But is there more to the story than the image of pitchfork and torch carrying crowds marching down on the people who say let them eat cake?
I heard on a political talk radio program that an AIG executive published his resignation letter explaining the context of his bonus that is now vilified by everyone.
While looking around for information on the story, I came across this Campbell Brown clip:
A little more digging yielded the letter published in the New York Times. Excerpts:
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.How much should these folks be paid?
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.
You and I have never met or spoken to each other, so I’d like to tell you about myself. I was raised by schoolteachers working multiple jobs in a world of closing steel mills. My hard work earned me acceptance to M.I.T., and the institute’s generous financial aid enabled me to attend. I had fulfilled my American dream.
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I have the utmost respect for the civic duty that you are now performing at A.I.G. You are as blameless for these credit default swap losses as I am. You answered your country’s call and you are taking a tremendous beating for it.
But you also are aware that most of the employees of your financial products unit had nothing to do with the large losses. And I am disappointed and frustrated over your lack of support for us. I and many others in the unit feel betrayed that you failed to stand up for us in the face of untrue and unfair accusations from certain members of Congress last Wednesday and from the press over our retention payments, and that you didn’t defend us against the baseless and reckless comments made by the attorneys general of New York and Connecticut.
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We have worked 12 long months under these contracts and now deserve to be paid as promised. None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house.
Many of the employees have, in the past six months, turned down job offers from more stable employers, based on A.I.G.’s assurances that the contracts would be honored. They are now angry about having been misled by A.I.G.’s promises and are not inclined to return the money as a favor to you.
The only real motivation that anyone at A.I.G.-F.P. now has is fear. Mr. Cuomo has threatened to “name and shame,” and his counterpart in Connecticut, Richard Blumenthal, has made similar threats — even though attorneys general are supposed to stand for due process, to conduct trials in courts and not the press.
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...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.
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. Once all the money is donated, you will immediately receive a list of all recipients.
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.
Mr. Liddy, I wish you success in your commitment to return the money extended by the American government, and luck with the continued unwinding of the company’s diverse businesses — especially those remaining credit default swaps. I’ll continue over the short term to help make sure no balls are dropped, but after what’s happened this past week I can’t remain much longer — there is too much bad blood. I’m not sure how you will greet my resignation, but at least Attorney General Blumenthal should be relieved that I’ll leave under my own power and will not need to be "shoved out the door."
Sincerely,
Jake DeSantis
How much is 10-14 hour days for a year worth?
Should their compensation be set by the outraged public and angry government officials?
Do we feel that sports figures get paid too much money?
The fact is they do something very few people can do.
Likewise, the world of high finance is opaque to most of us; thus, only a select few actually know how to do it.
How much do they deserved to be paid?
Maybe the picture of them being all bad guys isn't the whole story?
2 comments:
"How much do they deserved to be paid?" We could ask this question about many more people than just AIG workers. Like politicians, for example. They were so "outraged" because the tax payers money were used to pay some folks who's only job was to safe the company they were working for.
What about the politicians? How are they paid? Just thinking aloud.
Take care, Elli
Thanks for a bit of "the rest of the story" Rene. It seems to me the AIG execs should be paid what was agreed upon at the beginning. The problem is the timing: the execs got paid just when Uncle Sam was bailing out AIG. Alas for them.
Beyond that, it seems like AIG is only a small piece of the "the problem are us" pie, a pie with whipped cream lettering that beckons "suck me up now, pay for me some other time," whether we can afford it or not. I ran into a guy at a convenience store many years ago in Leeds, Alabama who said, as he picked up his items, something like "Where else but in America can you declare bankruptcy, have your bills written off, buy a new car, and keep making good money?"
Big government, big business, and big lots of consumers have been backing the plan.
But there's another angle, or actually a solution to the present angle. It's the Old Testament year of the jubilee, a once-every-50-years event. It protected family property rights even if they sell the property. Basically, in the jubilee year, all debts were forgiven, and if your family had to sell the homestead, it could be reclaimed if the family wanted during the jubilee year. While the capitalist system provides the best incentives to be creative in producing the best in goods and services, apparently God knew the capitalist system would eventually produce winners and losers, strong and weak, and if not checked, would run amok of itself and cause tremendous economic hardships. The year of the jubilee seems to be the way make sure the less fortunate would never have to suffer beyond a certain point, and would always have the jubilee to look forward to. This was probably a refreshing relief for the consciences of those who were successful as well. Such is the mercy of God...all things kept in loving perspective by putting his love first. That's a pretty sketchy explanation of the jubilee, but basically that's it. Lev. 25.
Anyway, it doesn't seem that all the people at AIG are bad guys.
Ciao, Charles
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