Going Galt at AIG
posted at 10:57 am on March 25, 2009 by Ed Morrissey
Share on Facebook | printer-friendly
Now that Congress, Barack Obama, and the media feel thoroughly satisfied in their two-week screechfest over AIG’s retention bonuses, the bill may come due for American taxpayers who invested in the company’s bailout to the tune of over 1,000 times the amount of the bonuses. The New York Times reprints a resignation letter from one of the targets of Official Ire over the bonuses, a man who worked for the huge salary of $1 apart from the bonus he was promised for helping rescue the company from bankruptcy. He blames Edward Liddy for not defending his employees, and refuses to work any longer for no compensation:
It is with deep regret that I submit my notice of resignation from A.I.G. Financial Products. I hope you take the time to read this entire letter. Before describing the details of my decision, I want to offer some context:
I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.
After 12 months of hard work dismantling the company — during which A.I.G. reassured us many times we would be rewarded in March 2009 — we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, 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.
I take this action after 11 years of dedicated, honorable service to A.I.G. I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. Like you, 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.
Last week, I wrote that I expected Liddy to say this to Congress in response to their entirely hypocritical, false, and calculated outrage. Liddy apparently didn’t have the courage of Jake DeSantis, who refuses to stick around and be abused by people who have no clue as to what he does and how he got compensated for it. DeSantis does, and the Times should get some kudos for giving him a voice.
The US has invested over $150 billion in AIG, expecting to get at least some of that value returned. If not, we could simply have made direct payments on behalf of AIG to its creditors and allowed the company to go bankrupt. In order to get value back out of the company, we need to have people on board who understand the complicated financial provisions of AIG’s problems and can apply the investment towards resolving them. In other words, we needed Jake DeSantis on that wall, and we just did everything we could to knock him off of it, along with the rest of his colleagues.
People have been calling the AIG bonus outrage “understandable.” That’s a load of crap. It springs from a fundamental lack of understanding in Congress about the business world and an almost criminal lack of curiosity about the nature of retention bonuses in general, and these retention bonuses and their recipients in particular. The screeching and hollering was only “understandable” as complete and total ignorance and stupidity. And that’s not even accounting for the fact that Treasury, Congress, and the Obama administration knew all about these bonuses long before being “outraged” by them.
Now DeSantis is leaving, and the rest of the people that we’ve pilloried without having a clue who they were, what they did, and what they’re doing now will probably follow as soon as they can find jobs. Why rescue a bunch of ingrates, after all? Let Obama, Barney Frank, and Chris Dodd rescue AIG instead.
You must be logged in to post a comment.
Blowback
Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.
Trackbacks/Pings
Trackback URL
Comments
Comment pages: « Previous 1 2 3
Will Jake DeSantis be our modern Daniel Shays. We need one badly to fight this government corruption just a Shays did in 1786. He lost the battle but won the war as Jefferson inferred and we got our present Constitution. We need a Shays to cut us free of this living constitution and return us to the intent of the Constitution and its clarifying Amendments.
amr on March 25, 2009 at 3:20 PM
What is disgusting to me in all of this, are the Republicans who backed this bill for a 90% tax on the bonuses. Do they look incredibly stupid or what? We can expect this from liberals, but we shouldn’t witness it from those who call themselves conservative.
pjean on March 25, 2009 at 3:27 PM
For me, it begs the question “Who were the Republicans that backed the 90% tax on the bonuses?”.
I may idiotically take the time to re-check it but then, once I do, WTF do I do with that info? Save it for ‘10 mid-term? ..share my indignation with my 12-hour-per-day working stiff friends? ..or perhaps save it for cathartic rant at my Obama-worshiping neighbor?
I’m fast approaching the threshold where Going Gault is more a reasoned response than a adolescent fantasy. The state takes 50% of my earnings and I’m gone.
Quetzal on March 25, 2009 at 5:18 PM
A woman called Rush today and told him that her husband works at Morgan Stanley on Wall Street and his colleagues are all being solicited by FOREIGN banks to work for them instead of American companies. No doubt a substantial exodus of bright and hard working businessmen is at hand.
This is Obama’s fault.
Direct your ire against him, not Wall Street.
He and his team will push until they hit resistance. No amount of reason will dissuade them. They will do whatever we the people let them get away with.
Moderation in defense of liberty is no virtue.
Let’s roll, people. Get connected and get organized.
rishika on March 25, 2009 at 5:27 PM
AIG employees have expressed concern about their safety and, in some cases, reportedly have received death threats. Their fears may not be unfounded: in Scotland, an “anti-capitalist” group attacked the home of Sir Fred Goodwin, former CEO of the Royal Bank of Scotland, smashing several windows and vandalizing a car parked in the driveway. Goodwin had been demonized in the press and attacked by British politicians, much like AIG’s management.
