Dear Jake DeSantis

Dear Mr. DeSantis:

Thank you for your heartfelt resignation letter printed today in the New York Times.

I would be remiss if I did not reply with a few comments. Since your company is now effectively owned by the government to which I pay taxes, consider this a reply from one of your employers.

You concede that you and your colleagues may have been overcompensated overall for your work in the past. You’ve worked ten or twelve-hour days in the past few years, and your division of AIG-F.P. made a profit. You do not discuss the exact compensation you received during those previous years. Yet in this year, after your company as a whole has suffered a catastrophic failure, has received massive amounts of public funds and your work has consisted of dismantling your company’s financial products division you believe you have earrned your after-tax compensation, paid in the form of a “retention bonus” of $742,006.

Again, that’s your after-tax income, being paid by a company which lost more money than any other business in history, after it came close to destroying the entire global financial system. I don’t work the same hours you do, and I don’t produce profit for a company as you once did, but that’s just shy of a decade’s worth of work for me. And I’m exceptionally well-compensated in comparison to 90% of working Americans.

I appreciate that you’re going to give away this money to charities working to undo the damage your company and others caused. Respectfully, may I suggest that you don’t understand that many of us believe that if you reaped the benefits of your company’s risky conduct, you should be exposed in equal measure to its failure. This should not just mean that you lose whatever value you held through AIG’s stock, but that your compensation this year should reflect your company’s failure. The fact that there is anything at all available to compensate you is a consequence of your company being bailed out by the American taxpayer.

You observe that you should not be cheated of your payment any more than a plumber who fixed the pipes should be robbed of payment if an electrician subsequently burns the house down. You might want to make that analogy more precise. If the plumber who fixed the pipes was employed by the same contractor as the electrician, worked on the pipes while the electrician was connecting the wiring to the plumbing system, and watched as the electrician laid a trail of flowing gasoline between all the homes in the neighborhood, then the plumber might reasonably expect that his own payment might be at risk.


Tim Burke

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52 Responses to Dear Jake DeSantis

  1. peoplegetagrip says:

    His compensation DID reflect his company’s poor performance. He says in the letter that he, like Mr. Liddy is working for $1 a year. This money is his entire compensation for the year. He could be making double taht elsewhere, fair or not, it’s the truth. This man is full of integrity and was doing the right thing for the greater good.

    You are right, we are the owners of AIG, and our misguided outrage is causing us to lose our ENTIRE investment. You should be screaming at Congress, who has now likely caused AIG to officially lose any chance of survival at their own hands, and in the porcess cost us BILLIONS, in their quest to obtain political gain. SHAME on the POLITICIANS, who sacrifice our well being, and the well-being and security of honest citizens like Jake DeSantis, for their own egos.

  2. Timothy Burke says:

    He argues that his $742,000 is compensation that he’s owed. So the $1 salary is just a stunt. Frankly, if he intends to give his $742,000 to charities who are trying to help people harmed by the economic collapse, and he thinks that his expertise is specifically vital to rebuilding AIG’s core business, then he should go ahead and donate his time and suck it up a little. But he like a lot of his colleagues wanted to benefit in extraordinary ways when times were good and be insulated against catastrophic risk when times were bad.

    AIG already cost us billions. Not just the cost of bailing them out directly, but in collateral damage to the entire financial system. Some group of people at AIG (and thus the overall leadership of the company as well) put the supposedly most secure class of investments in the world at risk without any of the people invested in that class of investments knowing or agreeing to those risks.

  3. newyorker111 says:

    This analogy sucks: “If the plumber who fixed the pipes … watched as the electrician laid a trail of flowing gasoline between all the homes in the neighborhood, then the plumber might reasonably expect that his own payment might be at risk.” I’m not sure if you have ever worked for a corporation that has multiple units, but it is implausible (actually, impossible), for ALL of the people in the organization to monitor the actions of ALL others. The next time ANYONE in your organization makes any sort of grave mistake, I hope YOU lose your job over it.

    I could comment on the foolishness of the remainder of your “letter” but your idiocy barely solicits a response and I am frankly ashamed that I even spent 5 minutes on your blog.

  4. Timothy Burke says:

    I’m sorry, isn’t this exactly what free-market advocates tell people who lose their jobs because the corporate leadership made horrifically dumb decisions? Too bad, sucks to be you, maybe you should have chosen another line of work or left for another company or done some retraining when the writing was on the wall. Now suddenly all these crocodile tears for executives whose companies were taking the most foolhardy risks in the history of risk-taking: why should they be held accountable? Why should they suffer the consequences? Well, they were content to reap a hugely disproportionate amount of the benefit when those risks were paying off, even when they themselves weren’t directly responsible for producing those huge risks.

    As it stands, if the top rank of my administration made fiscal mistakes comparable to what the FP division of AIG made, I might indeed lose my job over it, as would all my colleagues, because my college would be effectively bankrupt. This is in fact what is close to happening at some colleges and universities with much more marginal financial situations than my own. I might well protest that I was innocent of those mistakes, and I probably would be, but that wouldn’t save me. Do you work for a business where the catastrophic decisions of a major proportion of your colleagues wouldn’t lead to serious consequences for you as well? Nice work if you can get it, newyorker.

    I’m fine if you want to argue there should be a safety net, that we should be insulated from the consequences of other people’s bad decisions. I think that might be a fair, just and equitable basis for organizing a society. But then recognize that you’re talking about a huge modification of actually-existing capitalism, not just a one-time argument that applies to Mr. DeSantis and his colleagues. If we want to rethink the social, economic and personal consequences of risk, then let’s rethink them for the $10/hour worker in manufacturing as well as the multi-million dollar a year investment banker.

    Moreover, let me note: DeSantis tells us that he knew nothing about the CDS business in his own division, was uninvolved in it, was making profits without any sense that the division was incurring extraordinary risks. If that’s true, then his expertise isn’t especially important in dismantling the FP division. If it’s not true, and he knows a great deal that is of specific use in dismantling the CDS trades that brought the company down, then he had to be aware of (or involved in) the mistakes that division made.

  5. dnexon says:

    Tim’s two interlocutors could not better demonstrate the culture of entitlement that now dominates the financial class.

    I hate to break it to newyorker111, but people lose their jobs all the time because someone in their organization made “grave mistakes.” Indeed, that’s pretty much par for the course in a capitalist economy organized around firms.

