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Grace Under Fire: AIG Employee Schools His Boss And Congress

Good for Jake Desantis. The AIG executive resigned and wrote this letter to his boss Ed Liddy. The entire letter is a very well written and devastating critique of the mob mentality that consumed Congress last week.

Some key points of the resignation letter are:

  1. Many of the bonus recipients had absolutely nothing to do with the problems that caused AIG's demise.
  2. Many of the bonus recipients passed up other job offers in less politically polarizing situations to honor their contracts with AIG, only to find the bonuses that were offered to reward this sacrifice taken away.
  3. The author of the letter, Jake DeSantis, makes the brilliant point that he will be donating his bonus to less fortunate folks who have suffered in the economic downturn. But he will not return the money to AIG because he wants to make sure his donation goes where he wants it to have the best effect.
  4. The only real motivation anyone has to work at AIG now is fear, the inevitable product of government coercion of the individual (manifested in AG Cuomo's and Barney Frank's threats to "name and shame").
This letter is a dramatic put down of the Washington ruling elites as well as the ACORN thugs that invaded the neighborhoods of AIG employees last weekend.

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Comments (63)

#2 means that some AIG bonu... (Below threshold)
WorldCitizen:

#2 means that some AIG bonus recipients broke their contracts. Why is it ok/legal/ethical for them to break a contract and not the other way around?

Many implies not all.

#4 another motivation might be the downturn in the job market. And the vast majority of AIG employees that do not recieve bonuses have nothing to "fear".

His letter in the NY Times ... (Below threshold)
Kat:

His letter in the NY Times online, which I never go to unless their is a repectable blog link, is an excellent response to the circus that Congress had last week.
WorldCitizen- "the vast majority... have nothing to fear".... We are supposed to protect the minority in this country. Isn't that what all of you liberal thinking brain surgeons always preach?
Why should anyone have to fear the backlash of those bastards in Congress like Barney Frank who should be jailed for his stupidity and complicity in the financial meltdown.
Liberalism is a mental disorder.

#3 is not a "brilliant poin... (Below threshold)
Brian:

#3 is not a "brilliant point". It's an individual decision. Good for him, but it has nothing to do with anything.

The analogy of the plumber and electrician is a reasonable one. The problem is that AIG promised bonuses to the electrician just for showing up for work, and there was no clause that he couldn't burn down the house. When the shit hit the fan, AIG (or Liddy) was unable to distinguish between the two.

Wow. Just ... wow.<p... (Below threshold)

Wow. Just ... wow.

A few other things stuck out for me:

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.

Those eeeeeeeevil retention bonuses were the only compensation that many execs received.

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.

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. 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.

Well, shoot. So much for the "Brahmin born with a silver spoon in his mouth" stereotype that the ACORN agitators and others have used to try to smear financial executives. His work actually legitimately earned money for the company, and he dares to accept proportional compensation for it? The shame! And he even had a personal stake in the financial soundness of the company, via savings invested as deferred compensation! The horror!

And this:

As most of us have done nothing wrong, guilt is not a motivation to surrender our earnings. 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.

... 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.

Ouch. Funny thing, his comments sound exactly like the points that WizBang's bloggers and many others have been making about this whole ordeal -- many innocents have been punished, and a mass exodus of financial talent will be leaving the firms that desperately need their services the most. Barry, Timmy, Barney, and Chris, you're doin' a heck of a job.

Barry, Timmy, Barney, an... (Below threshold)
Brian:

Barry, Timmy, Barney, and Chris, you're doin' a heck of a job.

For the record, "Barry" and "Timmy" are against taxing the bonuses, and are the ones responsible for adding language to the bailout bill to allow them. And half the Republicans agree with Barney and Chris. But don't let that stop you.

United States of Chicago</p... (Below threshold)
mag:

United States of Chicago

I don't object to him getti... (Below threshold)
George Author Profile Page:

I don't object to him getting paid but the reality is that paying the good part of $1 million to an employee when you're bankrupt and taking taxpayer dollars is insane. What was the period in which he earned this "retention incentive"? Less than one year?

Sorry, Jake Desantis. You deserve to be paid but you didn't earn $742,006.40.

Unfortunately, those to who... (Below threshold)
GarandFan:

Unfortunately, those to whom this letter is aimed have no shame. Nor any ethics. Libby, especially since he was called in by the government to run AIG, should have stood before the committee and torn them all a new asshole.

Liberalism is a me... (Below threshold)
Mac Lorry:
Liberalism is a mental disorder.

...and it's progressive.

I agree with GarandFan. </p... (Below threshold)
LiberalNitemare:

I agree with GarandFan.

The people who need to read this letter simply wont.

They are too busy covering their butts on the next scandel to bother reflecting on complicity in the current scandel.

George,In the past... (Below threshold)

George,

In the past year he was involved in a senior capacity in selling his commodity business unit to UBS (for ~$150M). When deals are that big, small differences in skill and knowledge can result in swings of tens of millions of dollars in value. It is highly likely that had everyone just gotten up and left, the business unit would be worth zero.

If you had the specifics you might be able argue that he didn't actually earn his $1M bonus (he did not add more than $1M of value to the sale price relative to some lower-priced alternative). However, it is dishonest to argue that it is an entirely unreasonable number. It is entirely possible he contributed multiples of that in value returned to the taxpayers) who own 80% of AIG.

