Boo Hoo
AIG guy resigns via NYT op-ed, makes a compelling case for why he’s being screwed by his bosses and the pols, when he’s innocent of everything in this horrible mess, and he’s just a regular guy from a humble background, an American Dream-come-true who is being shafted.
It is a screwed-up situation all around. This punitive tax thing is dumb, dangerous and unethical. Contracts are contracts, and we need valued employees to stick around in dire times like this. I was starting to feel bad for Jake DeSantis, executive veep of AIG’s financial products, given his dedication to the company and the nation in these difficult times and how he was being betrayed. Then I got to the bit about his share of the bonus bucks payout on March 16 being $742,006.40 after taxes. He had buried that part for some reason, down near the bottom. That apparently was a payment of three-quarters of the contractual amount, the other quarter payment having been accelerated. Which suggests the whole wad, pre-tax, is approaching a couple million. Because Wall Street has been very good to him, Jake is in a position not only to quit without suffering and spend more time with the wife and kids, but to offer that entire amount to charity as a matter of indignant principle.
Not to get all class warfare about it, but that guy lives on a different planet than I do. $742,006.40 after taxes sounds about like what I made over 15 years of 12 hour days plus getting shot at and yelled at a lot* in the service of the Boston Herald, but the old man always told me I should be an accountant and I didn’t pay any attention, so I’m not complaining. Jake talks about being a plumber who did work in a house that burned down due to some chiseling electrician’s shoddy work. Actually, the walls of the burning house are falling around everyone’s ears, and we’ll be lucky if the plumbing that Jake earnestly bolted onto those walls is still standing in the wreckage. It sounds like work that bad should have been obvious to the plumber, who went ahead laying pipe and installing faucets like nothing was wrong.
Like I’ve said, none of this stuff makes any sense to me, and I just hope we get out of it without the entire neighborhood going up in flames. Theoretically that’s what that big wad of taxpayer money Jake is generously donating to charity was for. You’d think market forces might have kicked in and devalued that work a little by now. Anyway, he’s big enough to donate the cash, but apparently not big enough, given how good America has been to him, to donate any more time and see the job out because his boss hurt his feelings. Much like the rest of us, only maybe a little later than many, he feels betrayed. At least he’s getting a big fat NYT op-ed page “Eff you!” out of it. No waitress, factory worker, clerk or bottle washer ever got to deliver a “Take this job and shove it!” like that. Did any country western star ever even think of writing that one?
Boo hoo. That’s for the rest of us, because Jake, his boss Edward Libby, these nameless credit-default swap electricians … the ones Jake says shafted us when he was honestly raking in a couple million a year as a financial products plumber in that crappy house … and all the pols and bureaucratic building inspectors who stood by, have put us in a position where we have to pay people who made obscene amounts of money on this screwed-up system even more obscene amounts of money to unscrew it. If in fact that is what they are doing, a point about which I am not confident.
Any financial brainiacs out there willing to work for something less than two million bucks? Never mind Mom, Apple Pie and the American way, how about $1 million? I bet we can fly in a planeload of financial brainiacs from Bangalore at a fraction of Jake’s price. Outsourcing Wall Street to India. That’d get their attention.
Steyn at The Corner notes a technical problem with that idea. The TARP crowd is running the work-permit Indians out. Too bad. He adds:
You can certainly make the case that a lot of financial-sector execs are, like property and stocks, mostly mediocre assets that got used to being ludicrously overvalued as a permanent feature of life. But that doesn’t change the reality that Barney Frank-style demagoguing is not just a distraction but actively making things worse – not for the AIG guy, but for you.
No argument here. A pox on Frank’s house, too.
You know, this guy got whacked by not one, but two A-bombs. You don’t see him writing whiny NYT op-eds.
Posted by Jules Crittenden at 9:25 pm Comments (10) on Wednesday, March 25, 2009
10 Responses to “Boo Hoo”
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March 26th, 2009 at 10:36 am
I’m not going to begrudge anyone riches that are legally earned. It doesn’t matter whether his bonus was $1K or $1M, whether he earns more than me, or what I think about the monetary value of his skills or his personal value system. There were no complaints about the $1 annual salary he made in the interim.