    Now, most of those under discussion aren’t going to find themselves homeless, bankrupt, or impoverished if they lose their bonuses; they’ve been massively overcompensated for activity that, at heart, amounted to an extremely high-stakes shell game.

    None of this is the case for the overwhelming number of people who are losing their jobs, their retirement savings, and/or their homes because of the “grave mistakes” of not only others at their own firms, but of those in the financial sector who work for *other* firms.

    But what it boils down to isn’t rocket science. If the US taxpayer hadn’t covered A.I.G.’s losses, A.I.G. would be bankrupt. If A.I.G. were bankrupt, none of these people would see their bonuses. So what this is about is upwards income redistribution. You’re all for it, but the majority of Americans are simply, and correctly, appalled at the prospect.

  6. zdsands says:

    Mr. Burke,

    Your response is accurate albeit some what subdued. Doesn’t matter what department he worked in, if he was there for 11 years he knew of the games. His unit profited selling swaps over andover again, he didn’t bat an eye. He profited knowing full well the games being played in that company and didn’t say a word for 11 years. Take you lumps Mr. DeSantis, be a man for once in your life.

  7. Doug says:

    Dans ce pay-ci, il est bon de tuer de temps en temps un financier pour encourager les autres.

    Let us start encouraging.

  8. WhatisReadisNotPriori says:

    Our social order called Capitalism has created the desire for the American Dream. This has amounted to two threads of peoples performance as I have seen in my tenure as a participant in what is by default better than the other options currently available.

    1- Short cut mentality
    2- See no evil, keep my job, get paid

    One is the American Dream tells us we too can be rich, we strive for it, we struggle against the disdain for simplicity and renewable and resource management knowingly or naively as we drool at the new TV, the new big SUV, the new waste of space of object called houses. What is a home? To most in today’s Capitalistic world it is a toy cave that represents the strength of ones American participation in the Dream.

    Now how many of you looked and found the cliff notes for your work in High School? How many of you tip more than 15%? How many of you would not covet a winning lotto ticket? We want our money for nothing and our chicks for free. It is what we were raised in, the soup of desire for the quick path to big TV, sunny vacations on Carnival Cruises, and that platinum card to buy the latest PC car or vacation trip with in one quick transaction.

    Two is who likes change? Who wants to go looking for new employment or build a new business or tighten the belt and taking interim work until you get sell your self to someone who will compensate you for what you feel after a decade or more of effort you deserve? Majority do not relish this as most are not smooth operators with out risk aversion. Most people freakin lock up in a cold vomit ready state of fear at the implication that they may loose their job. The result of this reality is that people do not want to rock the boat. People see things all the time that ethically they SHOULD say or do something about but hey… if I do I may LOOSE MY JOB!

    So in small town business, in Fortune 100, in local and Federal government people look the other way at inefficient process, at blatant mistakes, they get paid for eight hours while only really working four between breaks and distractions (like this) and we the people soldier on some how in spite of ourselves.

    I think what Mr DeSantis did is valiant. I think most of all those reading this would jump at the opportunity to work for five or ten years pulling in six figure incomes. We would rationalize it the same way we do our SUV’s our wasteful houses pathetic use of resources defined by our trash production and the same way we look the other way while our very own American way underwrites the recent ‘top ten worlds worst dictators’ by our demand for resources.

    Until we collectively CHANGE to some sort of equitable sustainable compassionate society that truly uses reciprocity of ‘do onto others as we would have done unto ourselves’ we collectively have little to no basis to bash the likes of Mr. DeSantis. He is just one leading the charge the Dream, the American Dream we all are clamoring for.

    We heard it in a song when we were kids, ‘we want our money for nothing and our chicks for free.’

    Rome is burning folks, until we begin change in our individual selves our collective social order will continue to burn like it is.

    Marshmallows any one?

  9. angrydemocrat says:

    TIm, I understand that you’re addressing a very specific issue in the proposed bonus tax bill, in that you’re refuting a former AIG employee’s defense of his compensation. I was wondering how you feel about the other employees of a financial institution receiving over $5B of tarp money, and being taxed in the same manner? Keep in mind that the banks who received over $5B in tarp money were forced to accept it, regardless of their actual need. This was done in an effort to increase lending and help keep the credit markets open (and to try and mask the good banks from the bad). The proposed tax applies to families with a combined income that is above $250k. According to zillow (probably not the best source, but readily available) the average price of a home in NYC is $1,060,000. So a family earning $250k would make approx 23% of the avg cost of a home (which, in nyc, is probably a one bedroom…so the term “family” should be used loosely as any children would be sleeping in the living room). From your post, I’m inferring that as a professor of Swarthmore, your earnings are somewhere in the area of $70k. According to zillow that average home in Swarthmore, PA is $262,000 which would mean you earn approximately 26% of the avg cost of a house in your community. I haven’t even mentioned the difference in state & local taxes between NYC and Swarthmore, nor the disparity in the general cost of living (groceries, transportation, parking, etc). Taking this into consideration, can you tell me how you think a 90% tax is fair. Not to mention the fax that a de facto tax is unconstitutional and would never stand judicial scrutiny?

  10. Timothy Burke says:

    I think the bonus tax is a pretty clumsy way to go about this, yes. Not just on grounds of fairness but on the grounds that it is likely to create a really ugly, complex statutory artifact in the tax code that will have unexpected consequences down the road.

    Let me ask, though: you seem to me to be confusing Obama’s proposal to slightly increase the maximum tax on incomes over $250,000 with the “clawback” bonus tax. The bonus tax, as I understand it, is aimed strictly at much higher incomes, at compensation that was designated as “bonus”, and in some versions, at bailout recipients. Sort this out for me a bit. The 90% tax isn’t on everyone earning over $250,000 a year.

    (Your guesses about income and house price are about right…I’m a bit higher than that but not much, and the same for my house.)

  11. angrydemocrat says:

    Below is an excerpt from a 3/21 WSJ article, explaining the terms of the House tax bill…

    Q: Who would owe the tax?

    If you work for a company that accepted more than $5 billion under the government’s Troubled Asset Relief Program, known as TARP, and you — or you and your spouse combined — have adjusted gross income over $250,000, you would owe a 90% federal tax on any bonus received on or after Jan. 1, 2009.

    Q: Just cash bonuses?

    The House bill doesn’t specify cash bonuses, which means it could well apply to such payments as restricted stock. However, if that restricted stock didn’t vest until some year in the future, its unclear whether the new tax would be owed for this year, or when it vests.