"I don't object to him gett... (Below threshold)
engineer:

"I don't object to him getting paid but the reality is that paying the good part of $1 million to an employee when you're bankrupt and taking taxpayer dollars is insane."

"Sorry, Jake Desantis. You deserve to be paid but you didn't earn $742,006.40."

And how much does he deserve? Who are you to set his compensation rate? It is his boss who sets his pay, not an outsider. How much do people in comparable positions in other companies make? I believe it you read his letter, you will see that his division was profitable. He earned his compensation.

And you know Tom Cruise's last movie bombed at the box office, he needs to return some of the money he was paid, 'cause he didn't earn it. Same with athletes, even if A-Rod hits .400 this year with 80 homeruns, if the Yankees only play .500 play, he needs to return some of his compensation.

Segal:If you had a... (Below threshold)
George Author Profile Page:

Segal:

If you had a specific regarding what "small differences in skill and knowledge" he had that makes him worth $1 million per year, you could argue your point, too. It is entirely possible that he hung around doing a less-than-stellar job just waiting for that $1 million.

That's a wonderful argument... (Below threshold)

That's a wonderful argument for a socialist nation there, George. You nailed it in two sentences. It's up to the government to investigate every worker and determine what they're really worth. I think there's even a popular saying about it...has some words like 'from each' and 'ability' and 'need' and stuff like that in it.

It's simply much too important to leave it up to the free market to determine what these people should be paid when it could be done so much better and fairly by a handful of politicians with law degrees. It would all operate much smoother if they (or you) were telling the hundreds of millions of workers in America what they should be paid.

WorldCitizen: may I suggest... (Below threshold)

WorldCitizen: may I suggest you re-read the letter? #2 does NOT necessarily mean "... that some AIG bonus recipients broke their contracts".

Some of the bonus recipients may not have had other offers, and some of them may have had offers but had contracts with enough wiggle room that they could have taken jobs elsewhere. FWIW, the retention agreements I have used don't obligate the employee to stick around (for one thing, courts don't like enforced servitude) but merely offer them a bonus if they do stick around for the designated period.

Of course, if you're just set to keep thinking of everybody at AIG as bad guys, go ahead and ignore the facts and stick with your narrative. Repeat it enough times and...

George, pardon me but who t... (Below threshold)
ODA315:

George, pardon me but who the hell are you to say if he earned his bonus or not? Do you know what his business unit performance targets and results were? Do you know what P&L results he was responsible for? We know he was intimately involved in selling key assets (probably just coasted while suitors lined up to kick the tires and make big offers).

Oh, and "earth to George"....he had a CONTRACT with AIG. Know what a contract is George? It's a legal document drawn between multiple parties based on SPECIFICS such as dates, results, etc.

How dare he climb the economic ladder and live the American dream.....I'm betting he stepped on the peeps on the ACORN bus on his way to success. But what the heck, he's just another "rich guy", screw 'um. Probably an evil conservative anyway.


Question: Who's next?

Answer: Anyone Cuomo, Frank, etal wish to demonize.

George, What right... (Below threshold)

George,

What right do you have to dictate how much an individual should and shouldn't earn? This is not your decision to make. Many politicians recieved campaingn contributions from AIG. Should they have to return the money?

And while I'm at it here, many politicians have put this country in the shape it's in right now, should they have to return their pay for not doing their jobs? Should we continue to pay them for their poor work? After all, that's our tax payer money in their pockets.

I'm also thinking these people were working under a written contract. Looks to me like those who received retention CONTRACT pay may have a right to sue under a breach of contract claim? How long and messy a legal battle will that be considering the total contracts paid out were approximately one tenth of one percent of all the money AIG received?

Their Constitutional rights may have been violated by the House's decision to tax them. Especially after first passing legislation that included specific wording, by Christopher Dodd at Geithner's request, saying they would receive their promised pay.

This mess would have never gotten to this point if the msm had only done its job correctly in the first place as there's a distinct difference in paying out a bonus and honoring a retention contract, but that seems a bit too much to ask these days.

And lastly, what is there to stop the government from saying, oh hey, whiile we're at it, all you average Joe citizens out there make too much money also, so we're going to tax you at an additional (insert an amount here) as well. They just did it to a handful of people who were working under CONTRACT, they CAN do it to you too.

George,I'm not say... (Below threshold)

George,

I'm not saying he did earn it, I'm just saying you can't be outraged at the concept of a retention payment that size for someone in his roll, and it's unlikely any one of us can ever know if he truly deserved it. The truth is it is silly to focus on the 'bonus', if he had been paid 1M over the year (as some probably were), would people be pitchforking to get it back.

Personally, I think that AIG should have been allowed to go bankrupt, and in that case these bonuses would likely have not gotten paid at anything close to face. But especially since the bailout explicitly authorized these bonuses, it is silly to be outraged at the general concept now.

"For the record, "Barry" an... (Below threshold)
hermie:

"For the record, "Barry" and "Timmy" are against taxing the bonuses, and are the ones responsible for adding language to the bailout bill to allow them."

Funny how both Obama and Geithner claim they knew nothing about the bonuses until after the media wrote about them. They claim they weren't aware of the language in the bills. In fact, they can't even agree on the date they first knew about the bonuses.

