If you haven’t already done so, read the open letter published in the New York Times’ op-ed page in which AIG executive Jake DeSantis resigns from his job and blames everybody but himself for the company’s problems.
This letter is so relevant to current issues, and so illustrative of the mental disconnect that has been in operation at these financial institutions, that I am going to quote several of the points made by DeSantis and respond to each. But if you want the short version: DeSantis is an out-of-touch, self-righteous, arrogant, overprivileged ass.
Point #1: “I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G….Most of those responsible have left the company and have conspicuously escaped the public outrage.”
Response #1: Having no contrary knowledge, I will assume Mr. DeSantis is telling the truth. However, the fact that he is not responsible for ruining the company does *not* mean he deserves over $742,000 of the taxpayers’ money.
Point #2: “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.”
Response #2: But it’s still YOU, Mr. DeSantis, who are arrogating for yourself the right to decide what to do with OUR money! How do you not understand that? What if we, the taxpayers, don’t agree with your particular philanthropic interests?
Point #3: “I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down.”
Response #3: And how much have you and your family been making over the last decade, in which you added precisely what value to society? Spare me your cries of sacrifice as you return to your million-dollar home in Fairfield County!
Point #4: “I started at this company in 1998 as an equity trader, became the head of equity and commodity trading and, a couple of years before A.I.G.’s meltdown last September, was named the head of business development for commodities. Over this period the equity and commodity units were consistently profitable — in most years generating net profits of well over $100 million. Most recently, during the dismantling of A.I.G.-F.P., I was an integral player in the pending sale of its well-regarded commodity index business to UBS. As you know, business unit sales like this are crucial to A.I.G.’s effort to repay the American taxpayer.
The profitability of the businesses with which I was associated clearly supported my compensation.”
Response #4: Right, and I’m sure all that profit had to do with your personal economic genius and not the fact that you simply bought and sold in a raging bull market in which a 3-year old could have made money.
The point is not that DeSantis did a bad job. The point is that even if he did a great job, he doesn’t deserve $742,000 of the taxpayers’ money! How simple is that, and how out of touch does this guy have to be that he doesn’t get it? Let me put it more simply: During bad times, you get paid less than you deserve, and so does everybody else. Why should Mr. Three Piece Suit here be any exception? I’m not getting a raise this year, and I do a great job, too.
Point #5: “I never received any pay resulting from the credit default swaps that are now losing so much money. I did, however, like many others here, lose a significant portion of my life savings in the form of deferred compensation invested in the capital of A.I.G.-F.P. because of those losses. In this way I have personally suffered from this controversial activity — directly as well as indirectly with the rest of the taxpayers. “
Response #5: Cry me a damn river. Who forced you to invest your life savings in your own company? Ever hear of diversifying your portfolio, Mr. Financial Genius? And since when do you get the federal government to compensate you for your personal investment losses? How do I sign up for that deal?
DeSantis goes on to accuse AIG CEO Ed Liddy of hypocrisy for first approving the bonuses and then criticizing them once the political pressure was on. I have no comment on that part, though I suspect DeSantis has a point there.
Point #6: “I know that 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.”
Response #6: Reading between the lines, what DeSantis is saying is that those who are suffering now either didn’t work hard enough or foolishly squandered their money. Again, he is arrogant and out-of-touch. Does he think he worked harder than police officers, firefighters, teachers that are being laid off? He probably does think that.
Point #7: “Some might argue that members of my profession have been overpaid, and I wouldn’t disagree.”
Response #7: This is DeSantis trying to sound reasonable, but notice what he’s really saying is that other people, but not *him*, have been overpaid. He clearly feels he deserves every dollar of *our* money!
Point #8: “That is why I have decided to donate 100 percent of the effective after-tax proceeds of my retention payment directly to organizations that are helping people who are suffering from the global downturn. This is not a tax-deduction gimmick; I simply believe that I at least deserve to dictate how my earnings are spent, and do not want to see them disappear back into the obscurity of A.I.G.’s or the federal government’s budget. Our earnings have caused such a distraction for so many from the more pressing issues our country faces, and I would like to see my share of it benefit those truly in need.”
Response #8: You’re a true humanitarian, Jake. See Response #2 for why it’s not your decision to make. Also, I didn’t see you making this grand gesture until *after* the heat got turned on you and your buddies, so forgive me if I doubt the depths of your philanthropic sincerity.
Point #9: “On March 16 I received a payment from A.I.G. amounting to $742,006.40, after taxes. In light of the uncertainty over the ultimate taxation and legal status of this payment, the actual amount I donate may be less — in fact, it may end up being far less if the recent House bill raising the tax on the retention payments to 90 percent stands.”
Response #9: I’ll give DeSantis a point for actually giving the exact amount of his bonus in a public newspaper. But see how he’s already weaseling out of his grand charitable gesture? Basically he’s threatening the Congress – if you tax me punitively, I won’t give anything at all to charity, because the number one rule to be followed is that Jake DeSantis must never have to sacrifice anything. Never mind that Congress is in fact totally out of line in trying to impose that punitive tax – the point is, DeSantis’ attitude stinks.
Point #10: “This choice is right for me. I wish others at A.I.G.-F.P. luck finding peace with their difficult decision, and only hope their judgment is not clouded by fear.”
Response #10: Awww, can you hear the violin music swelling in the background? Actually, Mr. DeSantis, most of your buddies haven’t found the decision difficult at all – they’re giving the money back to the American taxpayers. You’re the only one who’s being an arrogant, self-righteous jerk about it.
To sum up, DeSantis’ whole argument is that since he is not personally responsible for the bad decisions, he deserves to profit from the situation. Well, guess what, Mr. DeSantis, most Americans aren’t responsible for the bad decisions your company made either. We work just as hard as you do, and strangely enough, we aren’t being handed bonus contracts when things go sour – we’re getting pay freezes, pay cuts, cuts in hours, and layoffs, through no fault of our own. The fact that you not only think you’re too good to share any of that pain, but actually deserve to profit from it, makes you the poster boy for everything that’s wrong with our political and financial leadership in this country. Thanks for being such a useful object lesson. Or should I say, thanks for being a tool.