Shortly after graduating from college, I was the youngest founding team member of a management consulting firm in Germany. After rapid growth and landing some top tier clients, the firm got embroiled in a controversial project to help the city of Berlin with its application for the Olympic games. I will at some point post more detail on this since it was a huge lesson on many fronts. One of the key take aways was how incredibly different a story looks from the inside. I was reminded of this by the AIG bonus drama. The resignation letter sent to the New York Times received a lot of caustic comments from people who simply cannot imagine the depth of the inside-outside gap on a major story like this. It is genuinely difficult, if not impossible, to appreciate that unless you have had the experience yourself. I have since talked to someone I trust who also represents the inside view and who confirmed an important facts: Only a handful of people were responsible for the trades that brought down AIG. So now imagine that you are another manager. You have worked hard for a decade or more. You have just lost a large fraction of your networth. You have to wind down a profitable business that you built, including laying off staff you have hired and causing issues for clients that trusted you. You knew little or nothing about the size and nature of the CDS business. I believe that if I were in that situation I too might feel like I am at the receiving end of this (there is a separate and legitimate line of inquiry as to how to avoid being in that situation in the first place). At that point it is a small step to thinking that a payment for sticking around and cleaning up the mess is in order, especially for someone who does have other options. I am not saying it *is* the right thing ; simply that something that looks like a clear cut issue for many on the outside would look extremely different to the same people if they were on the inside.

Shortly after graduating from college, I was the youngest founding team member of a management consulting firm in Germany. After rapid growth and landing some top tier clients, the firm got embroiled in a controversial project to help the city of Berlin with its application for the Olympic games. I will at some point post more detail on this since it was a huge lesson on many fronts. One of the key take aways was how incredibly different a story looks from the inside. I was reminded of this by the AIG bonus drama. The resignation letter sent to the New York Times received a lot of caustic comments from people who simply cannot imagine the depth of the inside-outside gap on a major story like this. It is genuinely difficult, if not impossible, to appreciate that unless you have had the experience yourself. I have since talked to someone I trust who also represents the inside view and who confirmed an important facts: Only a handful of people were responsible for the trades that brought down AIG. So now imagine that you are another manager. You have worked hard for a decade or more. You have just lost a large fraction of your networth. You have to wind down a profitable business that you built, including laying off staff you have hired and causing issues for clients that trusted you. You knew little or nothing about the size and nature of the CDS business. I believe that if I were in that situation I too might feel like I am at the receiving end of this (there is a separate and legitimate line of inquiry as to how to avoid being in that situation in the first place). At that point it is a small step to thinking that a payment for sticking around and cleaning up the mess is in order, especially for someone who does have other options. I am not saying it *is* the right thing ; simply that something that looks like a clear cut issue for many on the outside would look extremely different to the same people if they were on the inside.