Exclusive: Why I Deserve My Bonus

Blogger's note: To preclude any misunderstanding, the following is a complete fabrication meant to portray a certain kind of mindset. Any resemblance to the mindset of any actual AIG bonus recipient is purely coincidental.

OK, so I bagged a chunk of change: $4,605,321.54, to be exact. But I'm here to tell you that I earned every penny of it before leaving AIG and I'm fed up with hearing everyone -- everyone -- whining about the bonuses paid to me and the 417 other members of the Financial Products division who worked so hard to shipwreck the firm. All these people screaming about the bonuses -- from the big O and Tim and Barney right on down to Monsieur Etienne Colbert (and that's really getting down there) -- need to hear from at least one of the decent, dedicated, hard-working men and women who got us into this mess. So here are my answers to the questions most commonly asked about the bonuses -- mine in particular.

1. How can you leave the firm if this is supposed to be a retention bonus?

Easy. I left as a public service to the firm and to the nation, which now owns about 80 percent of the firm. Now that the firm has paid me over four million bucks, it will not have to pay me any more. Think of what that alone will save the American taxpayer.

2. Since your Financial Products division drove AIG so deeply into debt that it could
not survive without massive federal help, how can you claim a bonus for such an abysmal performance?

Most people don't realize the amount of work it takes to build over one hundred billion dollars of high-risk exposure for a firm such as AIG. You have to be constantly on the watch against low-risk securities creeping onto the books because with them you'll get low-balled into cut-rate premiums that will slice into the firm's bottom line. Day by day, week by week, month by month, you've got to weed them out, and this takes constant vigilance and extraordinary self-discipline, because in the insurance business the temptation to write low-risk coverage -- especially for solid securities based on document-backed mortgages that have been steadily performing without default for years -- can be almost irresistible. It's the first thing I have to teach newcomers. Watch out for safe securities. They're a lousy bet. They'll cut into our profits. They'll cut into our bottom line. Worst of all, they'll cut into our bonuses.

3. But how can you justify the gigantic risks you took?

That's what everyone keeps asking. Why should we have bet billions and billions on securities propped up by mortgages issued without any documentation on the borrower's ability to pay, and without any hard evidence of what the mortgaged properties were worth? Sounds like a great question but it's really a dumb one. Look. Let's face a basic fact: Americans are risk takers. We prize daring. We reward audacity. That's why we put Obama in the White House. Without a willingness to take risks, would we ever have invaded Iraq? Or chosen Bush and Cheney to lead us?

And one more thing: we backed those mortgages because we believed -- we sincerely believed -- that they rested on something far more valuable than documents, on would-be "proof" of the borrower's ability to pay back a loan. The mortgages we insured rested on the American dream: home ownership. Who in good conscience could spit on that dream? How could anyone tell the young couple making $850 a week stocking shelves at Wal-Mart and waiting tables at the Pizza Hut that they couldn't afford to pay $750,000 for a three bedroom split-level? Who wouldn't want to do everything possible to nurture their dream? Yes, I've been a risk taker, and I've been a dream maker. And my aim in life is to go on making dreams come true.

4. But since the top 25 executives of AIG have cut their own salaries to one dollar until the firm is solvent again, shouldn't you follow their example? Even though you're contractually entitled to it, shouldn't you give back your bonus -- or at least half of it, as CEO Edward Liddy has asked?

Are you nuts? First of all I earned every penny of my bonus, as I've just explained. Secondly I need every penny of it. People who cry about losing just one house have no idea what it feels like to face the prospect of losing half a dozen. Look: I owe eight grand a month on the Park Avenue condo alone. $3500 a month on the weekend house in Southampton -- and you wouldn't believe what's happened to its selling price since I bought it. Then there's the villa in San Tropez (it's only a little villa, for Chrissake), the pied a terre in Mayfair, the Newport cottage, the Palm Beach condo, the Aspen chalet -- all mortgaged to the hilt, all sinking in value, all bleeding me white from one month to the next. And what if I couldn't make the payments? Foreclosure of course, but also further meltdown of the securitized mortgages backing up those properties. Further drain on AIG. The point is, we're all in this together. I've got to do my part to keep us from melting down completely. I've got to make those payments.

5. Since you clearly believe that you've earned all your bonus and since you're obviously proud of the work you've done for AIG, will you tell us who you are?

You know, I really wish I could. But I'm contractually forbidden to do so.

Comments

[Warren O'Rourke]

Hey, everyone!

Check in your old lit book from freshman English and you will almost always find Swift's "A Modest Proposal."

As I have posted earlier, people don't get satire in times of insanity.

Swift's "saevo indignatio" (i.e., savage indignation) form of satire is appropriate to the madness of our times -- to wit: Bernie Madoff, home foreclosures, the b-----ds at AIG, etc.

Perhaps things are too serious to make satirical jokes and then expect our audience to laugh.

[Warren O'Rourke]

In an age when very little makes sense, satire becomes far more difficult to write.

After 36 years of teaching composition classes filled with very bright young folks I am convinced that many very bright folks will not realize you are kidding around.

