Jake DeSantis's "Dear A.I.G., I Quit!", the lead Op-Ed in yesterday's New York Times, seemed, on first reading, to be so risibly self-serving that I was certain that Mr. DeSantis had succeeded only in exposing himself to near universal ridicule.
However, as the day wore on, my in-box started receiving a rivulet of "Right on, brother DeSantis!" emails proclaiming that this poor, maltreated A.I.G. Financial Products executive had spoken eloquently for his beleaguered brethren--and indeed for everyone who has a grievance with a newly empowered Federal government bent on destroying the very foundation of trust on which Wall Street players and corporate executives have heretofore, or at least for the past eight years, relied.
So I went back to Mr. DeSantis' tear-stained letter of resignation, and tried to see if indeed his outrage at the very idea of being asked to give his bonus back possibly justified. I quickly concluded, No way. Here are just a few snippets of Jake's self-justifications, and the responses they engendered in me.
First: "the credit default swap transactions that have hamstrung A.I.G." "Hamstrung"? That is what Mr. DeSantis thinks the proper word for nearly bringing down the entire Western system of finance? For requiring $170 billion of taxpayer money to be put at risk--with no assurance that more won't be acquired, and no assurance as to how much of that will eventually be returned? Wow!
Second: "Nor were more than a handful of the 400 current employees of A.I.G.-F.P. [involved in the credit default swap transactions.]" Well, that surely ascribes awesome capabilities to do damage to those few who were directly responsible. But I would tell Mr. DeSantis that a 400-person operation, including clerical people, is a fairly small business, and I would guess that those lucky miscreants who, he claims, have gotten off nearly scot-free may have sat only a few desks away from him. Did he notice nothing that he thought amiss while this conflagration was building? Can he point to any memos he wrote to headquarters, alerting them to the monumental disaster was growing exponentially within a slightly separate sector of the Financial Products division of which he was so proud? That his division, no the entire foundation of AIG, no the entire structure of the worldwide banking was being put at risk by his colleagues--people I have no doubt he shared many an after-hours drink with?
Third: "Most of those responsible have left the company and have conspicuously escaped the public outrage." Why? You now have the New York Times as a public forum. Why not name these people? Why should you be blamed for their misdeeds? Or, at the very least, why not send a petition, signed by all those non-culpable "dedicated, honorable" members of A.I.G.-F.P., with all of them demanding that Mr. Liddy publicly disclose the names (and their compensation over the past five years) of those who have torched their company in this incomprehensible way.
Fourth: "In this way I have personally suffered from this controversial activity -- directly as well as indirectly with the rest of the taxpayers." Point well taken--sorta. Unlike the rest of us, you had reason to know what risks were being run by your colleagues, and what clever games were being played in order to make a regulated business--insurance--into an unregulated business--"Financial Products." (Everyone please note: when Wall Street calls something a "product," head for the hills).
Fifth: "As most of us have done nothing wrong, guilt is not a motivation to surrender our earnings." I didn't expect it would be. But, Mr. DeSantis, yours are sins of omission, not (we presume based on your statements) sins of commission. There may be a legal difference, but I do not see a significant ethical one.
Sixth: "because of hard work I have benefited more than most during the economic boom and have saved enough that my family is unlikely to suffer devastating losses during the current bust." Bingo! Would anyone care to hazard a guess at Mr. DeSantis' total compensation over the past five years? Several million dollars at a minimum would be my guess. I think that his receipt of $742,000 after taxes as a "retention bonus" from a destroyed company living on the US government's sufferance means that he is surely one of the 73 AIG-FP people who received $1 million or more pre-tax as a bonus.
Giving this bonus to charities of his choosing (NOT back to AIG, which means the US taxpayers) may be seen by some as an honorable response to a messy situation. I see it as a clever method of improving his chances of getting a high-paying job, despite the stench that his resume--fairly in my eyes--will carry.
I could go on, but I will spare the poor reader. I think many people have had the unfortunate experience in their business life of seeing stupidity--or fraud--by some other division of a company that they were working for destroy the long-term value of their stock holdings and options. Just ask any employee of my former company Time Warner about the disaster that merging with AOL brought to them. Hundreds of people saw their retirement savings--not one year's bonus--destroyed by a corporate action in which they had played no part whatsoever.
There are hundreds of other examples of companies where people who were unwitting victims of the failures of a business segment within their larger company became collateral damage. This statement is most definitely NOT true of Mr. DeSantis and his confreres at a slightly different sector of the very Financial Products division that brought AIG so spectacularly down.
So, sorry Jake. But all is not jake. You may see yourself as a noble victim of an inflamed and ignorant mob braying for someone's scalp. I see you as symptomatic of the culture that created AIG and a dozen other toxic disasters, whether "your" portion of the company was profitable or not. You are in fact a totally fair target of the righteous anger of the American people. You are a reasonable embodiment of the idea that a small cabal of greedy people, in search of absurd levels of compensation without taking for one second an entrepreneurial risk, have brought our country's economy to a near-standstill. (I hope Mr. DeSantis doesn't try to suggest to anyone that he "only" received base compensation of probably $500k p.a., and thus was "at risk" for his "bonus.")
Your family is indeed "unlikely to suffer devastating losses." But the rest of us have, to a greater or lesser degree, suffered such losses, due to the actions of a small group of people who, while nameless and faceless to us, are people whose wives and children you can name. Think about that while you tell everyone who will listen how you are "proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P."