Wednesday, March 25, 2009

AIG, and Another Point of View

I've been watching the AIG mess from afar. I'm in Obama's camp on this one with regard to what to do about the bonuses (or what I think is his camp): taxing one small group of people is likely illegal and is, at best, probably not a good precedent to set. Still, I keep thinking - if the bonuses are taxed at 90%, I won't be horribly offended. Not to add to the villification, but c'mon. Bonuses?

Then this a.m., I saw a letter in the New York Times from Jake DeSantis, one of the guys who heads up an AIG unit that isn't directly related to the debacle. It's called "Dear AIG, I Quit!." He was pretty upset - felt his bonus was legitimate, had taken a salary of $1 for the year as his contribution to try to be loyal to the big picture that is AIG... It was a compelling letter. It made me think about the AIG employees who did try to do right by their company over the years. It also made me realize why Tim Geithner (so far not my favorite Obama appointee) may have seen the bonuses as a legitimate payout, and how the reasoning behind the bonuses was not spelled out very well this past week - which, actually, is a dilemma for Geithner, if he can't articulate his reasons for supporting things. (Here is an interesting article about the impression Geithner left on one reporter a couple days ago.) DeSantis' letter confirmed my gut-reaction thought to the whole situation: could it possibly be less black and white than it all looked from the headlines? DeSantis talked of all the money he lost, both in AIG options and in the stock market generally. He spoke of how his part of the company created the profits, how AIG had repeatedly promised to honor these contracts in March. He said that the ones to blame for the debacle have long since left the company. So. Some gray area.

Some things did stand out, as I read. Like DeSantis' bonus, after taxes (that he was going to give away to charity) was about $750,000. That's a pretty big bonus. Sure softens the blow of taking a salary of $1 for the year. And when he said he did well "by working hard..." Hmmm. Lots of people work really, really hard, and don't earn $750,000 bonuses - nor do they get bailouts from the government that is, in essence, paying that $750,000.

So then I saw another article: "The Mindset of an AIG Executive," by Diane Brady. It helped me see some syllogism in the logic used in DeSantis' passionate letter. There is a disconnect. We are out of balance. I'd rather see men like Mr. DeSantis succeed. But he is missing some points. My favorite one in Brady's column is about the plumber. In response to DeSantis' point that "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," Brady wrote:
True, but if a house has burned down and the owners are left financially destitute, the plumber may have a hard time getting his full pay. And if you’re both part of the same company that carelessly causes the house to burn down, you may get much less.
What I love about our president is how he methodically approaches each of these circumstances. Loved him again in the press conference last night. I actually called my dad after the press conference was over - the good conservative that he is - to get someone's point of view that I trust that isn't my intensely positive one, just so I could keep some perspective. But when Obama said this is about perserverence, I was content. It is. It will be. Perhaps a day will come when the Jake DeSantises of the world end up working in places that do not send our finances into the armpit of despair. That would make me happy.

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