The business blogosphere was abuzz yesterday over publication of AIG executive Jake DeSantis’ remarkable resignation letter to AIG CEO, Ed Liddy.
But what was even more remarkable was the reaction of some commentators that makes abundantly clear that common sense often evaporates in the face of big money.
DeSantis is a longtime AIG executive who worked for one of AIG’s profitable units. When AIG was going down the tubes last year because of losses incurred in the company’s untethered CDS trading unit, DeSantis agreed to stay on at a nominal salary and continue making profits in his unit in return for a substantial, but not over-market, bonus.
Such arrangements are not unusual for financially-troubled companies and might very well have been arranged even had AIG gone into a chapter 11 reorganization rather than become the subject of an ill-advised government bailout. In short, it’s a good thing for creditors of AIG — including now U.S. taxpayers — that the company retain people such as DeSantis who might make the company profitable and valuable again.
Or course, we all know what happened when AIG disclosed publicly that it had made the bonus payments to DeSantis and other AIG executives. They were demonized in a manner that has not been seen since Enron.
DeSantis’ resignation letter lays this all out and notes the indisputable hypocrisy of AIG executives and government officials who knew about these compensation arrangements, but who flamed the public uproar rather than provide the quite simple and reasonable explanation for the bonuses.
I mean really. Who could argue that DeSantis and the other similarly-situated AIG executives were treated in an abominable manner?
Well, up to the plate steps one Brian Montopoli, a CBSNews.com political reporter, who establishes beyond any doubt that he needs to remain a political, rather than business, reporter:
Mr. DeSantis is not a plumber. He is a Wall Street executive who has made millions of dollars. And it’s safe to assume that most plumbers don’t believe he has gotten a bad deal, AIG scandal notwithstanding.
In essence, Montopoli reasons that other people are working just as hard as DeSantis and they would gladly trade places with him if they could have made as much scratch as he has earned over the years. Given that DeSantis made a lot of money while he was at AIG, Montopoli thinks he is "tone deaf" for pointing out the injustice of being unfairly demonized and cheated out of the compensation that was promised to him in return for staying on at AIG under extremely difficult circumstances.
In short, those evil capitalist roaders deserve most of our scorn and they should just shut the hell up.
In the face of such addled reasoning, it’s hard to know where to begin. But let’s start by pointing out that Montopoli ignores the rather important fact that no one has stopped him or anyone else from attempting to compete with DeSantis in his area of business and make just as much money as he has over the years. The reality is that there are relatively few people who do what DeSantis does well. That’s why he commands a larger salary than most of us.
The fact that DeSantis makes more money than we do doesn’t mean that it’s OK to screw him out of his compensation or that he shouldn’t be heard to set the record straight when such an injustice takes place.
The irony is that the majority of those working on Wall Street and the other financial institutions overwhelmingly supported Barack Obama and the Democrats. These are the same people who never contribute to GOP conservatives. They have been inadvertently funding their enemies. Oh well, the proverbial chickens have come home to roost. These naive individuals have nobody to blame but themselves.
The irony is that the majority of those working on Wall Street and the other financial institutions overwhelmingly supported Barack Obama and the Democrats. These are the same people who never contribute to GOP conservatives. They have been inadvertently funding their enemies. Oh well, the proverbial chickens have come home to roost. These naive individuals have nobody to blame but themselves.
David the Republicans supported the bonus tax and were just as fervent as the Democrats in flaying the rule of law. Republicans carried out many (certainly not all) of the witch trials over the past several years. Giuliani is the father of the white collar perp walk. I’m not saying the Democrats aren’t enemies of liberty and civil society, but it’s obvious that the Republicans are.
I guess I am becoming a conspiracy nut. But, I believe this whole bonus scandal was ginned up to take the focus off Congress and the Obama administration and their bailouts. By generating this fever, the hope is the public will be so incensed they will forget who was really responsible in the first place.
Isn’t this Alinsky’s 12 rule?
Rick
“Giuliani is the father of the white collar perp walk.”
Rudy Giuliani is not a conservative Republican! The same is true of John McCain.
The average American is furious at Wall St.
http://www.marketwatch.com/news/story/Memo-Wall-Street-America-hates/story.aspx?guid={9F91754E-8413-4B14-A140-6AA9D2327615}
95% of the comments to the Times article were negative.
Rudy Giuliani is not a conservative Republican!
You imply that conservative Republicans respect the rule of law, and you state that McCain isn’t among that group. Yet you criticize Wall Street employees who supported Obama on the grounds that he and the Democrats don’t respect the rule of law. Who should they have voted for? James Madison?
I guess you could say that if they had voted for James Madison, there wouldn’t be any irony, even though the outcome for the rule of law would have been identical. But that suggests that this is less ironic and more just sad. Given Obama v McCain, this outcome was a fait accompli.
Sorry about the breaks. Tom the preview didn’t parse, so I added them. Not sure if it’s Typepad or Firefox.
“Who should they have voted for? James Madison?”
One should consider subscribing to the principle of the lesser of evils. The Republicans often leave something to be desired. Still, you have a chance of improving them. The Democrats of today are a lost cause. They are now dominated by Saul Alinsky style radicals. Barack Obama is a full blown socialist.