The reactions of bystanders are rather appalling. A neighbor “said she was surprised that [Goodwin's home] had not been attacked before.” Others seemed understanding of, if not sympathetic with, the vandals.
So it’s no wonder if AIG employees get nervous when far-left political activists lead bus tours of their homes.(powerline)
Exactly WHO sent Acorn to the personal homes of the AIG employees? Anybody know?
Keemo on March 25, 2009 at 7:10 PM
Once again, I cite “Rules for Radicals” by Alinksy, Obama’s mentor: Pick a target, and direct all the rage at the target. After the people wouldn;t get mad at Rush – BECAUSE HE’S RIGHT, and all they were doing was getting people to listen to him, they HAD to pick a new target. And it worked. Congratulations to the sheeple and their messiah.
JustTruth101 on March 25, 2009 at 7:18 PM
If all the bonus babies and high paid executives did this it would work about as well for them as it did for the air traffic controls going on strike. I am not against free markets and capitalism I am just tired of hearing that the best and brightest will only work for you if they are obscenely compensated and only the dolts would work for less. I think we have more scum rising to the top than we do cream.
rsl775 on March 25, 2009 at 9:09 PM
Good Riddance. Let’s just be sure to get the cash out of them before they leave.
sethstorm on March 25, 2009 at 9:16 PM
It’s well deserved, even if it was extreme.
These folks are now feeling the thud that comes from being brought back amongst us.
sethstorm on March 25, 2009 at 9:18 PM
This is Wall Street’s PATCO moment. Now, they’re getting to feel what it’s like when they declared “open season” on workers of developed nations.
sethstorm on March 25, 2009 at 9:20 PM
sethstorm on March 25, 2009 at 9:20 PM
Comrade seth, how you must of rejoiced when all the farmers and small business owners were killed, and their property taken by “the people” defined as “the workers class”
Conservative Voice on March 25, 2009 at 9:24 PM
Hey getalife, getajob.
Your always here spewing crap.
If you have that much free time I must be payin your mortgage while you collect SS Disability or your livin in your mamas basement.
dhunter on March 25, 2009 at 10:34 PM
A textbook illustration of why fascism always turns ugly and violent. A fascist like sethstorm believes in the absolute moral and intellectual superiority of his Party leadership. It doesn’t take any sort of special education or talent to work at the highest levels of a major financial corporation! Why, a moral colossus like Barack Obama can run them all by himself, along with a few stalwart members of the Party. Let’s just get rid of all those arrogant capitalist pigs – just make sure to “cash them out” before they leave! After all, their money and property rightfully belongs to the people. Only members of the Party in good standing have the right to wealth and comfort, right?
Say, have you got someone who decides which nasty rich people should receive these “well deserved” attacks? Some sort of obergruppenfuhrer, perhaps? Will they let you know when it’s time for the “well deserved” attacks to involve fire and guns? I assume you’re all in favor of burning down George Soros’ house, right? He spent today capering and dancing about how much money he’s making during this “crisis.” Bet you can’t wait to organize a bus full of thugs to trash his home and “cash him out.” You might want to stop by Daily Kos and clear it with Commandante Markos before you start stuffing rags into those whiskey bottles, though. The Party has been curiously silent about ordering “direct action” against Soros, the most obvious profiteer of the post-subprime age – a man who made the bulk of his fortune by forcing currencies to devalue, by an odd coincidence.
Take note of this stuff, people. If you spent your whole adult life thinking fascism could never happen here, you’re wrong, but your mistake was understandable. You thought it would involve starched uniforms, racial or anti-Semitic scapegoating, and a militaristic cult. Fascism 2009 doesn’t quite work that way – the Left can’t help but flirt with the racial and anti-semitic stuff every now and then, but for the modern Party, it’s all about the class warfare.
Do you think the men who brought down Hitler ever imagined that sixty years later, some random nitwit would think nothing of publicly suggesting that rich people of insufficient ideological purity should be “cashed out”, or that vandalizing their homes would be “well deserved?” No matter what principles the fascists begin with, they always proceed from the assumption of absolute moral and intellectual superiority for themselves… which implies their opponents are absolutely inferior on both counts… which eventually makes those opponents seem less than human. Smashing the Democrat Party into oblivion in 2010 is the best chance America has of pulling out of this nightmare before it reaches its inevitable, violent conclusion.
Doctor Zero on March 25, 2009 at 10:41 PM
+1000
TN Mom on March 25, 2009 at 11:05 PM
With their money, not mine.