Obama spent how many days being 'OUTRAGED' and 'STUNNED' about the bonuses? He was still 'STUNNED' and "OUTRAGED' through Leno, when he could have mentioned just a little that he didn't think the bonuses could be taxed as it would be illegal.

No, he continued on the stump, proclaiming his 'OUTRAGE' to his campaign stops...er..'town hall meetings', inciting his ACORN minions while the MSM swooned once again.

I don't hate anybody who is... (Below threshold)
WorldCitizen:

I don't hate anybody who is working for or has worked for AIG, as far as I know. There could be some real bad people in the bunch, but I would have to get to know them first before I hated them.

And...

I am all for protecting minorities. I would prefer to concentrate on protecting the ones that don't have the power or political influence to protect themselves. But I guess any minority in a pinch.

Watch what I do here...hyperbole is all I get at this blog.

And number 7 - how would you handle a company that 80% of was yours? I would want to see the books, find out how my money was being spent and if I did not like it I would vote in a new board and fire everybody. But that would destroy the company, ahhh!!!!

For the record, "Barry" ... (Below threshold)
J.R.:

For the record, "Barry" and "Timmy" are against taxing the bonuses, and are the ones responsible for adding language to the bailout bill to allow them.

Then why the phony outrage Brian? And why hasn't our ever vigilant, non-biased press called them out on it? How does the One get away with his statements like I'm as outraged as anyone, when he was partly responsible for those payments!

FWIW, I think it's crazy that we bailed out these companies to begin with, it seems odd that the acceptance of these funds allowed them to proceed with the bonus payments, but I in no way feel that the recipients should have to return them or have them taxed away. This whole incident has just shown what a bunch of weasels our congress has become.

The Washington elites will ... (Below threshold)
LaMedusa:

The Washington elites will take the right punches as long as it covers their actual agenda. Token fall guys are a dime a dozen. Barry, on the other hand, doesn't have much control over what unfolds. He's just the "outraged" spokesperson who waits for the green light to say it. I'm sure they marked his calendar for such a special occasion.

"It took us a couple of days because I like to know what I'm talking about before I speak."
PRESIDENT OBAMA, defending his decision to wait a few days before expressing anger over bonuses paid to executives of the insurance giant A.I.G.

nytimes.com

How does the One get awa... (Below threshold)
hyperbolist:

How does the One get away with his statements like I'm as outraged as anyone, when he was partly responsible for those payments!

J.R., in other words: "The only thing worse than a liberal President, is a liberal President who is much smarter than everybody who is constantly whining about him."

If we want to look at every... (Below threshold)
slake:

If we want to look at everyone and asssess what they deserve to make, so be it. Maybe we can have tort reform, which will solve half our healthcare problems. Maybe we can stop welfare, since this contradicts your argument.

It's funny how everyone is looking at AIG for its bonuses, but nobody is complaining about the Fannie Mae and Freddie Mac guaranteed bonuses that were paid out this year. How about we go after the Countrywide CEO, who received a $90M golden parachute?

The outrage is being fueled by this Administration and they are providing the path of who we should blame.

I just have a few questions for President Obama that never seem to be asked:
1) Did you sign the $787B stimulus package?
2) Why are you making such a big deal over something you agreed to?
3) What other "goodies" are contained in the stimulus package that were agreed to in the backroom dealings? (nuclear waste storage, oil drilling, charter schools, etc.)

Holy shit, hyperbolist, aft... (Below threshold)

Holy shit, hyperbolist, after two solid months of watching our president stumbling around and making one boneheaded decision after another, and fucking up everything he has put his hand to, are you asserting that Obama is (giggle) smart? Seriously?

Sorry, I meant "smarmier", ... (Below threshold)
Hyperapologist:

Sorry, I meant "smarmier", not "smarter".

Hyperbolist You have got to... (Below threshold)
914:

Hyperbolist You have got to be one of the most arrogant trolls I have ever witnessed on here? Maybe You should consider a career in teleprompter programming.

Funny how both Obama and... (Below threshold)
Brian:

Funny how both Obama and Geithner claim they knew nothing about the bonuses until after the media wrote about them. They claim they weren't aware of the language in the bills.

Geithner was clearly not being up front. We don't know what Obama was told or when. However, the now-known fact is that Geithner is the one responsible for watering down the Dodd amendment, thus allowing the bonuses.

We need to be VERY afraid i... (Below threshold)
LB:

We need to be VERY afraid in this country of the power the government is currently attempting to grab. Taxing the bonuses at 90% is placing caps on earnings. If you were smart / lucky / hard working enough to figure out how to make a ton of money, how would you feel if the government said you can't have more than x amount of what you earned. Think really hard about being outraged over these bonuses. The outrage should lie with the administration who signed bail out plans without understanding what they were signing, and now having the audacity to be upset over what amounts to their own ignorance. Our legislators are scaring the crap out of me right now. How much of the private sector will the government own once all these bailouts are done?

That money isn't Liddy's to... (Below threshold)
galeharoldfan:

That money isn't Liddy's to give or DeSantis's to take. If he wants to give 100% of the money to "organizations who are helping people suffering from the global downturn" he can give it back to the U.S. government. No organization in the world is doing more to help people suffering from the global downturn.