    Q: Any exceptions to the new tax?

    If the bonus is returned to the company during the same tax year it was received, it wouldn’t be subject to the new 90% rate.

    Q: If you keep the bonus, you at least net 10%, right?

    No. You also would owe state and local taxes. In a high-tax locale such as New York City, the combined federal, state, local and Medicare taxes on the bonus will add up to about 102.5% of the payment.

  12. angrydemocrat says:

    just as an FYI… I work for JPMorgan and live in NYC. JPM is one of the most sound banks, largely due to the risk averse and no-nonsense leadership of Jamie Dimon. That said, we are not immune to the economic hardships and I’ve lost about 50% of the value of my unvested stock units. I’ve also been doing the job of 5 people due to layoffs. I do not have a “bonuse contract” (that is usually reserved for new employees who have been hired away from a competitor… duration normally being for a year), but will say that about 3/4 of my yearly income is paid in the form of an annual bonus (though, I take umbrage to the term “bonus” as it’s loosely based off of a %age of net commissions earned). Combined, my husband and I make over $250k, but not by much and we are still struggling to eek out a middle class lifestyle in nyc, despite making an upper class income (and being already taxed at the highest rate).

  13. Timothy Burke says:

    Ok, so it applies just to:

    TARP-recipient employees.
    Compensation designated as bonuses.

    So I agree that in some locales, this is going to put a small set of people in a pretty tough bind. I could argue that this is the risk they took by taking compensation *as* bonuses. I suppose this is part of the point, that the hard-hearted, hard-nosed position that most of the corporate elite have taken towards the consequences of risk for ordinary people is now being visited upon (a few) of them. That they are suddenly getting religion about why that’s really unfair should maybe be a wake-up call that our very badly frayed safety nets need a huge repair job across the board. Or maybe it’s a reason to realign risk and consequence in a coherent way. I’d rather either of those (which I think are constructive responses) than “Suck it up, buddy: what goes around comes around”. But it really does take the people who are worried about the unfairness of this stretching a little and asking, “So why weren’t we worried about unfairness or injustice before?”

    I’d much rather find a different way to adjust the payments, at any rate. A special tax isn’t just potentially unconstitutional, it’s a statutory Rube Goldberg machine that we’ll really regret having in place once everybody has calmed down a bit.

  14. Timothy Burke says:

    I appreciate by the way the breakdown of your work at JP Morgan. It’s true that very sound or careful institutions are getting hit by the generalized scorn directed at the entire industry. People really do need to take a deep breath and look at what works as well as what doesn’t.

    However, if you don’t mind me following up one point, a commission-based income is an income that is necessarily risk-exposed if everything is working as it should. It’s why a lot of people working on commission burn out after a while, because if you have even one slack period in your own work or if the firm as a whole has a bad patch, you see a big dip in your income. I appreciate that it’s not easy to live that way, but that’s why a lot of other people look for a profession or position that isn’t risk-exposed in that manner. The upside obviously is that in flush times OR if you’re especially talented, your income balloons accordingly. My father was an attorney who benefited a lot from his drive to build a client list and sustain his own practice and billed hours, and I received a lot of benefit in turn from his enterprise. But I saw a human cost to it, and that’s one reason why I chose a life that has much lower economic horizons but a lot more stability (if you manage to get through the terrifying uncertainty of graduate school and the academic employment market).

    Maybe it shouldn’t be that way, but if it shouldn’t be that way now, it shouldn’t have been that way before, when people in the industry were doing exceedingly well. You can’t take the premise that risk-exposure entitles one to disproportionate benefit in good times but that it is unjust in bad times. The whole point is that is swings in both directions.

  15. datroy says:

    You’re missing the point. Jake DeSantis has a job. Someone elsewhere in his company does something bad, causing the company to lose lots of money. The government tells us AIG is too big to fail., and we need to give $50B to AIG every other week. Meanwhile, a new CEO at AIG has to follow through on existing contracts with the company, and pays them their bonuses. This money amounts to 0.1% of all the money we have thrown at this company in the last 6 months. The government sees a political opportunity out of this. Republicans and Democrats alike compete to pretend to be more outraged than the other. Meanwhile, for AIG employees, yes, their company failed, but they’re still alive and healthy and smart, and can go find a job somewhere else if they want. Or they can stay and work to save AIG, but they’re not going to do it for free, obviously. So they can either take the money and risk being publicly named and endangered by our elected leaders, or they can leave. (In fact, the first option will likely lead to the second outcome happening as well). So now these people don’t work for AIG, and there is no one left to save the company. Company fails anyway.

    Wake up people, AIG employees are holding the cards here. The government has nothing, b/c they were the ones who made the decision that AIG couldn’t fail. They therefore have to deal with the consequences of that. To dump billions in a firm b/c you don’t think it can fail, and then get mad when an infinitisimal fraction of that money is spent to keep people working to save the company is insane. The faux outrage coming from Capitol Hill and the White House is also touching given the amount of taxpayer money government wastes every year.

  16. angrydemocrat says:

    The real tax issue that the average american should rally behind, is the fact that the hedge fund managers referenced in the above WSJ article are taxed at a 15% tax rate as their income is mostly viewed as capital gains tax. For instance, James Simons of Rennaissance Tech made $2.5Billion in 2008. The 15% tax on that income that Mr. Simons is paying v. the 35% he should be paying, equates to a loss of $500 Million in taxes. And that’s just for ONE manager. (sorry for the multiple postings… )

  17. datroy says:

    Angry Democrat – sounds like its time for you to become a conservative. (I’d say that its time for you to become a Republican if most of the Republicans were not also acting like children, trying to be more outraged by AIG than the Democrats)

  18. Timothy Burke says:

    Let’s not start the conservative-liberal thing.

    I’d agree that worrying about the bonuses in and of themselves is nuts in terms of their proportion to the larger bailout, but as per my previous entry, I think the bonuses are a synedoche for larger issues of genuine concern, for problems with the way risk and consequences are misaligned (or visited only on the relatively weak and powerless), for the way that short-term gains have completely outstripped long-term calculations, and so on. So ultimately, that’s why I’m indifferent or even hostile to the bonus tax per se, but I would still strenuously insist that the bonuses themselves are a completely legitimate cultural and social issue. And why I think DeSantis’ very studied way of evading his responsibility isn’t acceptable.

