After “choking on anger” over the AIG bonuses (which his Treasury Secretary sought to protect) and praising the House bill to take back the bonuses, the president is having second thoughts. This report tells us:

The White House has yet to publicly criticize the bonus tax proposals. But administration officials say privately they are concerned the House and Senate bills could lead to an exodus of employees or whole companies from the Troubled Asset Relief Program, known as TARP, as well as other government-sponsored financial rescue efforts.

You mean they might have scared the living daylights out of anyone contemplating doing business with the government? Perfectly — and unintentionally — characterizing the policy cul-de-sac in which the administration now finds itself, Robert Gibbs pronounces that “the legislation would ultimately be judged by two standards: whether the bills appropriately reflect ‘taxpayer anger and frustration,’ and whether they maintain ‘our ability to stabilize the financial system and ensure that credit flows from banks and lending institutions to families and small businesses and big businesses.'”

Sigh. Yes, those two things are incompatible. Businesses cannot operate, plan, hire, and succeed if they gauge their actions by the likelihood that they will provoke taxpayer anger and frustration. They might as well hire Frank Luntz — or buy a Ouji Board.

Frankly, whatever compromise the White House reaches on this issue is beside the point. The damage has been done and the lesson learned. If businesses take on the government as a partner, they should prepare for the worst. There is no way to anticipate how 535 members of Congress and the administration will react on any given issue and how your business will be disrupted. As one observer summed up, “You’d be crazy to let the government invest in your business.”