One set of people it helped is at AIG. If the government hadn't appropriated billions for that purpose, AIG would be in bankruptcy right now and DeSantis would have no job to resign from, let alone a bonus to dispose of as he pleases.

Which is it, by the way? He agreed to work for one dollar, or he agreed to work for one dollar and another million-plus in bonus pay during a year the company has made no profit? He can't have it both ways. Was the one dollar a year thing a pure stunt? I applaud stunts, but only at Cirque du Soleil, not in the financial district.

This is portrayed as a retention bonus, but it's not clear in that case why Mr. DeSantis was promised one at all. I watched Mr. Liddy's testimony, in which the retention bonuses were described as efforts to retain - only temporarily - the executives in the company whose jobs were to be eliminated, who understood their own books of business, and were qualified to shed those junk securities as efficiently as possible on behalf of the company.

Mr. DeSantis says those people are already gone, and that he isn't one of them. He's at pains to say he comes from a different division, a profitable one, handling an entirely different type of business from credit default swaps. Why was his job ever endangered, and why did they give him a new one (at a one million dollar bonus) doing something he has never done before?

Although DeSantis may not have been one of the AIG executives who helped tank the economy, he might as well have been. His greed, hypocrisy, and utter lack of perspective are exactly the attitudes that put us in this recession.

He complains to unemployed people that he has been working long hours. He complains to homeless people that he fears protestors around his costly home. He complains to auto workers whose benefits have been wiped out at the insistence of the government that the government wants to renege on his employer's commitment to give him a million dollars. He boasts to people whose 401K's have been wiped out that he is donating three quarters of a million dollars to charity and quitting his job in the middle of a deep recession. And he demands the public's sympathy.

I'm sure Mr. DeSantis is a dandy professional and a right clever man, but he's not very clever at appealing for sympathy. When we bailed out the automakers we made it contingent on the loss of pay, bonuses, unemployment protections and health benefits by ordinary Joes on the assembly line. Mr. DeSantis's cleverness at creating value by manipulating commodities markets is impressive, but I find it unimpressive compared to the efforts of those who created real value by creating the commodities in the first place. The commodities themselves have value, no matter what.

If Mr. DeSantis didn't know that perfectly well, he wouldn't have wanted a million bucks to buy commodities like a second Porsche. He wasn't buying the cleverness of the guy who manipulated Porsche AG stock; he was buying a damned car.

While he complains of being resented, he might examine a little more closely the nature of his own resentments. He doesn't seem as outraged with the former bad actors at AIG as he is with Mr. Liddy (another dollar a year man with no responsibility for AIG's woes), the Attorneys General of New York and Connecticut, members of Congress, and the American taxpayers.

I'm sorry he's been threatened with violence, but I hardly feel responsible for it simply because I am outraged at his demands. The same taxpayers who want the bonus money back not only paid that bonus, but are paying for the police who will keep him and his family safe. That protection -- another expense we didn't need -- wouldn't be necessary if he hadn't been greedy enough to land on the shame list.

Most of us aren't thugs, and the worst thugs all left AIG with golden parachutes. He whines that those people have escaped blame, but he doesn't exactly go on to blame them. They are former colleagues, and who knows, might be future employers.

This taxpayer would gladly work for a living wage (Mr. DeSantis no longer needs a wage, and could obviously retire any time he pleases) at any financial firm or law firm where sleeves are being rolled up to resurrect the American economy. It's my duty as an American, and I'd feel great about it even without a million dollar bonus. Thanks to AIG and other behemoths (and a lack of government oversight) I'm actually out of a job at a law firm instead.

But I'm still expected by Mr. DeSantis to pay him, from the taxes I've already paid, a huge sum promised him by a teetering company.

The invincible sense of entitlement of these people even in the middle of a deep recession -- not only to a lucrative job, not only to millions in bonuses at a failed company, but that these bonuses should be paid to them by the U.S. taxpayer -- is nothing short of amazing. The kind of gall it takes to write a Times op ed complaining about those who would deny you those bonuses could be used to strip Mr. DeSantis's sun porch.

That he may not have helped cause the recession is sheer good luck on his part. That he should be rewarded for lending a helping hand in the crisis is quite just. I'd be just fine with his accepting a decent salary and forgoing the bonus. But he chose not to, and if a dollar isn't enough incentive, perhaps he should consult his patriotism (if he has any loyalty not for sale) for a better one.

And as a longtime high level employee of a company whose practices have brought us to this pass, he might even consider taking on some of the shame. Shame is notably absent from his letter, save for that he wants to heap on others. I'm not taking delivery on it. Mr. DeSantis's isn't a private missive to Mr. Liddy or Andrew Cuomo, it's an attack on anybody who feels Mr. DeSantis doesn't deserve a million dollars. I'm unapologetic.

I got an idea for you gale.... (Below threshold)
ODA315:

I got an idea for you gale. Why don't you gather all you pals off the ACORN bus, invest in yourselves (business, education, etc.) and begin living the American dream. Mr. DeSantis was until elected official (including our illustrious President) chose to vilify him. No...you and your ilk choose to whine and complain like little school girls claiming racism, sexism, disenfranchisemt, or whatever victim's desease-of-the-day you've concocted.