He earned it. He had a contract. Treasury, Congress and the President himself explicitly approved his bonus. They can spare me their faux outrage, Jake DeSantis deserves to be outraged.
Later we can talk about the $320,000 that Emmanuel made in his do-nothing patronage job.
March 26th, 2009 at 11:11 am
This is the worst piece of self-contradictory nonsense that I have ever read by Jules Crittenden. It swerves from sympathy for Santis to dismissal, from whiney self-pity to denial of such feelings straight back to the self-pity.
Shorter Crittenden: “I thought that breaking contracts and screwing people was bad until I realized that Santis makes a lot more money than I do. Who cares if Congress demonizes him and takes away his legally earned money?”
Actual Crittenden: ” It sounds like work that bad should have been obvious to the plumber, who went ahead laying pipe and installing faucets like nothing was wrong.”
That is a load of bilge. Utter crap. What did this guy Santis know about the CDS holdings in AIG’s portfolio? What could he have done about if he had known there was a problem. I have no idea and neither does Crittenden. No, it should not have been obvious, except to omniscient reporters on Monday mornings.
Santis not only makes more than Crittenden, he makes a lot more money than I do too. So what? Maybe we should form a committee to decide who gets to keep their money. Oh wait, that seems to be Congress’ job.
The biggest problem in all this is not that people like Santis are getting screwed or demonized — although they are and that is a problem. The biggest problem is that the AIG bonus issue distracts us from the actual causes and resolution of the problems.
March 26th, 2009 at 1:54 pm
Sorry, Jules, you are just substituting emotion for logic and morality. DeSantis was promised last year that if he hung around, he would be paid that bonus. He could easily have left, but he did not.
Perhaps more importantly, when the government took over in October, it had the opportunity to say things have changed, we’re not going to pay your bonus. Instead, it and its handpicked CEO said the opposite — please stay, we need you, we’ll pay your bonus.
DeSantis stays for five more months, works hard, and now the government says it doesn’t want to pay. That’s wrong, he was wronged, and the fact he’s rich and was paid a lot of money is irrelevant. What kind of moral universe are we in that says it’s okay to break contracts if the person on the other side is rich? What’s next? Can we all break into the homes of Google executives and steal their possessions, because they’re rich?
March 26th, 2009 at 2:23 pm
Thank you for reading and commenting. All much appreciated. Read again. I didn’t say that contracts shouldn’t be honored or that Congress should punitively tax him. I did say that a planeload of finanical whizkids from Bangalore might put a cork in that fine whine, though.
March 26th, 2009 at 3:04 pm
Jules — then I guess your point is that somehow because there are others who would do his job (maybe as well) for a lot less money, he had no right to whine. Or maybe just because he’s rich, he has no right to whine. I just don’t buy that argument. If you fairly negotiate a contract, give your labor, and the other side decides to breach it, or to honor it and then try to humiliate you for living up to your contract, you have a right to be angry and to whine! This is not like a movie star complaining about his picture being taken — that goes with the job. Being wrongfully pilloried is not part of DeSantis’s job description. He has been very wronged and has the right to complain about it, rich or not.
March 26th, 2009 at 3:37 pm
Jules you miss the whole point! Of course AIG can always fire their highly paid skilled workers and “fly in a planeload of financial brainiacs from Bangalore at a fraction of Jake’s price”.
Just like Major League Baseball doesn’t need to pay their ball players millions of dollars. I am sure the Yankees can save a fortune by letting Derek Jeter (who will earn $20 million this year) go and flying in some young athlete from Bangalore at a fraction of Jeter’s price to play shortstop.
The problem is what happens when all those fired former Major League Players decide to get together and form their own competing baseball league? What happens to the value of the New York Yankees as a franchise when they are staffed by no named players from Bombay and New York has a competing baseball team with Derek Jeter, Mariano Rivera, et al…. Which team do you think fans would pay to see?