    If I take credit for a collective or institutional effort when it’s going well, but disavow it utterly when it’s going poorly, something’s not right. One of the basic premises behind this blog is that I accept that the flaws of academia which I see involve me, and I have some measure of responsibility for them, some need to try and nudge or move long-standing practices where I think they’ve become a problem. Ok, so I also think that applies to other institutions, that this is a basic responsibility of professional life.

  19. MattJ says:

    There is a difference between a contract and a salary. By writing the contract as they did, AIG ensured that these employees worked through the end of 2008 before they earned any income beyond the $1 salary.

    We have a tried and true way for an insolvent company to avoid paying its debts; it is called bankruptcy. The government wants to keep AIG from entering bankruptcy, but wants to be able to pick and choose which debts to pay (Goldman, other major banks) and which not to pay (employees).

    I am shocked at the number of apparently intelligent people who think they should be able to do so.

  20. Timothy Burke says:

    Ok. Again, this where I’m more interested in pushing at the bonuses in order to raise larger cultural and social issues. But again, there is the peculiarity here by the very point MattJ raises: DeSantis would not get what he is owed if the government had not taken over his business (a fairly unprecedented act in and of itself) in order to prevent a bankruptcy which would have otherwise occurred. This at least creates a situation where the people who are owed might want to recognize some unusual obligation to renegotiate what they’re owed. Kind of like the UAW is recognizing an unusual need to renegotiate a contract…

  21. Andy V. says:

    There is a difference between a contract and a salary

    Right. But how is this case different from a furloughed factory worker who had been laboring with the expectation of a pension? Cf.

  22. HFree1 says:

    Jake – If you are as good as you think take all the money you were overpaid for all those years, leverage up 20 times and get out there and trade for your own account. There’s a story out there about a Florida based trader making $750K a year who tried to set up his own hedge fund and is now delivering pizza for a living. I’m sure you’re cinfident that your MIT degree hasa leg up on his UCLA MBA so why not set up a blog, report to us your personal trading results and show us how good you really are. Then you will be able to say you created value and should be paid 7 figures. You clearly were not as good an analyst as you thought since you failed to recognize the downside of the credit swap transactions on AIG. So please don’t whine about your lost deferred compensation. A smarter Jake would have seen that coming. In my opinion no one who takes a riskless path by going to work for a large robust organization that would no doubt make the same profits with or without you should whine the way you whined in your letter to Liddy.

  23. MattJ says:

    Timothy, I think GM situation is an instructive comparison; currently, as I understand it, the GM bondholders are resisting the government plan because they believe that they are being asked to take a 60% haircut, while the UAW is asked to take a 40%haircut. Negotiations continue, but all of the debtholders of GM are being asked to take significant losses.

    In the AIG situation, the employees are being asked to take 90-100% losses, while the other debtholders are taking no losses at all. This seems both objectively unfair, and very shortsighted; the government can perform this kind of retroactive penalty only once. It is unlikely that future financial companies in distress (of which I expect many) will be able to keep many of the personnel they need to minimize their losses while winding down the company.

    I happen to strongly agree with what I understand to be your larger issues. I believe that the only realistic chance to force a large-scale change on the culture and incentives of the banking system is before the major banks are recapitalized. I see the firestorm last week over the AIG bonuses as a successful attempt by Congress and the administration to shift focus from the massive bailout of the banks that caused this problem, and from themselves, to an easily demonized, relatively weak group of AIG employees.

    Like everything else the government has done since this started, I expect it to fail and make things worse.

  24. keuph11 says:

    Was going to bring up inequality of Tarp/90% tax, beat me to it. Plus put it WAY better than I could.

    Angrydemocrat and Timothy sound waaaaay too smart. I don’t think commenting in this section is a good idea for me. Don’t want to get me a** handed to me.


  25. ladyjessica says:

    Um, this was not Mr. DeSantis’ money to donate. It was the money of the AMERICAN PEOPLE, and we WANT IT BACK!!! WE WILL DECIDED where to spend our MONEY. GOOD RIDDANCE you freak of nature!

  26. MattJ says:

    AndyV – the difference from the example you link is that in that case, the company promising the pension went bankrupt, and the courts decided which debtholders got what portion of what they were owed. In this case, the governement want to choose some debtholders to take no loss, and others to take 100% loss, outside of bankruptcy. That is not how it is supposed to work, and sets an obviously dangerous precedent.

  27. Andy V. says:

    That’s not what happened. The company promising the pension – International Harvester – sold the plant to a bullshit holding company. The employees sued, noting that the holding company was created specifically for the purpose of unloading the pension obligations.

    Happens all the time. Yet for some reason factory workers aren’t granted column space in the NYT to bitch about it.

  28. Timothy Burke says:

    Let’s keep it cool and smart here, eh?

    I may try to come at this again tomorrow so it’s clear that the issue is shifting the way we (including people like Mr. DeSantis) fundamentally think about these issues. But I really think it’s key that someone like him recognize that what he feels is being done to him is similar to what has been done to other workers and managers in other industries partly at the urging of speculative investors. If at this date he and others regret the way that risk, consequences and a certain kind of market logic operate when they’re not the masters of the universe any longer, then I think the best way out of the tunnel is to question the whole operation of that system on behalf of us all, not to complain about the specifics of your own situation.

  29. zagros says:

    I believe that all of the given examples are faulty. Do I like the fact that AIG executives are getting retention bonuses? Not one bit. But I also argue that we shouldn’t be able to do anything about it in this case and can only institute controls going forward.

    The retention bonus was really a form of deferred compensation that is more akin to a salary than a bonus since it was related to time in position (otherwise why compensate only $1–you can do better at McDonald’s without the grief). It was a payment for staying on the job. If AIG wanted to abrogate these contracts and the government wanted them abrogated, they had plenty of time to do this PRIOR to Mr. DeSantos (and other executives) putting in several months of his time and effort. The problem is that AIG and the government basically LIED to Mr. DeSantos, telling him, in effect, work like a good little little worker bee, and you will get your honey at the end of the day. However, when the time came to pay Mr. DeSantos what he was owed, Mr. Libby of AIG demurred and the government wanted to renig despite having the money to pay him (yes, you can say it was government bailout money, etc., but remember that the government bailout money was initially not subject to any form of oversight or regulation, so to do so after the fact is quite problematic).

    This does not mean that there are not sometimes valid reasons to cancel a bonus. These would include having insufficient assets to pay (formal bankruptcy) as well as fraud. Although it is certain that fraud has occurred in the runup to this financial collapse, there is no evidence that Mr. DeSantos was engaged in such activity (mere suspicion on the grounds that he “ought to have known what was going on” doesn’t quite meet the legal grounds for this test without a formal hearing on the matter). So let us look at the bankruptcy possibility.