Johan Klaus on March 25, 2009 at 11:07 PM
Maybe someone from ACORN can step in and fill Jake Desantis shoes? Yeah, right.
Bottoms up will not work…….
Bottom feeders don’t want to put in the long hours that Jake did…..
TN Mom on March 25, 2009 at 11:09 PM
I thought that you were against outsourcing.
Johan Klaus on March 25, 2009 at 11:11 PM
Obama and Democrats are spending TRILLIONS. Billions in earmarks on the last spending bill. Trillions in TARP.
Sen. Judd Gregg warns that America will face bankrupsty. The CBO warns of TRILLION dollar deficits.
Is America too big to fail?
Who will bailout America?
TN Mom on March 25, 2009 at 11:14 PM
We will realize Obama’s true plans when he tries to push his national police through congress. He will probably try to disguise it as protection of the border, while he tries to take our guns.
Johan Klaus on March 25, 2009 at 11:22 PM
Office workers got bonuses. People who came in after the meldown or moved over from the profitable divisions to help keep the company afloat. Support staff in the lower to middle class.
I really don’t care that you’re an exremist ignoramus. It’s that the people like you got elected are every bit as inept.
You’ll learn soon, believe me.
Chuck Schick on March 26, 2009 at 12:14 AM
Controversial AIG unit sees more departures: source
There ya go! Now ACORN can go fix the mess Dabama created.
Obvious Dabamonomics solution: Another trillion!
DannoJyd on March 26, 2009 at 12:15 AM
This is what I have been shouting for the past couple weeks. The guys left at AIG are not the ones that screwed up mightily in the credit default swap division, and we need the ones that are left to stay and wind down the businesses and sell them off in order for taxpayers to get their money back.
AIG was losing top talent left and right last fall and had to promise the retention bonuses to stem the tide.
See my blog http://tbierly.blogspot.com/
Also, make sure to read the entire op-ed in the NY Times by Jake DeSantis. This is everything that CEO Edward Liddy was scared to say to Congress last Wednesday, although Liddy did warn several times that many of the bonuses would likely be coming back with resignations.
This has been the most brain-dead rush by just about everyone to paint AIG with one broad brush. And it’s DANGEROUS because conservatives are helping set the stage for the government to interfere with executive pay which will have a lot of unintended consequences that no one is even considering right now.
Stop marching, rest on your pitchforks for a second, take a breath, and THINK!
willamettevalley on March 26, 2009 at 1:24 AM
So? Those who ruined AIG/AIU should leave. If they were top talent in the first place they wouldn’t be in this problem.
sethstorm on March 26, 2009 at 3:27 AM
Depends on if they were a small business or just structured to evade regulation. Most likely they’re an honest small business and nothing to worry about.
It’s a sad thing to have to do, but there are people who will evade regulation in very creative ways. They only need to repay the bonus money even if they decided to “dispose” of it. It’s only 156 million.
Sounds like you want to have Soros pay as much as you speak badly of him. He’s your universal device of cognitive dissonance when someone speaks badly about the wealthy. If someone speaks badly about someone like AIG, bring up Soros in an attempt to trip somebody up.
Honestly, I don’t think he cares about either the left or the right. He only cares about the cash. I honestly don’t care about him.
sethstorm on March 26, 2009 at 3:46 AM
Corrected.
sethstorm on March 26, 2009 at 3:47 AM
Oh, boy. He’s on a roll (emphasis mine):
Yer showin’ yer ignorance there, sethieboy. That is, much more clearly than in your previous posts.
From what you’ve written earlier, you seem to be a bit miffed over $165 million in bonuses. Now, let’s hear that quote again:
That’s right. You don’t think. You fail to understand how financial institutions work; instead, you broad-brush a conclusion of how “bad” everyone at AIG must be because of the bailout.
Now before you get all puffy again, listen. I do not support Govt bailouts of any kind. AIG and other companies that speculated on certain products wrongfully should have been allowed to fail. Let the market clean up its mess.
But, of course you understand all that.
Oops:
Yep. The original purpose of TARP was to buy off the toxic assets. If TARP were to have worked in the original intent, two things would have been done (that were not):
* Loans made under CRA II guidelines would have been covered, if those loans were in default, and banks would have been allowed to sell the defaulted properties off to repay the toxic asset recovery costs; and
* Lending under CRA, and lending by Fannie, and Freddie would have been halted, along with any requirements to securitize mortgage products.
I’m sure you thought of that as well. After all, your posts are all about problem solving, right?
Oh.
True.
Neither do you think about *why* so many of us point to Soros. It’s easier for you to remain in ignorance about his activities over the past several years, because otherwise you’d come to see that Soros is, to borrow an LOTR reference, the market’s version of Shelob.