I guess like most socialists you don't believe in the rule of law (see CONTRACT in your local dictionary). "It's just not FAIR" you scream as others excell while you grovel in self-imposed obscurity. Of course you call him "greedy" and a "hypocrite". What you're really telling us is what a f*cking loser you are who'll never pull himself up and is jealous of DeSantis success.

Have a nice life being a bitter apologist while the rest of us try to keep this sinking ship afloat.

People like you aren't who made America great, but it happened inspite of you. Go back to the KOS or some other place where you can do a group hug and plan assault and interdiction ops against other private citizens.

gale - "If he wants to ... (Below threshold)
marc:

gale - "If he wants to give 100% of the money to "organizations who are helping people suffering from the global downturn" he can give it back to the U.S. government"

Yeah 'cause they do so well appropriating cash for utter bullshit like bike paths and studies of while farts.

"If the government hadn't appropriated billions for that purpose, AIG would be in bankruptcy right now and DeSantis would have no job to resign from, let alone a bonus to dispose of as he pleases."

Your ignorance has no bounds I see. AIG if placed into bankruptcy would STILL exist, DeSantis would STILL have a job and the experts that manage chapter 11 cases (as opposed to lamebrains in congress or The Tax Cheat) would legally void or renegotiate then current contracts and sell-off what assets they could. Oddly enough, the very same thing the obamatons and congress are doing but at a much high monetary and political cost.

"gale" I hardly make it a regular feature of my day but I might just tune in to see if O'Reilly names you as pinhead of the day.

It would be interesting if ... (Below threshold)
Bruce Henry:

It would be interesting if Mac Lorry or JLawson would reply to gale's post. The pathetic talking points spewed by marc and ODA315 are just that -- pathetic.

I'd also love to hear from Hugh, the Baron, or Mr Drummond in response to gale's comment.

C'mon, Wizbangers, let's elevate the discourse. I have a feeling this guy is as good as the best you got. I've named the best you got. Let's hear from 'em.

Bruce -Not enough ... (Below threshold)
JLawson:

Bruce -

Not enough hours in the day, man. Besides - why bother with someone who shows no indication of accepting any other possible point of view, especially someone who looks like they just dropped in on one thread, dumped a screed that originally came from either the Village Voice or USNews&World Report. (Looks like USNews first, by the clock times) - and most likely won't be back?

I'm not sure of your point,... (Below threshold)
Bruce Henry:

I'm not sure of your point, Mr Lawson. It looks to me like the guy posted the same comment both here and at US News. What does that have to do with the substance of what he said?

Of course I'm not very sophisticated in these matters. I read Mr DeSantis' letter. It was well written. But gale's comment was too.

I asked for feedback from you and Mr Lorry because I'd like your opinion, not nonsense like "obamatons," "bike paths and whale farts," and "go back to KOS."

It is my heartfelt belief t... (Below threshold)
hcddbz:

It is my heartfelt belief that Tarp only purpose was to gain control of banks. We all heard how the government was not going to nationalize the banks, how they were not going to get into day to day operations. Now all we hear is that they OWN the BANKS and yesterday they said they need to control all companies that pose a risk.

galeharoldfan

That money isn't Liddy's to give or DeSantis's to take


How do you know that? The 165Million paid would be 1/1oth of 1% if Tarp money was even used. However, since DeSantis arranged a sale for 150M dollars 100% of the 1 million dollars could be paid to him. You ignored the part that for the last year he only took $1 in compensation and did not take any commission on his sales.

The Dems in Congress, who receive 100% of their pay from the American people created the environment for this disaster, by passing the CRA and allowing FM/FM to create the subprime bubble. Republicans are responsible because they did not force the issue in 2002 and 2005 when it was plain we would have crash because of subprime.

Yet Congress received in a pay raise in January, why don't they give it back?

Congress has spent Trillions of dollars and we will never see it come back. Why not have the President and all of congress work for $1 a year until we have blanced budget.

It is time for Obama to put away the $100 lb beef and stock up on some PB&J and tuna fish.

Why did the AIG bonus go forward, because AIG and the Government did not take the time to do the honorable thing renegotiate contracts before their due dates. Instead AIG they said do not worry we will honor it.

This whole TARP system is stupid. After giving billion they talk about stress test? You test before you give the money. With the level of incompetence showed by Tim G. (who was head of NY FED and did all the T&C for AIG) shows why no one should turn money over to the government to spend.

Desantis is a high earner technically most of the Money is HIS! I love when people talk about getting tax money they talk like we have flat tax system. But when it is time for Tax cuts we always here TAX THEM MORE!
High income workers pay the majority of taxes.

He earned his money.
He has right to it!
If he has done something illegal then due process of law should be used, and if he is found guilty then the government can relieve of money. Otherwise this is tyranny and mob rule.

"Property is the fruit of labor...property is desirable...is a positive good in the world. That some should be rich shows that others may become rich, and hence is just encouragement to industry and enterprise. Let not him who is houseless pull down the house of another; but let him labor diligently and build one for himself, thus by example assuring that his own shall be safe from violence when built." The Collected Works of Abraham Lincoln edited by Roy P. Basler, Volume VII, "Reply to New York Workingmen's Democratic Republican Association" (March 21, 1864), pp. 259-260.