    Mere financial dire straights is no reason to renig on a promise and, if we wish to employ this argument, what the government should be saying to Mr. DeSantos is “Sue AIG — they owe you the money and they should pay you.” However, it is the government, and not AIG, that wants to stop Mr. DeSantos from getting paid.

    How about formal bankruptcy? Technically, although AIG is insolvent, it ISN’T bankrupt (in other words, operating under the auspicious of the bankruptcy court). It instead is being giving copious sums of money by the Federal Government to continue to operate and meet its obligations and, more importantly, it still has individual SHAREHOLDERS and it still trades on the NYSE (it currently trades at $1.20/share). In a bankruptcy, the shareholders must have their equity wiped out FIRST as they are last in line to be paid. Interestingly, even if it were bankrupt, AIG executives would actually have a stronger case since services rendered during a bankruptcy often have higher standing with courts than those rendered prior to the bankruptcy. Indeed, if AIG and the Federal Government wanted to not pay bonuses, they SHOULD HAVE TERMINATED THE AIG EXECUTIVES JOBS AT THE TIME AIG WAS BAILED OUT. To instead string Mr. DeSantos and other executives along with the promise to pay in exchange for more work was theft by the Federal Government, pure and simple.

    What about the pension example? This is probably the closest analogy. Yes, companies can shed obligations such as pensions (although a portion of those pensions are backed by the Pension Guarantee Insurance Corporation, an entity of the Federal Government). So again, the problem is that the Federal Government through Congress and the State Governments through their attorney generals are conspiring against AIG executives, rather than attempting to assist them.

    Well, shouldn’t we just tax them or deny them their money because they are well-compensated and their company failed? No, again, the logic is faulty. When a company fails, employees under such contracts become unsecured creditors of the corporation. The corporation is supposed to liquidate assets to met these obligations and all shares of the corporation must become worthless.

    In a nutshell, while it is true that the retention bonuses should not be paid from government funds, so long as AIG has shareholder value outside of the government holdings, the shareholders of AIG have a legal obligation to pay these executives and the US government, state governments, and the public have a moral obligation not to bully these executives to “return the money.” The problem isn’t with the bonuses — it is with those who decided to write the contracts in the first place and those who decided to tell the AIG executives that they would be getting their bonuses during this whole debacle.

    Pay the executives their bonuses and don’t retroactively raise their taxes on their compensation. Or, now here’s a thought: offer to pay the executives what they are owed in AIG restricted common stock that cannot be liquidated until the end of the year (that would certainly tie their compensation to the company’s fortune!).

    Then learn your lesson and don’t write such stupid contracts in the first place. Also, we really MUST force AIG into involuntary bankruptcy, wind down and liquidate the company, and WIPE OUT ALL SHAREHOLDER EQUITY. THAT is what we should be doing, not worrying about a couple of hundred million dollars in retention bonuses. This will also let us put future bonus recipients on notice that they are now unsecured creditors and will not be paid unless funds are left over after paying off the secured creditors first.

    Unless and until we do just that, I’m going to start buying AIG shares. After all, it seems as though the only guarantee you get around here is that the government ISN’T going to let AIG go bankrupt!

    Zagros Madjd-Sadjadi
    Associate Professor of Economics
    Winston-Salem State University

    My Recommended Financial Meltdown Portfolio: Equal parts AIG, GE, Bank of America, Citigroup, and GM. If the government won’t let ’em fail by wiping out the shareholders, there’s really not much downside risk and a whole lot of upside potential!

  30. Timothy Burke says:

    I tihnk this is an interesting analysis, Zagros. But again, can I just point out that the stringing along you describe is something that more or less has been done repeatedly to many other workers in many other industries over the last two decades (at the least). So there are some potent questions here to be asked about whether it is at last time to do some generalizing of the lessons learned and rethink what we consider to be fair and unfair, just and unjust, and not just legal and illegal. And, as you observe, what we think to be prudent contracts and reasonable compensation.

  31. Andy V. says:

    My apologies. This issue picks at some personal scars. Here’s a cooler and vastly smarter examination on being sold out by one’s employer and government that Mr. DeSantis might learn from.

  32. zagros says:

    Yes, Dr. Burke, and as I also point out the analogy for the pension is very similar. However, there is a proper way to abrogate bonuses (it is called bankruptcy) and an improper way (taxing the recipients into oblivion). In addition, in such cases, the AIG executives would have the option of suing AIG to try to recover what they were owed.

    Furthermore, the problem is that it isn’t AIG that is choosing to renig, it is the Federal Government, which under social contract theory exists to uphold the rule of law. The fact that the private sector does things that are unethical is well known but government is expected to be held to a higher standard. After all, if the Federal Government isn’t interested in the rule of law for this group of AIG executives, what value is the rule of law to any of us? It is precisely because I find this particular retainer contract so loathesome and the payments so eggregious that I find myself having to defend the contract and the payments. Just as we must afford the most heinous of criminals a fair and speedy trial, we must also not interfere in the execution of all legal contracts that both parties are in agreement should be implemented (and both AIG and its executives agree that the agreement should be implemented) even if the terms offend our own conscience. Furthermore, even the Federal Government agreed that the bonuses had to be paid, so this is the case of buyer’s remorse. So please let’s confine ourselves to looking only at cases where a person was paid under a valid contract without legal objection by either party and then the government decided to step in and, after the fact, changed income tax law to relieve the recipient of the entire sum. I would be very surprised if you could find a single case where such an occurance has happened in the history of our great nation.

    One other point that I forgot to mention: much of this centers around the notion that the Federal Government is the new owner of AIG and can do what it wants. After all, it is the Federal Government’s (and, by extension, the people’s money) While it is true that the bailout money is coming from the Federal government, the notion that this means that we can unilaterally and at any time interfere with past contractual obligations of AIG is simply not true. Past contractual obligations come with the takeover of a company unless they are severed at the time of the takeover. Once the reassurance that the AIG executives would be paid was given AFTER the government became the majority shareholder, the government, in effect, choose to tie its own hands and is required to pay the money (since it has it). That is, unless we want to put the Federal Government into involuntary bankruptcy too!

