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. Timothy Burke says:

    Some of my previous entries discuss my disappointment with the way the Administration is handling these issues. But I think the bonuses are an important issue because they stand in for some of the larger errors of judgment that got us to this sorry place.

  2. dhb210 says:

    i had the same idea that Jake DeSantis plumber-electrician analogy breaks down when the two are employed by the same firm. However I think when you exaggerate to say “trail of flowing gasoline” that this takes away seriousness from our rebuttal since gasoline is not literally involved. That takes the focus away.

    Better still is to just state it plainly and make the focused conclusion that the plumber is liable for the errors of the electrician when they’re both employed by the same firm.

    The issue is identical to the way law and accounting firms used to make all partners liable for the actions of all other partners prior to the formation of Limited Partnership firms. Under the LP designation each partner is not liable for the actions of his partners and most law and accounting firms are now taking up the LP designation. (This is discussed at excellent length in David Cay Johnston’s 2 books “Perfectly Legal” and “Free Lunch” about the failures of our IRS Tax systems.)

    So unless AIG is an LP the fixed income derivatives traders are most certainly liable for errors made by the Credit Default Swap traders and vice versa. DeSantis should be paid a zero bonus regardless of any contractual obligation he thinks AIG has to him.

    The AIG episode and all the other bank bailouts we taxpayers just suffered are merely the result of the continuous fraud that has been happening against our public treasury for hundreds of years. See any work by Gustavus Myers about such fraud in the 19th century in particular the History of the Great American Fortunes and History of the Supreme Court. Follow this with the Iraq For movie and website and after that with these 2008 bailouts and you’ll see the same fraud from the 1800s to now unbroken, just by different fraudsters.
    Even Ralph Nader, Ron Paul, Dennis Kucinic, et al are not loud enough to get the attention of the media (since the media are owned by the same fraudsters) and hence the American Public to wake up this country from the permanent fraud that raids our treasury continuously.

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