I don't see much point in b... (Below threshold)
JLawson:

I don't see much point in bothering with drive-by spammers, Bruce. Life's too short. And if you're doing a sockmonkey with galeharoldfan, then there's even less reason to answer it.

But you wanted my thoughts - here's five minutes worth.

Now, thanks to government action, employment contracts are potentially worthless. Congress can pull any amount that they want, if they get pissed off enough.

Or act pissed off - Dodd himself said he put the AIG exemptions in, on request from 'Treasury'. Not that many people there these days (almost like people are avoiding it - gee, wonder why?) so who would/could have done such a thing?

As far as the whole mess goes - if it were part of a magic trick I'd think it was classic misdirection and applaud. Focus your attention on a few million over here, while someone makes off with billions over there. It's a neat trick if you can pull it off - and the question is both who and why - IF it was something deliberate, and not the frantic thrashing of a President who's in over his head and realizing just how deep that beautiful pond he wanted to go wading in actually was.

Sorry, couldn't work in 'whale farts' or 'bicycle paths'. Maybe next time.

No, gales comment wasn't we... (Below threshold)
ODA315:

No, gales comment wasn't well written. It was the usual pile of leftist bilge. It gets spewed here by people like you, gale, and others repeatedly.

What will you do Bruce when some govt official comes after you? What will you do when they take your guns, tell you what you can drive, tell you what temp you can set your thermostat at.......Will you still be worshiping Obama as our currency is ditched for a "world currency"? When politicians don't like what your employer does, will you feel OK about your name and address being plastered over the internet? How will our country defend itself when Islamofacists (yes, they stiil exist even though our new leaders seek to minimize the dangers) go back on the offensive....will we have to ask the UN? Of course we shouldn't be upset when Geitner asks for the power to seize entire corporations based on "need"....

If you took the time to read my post there wasn't a talking point listed. It was a scree at brain-dead leftist lemmings who'll readily follow Obama over a cliff. Do you have ANY idea what his spending spree will cost us??? Got kids Bruce??? Better get 'um ready for every dollar they give the govt, 80 cents will go to pay the interest on the new debt. I guess we won't worry about paying for national defense, medicare, or social security.

Ya know, you leftys pissed and moaned about Bush "shredding" the constitution. Of course NO evidence of such was ever produced. Now we have a President and administration that appears to have no knowledge the content of Article 1. And Obama is supposed to be a constitutional scholar? But it's OK....you keep yelling lalalal with fingers in your ears.

It'll be just fine 'cause Obama is just sooooo cool.

Umm BrucyIf I own... (Below threshold)
914:

Umm Brucy

If I own a million dollar company and want to give bonuses out because of good work, bad work, because I like the color of the sunset or the way water runs down a dirty sewer or any other reason its none of Your G damn business.

bh - "The pathetic talk... (Below threshold)
marc:

bh - "The pathetic talking points spewed by marc and ODA315 are just that -- pathetic."

bh - "I asked for feedback from you and Mr Lorry because I'd like your opinion, not nonsense like "obamatons," "bike paths and whale farts," and "go back to KOS."

Considering you broached the topic of pathetic, it's pathetic that's all you could come up with to rebut me.

Why?

Couldn't refute the fact that if AIG had been put into receivership the very thing the gov is attempting to due would have been done by those that have spent YEARS doing it rather than a bunch of marginally competent politicians, and that's being OVERLY kind.

Here you should like this:

Piss-off. (Consistent aren't I?)

hcddbz - "Why did the A... (Below threshold)
marc:

hcddbz - "Why did the AIG bonus go forward, because AIG and the Government did not take the time to do the honorable thing renegotiate contracts before their due dates."

There's another just breaking reason.

Dodd's wife has close ties to AIG:

From 2001-2004, Jackie Clegg Dodd served as an "outside" director of IPC Holdings, Ltd., a Bermuda-based company controlled by AIG. IPC, which provides property casualty catastrophe insurance coverage, was formed in 1993 and currently has a market cap of $1.4 billion and trades on the NASDAQ under the ticker symbol IPCR. In 2001, in addition to a public offering of 15 million shares of stock that raised $380 million, IPC raised more than $109 million through a simultaneous private placement sale of 5.6 million shares of stock to AIG - giving AIG a 20% stake in IPC. (AIG sold its 13.397 million shares in IPC in August, 2006.)
Let me say it before anyone else does... Dodd stinks like rotten Cod.

"Dodd stinks like rotten... (Below threshold)
914:

"Dodd stinks like rotten cod."

He kinda looks like it too.

Bruce, you expect responses... (Below threshold)
Oyster:

Bruce, you expect responses to that long and drawn out appeal to emotion posted by gale? That's all it was. It was well written mind you, but void of the facts surrounding the situation. Would that "gale" showed that much emotion aimed toward the very government who has wasted untold multiples of what Mr. Desantis was paid.

"Gale's" whole complaint is against Mr. Desantis' compensation; how much "Gale" deems to be appropriate. If Mr. Desantis was given 1/4 of what he was given, he would still be subject to the government seizure of 90%. This is after a base salary of $1. So Mr. Desantis could conceivably walk away from this job with a net salary of $32K + $1. Why that ought to be enough for any MIT grad, right?

But see, Gale's screed isn't about facts. It's all about emotion.