    As for Andy V.’s comment and reference, it is noted in that article that the federal government did not “sell out” the employees at least insofar as their pensions were concerned. Those pension obligations were partially (and, in some cases, fully) funded by the Pension Benefit Guarantee Corporation. In fact, I see no malfeasance on the part of the government in failing to step in to save that mill or the worker pensions, whereas it appears to be going after these AIG employees with malice aforethought. The key is that in the International Harvester case, the federal government did not come in and tell International Harvester, even though you had the money and have actually paid the workers, we are going to go after the workers and grab that pension money because you never should have paid it in the first place. Furthermore, the Wisconsin mill was completely closed down and bankrupt, while AIG not only continues to operate but the very division that paid the bonuses continues to operate without the scourge of bankruptcy protection. These are the circumstances here with AIG and it is that point that is crucially important. Indeed, I also note that those who worked at the Wisconsin Steel plant were eventually paid a small fraction (10%) of what they were owed and that no one argued that they should not receive it as a moral objection — the reason they were not being paid was because the mill was bankrupt and no longer operating (Wisconsin Steel Veterans Accept 10% of Their Due, Chicago Sun Times, January 3, 1996, p. 6). Yet the AIG executives are being demonized, told that they will receive NOTHING (indeed LESS than nothing if the 90% punative tax occurs because with state, local, and medicare taxes, the total will exceed 102%), and yet there is not only money to pay them (it is called SHAREHOLDER EQUITY!), but AIG is not bankrupt (technically).

    What is being done in the AIG case by threatening to impose a punative tax after the fact on a small group of people is unconstitutional as a bill of attainder and, therefore, illegal. Threatening to publish their names if they do not pay back the money is a felony called blackmail. The issue of legality is relevant here. If we are not a nation of laws, operating under due process, we do not deserve to call ourselves a republic.

    We can, of course, agree that these bonuses should never have been negotiated in the first place but, once the federal government took effective control over AIG and failed to take proactive steps to inform these executives that these bonuses would not be forthcoming, it forfeited the right to argue that they were not entitled to the bonuses in the first place. It certainly cannot use the taxation power to interfere with contracts, which is prohibited by a little document that George Bush called “that g–d—ed piece of paper”, the US Constitution. Sadly, it appears as though the Capitol Hill mob called the US Congress thinks the same way, although President Obama has wisely noted that this stampede to judgement is likely unconstutitional and should, therefore, stop.

    Zagros Madjd-Sadjadi
    Associate Professor of Economics
    Winston-Salem State University

    My Recommended Financial Meltdown Portfolio: Equal parts AIG, GE, Bank of America, Citigroup, and GM. If the government won???? let ????m fail by wiping out the shareholders, there???? really not much downside risk and a whole lot of upside potential!

  33. dnexon says:

    “What is being done in the AIG case by threatening to impose a punative tax after the fact on a small group of people is unconstitutional as a bill of attainder and, therefore, illegal.”

    I think the 90% tax is bad policy, and I agree that the real culprit here is a system that compensates primarily through bonuses that remain largely untied to company performance. That being said, your constitutional analysis is off.

    I wish these people would realize that they wouldn’t be in this mess if they’d settled for a “measly” 100K-250K. But they can’t bring themselves to understand that they’re simply not worth as much as they think they are, let alone that they’re pissing in their own well.

  34. NYCunion says:

    Tim, I agree with you. The $1 salary was a stunt. I’m certain that the donation to charity, another stunt, wouldn’t have been offered if he hadn’t felt offended by the public outrage he’s receiving. It was a weak attempt at drawing the fire back on the government for wanting to tax the bonus 90% by pointing out that the tax would greatly reduce his thoughtful gift. If he was truly honorable, he would have worked for free anyway considering HIS company/team/club/clique/family ? whatever you want to call it ? of 11 years (AIG) has played a role in destabilizing the whole financial universe. We’re not talking about someone like Liddy who was brought in from the outside. DeSantis has a solid link to AIG which is all the more reason to pull back on compensation for the time being. I guess he wouldn’t have been able to “rough it” by maybe making a more palatable $250k a year, still 5 times the average American household income. I’m sure that if he was previously accustomed to millions per year in compensation, he could “make due” with a quarter mil for a couple of years. The government has drafted soldiers during times of war for the good of the country and they’ve risked or given their LIVES for a soldier’s salary. I suppose an uncompensated 2 year tour of duty in the financial trenches for the good of his country would have been too much for him to bear. He cites his humble beginnings. He’s surely forgotten them by now, as his whole perspective is out of line with that of the average citizen.

    There’s a movie called “The Edge” with Anthony Hopkins. He plays the role of a rather intelligent billionaire. I suppose all billionaires do have a high degree of intelligence considering their financial achievement and I don’t really think we should discourage rewarding competence, but this is a bit tangential to my current thought. Anyway, one of his lines in the movie is, “Never feel sorry for a man who owns a plane.” Now, I don’t believe Mr. DeSantis is a billionaire and I don’t know if he owns a plane. What I can tell you is that you’ll have a hard time finding sympathy from the average American for a man who was looking for an annual income that is 25 times theirs at a time like this. I’m left wondering if he feels he was still doing us a favor by working for the amount he was expecting.

    Having said all that, I think the public outcry IS extreme. The 90% tax gives me SOME pause but I think the politicians, who are representatives of the public, feel they have a duty to reflect the feelings of their constituents. It is apparent that many people feel angry right now. The message has been heard loud and clear. Now let’s have cooler heads prevail and work to reform executive compensation.


  35. NYCunion says:

    Some other quick comments before I get some sleep.

    Wouldn’t it be better to cite the MEDIAN home price in New York City? According to it is $658,600. Remember that NYC is made up of four other boroughs besides Manhattan! Those penthouses skew the average.

    Also, it was reported on the local news recently that one needs to make $120,000 per year to be considered middle-class in NY.

    I see that dnexon posted similar thoughts while I was still typing!

    Good night,

  36. lou in mill valley says:

    Tim has it right. Jake’s pay is outrageous, his “indignation” is obscene, the closed eyes of everyone at AIG who let this all happen are a testimony to their lack of ethics, and the public attempt to blame Liddy is completely off the mark.

    Time for the Wall Street animals to return to the human race and think about the common good.

  37. zagros says:

    “The $1 salary was a stunt. I???? certain that the donation to charity, another stunt, wouldn???? have been offered if he hadn???? felt offended by the public outrage he???? receiving.”