I once had a kid with a stratospherically high IQ try to get approval of a research paper topic on Swift's "A Modest Proposal." His proposal was to research Irish historical records to discover where poor Irish kids had been cooked and eaten and to discover where and how many Irish youths were hunted in the forests.

The kid was smart enough to follow my explanation of satire and propose another project, but the fact is that when he read Swift's essay on his own he thought Swift was being serious. That was in another time of insanity -- the Vietnam Era!

Madness abounds today. Ergo, you will be misunderstood. You probably are fully aware of that danger.

That bright young man eventually earned a Ph.D. in American Lit from a semi-respectable state university. His Vietnam Era pony tail is mostly gray today, but it is still there and he is the one who must now deal with a bunch of a very bright students who don't quite get satire.

Go figure!

[NevinBearley]

The Simple solution to these problems is for the government just to nationalize the Banks!

[RickCoMatic]

Looks like you get to take any prize off the top shelf. Did you get the whole $4-Million. Sweet.
We didn''t have one of those over-our-heads mortgages. We never missed a payment on our place.
When my wife got laid-off we just started living-lean. Cut back on cable, movies and dining-out.
Me losing my job pushed-it over the edge. We started selling stuff. We ran-out of stuff. We missed a payment on the car and the house. Couldn't get anybody to buy one of the cars so we very reluctantly called to let the Dealer know. A tow truck came and got it. We spent Valentines Day together breaking-up the Dining Room Chairs for the fire place to keep warm. We paid the December Mortgage Payment and they let us slide on the late fee. We got the Registered Letter on Friday. The Bank would like us out by April 15th. I can't help feeling like some of that money they dumped on you came from a few of those Payments we made late trying to avoid losing the place. The Bank said they'd do what they could do to help. They reduced the Interest Rate on our Credit Card from 19.99% to 11.5% and lowered our Line of Credit to 10-Grand. Hey, Great Job on them loans. I know you deserve more.

[CZ111]

Jim,
Funny stuff… funny and sad ‘cause it could be true.

What’s almost as funny is the number of people who posted comments here and did not read the ‘Blogger’s Note’… funny and sad commentary on today’s commentators.

[voltage356]

Yeah, ok, with # 3 this whole system was design to fail from the get go. Greed was the engine that drove this crisis into the ground. The question remain how do Goldman Sach gets paid 12.9 billion dollars of the subprime crash unless they had a hand to see it crash in order to get paid that amount of money .It would only serve their own interest. Here's the real kicker Thank god they had Paulson in place to say we will bailout AIG they're to big to fail. This was nothing but a smooth robbery plain and simple. Who get hurt in all of this are the Homeowners who took the fall and gets blamed you always need the scrapgoat to put a face on the scene of a crime and the American Public who have lost their jobs as a result of GREED.

[voltage356]

Yeah, ok, with # 3 this whole system was design to fail for the get go. Greed was the engine that drove the crisis into the ground. The question remain how do Goldman Sach gets paid 12.9 billion dollars of the subprime crash unless they had a hand to see it crash in order to get paid that amount of money it would only serve thier own interest. Here's the real kicker Thank god they had Paulson in place to say we will bail them out now because AIG was to big to fail. This was nothing but a smooth robbery plain and simple. Who get hurt in all of this are the Homeowners who took the fall and the American Public who have lost their jobs as a result of GREED.

[Michael Rushmore]

Honest to god, I've met a couple of the people who first designed and traded these sub prime mortgages and #3 is pretty much exactly what they say. It is really... unfortunate. I know this is satire, but #3 could definitely have been a direct quote from one of these guys in real life.

[AN2009]

You should have gone further and made the piece more satirical.

[Warren O'Rourke]

My goodness! You made my point exactly.

In times of madness and misery most people neither understand or appreciate irony and satire!

[mmgbizgirl]

NO.

[WilliamProc]

James,

You don't have to give up the Park Ave. condo! Don't make the mortgage payments for three months and the Fed will restructure the loan for you! For goodness sake, man! If you haven't figured out how to abuse... AHEM, use the system-SHOOT!, I mean use the finacial devices available to you poor millionaires, the peasants will get the funds first. And we can't let that happen!

Satire can be cleansing in a sense. Thanks!

[AngelaQuattrano]

My article will be entitled, "Why I deserve your bonus."

[kjacobsmeyer]

People, under the title there are links to "More News." Included is "Comedy News" and "Satire." So it's safe to say Jimmy's yanking your chain. I just wish we were all in the mood for this kind of parody. Looks like we're not. And I don't blame you. Sorry, but good effort, Jim.

[Kate29]

and then I finished reading the blog, and realized I'd been had. :( I thought the Huffington Post was a legit news source? Seems like someone has been reading The Buffalo Beast.

[Kate29]

This man worked with numbers in the financial market for a living? Who the hell gets paid $400 a week to stock shelves at Walmart? And then considers buying a house for $750,000? Unless you are an overpaid Wall Street executive, who thinks that buying and selling with your 401k is a "game," why would you stretch your budget like that? It's not the American dream, it's stupidity.