Over the last week the news cycle has been enjoying a Five Minutes of Hate over the bonuses being given out to a number of individuals in the AIG Financial Product division, with some going to so far as to say that at a minimum they should all get jail time, and since that’s not possible they should see all their earnings taxed away. Given the, “our problems are all the result of Wall Street greed” narrative which many have applied to our current financial crisis, and that as fallen human beings we are all prone to envy, this can hardly be surprising.
For those wanting to know about the reality behind the fracas, this editorial in yesterday’s New York Times is illuminating. It is an open resignation letter from Jake DeSantis, an executive vice president of the American International Group’s financial products unit (and a recipient of one of the infamous bonuses), to AIG’s CEO.
DEAR Mr. Liddy,
It is with deep regret that I submit my notice of resignation from A.I.G. Financial Products. I hope you take the time to read this entire letter. Before describing the details of my decision, I want to offer some context:
I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.
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.
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….
Frankly, it sounds to me like Mr. DeSantis and his co-workers were (knowingly or unknowingly) used as symbolic scapegoats by politicians and media commentators with complete disregard for whether they personally were actually guilty of anything. And while one is certainly entitled to think that Wall Street analysts are overcompensated (and feel little pity for them when they land themselves out of work as the result of a crash) I think it remains both unwise and immoral to treat them in a dishonest fashion simply because they’re highly paid.