Maybe we need to quiet the angry mob
I've been as mad as anyone about the AIG mess and the bonuses paid to executives there. Clearly, without our bailout money, there would be no money paid to anyone there, bonus or otherwise.
But, an op-ed in today's New York Times is giving me second thoughts. The op-ed is a resignation letter from Jake DeSantis, an executive vice president in AIG's infamous Financial Products Unit to Edward Liddy, CEO of AIG. In the letter, Mr. DeSantis describes his work in AIG's commodity division which had nothing to do with credit default swaps. In fact, he says that "no more than a handful of the 400 current employees of AIG Financial Products were involved in credit default swaps and that most of those who were involved had already left the company.
Where Mr. DeSantis's letter gave me pause is when he described agreeing to work for a salary of $1 in addition to the promised bonuses, while turning down other more stable jobs. It sounds like he's been working hard to sell off a division to UBS to generate cash needed to repay us taxpayers. Although it's staggering to read that Mr. DeSantis's bonus, after taxes, was $742,000, it's also hard for me to say that he wasn't entitled to something that he had been promised multiple times and had given up his fixed salary for. Certainly, this guy doesn't sound like someone who should be villified. Perhaps we're just envious that someone who graduated from MIT in 1992 can make so much money at his job. Never forget the value of a technical education!
The problem is that paying Mr. DeSantis to help raise cash for AIG is a sound business decision, but a poor political one. In politics, the baby is thrown out with the bathwater on a routine basis. The media hype drowns out the details and subtleties of a story. Unfortunately, Mr. Liddy, the CEO of AIG, didn't have the ability to do what Mr. DeSantis did -- tell an individual story that changes how you look at a situation. The only people at AIG that we really should be mad at are the ones who built up their credit default swap business, or others who took similar risks. If we believe in capitalism, we have to let the rest of AIG run their business in the way they see fit so they can try to return some or all of our money. Let's just send the angry mob after the bad guys, if we can figure out who they are.
Speaking of angry mob, Jon Stewart unleashed them last week.
|The Daily Show With Jon Stewart||M - Th 11p / 10c|
|The Notorious AIG - Scorn in the USA|