Much is being made of the publicly printed resignation letter of AIG executive VP Jake DeSantis. The letter ended up in the NY Times Op-Ed section.
I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.
After 12 months of hard work dismantling the company — during which A.I.G. reassured us many times we would be rewarded in March 2009 — we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, I will now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself.
The Galties are hailing him as a hero, giving us dire warnings that as American workers any of us could be next. My response:
Dear Mr. DeSantis:
The millions of jobless Americans who were denied the choice of your noble gesture to resign and donate your bonus because of the damage your company wrought upon the financial landscape of the globe, the millions of families were forced to sacrifice and pay for your mistakes while they have to resort to the indignity of assistance to make ends meet, the millions of Americans kicked out of their homes or rental properties having to uproot their lives to make other arrangements, and the millions of Americans who are personally offended at being lectured at by a man such as yourself who can no doubt afford to donate your bonus, all have but one question to ask you.
Where’s my $182.5 billion, you sanctimonious asshole?
Next time, try returning that money. Then — and only then — you will have regained permission to speak of how your rights as a free-market capitalist are being impinged upon by the government — the same government from which your company so freely took a staggering 12-digit sum of money from and which we know will never be paid back in my lifetime — and only then will your gesture begin to count as having corrected the balance in the universe.
Until then, have fun finding a job in this economy.
Sincerely,
Zandar
P.S. You’re still an asshole.
Also posted at ZVTS.
Ah, the luxury of a letter of resignation, how grand it must be to indulge in indignation on being asked to give up a million when you already have millions. We should all be so put upon by the hardship of retiring to our mansion in Greenwich and having to putter about aimlessly until we feel like starting up a hedge fund.
The reactions of the John Galt Wingnuts is absolutely priceless.
The Power Line guys say “Among those for whom DeSantis’s letter should be a cause for shame are Barack Obama, Timothy Geithner, Nancy Pelosi, Andrew Cuomo, Richard Blumenthal and the many journalists and pundits who have egged them on.”
Mark Steyn blames the “thug legislators-for-life who bear far more direct responsibility for this mess posing as champions of da liddle guy in order to extend their already disastrous “oversight” ever deeper into the private sector.”
At Red State, we’re told “Will we soon face national income caps? And has the Congress forgotten about that old document known as “The Constitution?””
So remember, Jake DeSantis is a goddamn American hero. It’s people like us who need to hang our heads in shame…and continue to fork over billions to companies like AIG.
What’s so infuriating is that Obama gives these right-wing nutjobs credibility by taking their arguments seriously; that avoiding the appearance of “socialism”, as defined by these right-wing morons, is a good thing. No matter that the allegations of socialism are nonsensical and are made in bad faith.
It’s maddening. We should be delivering a lesson to these fools that supply-side Randian economics is a fairy-tale and CAUSED most of our current problems. The entire left should be standing up to teach this lesson. Instead, the Democratic party has to obscure this lesson because it is infested with conservative, supply-side, 3rd-way, Clintonian Democrats. Hence, we get a party that tries to appease these right-wing fairy-tale Randian economic loons and yet locks out any progressive ideas as being un-American or something.
I mean we are talking about INSOLVENT firms here. The very fact this man got paid the last 12 months at all is because of government cheese. His firm was propped up by the government when the other solution was for it to enter bankruptcy. But he does have a point that the government should have not given him such a sweet deal when it took his firm over. Obama and the gang don’t want to treat these insolvent firms like a normal insolvent person or firm would be treated so they get special treatment; a bankruptcy court may not have allowed high-priced bonuses to be paid to traders in the first place (whether they trade bonds, equity, or derivatives). These are the types of employment contracts that bankruptcy courts should be winding down or modifying. I’m not sure of the typical treatment of trading firms in bankruptcy but that is the point of bankruptcy–a firm has too many creditors to pay off so we need the government to step in and sell the good assets and pay people off in a fair manner (while honoring contracts as much as possible) and then wind down the company or give it back to private hands (traditionally a court would do this via a trustee that should pay for itself out of the estate–or receivership for banks). The idea that we can’t wind down this company because contracts are sacrosanct really misunderstands the whole concept of insolvency and bankruptcy. The real socialism is that instead of pushing this insolvent firm into bankruptcy or receivership the government is propping it up and signing sweetheart contracts with traders that might have been wound down under normal insolvency processes.