Let’s hear your quote again:
Yep. Soros likes to crash countries, even as he speculates against their currency valuations. Didn’t you whine long and loud about oil futures speculation some months ago? Soros does to countries what oil futures speculators did to the crude oil market back in mid-2008.
Nope, you didn’t. Because if you had, you’d have followed the money, as they say, and noticed all the little pies Soros has his fingers in, from MoveOn.org on down. Soros has been betting heavily against the US economy, and has been actively funding a plethora of groups to accomplish that goal. He uses his wealth to cause misery. Have you ever complained about how you believe AIG and other “Wall Street Execs” get rich off the labor of others? Soros is the penultimate example of the thing you claim to hate.
But.
Because ignorance is the purest form of bliss, baby!
So go on posting whatever you like, and keep demonstrating how mean, low, and ignorant you are by the things you say here.
Meanwhile, your attitude of “don’t let the door hit you on your way out” about people in the financial world (from your posts above) is shared by someone named Robert who has been practicing that worldview for years.
The result of his actions mean that today, you can buy a bottle of water in a restaurant in Zimbabwe for Z$14 million.
A small one.
So knock yourself out, guy. Just don’t ever think. You might get hurt…
Wanderlust on March 26, 2009 at 6:25 AM
I do think (and it’s not just in you taking the quote out of context).
Wall Street (like Madoff) knew this was going to happen at some time or another. Perhaps if it didn’t turn its industries into a profession full of dishonor, it wouldn’t be targeted so boldly. What they didn’t know is how boldly that they’re being targeted.
I’m not asking for Zimbabwe. I’m asking for a First World nation to stop treating its citizens with contempt when they look for work.
sethstorm on March 26, 2009 at 7:00 AM
You are too funny.
Madoff isn’t “Wall Street”. He’s an individual; someone who took advantage of a regulatory system built on disclosure and not on investigation, as others have wrote. “Wall Street” has absolutely nothing to do with “turn[ing] industries into a profession full of dishonor”.
I used your “I don’t think” line deliberately, to illustrate a larger point. I do not believe you are thinking through the items upon which your opinions are founded, before you issue your conclusions.
Case in point: “Wall Street” as many understand it, is nothing more, or less, than a glorified bazaar. Instead of trading goods, it trades equities and debt. It has nothing directly to do with your job, or mine – unless someone games the system.
Madoff gamed the system, and got away with it, until the market contracted and left him exposed.
There is nothing dishonorable in trading an item of value for another. If you do not understand the fundamental concepts of equity and debt, at least try to learn about them before you excoriate something in which your knowledge is lacking.
As for “targeted”, I go again to Zimbabwe. Mugabe “targeted” white farmers without understanding that they were the backbone of his country’s economy. In pursuing his “targets”, he impoverished and famished his nation.
And finally, your last sentence:
Exactly how is the United States of America acting in contempt of its citizenry to thwart them from working – other than, perhaps, through the policies of a Government that is actively working to crash the economy through unbridled deficit spending?
Wanderlust on March 26, 2009 at 10:14 AM
Blissful unconcern with the Left must eplain why Soros spends countless millions funding liberal smear sites and propganda outlets. Senile dementia, maybe?
Soros is the most convenient way to prove the utter hypocrisy and intellectual bankruptcy of the Left, but there are plenty of others. You don’t have an answer for why you don’t encourage militant activism against Soros’ property, any more than you can have an answer for why Fannie Mae execs get to keep millions in bonuses but AIG executives don’t. There’s no logic or reason behind it, it’s just subjective emotions, and the direction you and your ideological soulmates receive from the Party. It’s not a question of tripping you up – there’s nothing you could say that would make the slightest bit of sense, so you’re wise to dodge the issue. Be sure to let me know when your friends at Daily Kos start agitating for all the money Barney Frank and his lover looted from “the people” be taken away from him, okay? And I’d especially like to know when the first bus trip to burn down Barack Obama’s house is organized – he got a lot more money from the corrupt, collapsing financial industry than anyone at AIG did. You can’t do much about his current residence, but you could burn down his house in Chicago. Bonus moral consistency points if you do, because he got the house in a corrupt land deal payoff from Tony Rezko!
Maybe we should have simpler regulations, with less social engineering and political featherbedding built in, so less “creativity” is used in “evading” them, freeing up more creativity for productive endeavors. That won’t happen until the Republicans get their minds right and the Democrats are utterly swept away, but Obama has given me the audacity to Hope for Change.
Doctor Zero on March 26, 2009 at 11:16 AM
Comment pages: « Previous 1 2 3