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What do you work for?
When you perform a function, you expect to be compensated for it. It is a simple concept that has driven just about any market you can think of since the inception of time. In fact, when you put in above the average amount of work, it has become fair practice to expect compensation at a higher rate for overtime. I have had conversations with numerous people over this past week concerning the AIG bailout and bonus topic that has been sweeping the media.
I remember having a conversation a player named Budian just this week, stating that I believe that not everyone in AIG driving it into the ground and that workers who execute profitable divisions deserve to be paid their bonus's based on the profitability of their work. I also stated that the company deserved to sink, and that bonus's cannot be paid out of bankrupt companies. Employees understand this concept and these men understand the risk they take when they invest their time into a company for a contractual bonus and that the company can falter.
Here is a letter of resignation written by Jake DeSantis to the head of AIG, that was posted in the New York Times. His letter describes his contractual agreement with the company (like many executives affected by the bailout) to be paid a salary of $1 annually with a bonus of 1 million dollars at the end of the year. He describes working 12 to 14 hours a day making his "Financial Products Unit" a success and extremely profitable for the company. Jake DeSantis describes in his letter that he will be taking the bonus he received from AIG, in the sum of $742,006.40 (that's right, over 256 thousand dollars in taxes) and donating the after tax amount to institutions that are truly helping people in need during this economic downturn. He states that he will then post the recipients of the money as well. The sad part of this story remains that legislature is looking to tax the bonus at 90%, drastically reducing the amount that Jake is looking to donate.
This is an amazing story in many aspects to me. The idea that someone who has used and abused his body and family for his job for an entire year of labor in expectations of a final compensation, only to find out that his hard (and profitable) labor will be forced from his hand if he does not provide it back voluntarily. I personally believe that AIG should bankrupt, and that to continue funding failed businesses will only continue to destroy hard working American's lives and ultimately slow the development of our country. Since I have always been a person who supports delayed gratification in exchange for a larger compensation, I am worried that my continued hard labor will end in the same results Jake DeSantis is experiencing as well.
Does anyone still believe in work hard, play hard? Does anyone still believe in delayed gratification? I believe almost anyone who reads this supports the idea that they deserve compensation for the work that they put in to any structure. However when it is not your pockets do you still support this idea, or do you let it slide by since it does not affect you directly? I'd like to believe that almost all of you have aspirations of becoming something great in life and, whether that involves a larger monetary compensation or not, I also believe that you would struggle with the idea that another man has the right to take from you what you have worked so hard to achieve based on their perception of your life. If most people are so quick to anger about being judged by others, then why are more people not in arms about stories like this? This could be you.
Maybe it is my inexperience leaves me wondering these questions, or maybe we are never meant to aspire to anything greater then a working middle class "nobody". Whether or not that is true, I still believe that great things most often come from those who think great thoughts, hold themselves to higher standards, and dream about how the unimaginable is possible. If the idea that what we work for can be taken away, then the hope of this idea dies in the process along with the ambition of the men and women who aspire to these thoughts. I hope, for my own sake as well, that this is not the case because these ideas are a large part of who I am and without them I feel as if I would be slave to an invisible master.
I agree with you 100%. The story about Jake is extremely sad, and very disturbing. I don't even know what to think about trying to take someones hard earnings away, that's really low. Especially on a salary of $1 a year. I'm not positive how long this guy worked there, but if he's taxed for 90% of his bonus, then the most pathetic part is that depending on how long he worked there, then he would have made more money in say, a ten year time frame working a full time job at McDonald's then he will have for that company.
Disgusting.
I also completely agree that AIG should just die. The payoffs the government has given to that company is completely ridiculous, and I know the entire country agrees. It's like trying to give a man sentenced to hang, a small step to just keep himself up long enough to suffer more until he dies. Companies come and go all the time, this is one of the ones that go, and it needs to. And clearly, the sooner the better.
I'm not if I could have done what Jake DeSantis has done in this situation. I believe that this is a momentum occasion, because people who honestly worked from the ground up are not willing to accept someone legally taking it from them. Jake has taken the peaceful way out, and I have a lot of respect for that. However, I am afraid that others will not follow the same path and that we will have a "tea party" like experience if this trend continues. Menu who built their life on their hard labor are willing to fight for the concept because it is the foundation of their life.
In your defense, I can see where you're coming from.
For the most part as a tax paying citizen I believe that any company and their executives should not benefit from making poor or bad business decisions. To give our tax dollars to payout millions of dollars to the guys that thought up of these financial products and help drive our financial security into the ground is insane. However, being familiar with AIG and what the company has done I would have a 2nd thought about letting AIG fail. True in most cases if a business losses money they will generally close their doors and we would never hear from them again. It happens all the time Circuit City, CompUSA, etc. It happens all the time. However, with AIG they have their hands in so many different places it would have huge repercussions not only here in the US but worldwide. AIG is the world largest insurer and they insure everything from peoples lives, their property and also money. To simply unravel what AIG has done would literally cripple the worlds financial economy. You do realize that insurance companies have more money and assest than banks do. Do I like AIG absolutely not but there is a need for us to keep it afloat until they sell off their assesets and business so that we dont plunge further into this recession/depression depending on how you view things.
On a side note foreign investors (mostly China and the middle east) have a huge amount of money invested in the US and if AIG were to fail they would lose their investments and would stop lending money to the US government or at least less likely to lend us the money without further leverage. Just my 2 cents and yes AIG sucks but is a necessary evil...for now.
Regardless to where the money comes from, if you are performing a job function and are successful at that job function you have a moral obligation (and a legal one in this case) to be paid for your services. Many of these executives were very successful in fulfilling the needs (and then some) of what they were contracted to perform. Bankrupt companies cannot pay their obligations, which of course is the idea behind filing bankruptcy. If the government offers to bail out a companies financial obligations and they are not in the position to offer an amount large enough to cover all of the financial obligations (or at least renegotiated obligations) then it should not have been passed. Had the American people been consulted in bailing out AIG in it's entirety I do not believe the American people would have agreed with the policy being passed. Not that they agree with the current bailout situation as a whole, either.
Regardless to the worlds economic situation, are you really willing to trade that concept that moral obligations are meant to be upheld, in exchange for keeping the peace with foreign investors? Even in the worst case, it bad blood runs deep and war follows, at least I will still be able to see a return on my hard work at the end of the day and be able to make decisions concerning the use of my labor. If you allow any entity to have the power to take your labor and dispose of it as they please, then we are no better off then the slaves who worked the cotton fields during the darker days of our past. I am not interested in keeping the peace, so that I can be a slave to any entity.
We already are partially bound now to a this concept, under the idea that we must work together as a community to build roads, schools, etc. I believe that even these things encroach on the constitutional liberties to a household without cars, children, or other needs that a government entity provides. I just cannot support the idea that we should trade our freedom for protection from failure, even if it means failure as harsh as a depression.
What if AIG never get's back on it's feet? What if public opinion of AIG is so low that it can never recover. We already know the American people are very brand receptive. Even if AIG managed to break even and sell it's assets, do you really think that the government will let AIG die? I doubt the government will pass up the opportunity to keep it's hands in the meat of the market, allowing money that flows from nearly every single industry to pass through it's fingers. A publicly faced entity that cannot lose a law suit, or be held accountable for mistakes is asking to allow more power then has ever been allowed to any group of people of American lineage, and without the restrictions or due process of public office. The thought of that scares me more then anything else we have discussed here.
In your defense, I can see where you're coming from.