidiaries, not its financial service executives.

That is one differentiation few are going to make. Even though AIG’s insurance operations are on solid footing, all entities bearing that acronym feel fundamentally toxic to most people. AIG is AIG to the average person, and more and more it seems like it stands for Anything I can Get.

This story broke as the government agreed to lend AIG another $37.8 billion.

Everything associated with the bailout is a huge source of concern for most Americans. Fat-cat executives, a description enhanced by spa treatments and posh retreats, are getting even richer at the expense of the average American, who is now faced with rising prices and shrinking retirements. AIG officials will never be able to explain the trip effectively, although they did make an attempt in this press release. It doesn’t matter. The damage is already done.

Before long people are going to be rooting for AIG to fail, even if it means they’ll lose up to $125 billion in loans.