President Obama made around $4M last year, didn't he? About $170K of that was as a US Senator. And how many days was he present in the capacity of a Senator? Who pays him? The taxpayers, you say?

Why, that really gets me emotional!

Dood is a tool but I am pi... (Below threshold)
hcddbz:

Dood is a tool but I am pissed at the whole Giverment.
Tim G and the Entire congress bears the full responsibility for this. Tim G did the the original T&C for TARP and worked on AIG personally.
When the evil Wall Street firm (that I worked for) did M&A a review of labor contracts and short and long term spending was reviewed. When we provided venture capital for startups we reviewed the books and business plans to see how viable they were. Heck when we picked up a new vendor we reviewed their books.
So for Tim G to hand over TRILLIONS of dollars without knowing about bonus coming in less than 18 months is gross incompetence . Congress rushed to put as much pork into the TARPI, TARP II and Spending bills that they did not do their job of protecting the American Tax payer by READING what they were voting on!

Also lets all remember that OBAMA was going to PROTECT the American tax payer by making sure the bills had provisions in it to do just that ensured money was spent wisely. So he was in over his head as senator or he is just a pathetic liar on second thought we know him to be both.

Now TIm G and the ONE want to run all companies.

I mean all Government run/administered companies provide great ROI
Amtrack
FM/FM
Post Office.
Heck if we held Social Security Administration to the same standards as everyone else they would all be bunking with Madoff.

Dodd is usefull idiot.
However if anyone things these guys are gonna stop at AIG, they are only starting.
Money was sent to HAMAS and praised given to Iran while he called described AIG as suicide bomber.
The Hitler Youth bill passed the house in the dark of night.
A bill to tax people at over 102% passed the house.

As the Clash Sang

When they kick out your front door How you gonna come? With your hands on your head Or on the trigger of your gun

When the law break in
How you gonna go?
Shot down on the pavement
Or waiting in death row

Mr Lawson, thanks for your ... (Below threshold)
Bruce Henry:

Mr Lawson, thanks for your thoughtful opinion. I get the "drive-by spammer" part, too.

You too, Oyster.

Marc and ODA315, 914, et al, thanks for your consistency. You guys are priceless.

I'm not sure what a "sockmonkey" is. I'm relatively new at this stuff.

I honestly have no idea how... (Below threshold)
ExSubNuke:

I honestly have no idea how our drive by spammer (or their fans) could defend that piece of tripe.

I haven't the inclination to address it line by line, but here's some major points.

He had a valid contract, and he faithfully completed his portion of the agreement. An example would be, oh, a free agent professional athlete. In their contracts they get bonuses for gaining x number of yards per game, or for completing x number of catches, or making x number of homeruns, etc...

It DOESN'T MATTER, if their teams end up with a losing record, or lose the big post season game. If they met the conditions of their contract, the teams they sold their services to are bound BY LAW to pay them the agreed upon sum. The only time that's not the case, is if the business can't afford to do so. In which case they'll get sued, or file for bankruptcy so the contract can be renegociated.

To apply the example to AIG, you start to see the fallacy in gales argument around paragraph 3 or so (God what a long screed). AIG was contractually bound to pay those bonuses for the terms agreed upon within those contracts, if the terms agreed upon were fulfilled.

So it's argued that if the company had gone under, there'd be no bonus. Correct, sir!!! Then their just compensation (if any) would be worked out in bankruptcy court. But the company didn't go under. The company was propped up by a new investor, that being the United States Government, using OUR money as taxpayers.

At that point, they COULD have made it contingent upon them taking over, that no bonuses be paid. But that route wasn't chosen. As they chose to retain the bonus structure AS IS when they took over, guess what, they are now bound by that contract. Suddenly, AIG does have the resources to fulfill their contractual obligations.

There's a REASON for the saying "Buyer Beware." Anyone with an ounce of personal responsibility and real world experience KNOWS to read something before signing it.

When I applied for my first credit card (to start building credit way back when) I read the terms of the agreement and understood the card would have 25% interest. You're darn tootin' I didn't charge the thing up beyond my means to pay it off.

When I leased a vehicle while in the Navy, I read and understood to maintain a certain mileage. As it turns out, my ex-wife ran up the mileage while I was on deployment before she cheated and left me. I was still on the hook to pay for that excess mileage. Why? I was contracturaly bound.

And if the good galeharold or his/her fans can't understand that simple fundamental, then there IS no reconcilling their understanding with ours. It's a populous argument, and has no founding in the fundamental laws of our land (The Constitution).

Finally mad it through most... (Below threshold)
ExSubNuke:

Finally mad it through most of that screed, and here's another money shot hole in their thinking.

But I'm still expected by Mr. DeSantis to pay him, from the taxes I've already paid, a huge sum promised him by a teetering company.

No, you're expected to pay for those agreed upon bonuses because YOUR REPRESENTATIVES in the deal agreed to the bonuses in bad faith. Who are those representatives? Why they would be your representatives in the government, both in Congress and The Treasury Department.

You're getting mad at the wrong people. Do I get mad at the door to door salesman if they sell my wife vacuum for $2400? Or do I get mad at my wife for making the deal on our behalf without consulting me?

YOU'RE MAD AT THE WRONG PEOPLE!!! Get outraged all you like. I was outraged too. I wasn't outraged at AIG, though. I was outraged at the Congress and the Obama Administration for putting us in this position without letting anyone READING THE GOD DAMNED BILL!!!, before signing it.