The Yankees franchise would be worthless. Sure they would save on salary and bonuses but they would destroy their business.
This is the classic example of being penny wise and pound foolish.
Well AIG has the same problem. If they suddenly decide their “Derek Jeters” are being paid “too much” AIG top earners and revenue producers are going to get up and leave. They are either going to go work for someone else or start a new competing company.
This would destroy the value of what is left of AIG and make it near impossible for it to ever return to any sort of profitability.
Some might say who cares if AIG is destroyed. They screwed up let them go down. Well since us taxpayers bought 79% of the company last year we now have an interest in making sure AIG keeps it’s worth and makes a profit.
Firing all the employees who know how to make a buck and who give the company it’s worth is not in the best interest of taxpayers.
Sure it could be objectionable that somebody gets paid millions of dollars to trade commodities and equities. Just like it might be ojectionable for somebody to get paid $20 million to play baseball for a team that gets taxpayer financing for their stadium.
But destroying what’s left of AIG for spite or jealousy make no sense for taxpayers who have invested billions of dollars in this company.
March 26th, 2009 at 10:24 pm
I quite liked this personal essay. The particular makes things real. Fifteen years is a long time. Some people work hard for a lving.
As Jules would say, I’m getting knee-jerk-reaction off a lot of these comments. Read again. Jules did not say the guy shouldn’t get his money. Jules clarified in advance that he does not believe in punative taxation. What he is arguing is that a well-paid executive is being a crybaby to leave in a huff right when we need him just because he’s got no respect. He’s not the first person to be asked to put up with bad management and a tough situation. It’s a fair point.
March 27th, 2009 at 2:49 am
“What he is arguing is that a well-paid executive is being a crybaby to leave in a huff right when we need him just because he’s got no respect.”
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Gee. “We need him.” Funny, that. So, you place the emotional burden on him to bear up under public scorn and hatred, for YOUR benefit? He should expect to be vilified, ‘cuz it’s for YOUR gain?
Yes, I agree with you that that’s what Mr. Crittenden seems to be saying, and I’m sorry for that, because I’ve not seen any other reason in his past writings to have to gulp and pretend no one’s passed gas here. But that’s what’s happened now, and I hope to heck the air changes quickly.
When the public’s 80% share of AIG slowly begins to resemble the net worth of my dog – when we see all that bailout money is just plain gone, because we’ve decided that it’s the smart trade tech’s burden to suffer for our sins and take our disrespect even as he makes us money – that little bit of respect he seems to be demanding – or maybe that big hit of disrespect that he refuses to bear unless someone can explain where he done wrong – sure starts to sound expensive.
March 27th, 2009 at 11:31 am
By “we”, I meant the entire country. I did not mean to imply that anyone has an obligation to work for others. Just that the crybaby accusation is a fair point. Nobody is saying that the crybaby point is the entire story. And nobody is saying it’s a good thing to vilify the execs. But stop and think for a moment about all the other people who have been vilified and didn’t act like crybabies. Jules Crittenden and President Bush are two who come to mind.
Probably you should take it as a compliment, Jules. Your writing here is so superb that people have forgotten it’s just a blog.
March 27th, 2009 at 9:09 pm
There is a reason why envy is listed as one of the seven deadly sins.
If you wanted investment banker money you should have gotten investment banker training and taken up investment banker work.
Mr. Crittenden, you either did not want that job, or you could not hack it. It is repulsive that you took cheap shots at a man who did and could.
Mr. DeSantis’s point is that he personally is taking heat — entirely unjustified heat, lest you forget –not from his management, but from his government, the national press, and various, ignorant, nutter groups who have threatened him and his family, all for doing a job that these same groups were begging him to do only a few months earlier.
Ms. Rolph, I’ll be interested to learn just how sanguine you feel if ever your disgraceful president and congressmen decide that they should rouse the rabble in your specific direction.