Third Party & Independents Archives

Making The Point

In a letter to Edward Libby of AIG detailing his resignation from the company, Jake DeSantis provides the evidence that will most likely be missed by the populist rush to further the class warfare that this administration is waging as to why a political body has no business dabbling in running a business. President Obama, who’s supporters claim is a pragmatist, showed the exact opposite character trait and instead displayed a wonderful example of demagoguery.

First, couple of facts that are missed by anyone who didn't listen to the hearings on the AIG bonuses because I don't recall any of the news media pointing these things out.

* No one involved in default credit-swaps received a bonus. I keep hearing that 'we should not be rewarding the people who ran the company into the ground'. The fact is, none of them were. They individuals were all removed from the company long ago.

* The people who received bonuses were working in still profitable or non-loss areas of the company that were being wound down.

* Most, if not all, who received the bonuses were working, like Mr Liddy, for $1 a year.

* The people who receiving bonuses could have left the company while winding down their divisions leaving those areas in tough straights and possibly causing more losses in revenue, which is why the bonuses were offered to them.

Now, with that out of the way, let's look at the result of what was told would happen by Mr Libby and is now currently occurring. The people in charge and responsible for profitable areas of the company, having nothing to do with the failed default credit-swap area, were continuing to work in a division that was about to close and put them out of a job. They were being asked to work for $1 a year. They were needed to ensure that this wind-down occurred smoothly and, most importantly, with no further losses to the company. In return for staying and not leaving, they would work themselves out of a job.

This happens from time to time in business. Providing an incentive to keep the knowledgeable and integral part of a division is the best way to ensure that this type of action happens without upheaval. In addition, if these people were to leave, the job will still need to be done, who is going to come in to learn the details of a job quickly at $1 a year and walk away 9 months later with nothing to show for it? In fact, who is now going to replace Mr. DeSantis at his position and how much is it going to cost to replace him?

Mr. Libby attempted to make this point during hearings and was basically told to pound sand. He stated that he felt it was the best, most pragmatic, business decision to ensure that the company was able to return to profitability sooner. He didn't like the bonuses and was not involved in their being promised, but understood the business sense that it meant and feared this result.

Instead, with bluster and fury, the president and those on the banking committee who apparently don't understand how businesses work or were pandering to a populist constituency, decided to berate the bonus receivers, demanded their names (even though they were receiving death threats) and were made out to be the villains. The people who turned down jobs with other firms to ensure the smooth running of the other areas of AIGFP were turned into an example of all that is evil with America.

In other words, politics.

The end result is that it is now likely that the money we borrowed from someone else to lend to AIG will be paid back much later, if at all. This will place the company in worse business footing and result in the people who were still being serviced by AIG to suffer further. This is the result of injecting politics into the running of a business and what pragmatism is not about. A pragmatic president would have first figured out that his own Secretary of the Treasury was involved in protecting these bonuses and found a way to explain the need for them to a public that would be better served by having these people remain on and serve the company as they had agreed than to turn them into the purveyors of all that is unholy in our society.

Good job and Bravo. This is going to end up costing the US taxpayer more in interest on the money that we borrowed and MAY get back but most likely much further down the road if we do. If we were really worried about the cost to the taxpayer, this debacle would never have happened.

I think it is obvious what it was all about.

Posted by Rhinehold at March 30, 2009 12:10 AM
Comment #279177

Should it not be the Duty and Responsibility of the CEO of a Corporation to keep the Companies Stockholders informed about the daily operations that can and do have a great efect on the way an Individual Citizen would use their vote?

Yes, you and Jake DeSantis can blame the outrage of the Average American Citizen for not understanding the End jutifies the means; however, given that using the Word Bonus to explain the Employees Paycheck is either a DUMB move or a realy Stupid business problem given that this is just the latest in a bunch of Boneheaded Failures.

For shouldn’t have AIG been telling the American People about this problem seeing that Congress told them that the payment would not fly in its current form? Don’t you think Mr. Libby or Mr. DeSantis could of come up with a better word than Bonus to explain that these Employees were working from a Base Pay of $1.00 and up Contract plus % of profits with a guaranteed bottom line. Could they have called it a Minimum Compensation Package and got away with it?

Such is Dust in the Wind?