GOD FUCKING DAMNIT!!! HOW CAN YOU NOT UNDERSTAND THAT SIMPLE FUNDAMENTAL?!?!

914 is right on the money (... (Below threshold)
WildWillie:

914 is right on the money (no pun intended)

I don't want the government to ever question how companies pay their people. Let the market and consumers make the corrections.

Hyper, Barry is by far no considered intelligient by me and many others. He was just at the right place at the right time. After watching his last "press" conference, it should be rather obvious now that this guy is shooting blanks. Even for you Obamanites. ww

Bruce -Sockmonkey ... (Below threshold)
JLawson:

Bruce -

Sockmonkey - sockmonkey... damn! That's what I get for blogging half-asleep. It should have been sockpuppet.

It's usually when someone argues or agrees with another poster, when they're playing both sides of the conversation. For example, if you put up galeharoldfan's post here because you thought it was absolutely the best thing you ever read and wanted to bear its children, and then started jumping up and down agreeing with it and trying to get OTHERS to post on it, then you're setting up a sockpuppet.

Sock monkey. Sigh. I've GOT to start getting more sleep.

I assure you I did not, and... (Below threshold)
Bruce Henry:

I assure you I did not, and would never do, that.

Didn't figure you would, Br... (Below threshold)
JLawson:

Didn't figure you would, Bruce. But it does seem odd that the particular post in question shows up at USNews, the VV, and HERE.

Don't bother to answer the ... (Below threshold)
ODA315:

Don't bother to answer the questions Bruce, just drive on by.

Yup, you've chosen the right party.

Re # 39:If I own 7... (Below threshold)
Bruce Henry:

Re # 39:

If I own 79% of your million dollar company it is my G damn business.

I haven't taken any position on whether these bonuses should be paid or not. Matter of fact, I've said the whole kerfuffle is kinda silly. Why put words in my mouth, or attribute opinions to me that I have not espoused?

I was asking for intelligent, thoughtful, conservative replies to this gale person. and Mr Lawson, Oyster, and ExSubNuke obliged. Thank you guys for that.

When you post something I think deserves my attention, ODA, I'll reply to it. What I won't do is defend a position I didn't take.

If? is the operative word.<... (Below threshold)
914:

If? is the operative word.

Not really. The U.S. govern... (Below threshold)
hyperbolist:

Not really. The U.S. government owns AIG. The way they compensate their employees now warrants Congressional oversight.

And they brought it upon themselves, for doing a really shitty job as investment bankers.

Warrants Congress oversight... (Below threshold)
914:

Warrants Congress oversight? Who the hell screwed it up in the first place moron?

bh - "Marc and ODA315, ... (Below threshold)
marc:

bh - "Marc and ODA315, 914, et al, thanks for your consistency. You guys are priceless."

First thing you've come close to being correct on in this thread, I am priceless.

Unlike you who still haven't answered my original question, which pretty much places you in the bargain bin.

marc, if you communicate to... (Below threshold)
hyperbolist:

marc, if you communicate to others in real life the way you do on this blog, you should be used to people ignoring you by now.

This blog is real life Hype... (Below threshold)
914:

This blog is real life Hyper, I aint using no teleprompter.

Perhaps I didn't respond to... (Below threshold)
Bruce Henry:

Perhaps I didn't respond to your "original question" because I didn't see you ask me one. What question is it so important to you that I address?

"Not really. The U.S. go... (Below threshold)
Oyster:

"Not really. The U.S. government owns AIG. The way they compensate their employees now warrants Congressional oversight."

No. The TAXPAYERS own AIG. And The TAXPAYERS are rapidly beginning to notice that the new managers don't know what they're doing.

Now that we have that out of the way...

That "congressional oversight" thing; it "now" warrants oversight? After the fact? After they signed on the dotted line without reading the fine print? A pretty simplistic comment there, hyper. Do you think about what you're going to say? Or do you just blurt things out because they sound good to you?

Well, Oyster, you can't fit... (Below threshold)
hyperbolist:

Well, Oyster, you can't fit all the TAXPAYERS into a room and have them debate, can you. If only there was some group of people appointed to represent them...

Congress has done a better job--any Congress in history, perhaps--than the investment bankers at AIG. They failed spectacularly and bear some of the responsibility for a global recession. People don't want the government not to manage AIG--they want them to do a better job of it. That does not mean taking a hands-off approach.

And lest you think I'm suggesting that Obama be given a pass on this, I've said a bunch of times that Tim Geithner should be fired; and that Obama should be ashamed for having listened to that guy when better economists have known for over a year that the "toxic assets" have not caused a problem with liquidity, but with solvency.

"Congress has done a bet... (Below threshold)
Oyster:

"Congress has done a better job--any Congress in history, perhaps--than the investment bankers at AIG."

That's a fine point you've made there. This would be the Congress which has thrown trillions at the "war on poverty". How's that working out?

This would be the Congress which has thrown billions upon billions at the "war on drugs". How's that working out?

This would be the Congress which signed legislation they didn't read. How's that working out?

This would be the Congress which has a higher percentage of criminality than just about any group or company in the country. How's that working out?

Goodness, you're blind.




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