[Marxism] Matt Taibbi on AIG

Louis Proyect lnp3 at panix.com
Thu Mar 26 13:50:54 MDT 2009

AIG Exec Whines About Public Anger, and Now We're Supposed to Pity Him? 
Yeah, Right

By Matt Taibbi, AlterNet. Posted March 26, 2009.

     "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." via Op-Ed Contributor - "Dear A.I.G., I Quit!"


Like a lot of people, I read Wednesday's New York Times editorial by 
former AIG Financial Products employee Jake DeSantis, whose resignation 
letter basically asks us all to reconsider our anger toward the poor 
overworked employees of his unit.

DeSantis has a few major points. They include 1) I had nothing to do 
with my boss Joe Cassano's toxic credit default swaps portfolio, and 
only a handful of people in our unit did 2) I didn't even know anything 
about them 3) I could have left AIG for a better job several times last 
year 4) but I didn't, staying out of a sense of duty to my poor 
beleaguered firm, only to find out in the end that 5) I would be 
betrayed by AIG senior management, who promised that we would be 
rewarded for staying, but then went back on their word when they folded 
in highly cowardly fashion in the face of an angry and stupid populist mob.

I have a few responses to those points. They are 1) Bullshit 2) bullshit 
3) bullshit, plus of course 4) bullshit. Lastly, there is 5) Boo Fucking 
Hoo. You dog.

AIGFP only had 377 employees. Those 400-odd folks received almost $3.5 
billion in compensation in the last seven years, a very large part of 
that money coming from the sale of credit default protection. Doing the 
math, that averages out to over $9 million of compensation per person.

Ask yourself this question: if your company made that much money, and 
the boss of the unit made almost $280 million in just a few years, 
exactly how likely is it that you wouldn't know where that money was 
coming from? Are we supposed to believe that Jake DeSantis knew nothing 
about Joe Cassano's CDS deals? If your boss and the top guys in your 
firm were all making a killing selling anything at all -- whether it was 
rubber kayaks, generic Levitra or Credit Default Swaps -- you really 
wouldn't bother to find out what that thing they were selling was? You'd 
really just mind your own business, sit at your cubicle, and put your 
faith in the guys up top to fill you in if there was something you 
needed to know?

This would be a believable claim for an employee of some other wing of 
AIG, a company with well over 100,000 employees. But DeSantis works for 
tiny, 377-person AIGFP, a unit that had only two offices, one in London 
and one in Greenwich, Connecticut. And we're talking about financial 
professionals, the most shameless group of tirelessly envious gossips 
ever to walk the face of the earth. The likelihood that Joe Cassano 
would pull in $280 million for himself, and his equally greedy, 
hopelessly jealous employees wouldn't know not only exactly how he made 
that money but every last ugly detail about his life -- from what skank 
he's sleeping with to what side of his trousers he hangs on -- is almost 
zero. I know plenty of people who work in this world and I've met very 
few who didn't hate with every cell in their bodies anyone in their own 
companies who made more money than they did or got bigger bonuses at 
Christmastime. Gossiping about each others' bonuses, and bitching about 
each others' compensation, is the national pastime for these people.

So forgive me if I don't buy this story that poor Jake and his buddies 
didn't know about Cassano's CDS business. Also, there's this: let's just 
say, Jake, that you're telling the truth, that you don't know anything 
about this toxic portfolio. If that's the case, then why the fuck does 
anyone need to retain you at an exorbitant salary to help unwind that 
very portfolio? If these transactions aren't and never were your 
expertise, then where the hell is your value here? When I spoke to 
Christine Pretto, the AIG spokeswoman, and asked about those bonuses, 
she said that AIG needed to retain people like you in order to take 
advantage of your "knowledge of these transactions." So if you don't 
have knowledge of these transactions, what are you being paid for? Your 
winning attitude?

Then there's the matter of Jake's other job offers. About that: It was 
apparent as early as last February that Cassano had basically destroyed 
not only the unit but perhaps AIG itself. The company announced over $11 
billion in losses around that time. If I'm Jake DeSantis, and I'm really 
innocent, I'm looking for a job that very instant. And I'm taking the 
first good job anyone offers me. Because by then I'd have realized that 
I was working for the latest version of Enron. That the man I've been 
working for for the last six or seven years has turned out to be one of 
the most irresponsible Wall Street villains of all time, a man who 
single-handedly destroyed the 18th-largest company in the world. If I'm 
Jake DeSantis, I'm quitting out of moral disgust, because I don't want 
to be associated with this kind of behavior.

The only reason I'd stay is if I didn't have a choice. Which I feel sure 
is what happened here. If Jake DeSantis didn't take advantage of an 
opportunity to get a better job elsewhere with a company that didn't 
hide billions in losses and make $500 billion bets with money they 
didn't have, that's his fucking problem. The notion that I the taxpayer 
have to pay this asshole a million-dollar bonus because he turned down a 
better job at a less guilty company is repugnant to begin with; the 
notion that he stayed at AIGFP because he expected me to pay him this 
bonus makes me hate him even more. But it's all moot, because I feel 
quite sure it's a lie. As one trader for another firm told me not long 
ago when I asked what he thought about the need to pay these "retention 
bonuses" to these "valued employees" at AIGFP:

"Yeah, right. Who would hire these guys? They'd stay for a dollar if you 
offered it to them, much less a million."