    But it shouldn’t have had to be offered in the first place! I disagree with the legal analysis that dnexon has cited for one simple reason: at least one of the executives in question was being paid $1 in salary. Do we expect ANYONE including our elected officials to work for $1 in salary on a full-time job? Furthermore, the cumulative effect of the tax is overly punative to be considered merely civil in nature as the effective tax rate exceeds 100%. Finally, all those of you who consider Mr. DeSantis’s pay “outrageous” need to look at his pay over the past several months. He has been working for $1. I agree that is outrageous — to HIM! You cannot invoke his payments for past work because he was legally entitled to leave the company at any time (and many did). Why should those executives who decided to STAY with the company be punished when those who left were able to pursue pay in other fields. We must remember that one cannot be obligated to work for an employer without pay (except as a form of PUNISHMENT — which makes it a bill of attainder) but the US government essentially did just that. Last time I checked that was called slavery (or at least involuntary servitude, which is also illegal). So unless everyone agrees that Mr. DeSantis is entitled to at least the equivalent of unemployment compensation for the entire time he was earning $1/year under the assumption that he would receive a bonus retainer at the end of that term, you really are supporting state-sanctioned slavery.

    As to the statement “If he was truly honorable, he would have worked for free anyway considering HIS company/team/club/clique/family ? whatever you want to call it ? of 11 years (AIG) has played a role in destabilizing the whole financial universe.”, I have something to tell you: HE DID because we just FORCED him to do so. That’s not an honorable thing for us to do — it is despicable.

  38. dnexon says:

    You disagree that court precedent limits Bills of Attainder prohibition to criminal law because the base salaries in question are $1? The courts might break with precedent, of course, but I hope you realize how little sense your rejoinder makes.

  39. zagros says:


    I must respectfully disagree that my rejoinder makes “little sense”. There does exist a minority of respected legal scholars (including Lawrence Tribe who advised President Obama–and don’t forget that we can include the President in this group as he seems to regard to 90% tax as illegal for the same reasons) who have called into question this law on this very basis. Instead, the legislation needs to be reworked so that it claws back on that portion that is federal funds. If it did that, it might pass Constitutional muster and Lawrence Tribe also indicates as much (a way to do this is listed below).

    The central question isn’t criminal or civil law, but rather punishment versus non-punishment. In fact, it is the prohibition against ex post facto law, not bills of attainder, that is specifically limited to criminal law. Indeed, if this were not the case, the most important bill of attainder case in recent years, SBC v FCC, would have been thrown out without comment by the courts or would have been disposed of on merely that basis, since the case involved purely civil law, not criminal law. The fact that it was not speaks volumes against your assertion that bills of attainder are subject to the criminal v. civil distinction.

    Now, as to the question of punishment, there is a three step process to use (see SBC v FCC): “(1) whether the challenged statute falls within the historical meaning of legislative punishment; (2) whether the statute ‘viewed in terms of the type and severity of burdens imposed, reasonably can be said to further nonpunitive legislative purposes’; and (3) whether the legislative record ‘evinces a congressional intent to punish.'”

    On the third point, there can be no argument that this is the intent of this legislation. On point one, a requirement to pay that which one has already acquired when there is no fraud or deception involved and when the federal government already contenanced the payments by its actions, I believe it does constitute punishment. On point two, I cannot see how it furthers nonpunitive legislative purposes unless we impose a 100% effective tax on ALL retention bonuses as soon as an entity receives ANY federal funds.

    I must point out that I do not see as problematic additional taxation of bonuses in this manner per se nor do I see as a problem clawing back the US government’s money. My problem is that the government knew about these bonuses in advance (or should have) and allowed them to go forward precisely because they believed it to be unconstitutional to otherwise deny them. Furthermore, the intent of the legislation is to interfere with valid contracts (sorry, but that is clearly only in the civil law, not the criminal law) and it is directed solely at one group. Still, I would hope that you would see clearly that there is a valid way to do this: force AIG to pay for the funds by reducing shareholder equity by a like amount and turning that shareholder equity over to the government, thus increasing the government’s stake by that amount. If there is insufficient funds to do this, then and only then, can you discuss wiping out the bonuses. The entity that ought to pay is AIG — not the executives who were promised to bonuses — yet we aren’t punishing the real villains here: AIG and its owners for agreeing to these contracts (yes, I know that the owners didn’t necessary directly agree but by hiring the managers, they become responsible for these actions under the law to the extent of their ownership [meaning they can lose their shareholder equity]). So, the mere fact that Congress does not allow for the option of having AIG shareholders pay for it makes it an unconstitutional taking by the government (indeed, why isn’t anyone here upset that nearly 20% of AIG is STILL in private hands?).

    Zagros Madjd-Sadjadi
    Associate Professor of Economics
    Winston-Salem State University

    My Recommended Financial Meltdown Portfolio: Equal parts AIG, GE, Bank of America, Citigroup, and GM. If the government won’t let ’em fail by wiping out the shareholders, there’s really not much downside risk and a whole lot of upside potential!

  40. dnexon says:

    “I must respectfully disagree that my rejoinder makes ??little sense??. There does exist a minority of respected legal scholars (including Lawrence Tribe who advised President Obama?and don??t forget that we can include the President in this group as he seems to regard to 90% tax as illegal for the same reasons) who have called into question this law on this very basis.”

    But Tribe’s analysis is not based on the $1 salary, but a legislative record that suggests the tax is clearly designed to be punitive, as you elaborate below. So I’m glad my prodding led to a genuine engagement with the question.

  41. dnexon says:

    Which, by the way, I think is dubious, given the way that the bill is worded to apply to a large class of people with a variety of specific stipulations.

    Personally, I prefer the 35%-35% proposal, which recoups a significant portion of taxpayer money without being as onerous as the 90% version. But, regardless, people like Jack DeSantis should STFU if they want to maximize their chances of not being slapped with a 90% clawback.

  42. dnexon says:

    “So, the mere fact that Congress does not allow for the option of having AIG shareholders pay for it makes it an unconstitutional taking by the government (indeed, why isn???? anyone here upset that nearly 20% of AIG is STILL in private hands?).”

    Why do you assume we’re not upset about this? I’m much more pissed off about it than I am about the bonuses. But that doesn’t mean I can’t also be outraged at the culture of entitlement that oozes from Wall Street, or even that I don’t see a relationship between it and government policy.

  43. G. Weaire says:

    I hope this doesn’t seem horribly meta. But before we consider what cultural consequences may flow from all this,* perhaps we should take a moment to think about what the controversy itself – not least in the passions it has aroused in this comment thread – suggests about the cultural tensions and divisions that prevail in the US (and the rest of the world?) right now.

