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Wednesday, June 30, 2010

The MOUs Sacrificed, So Should You

by digby

Thinking about the developing conservative meme about giving the unemployed "tough love" and forcing them to go back to entry level jobs that don't exist, I couldn't help but remember some of the arguments we heard not long ago when it was suggested that the taxpayers shouldn't be on the hook for the Master's of the Universe's million dollar bonuses:


"A lynch mob is expanding: the peasants with their pitchforks surrounding the corporate headquarters of AIG, demanding heads. Death threats are pouring in. All of this being ginned up by the Obama administration... This $500,000 limit on executive pay -- let me tell you why it won't work. New York City will die. New York City needs a whole bunch of people being paid a whole lot of money, so they can tax their butts off, so that the city can maintain its stupid streets, potholes, and welfare state. Without the super wealthy in New York, it's over. ... This -- it's just a populist ruse. It's just designed to people go, 'Yeah, yeah!'"

That's right. Everybody knows that you can stimulate the economy much better by having one wealthy investment banker buy treasury bonds or rare pieces of art than a thousand lowly laid off insurance salesman or police officers spending it on groceries and gasoline. That's just basic wingnut economics 101.

How about this one:

"The pay scale for Wall Street is different (than) the pay scale for America," explained the chief lobbyist for the Financial Services Roundtable in an ABC News interview this month. "So these numbers look large, but the market value for these executives -- there's a very small talent pool of individuals that have the education, experience and knowledge to operate a global, international services firm in this day and age. I don't think the issue is a dollar amount. It's being paid what you're worth. Would you be willing to work for less than what you think you're worth?"

If I were a very special person such as that, well, of course not. It's only the "small people" who need tough love in these troubled times.

These bankers and wall street wizards are the very backbone of our economy, working harder than any of the rest of us for the good of the nation and so they deserve to make in five minutes what people surviving on unemployment get in a week. One could never ask such superior people to take a pay cut or start over by taking a minimum wage job.

Indeed, even asking them to forgo their million dollar bonuses after nearly destroying the global economy was a ridiculous idea and luckily, like the proposed limits on executive pay, they were quietly shelved. It's one thing to tell someone who's getting by on 300.00 a week to suck it up. It's quite another to force the true victims of this economy to suffer.

As saintly AIG executive Jake DeSantis plaintively wailed detailed in the NY Times:

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.

This poor man suffered greatly. (It's much worse psychologically to lose millions than it is to lose some measly 401k that couldn't even pay for a gourmet hotdog in the Hamptons):

The profitability of the businesses with which I was associated clearly supported my compensation. I never received any pay resulting from the credit default swaps that are now losing so much money. I did, however, like many others here, lose a significant portion of my life savings in the form of deferred compensation invested in the capital of A.I.G.-F.P. because of those losses. In this way I have personally suffered from this controversial activity — directly as well as indirectly with the rest of the taxpayers.

Breaks your heart, doesn't it? How could anyone have asked such victims to suffer even more by asking them not to take their hard earned bonuses?

As most of us have done nothing wrong, guilt is not a motivation to surrender our earnings. We have worked 12 long months under these contracts and now deserve to be paid as promised. None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house.

Well ... they were actually like employees of a housing contractor that burned down the whole town because they cut corners who then held up the residents for big bucks to clean up all the toxic waste. But whatever, there was no denying just how unfair it was to complain about these bonuses when these guys were such hard workers who had made such sacrifices:

So what am I to do? There’s no easy answer. I know that because of hard work I have benefited more than most during the economic boom and have saved enough that my family is unlikely to suffer devastating losses during the current bust. Some might argue that members of my profession have been overpaid, and I wouldn’t disagree.


On March 16 I received a payment from A.I.G. amounting to $742,006.40, after taxes.

He said he was going to donate that full amount to charity as a political protest --- yet another high-minded sacrifice.

The least the lazy unemployed can do is follow this noble person's example and give up their 300 dollars a week in benefits. We all have to pitch in.