Reality Liberation Front

Recently, the New York Times printed a letter of resignation sent by Jake DeSantis, an executive vice president of A.I.G.’s financial products unit, to Edward M. Liddy, the A.I.G.’s CEO. The letter may be read here. The letter has achieved a lot of “public traction,” and the internet is rife with acclaims and criticisms.

Like most who read the letter, I read DeSantis’ initial criticisms of A.I.G.’s practices and his intention to donate all of his “retention bonus” to “those suffering from the global economic downturn,” and I thought, “How very noble…how principled.”

But then I kept reading…here are some excerpts:

“I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G.”

“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.”

“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.”

“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.”

“My guess is that in October, when you learned of these retention contracts, you realized that the employees of the financial products unit needed some incentive to stay and that the contracts, being both ethical and useful, should be left to stand.”

“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.”

As I read these statements, I couldn’t help thinking:

1) Some of these statements simply don’t pass the “smell test” for truth. For example, there is no way, in a division the size of A.I.G.’s financial products unit (less than 400 employees), that DeSantis (a financial expert) did not know that Credit Default Swaps were being bought/sold…and there is no way (being a part of that unit) that he didn’t benefit from them. The sale of the CDS’s contributed to his large bonus every year, whether he personally sold them or not.

2) This sounds a lot like the entitled whining of someone who actually thinks he EARNED a million dollar bonus. It’s obvious that DeSantis has no concept that most of us don’t get a BONUS for doing our job…we just get paid. And if we work for a corrupt company that goes under because it’s hiding $11 billion in losses…then we don’t even get paid. Plus, let’s face it…while I’m certain that DeSantis believes his job to be the cornerstone of the economy…all he really does is buy commodities for “X” dollars and then sell them for “X+Y” dollars…he’s not curing cancer or developing a car that runs on water. I’m a highly-skilled software designer and developer…you know what I get extra if I do a super-duper job writing programs this year? Nothing…zip…zilch…maybe a pat on the head, but other than that…nada.

3) He’s also obviously attempting to play the martyr by not-so-subtly proposing that he has had lots of opportunities to leave, but has stayed to help the company out of the goodness of his heart. If he is really so principled and so noble…why didn’t he leave? When he found out that his company had been hiding losses, cheating investors, and selling CDS’s…instead of saying, “I’m going to stay here and help my corrupt employer out of loyalty,” why didn’t he say, “I’m going to go leave for a company that engages in transparent, ethical, and legal financial practices.”

Well, it appears I was not alone in having these thoughts, and Rolling Stone‘s Matt Taibbi has voiced these same criticisms…and did so somewhat more bluntly. His article is here.

Some choice excepts:

“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 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.”

“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?”

“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 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.”

“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?”

“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.”

“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. Second, 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. Third, 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.”

“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 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?”

Isn’t this the problem: these brokers, traders, et cetera…they see themselves as “kings of the universe.” They see themselves, through no more than trading items of value, as having earned MILLIONS in bonuses…even when their company is going under, and held afloat only by the grace of the taxpayer. They don’t just think they deserve MILLIONS for what they do…if their company doesn’t have the MILLIONS anymore, they think they deserve OUR MILLIONS. I’m certain that their monumental egos and self-confidence are part of what make them very good at trading various commodities…but maybe they would benefit from working for a while in a factory, or as a programmer, or in retail…or as a plumber. Maybe they’d learn what it really means to “earn” something, and the real value of money when it’s not just numbers on a balance sheet, or in their own bank accounts.