    One possibility is that these sharp and highly emotional disagreements reflect
    a divergence in the norms and expectations in different segments of society, the cultural consequence of several years of widening income differentials.

    *About which I am a bit sceptical. Our modern media culture likes to produce spasms of outrage which are intense but short-lived, and which nearly always turn out to have much less significant consequences than people predict at the time. It will not at all surprise me if the AIG bonus controversy seems very distant a year from now.

  44. Timothy Burke says:

    I think that will depend a lot on where we’re at in economic terms. But I think you’re right that this might be another transient debate. The problem is that most cultural debates seem like that until suddenly bam! you realize that you’re in the midst of a genuine social upheaval and the tempest du jour is really a sign of a generalized storm.

  45. MattJ says:

    I believe there are at least three different arguments about the AIG bonuses going on here. The first is, are they just? Many of us are troubled by the idea of the government selectively choosing which obligations of AIG to abrogate. Those receiving these bonuses had fulfilled their end of the contract; the government for political reasons is attempting to break AIG’s end of the deal, without doing it through the available legal channels (bankruptcy).

    The second is, are they fair? I think this is the argument Timothy Burke was addressing. The financial industry as a whole, and AIG in particular, seems to have been a prime cause of a vast destruction of wealth. Those receiving these bonuses have been massively, excessively compensated by comparison to most Americans, who managed not to risk Western civilization. It at least remains to be seen whether Jake DeSantis did in fact create real wealth for AIG; we won’t really know until the disruption in the financial markets plays itself out, and accountants can determine how much of that reported wealth remains. It is in this sense that DeSantis letter was particularly tone-deaf, and the arguments comparing these AIG employees to the UAW members, or the Wisconsin Steel employees that AndyV referenced, are most appealing. Certainly, it is much more fair for the AIG employees to suffer than the UAW retirees.

    The third is, are they beneficial? This is the point that Megan McArdle is arguing. Setting aside whether it is fair or just to demand the money back from the AIG employees; will it make the country as a whole better or worse off to do so? The potential effects of doing so are that the employees resign, and need to be replaced; the employees who best know the current positions of AIG are then available to go to competitors knowing how best to trade against AIG and take advantage of AIG’s weakness. It will be difficult if not impossible for AIG to hire replacements to continue unwinding their positions, and AIG is still in position to lose an extremely large amount of money if that cannot be done successfully. Going forward, it will be very difficult and expensive for future financial firms in distress to keep valuable employees. Those of us who have been seeing this financial turmoil coming for years are for the most part of the opinion that the worst is yet to come.

  46. MamaHenn says:

    I wish Jake owned a calculator and had the knowledge and wherewithal to perform a simple task called “income averaging” and estimate his average salary and bonus packages in the years in which he has been an AIG cash siphon. He’s bemoaning the demise of his own stock portfolio? Mine crashed and burned to the point that the amount I owe on my own 401k is more than it is worth. That means if I ever get relieved of my duties, I have to GIVE them money! He took a salary of $1? Oh, really? Except he had been promised the remaining … what … $million at the end of the year … ? How noble of him. I can add up every tax return I have ever submitted (and some years they were complicated as I worked a full time and two part time jobs just to keep my family going) and they don’t even come CLOSE to his non-income. I will be the first one to admit the government was remiss in assuming the contract preservation language did not pertain to bonus agreements. But chasing after these executives with a 90% tax net is as pointless as the executives advertising they worked for $1 last year. Even when they announced in the newspapers that these folks were working out of the benevolence of their hearts to preserve the companies they had bilked for years, I didn’t believe the newspaper was worth more than lining my cockatoo’s cage bottom. I was thinking salary PACKAGE over weekly paycheck, and I’m betting Jake, who’s stepping on his lower lip, had his car insurance covered by the company, didn’t pay for medical, dental, life or disability insurance, flew for free, ate for free, had his clothes cleaned gratuitiously, and had company-funded vacations. I can’t even afford a pap smear because my company doesn’t offer insurance. I’d take his $1 salary, work 12-hour days, and put up with all his undue stress (allow me to get a tissue here) for his benefit package alone. He thinks he has stress? Try telling your son who was falsely accused of wrongdoing he’s going to have to take a lousy plea bargain because we cannot afford an attorney! Try telling your daughter she can’t take driver’s education because Dad just was handed a 20% paycut. Try telling my family (and I haven’t yet) that I missed a cancer diagnosis in Stage 1 because I couldn’t afford my pap smear! I’d GLADLY take his stress over mine! And now they’re taking MORE of my tax dollars to help pay Jake DeSantis’ bonus? My heart bleeds for your poor, pathetic soul. I don’t care how the government does it, but I want my money back.

  47. G. Weaire says:

    “… this might be another transient debate. The problem is that most cultural debates seem like that until suddenly bam! you realize that you????e in the midst of a genuine social upheaval…”

    I suppose the revealing question (not one that I’m asking anyone on this thread to answer, mind you) is: which of the two possibilities would you personally prefer?

  48. MattJ says:

    AndyV – That Atlantic Monthly article is really great; thanks for the link. Very thought provoking to read that, written in 1985 just after the last really bad recession, in light of our current troubles.

  49. Timothy Burke says:

    That’s a nice summary, Matt.

    I think the final point is the one I’ve been going back and forth with Megan and some of her commenters on. They may be right that I’m being far too skeptical about whether retaining AIG-FP staff is of any productive use, but I think on balance that they’re far too trusting. The way that those intuitions come down may tell us something more profound about ourselves as a whole: that’s what I think I’ll try to write about next.

  50. larry says:

    Mr. Burke,

    I have never been to your site until tonight. I must admit that I have never read any of your previous posts on any other subject. I am not sure why you would spend any time on Jake when the bigger issue seems to be how our President, many members of Congress and some attorney generals continue to launch their fury on AIG and others and take no responsibility for their own actions. Wouldn’t your time be better spent holding our government accountable for their part in our financial collapse? Why is the government choosing to spend time on a nuclear attack on bonuses at AIG but don’t seem as concerned about similar bonuses at Fannie and Freddie? I certainly was hoping for serious leadership after the last eight years. Sadly, I see a President and a continued ineffective Congress who are dedicated to finding blame with anyone but themselves. It seems that many of those posting comments are focused on Jake and not on many of the important issues.

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