Trawling through the piles and piles of online newspapers and blogs as I do every day, I ran across a comment by Andrew Sullivan of the Atlantic. I don’t always agree with him, and he can be a drama queen at times, but overall I enjoy what he has to say. This time he was agreeing with a blog by Jim Manzi about how when you look at the AIG bonuses as a percentage of the bail out billions, it’s tiny.

If we assume (conservatively) total average loaded comp per person of $50K, this is about $5.8 billion per year of aggregate headcount cost for rough figuring.

$165 million is less than 3% of this number.  Why isn’t everyone outraged every 10 days at this amount of money going out the door to employees — because it is labeled “salary”?  Suppose AIG eliminated this bonus entirely, but raised salaries 3%, would everybody feel better?  After all, salary is what you “deserve” for your labor, while bonuses are just extra cherries on top — right?

Pardon me? Well Jupiter looks small from where I’m standing, but it’s still huge.

Annoyed, I fired off this missive. It’s posted on Manzi’s blog.

Jim,

You’d have a valid point if:

1. The people who caused the problem were the only ones who could fix it. They’re not.

2. 11 of the people given retention bonuses were actually retained. (Whether they’re worth retaining is another conversation.) A retention bonus implies that should they leave they forfeit their bonus, no?

3. That genuine risk was involved in the bonus. If the company loses money they lose their bonus. The word bonus implies reward for working above and beyond the scope of the job. If as you suggest it’s merely another part of the remuneration then it should be paid as salary and taxed accordingly.

4 Defining 100 million as a percentage of 100 billion wasn’t so disingenuous. It seeks to belittle just what a huge number 100 million is. Let’s try 100 people as a percentage of 100 million. Why that’s only 1% of the entire sum. That’s tiny!

Except those 100 people just got paid 1 million dollars each, of tax payers money, for driving a company into the ground and torpedoing the entire economy.

1 million.

Now, you may think that’s not a lot of money. The average salary in the US is just over $40,000 dollars (2007 figures.) That’s if you do a good job and don’t have your wages garnished for whatever reason.

So let’s look at $40,000 as a percentage of 1 million. Wow, that 4%. That’s tiny too!

So in your upside down world, Jim, it’s perfectly reasonable to pay someone a million dollars for being greedy and utterly incompetent.

But a cop, a teacher, a firefighter or a soldier (if he or she is E4 six years of service and above) is only worth 4% of that.

You’re not only out of touch, you’re certifiable.

May I suggest you extract you head from whatever orifice you seem to have inserted it and find a little perspective.

Really, is it too much to ask that the people commenting professionally on this crisis try and have some understanding of what it’s like viewing this train wreck from the other end of the telescope?

Seriously, when you have a company this infested with greed, contempt and ineptitude, it’s unfixable.

CNN reports that AIG paid million dollar bonuses each to just 73 people, 11 of whom don’t even work there anymore.

If they were a profitable company, fine. But they’re bankrupt and 80% publicly owned.

What baffles me, is why hasn’t the government taken the approach that many corporations take? Break the company up. Sell the parts that are worth something and move on.

Incredible.