Anyway, these people are idiots. Too bad Obama seems to be listening to their concerns much more than he listens to liberals.
Is he an asshole because we works at AIGFP, because he lectured you, or because he’s culpable for some reason?
I find it hard to believe an executive VP at AIGFP wasn’t aware of exactly what was going on there in that division. And to his credit, most of his letter is directed towards Liddy and the people at AIGFP who were theoretically more culpable.
But while Congress is just blowing smoke going after bonuses when the company took $180 billion plus from us, I’m not inclined to give a guy absolution when he was an executive of a company that lost billions.
He’s trying to unwind it? Great. He still made more money than most of us will ever see when he wasn’t so indignant towards his employer. He still had some oversight as an executive VP in the financial products division. He could have questioned or stopped or raised doubts then.
Instead his division lost a shitload of money because it got greedy and got burned. He failed. The fact that he still had a job to quit after doing that should offend every human being on Earth, and then he turns around and calculates the price of his indulgence to the People as his bonus, then expects us to forgive him and others like him on Wall Street…the same people who failed to show the restraint two years ago that could have curtailed this mess are now saying “Well fixing this is hard work!” and expecting us to feel sorry for them.
That’s what makes this guy an asshole. Americans take responsibility for their actions every day. These guys only did it when it became politically expedient to do so, for the express purpose of absolution of guilt.
An entire culture of people did this. An entire government failure in oversight allowed them to do so. Many, many, many people are at fault.
I choose not to forgive him, because the only reason he’s doing this is because AIG got too greedy and got caught. Otherwise this guy would be still making the big bucks without a care in the world.
This guy wants to fix the mess he made? I hear Tim Geithner’s looking for Treasury personnel. I would actually hire Jake here for that job.
OK. Maybe…just maybe…I was a tad harsh on the guy. Not everybody on Wall Street is 100% Evil and the American consumer economy is in many ways just as responsible in the long run.
I still stand by the above statement that since Treasury needs people to help unwind this mess, and since Mr. DeSantis is looking for employment and satisfied with a $1 salary, working for Treasury might actually not be an entirely bad idea, and is about as much constructive criticism as my indignation will allow at this point.
I will admit that he is somewhat qualified in dealing with toxic assets.
(stupid guilt and logic, why can’t you let me just be angry at this clown.)
Really, how hard is it to unwind equity positions? Yes, knowing the current book can be helpful. But it’s not necessary. Aren’t they just winding down most of the trading positions? If we re-regulate insurance companies again they shouldn’t have large trading operations anyway–if any trading operations at all.
As others have noted compensation has gotten way out of whack for these guys and I bet we could find a competent person to work for pretty cheap. The problem is the government is so beholden to the current system that all they know how to do is pay ridonculous compensation to incompetent people. What did a trader make 30 years ago to unwind a simple equity portfolio? Give this to a bankruptcy judge and I bet we would get better oversight of these contracts.
You’re discussing this so I hope you are interested in the facts.
Dude didn’t create the credit-default swaps and he didn’t lose money for the company, he made it. He worked all year 12-14 hour days and helped package up his part of FP and sell it off to UBS. He was paid one dollar. He did it because he was promised a bonus of $700,000 at the end of the year. He has been asked to give that money back. The House passed a bill that would tax him $630,000 and leave him with $70,000.
Now, those are the facts. We can talk about whether it is seemly to complain when he is so well off. But mitigating against that is the fact that he’s defending his employees who are in the same boat.
You tell me why this is a productive way to go about solving our problems, because I don’t see it.
Why do insurance companies need trading units? Why do they need to trade equities and commodities, let alone derivatives? Tradidionally, insurance companies were regulated (like banks) because they had a special role in our economy. We regulated them so that they wouldn’t take undue risks and society can rely on the insurance contracts they wrote. We did this by not letting them take on undue risk, by buying risky assets, and by leveraging themselves to a level that is inherently risky.