I mean, half of Wall Street is unemployed right now. There are plenty of 
unemployed traders out there whose resumes don't include such entries as 
"Worked for years at small unit of AIG that helped destroy the universe; 
throughout that time was completely ignorant of burgeoning global 
disaster unfolding five feet from my desk." The idea that other 
companies would be so anxious to pass over the seas of truly innocent 
available people in order to scoop up some still-employed veteran of 
AIGFP -- and that they would be so enthusiastic in their pursuit of said 
AIGFP employees that AIG would need to pay those AIGFP folks 
million-plus retention bonuses to get them to stay -- is so ludicrous it 
almost defies comment. Show me, anywhere, the Wall Street firm that's 
willing right now to spend more than a million dollars poaching 
still-employed mid-level executives like Jake DeSantis, when they can 
just put an ad in the paper and have 500 recently-unemployed CEOs 
begging for work at almost any salary in five minutes. So the idea that 
the rest of Wall Street is breaking down AIGFP's doors to lavish its 
idiot personnel with million-dollar offers is just utterly preposterous. 
The fact that DeSantis expects us to believe this is insulting in itself.

Also, remember, DeSantis until this year was probably the recipient of 
performance bonuses. This year, obviously, there was no performance, so 
AIG doled out these "retention" bonuses instead. And the value of these 
retention bonuses is seriously in question if AIG never really needed to 
pay extra to retain this personnel, which I personally believe they 
didn't. I personally believe these "retnetion" bonuses were a ruse 
cooked up by management to suck a few more dollars out of the company 
before it sank to the ocean bottom. So if DeSantis is "owed" these 
bonuses it's only in the sense that someone up above agreed to cheat the 
shareholders by paying these bonuses out when they weren't really 
necessary; they weren't "earned" in any real sense.

But all of this is really secondary to the tone of DeSantis's letter. He 
acts like he's a victim because he didn't get to keep his after-tax 
bonus of $742,006.40 in the middle of a global depression. And he really 
loses his fucking mind when he writes:

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.

First of all, Jake, you asshole, no plumber in the world gets paid a 
$740,000 bonus, over and above his salary, just to keep plumbing. 
Secondly, try living on a plumber's salary before you even think about 
comparing yourself to one; you're inviting a pitchfork in the gut by 
even thinking along those lines. Thirdly, Jake, if you were a plumber, 
and the electrician burned the house down -- well, guess what? If you 
and that electrician worked for the same company, you actually wouldn't 
get paid for that job. Out in the real world, when your company burns a 
house down, you're not getting paid by that client. It's only on Wall 
Street, where the every-man-for-himself ethos is built in to an insanely 
selfish and greed-addled compensation system, that people like you 
expect to get paid in a bubble -- only there do people expect their 
performance bonuses no matter how much money the shareholders lose 
overall, no matter how many people get laid off after the hostile 
takeover, no matter how ill-considered the mortgages lent out by your 
division were.

You expect that money because you think it's owed to you. But what 
money? The money is gone. Your boss, if not you, set it all afire. You 
want the money, but where exactly do you think it's coming from? Do you 
just not understand that that that money now would have to come out of 
someone else's pocket? That it would have to come from middle-class 
taxpayers, real plumbers, people who didn't make millions over the years 
in equity and commodity trading?

Here's the real problem with people like Jake DeSantis.Throughout this 
whole period they never were able to connect the dots -- to grasp the 
fact that when they skimmed a million here or a million there off the 
great rivers of capital that flowed through their offices, that that 
money came from somewhere, from someone. To them, it wasn't someone 
else's money, it was just money, and why shouldn't they have it?

It's remarkable that when DeSantis in his letter touts the reason he 
deserves his high compensation, all he can talk about is how much money 
he made: "The profitability of the businesses with which I was 
associated clearly supported my compensation." For a guy like this, his 
worth as a human being is wrapped up in buying a bag of beans for $10 
and selling it for $11. He states this like it's a law of nature: he was 
a good equities and commodities trader, therefore he should make a lot 
of money. Only a person with a habitually over-inflated sense of 
self-worth could think he deserves a $700,000 retention bonus, even if 
it has to be paid by taxpayers, when in reality no one "deserves" that 
much money. It may be that some people do get paid that much, but most 
people who make that much money have enough sense to realize their cushy 
lifestyles are an accident of fate, of birth, of class, not something 
that is "supported" by some unwritten natural law of compensation.

Hey Jake, it's not like you were curing cancer. You were a fucking 
commodities trader. Thanks to a completely insane, horribly skewed set 
of societal values that puts a premium on greed and severely undervalues 
selflessness, communal spirit, and intellectualism -- values that make 
millionaires out of people like you and leave teachers and nurses, the 
people who raise your kids and clean your parents' bedpans, 
comparatively penniless -- you made a lot of money.

Good for you. Consider yourself lucky. But your company went belly-up 
and broke, almost certainly thanks in part to you, and now you don't get 
your bonus. So be a man and deal with it. The rest of us do, when we get 
bad breaks, and we've had a lot more of them than you. And stop whining. 
Jesus Christ.

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