Friday, March 27, 2009

An Open Letter to Jake DeSantis

Dear Mr. DeSantis,

It occurs to me that the experience of betrayal and persecution you described in your AIG resignation letter is qualitatively indistinguishable from that of millions of American workers. According to your account: contractual obligations to you were, in some sense, breached, just like, for instance, the thousands of Delphi retirees who have had their retirement and health benefits eliminated as a consequence of the company’s bankruptcy and the unwillingness of automotive executives to undertake rational changes to their business model; you accepted a significant short-term economic disadvantage in trade for what was presented to you as attractive long-term benefits that will, now, never be realized, just like the millions of manufacturing workers who have had their livelihoods exported so that, for instance, underwear could be fifty cents cheaper at Wal-Mart and inexpensive toxic pet food could be imported from China; you were betrayed and your compensation was sacrificed on the altar of painfully myopic considerations by executives, politicians, pundits, and, ultimately, a fickle and ill-informed public, just like the tens of thousands of competent, dedicated, and hard-working teachers who are expected to single-handedly address all of a consumer society’s ills with less and less resources, yet who are routinely vilified to gain a few precious ideological points; you were compensated at a level that didn’t fully recognize the effort you have invested in preparing for and conducting your career and that amounted to only a tiny fraction of the value of your contribution, just like the thousands of academic, government, and corporate PhD scientists and engineers who are responsible for the technological foundations on which our multi-trillion dollar economy is built; you had to work in a miserably stressful and demanding environment, forgoing any semblance of a healthy family life, just like the thousands of single mothers who work two and three life-draining jobs, trying to make ends meet so that their children might have a remote chance to escape the cycle of poverty; your company’s misfortune was due not to your actions but to the ill-advised, unethical, or outright fraudulent corporate policies of others, just like the thousands of Enron workers who lost their life-savings and their careers.

In this light, your personal experience really is terribly mundane, has been repeated across the country a million times over and for decades and in every variation, is old hat, causing one to wonder why it warranted such central placement in the national media. Forgive me this indulgence, but I can’t help but suspect those who placed your story in the media spotlight, who wanted it there, are an unreflective, incapable-of-recognizing-irony cohort of media, business and political elite who probably misunderstood its ultimate nature, not recognizing the mind-numbingly repetitive themes in it that I have identified above. But I do find it genuinely unusual in several ways. First, it is striking that so many of these economic realities with which the elite have endlessly browbeaten the American public have finally reached into the very boardroom which has for so long been their champions, and that in doing so they have elicited the most bitter remonstrance. Second the quantitative nature of the situation is striking: the admittedly severe imposition of a high special tax on your bonus payment would still have left you with nearly twice the U.S. median household income, something that left you reeling at the injustice and yet which, presumably due to your prior earnings, you were in a position to reject. Even further, the situation has highlighted the paradoxical nature of the astronomical amounts of money at play: to justify the bonuses, it has been correctly, and yet oddly dismissively pointed out that $165,000,000 is only a fraction of a percent of AIG’s taxpayer financed bailout package, a truly tiny amount; yet that amount of money would pay for the operation of a university educating 20,000 students for an entire year, or would purchase health insurance for 10,000 children for a year, or could be used to erect 100 Megawatts of wind turbine capacity, enough to supply electricity for up to 100,000 homes. Why do I find it likely that most of those pointing out the “tiny” aspect of the bonuses would scream bloody murder at the use of those funds for these alternative purposes? Finally, I find your attitude about your education at MIT, quite frankly, ugly. You have every right to be proud of the accomplishment represented by that education, but somewhere along the line you seem to have missed an important point: that education was not provided solely so that you could enrich yourself, Gordon Gekko notwithstanding. A great deal of public money was invested in your education through hundreds of millions of dollars of government grants and loans and tax incentives for charitable giving to MIT and its students over many years. That investment came with an implicit understanding, a social contract if you will, that your education would benefit not just you but the nation as a whole. So where were you when AIG was constructing their financial weapon of mass destruction that would implode not just your company, not just the national economy, but the world economy? Where the hell were you? You were a hell of a lot closer to ground zero than I was, and I had enough sense to recognize something had gone terribly amiss years ago, I had enough information to write to my legislators and ask them to do something to back us out of the impending disaster, fat lot of good that did. Where the hell were you? A very conservative reading of your apparently healthy compensation during those halcyon years at AIG came with, presumably, some level of fiduciary responsibility. How can you argue that you met that responsibility, short of the innocence by incompetence excuse perfected by the Bush adminstration: "nobody could have predicted?" How? Again, forgive me my indulgence, but your protestations of innocence in the events that precipitated this unmitigated disaster sound to me strangely like those of the arsonist who returns to the scene of his crime to help put out the fire and then expects to be treated as a hero.

I wish your expertise could be applied to unwind the AIG catastrophe, to save this country the billions of dollars we desperately need to invest in other places than the now worthless financial instruments assembled by your company. I wish you no ill will and genuinely hope you can rebuild your life and your career in a way that is productive for both you and your family and for the nation. But in the end, sir, in your story to this point, I see not only the depth of your betrayal, but the height of your hubris.

Wednesday, March 11, 2009

Trapped Squirming Vermin

Watching the exchanges suggests to me trapped squirming vermin - evidence that Jon Stewart has these racketeers dead to rights. Dead to rights.

Saturday, March 7, 2009

The Michelle Obama Cell-Phone Portrait Session

It seems to me that many commentators are missing the broader meaning of the brouhaha over the photo of a soup kitchen cell-phone portrait session with Michelle Obama. Those who read into that photo either a contradiction or the irresponsibility self-evident in owning a cell phone while accepting help in a soup kitchen and food pantry, who saw a confirmation of their disdain for the poor and for programs that minister to them, are simply participating in a wide-ranging long term American campaign. Some various elements of the campaign with which you may be familiar include pointing out the obesity of the poor, John Galt, Rick Santelli and his Chicago Mercantile cohorts’ tirade against “losers”, the justification of obscene CEO compensation packages, the welfare cadillac, and NY Times stories about the tragedy of a former executive working as a janitor. At its root, that campaign advances the understanding that economic well-being is perfectly correlated with personal worth, that being poor, should, in and of itself, be a source of shame, is due solely to irreducible personal failings. In order to accomplish this, though, those who pick up the threads of the campaign need to ignore any countervailing evidence: structural elements of the economy, prejudice, inequality of opportunity and education. It must ruthlessly ignore that the predominant CEO compensation mechanisms are subject to positive feedback distortions, that the businesses operating in poor neighborhoods, agricultural and corporate policies, and rational decisions about how to convert money into calories conspire in determining the diet of the impoverished, that wealth can be built with activities that are not only unproductive but counterproductive to social welfare, and the role and economics of cell-phones in 2009 (not to mention a lack of any semblance of reportorial due diligence in examining the context of a particular photograph). And with this as a backdrop, it is trivial to look over the shoulder of a young black man, scornful of how he has (apparently) chosen to spend his money, secure in the superiority of our own money management, our own net worth, the content of our character.