If an insurance company manages its risk in a responsible way and meets all regulations to ensure it will pay out on its contracts I don’t care if it engages in equity or commodity trading.
The problem is this firm engaged in practices, in part, from it’s trading practices. That’s great this particular guy was involved in the less risky aspect of the inherently risky practice of trading. But, this entire unit should be shut down (as appears to be happening). Especially when it’s clear that the entire firm is insolvent!!!! If Booman LLC, or whatever legal entity you had, started engaging in risky trading and went bankrupt the court may allow you to continue your blogging part of the business but not the risky trading part of the business. And that’s what’s going on here.
Instead of winding this firm down on terms that are most favorable to the creditors and public, it was given sweetheart deals to wind down on terms favorable to it and its employuees.
I have no personal animus to traders and think it’s kind of a cool job. It’s just ridiculous to pay someone this much money for such inherently risky behavior. How hard is it to wind down a 400 person fund? Especially the equity and commodity positions? What was reasonable compensation 30 years ago for a trader to unwind commodity and equity positions? Why should the government pay such a high price? Did the government do its job to ensure the firm was wound down as efficiently as possible or did it simply seek to enrich the current players, such as the equity traders?
See, I don’t disagree with a single thing that you wrote. But I don’t understand why any of that means we should go after people retroactively on their basic compensations packages. Real performances bonuses I can see, not these so-called retention bonuses…not retroactively. That kind of stuff is ruled out in the Constitution precisely because it’s such an asshole move.
Well. I’m not too worried about clawing back this guy’s compensation/bonus either. I was always more worried about the broader issues of Washington being owned by Wall Street and don’t need to get bogged down in one minor detail. I agree this is a distraction and not the best way to discuss the broader issue . . . but America has a right to be mad and we need to have this discussion even if some trader’s feelings get hurt. And I’m not about to lift a finger to fix this “injustice” since the injustice on the other side of the scale is so overwhelming. Wall Street has done so much damage to real America that we need a little TLC on America and not the Wall Street traders. You don’t get to ignore the huge structural injustices and then demand we all pay attention to one small little injustice. If we are going to help people and fix injustices this guy is not the guy to start with. Let him sue for his precious bonus–or I guess he’s going Galt. Problem solved. Or hire him to work for reasonable compensation–what a trader made 30 years ago (adjusted for price inflation). I bet there is a young trader willing to work for this lower rate. Plenty of other workers in this country are being asked to sacrifice or stand aside for another worker that will work at the lower rate.
And, as I noted, it may have been unjust to give him that contract in the first place. What about the taxpayers that have already spent over 11 trillion simply shoveling money to these guys with no strings attached? That’s the real injustice.
Really. The guy might be a great guy. Traders aren’t evil. But shit happens and boo hoo that this guy voluntarily gave up 3/4 of a million dollars. I see real problems with real people every day that are much more significant than this guy’s problems.
here’s the problem.
As Rick Blaine said in Casablanca, “it doesn’t take much to see that the problems of three little people don’t amount to a hill of beans in this crazy world.”
And that’s true about these AIG folks that lost their salary for the last year, too. On one level, who cares? And I don’t really care. But when someone says this is a great idea, or this is a just thing to do, or this is payback for this injustice over here, or whatever, then I call bullshit.
And just because someone else was a greater claim to my pity doesn’t mean shit in a logical argument.
Very true. I’m not opposed to contrarian thinking and I welcome you correcting the mob when it’s not seeing clearly.
But right now the mob is not far off. The mob is doing a better job than the politicians and the press. In fact, public anger is the last tool we have to save this country. I no longer have hope in the Democrats–I guess I never really did.
I’m with the mob. Yeah, they get a few details wrong. But in the grand scale of things the mob is more right than wrong on this issue; especially compared with the politicians. I don’t know if you can see the shambles this country is in like I do.
Plus, it’s not like these ideas are coming from the Anarchist’s cookbook or something. Defending pensions, social security benefits, providing a basic social safety net (food for the poor, etc), fighting for worker’s right, stronger unions, socialized health care, and less spending on war and prisons. This used to be what the Democratic party stood for. Now the opposite is true.