Posted by: Henry Schlatman at March 30, 2009 1:27 AM
Comment #279193

One can only hope that the company to big to fail without bringing down the entire financial global economy will at the hands of the government become the company not to big to fail.

Rhinehold can you back up the statement that these executives were being paid only $1 per annum? Either way if they agreed to $1 and a few million in “bonus” or just $1 the company was still alive because of government bailout money. Why should the stockholders pay big bonuses when the company as a whole is not returning any money on their investment.

Posted by: j2t2 at March 30, 2009 7:44 AM
Comment #279195


It appears the link to the NY Times article with the letter appears to require registration now, it did not last night. Another link is

I take this action after 11 years of dedicated, honorable service to A.I.G. I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down.

I would recommend reading the letter…

Why should the stockholders pay big bonuses when the company as a whole is not returning any money on their investment.

Because without those bonuses, those who were not responsible for the problems and who could effectively keep the company running well so that the money could be paid back quickly would have left the company. And now they are. So it will most likely cost the shareholders MORE money in the end by not keeping those individuals in place because of how hard it would be to replace the knowledge at a lesser cost and it will now most likely take longer to pay back the bailout money that we are BORROWING to give them.

Posted by: Rhinehold at March 30, 2009 8:07 AM
Comment #279196
however, given that using the Word Bonus to explain the Employees Paycheck is either a DUMB move or a realy Stupid business problem given that this is just the latest in a bunch of Boneheaded Failures.

Because they were not paychecks, they were bonuses, which is why they were called that. They were not given out unless the individual either stayed the year or successfully closed down their responsibility.

Posted by: Rhinehold at March 30, 2009 8:10 AM
Comment #279199

Something smells fishy. Working for $1 so it would look good, and then getting a “bonus” that no one was supposed to know or be upset about? Sorry, I don’t buy it.

It’s too bad that the supposedly profitable parts of the company had to suffer, but that’s all part of the being too big to fail problem, isn’t it?

They are all part of the same company. If that’s how businesses run, perhaps it’s high time some changes were made. I am totally unsympathetic about someone complaining they didn’t get their bonus who can afford to work for only $1 a year, and still give their “earned” bonus to charity.

Posted by: womanmarine at March 30, 2009 8:22 AM
Comment #279202

This charade about being payed a $1 per year is what gets people upset about the AIG affair. It sounds very noble until you learn that their actual employment contracts called for $1.00 + “bonus” payable at the end of the contract period. In reality, it was a million dollar contract. The risk being if AIG went under prior to end of the contract. The government bailout minimized that risk.

Posted by: Rich at March 30, 2009 8:44 AM
Comment #279203
Something smells fishy. Working for $1 so it would look good, and then getting a “bonus” that no one was supposed to know or be upset about? Sorry, I don’t buy it.

Who wasn’t supposed to know about it? Why do you think anyone was hiding anything? That statement doesn’t make sense.

I am totally unsympathetic about someone complaining they didn’t get their bonus who can afford to work for only $1 a year, and still give their “earned” bonus to charity.

It might be a good idea to re-read the letter. The issue wasn’t that he couldn’t afford to not be paid the bonus, it was that he didn’t leave the company for another job because it was promised to him. But even worse than that, as soon as Obama and the Congress starting with their ‘outrage’, these people were thrown under the bus and made to look like evil personified. Congressmen were saying that they should commit suicide and their families were having to deal with death threats. And no one defended them.

Why would any of them want to continue to work for someone for up to 14 hours a day when they are going to be treated like that?

If that’s how businesses run, perhaps it’s high time some changes were made

The great thing about the US, if you think it can be done better, go out and do it. The fact is that things change when you are on the other side of the coin. I know a somewhat famous individual that has worked for people and would often complain about ‘the man’, etc. Recently he started his own business and is now employing a few people. He admitted that he sees things very different now, there is so much more to have to be aware of, be responsible for, etc. I found out similar things when I went into management myself.

But hey, maybe Obama can show us all how to do it with his massive business experience!

Posted by: Rhinehold at March 30, 2009 8:55 AM
Comment #279205


Talk down to someone else. I read the letter. What happened to company loyalty? I work for a living. While earning enough to support myself is important, so is company loyalty. At least to me.

And frankly, this blame Obama crap is tiresome. These companies were failing before he took office. Bush almost crapped in his pants in his rush to get this bailout stuff started.

And whatever you may think, this is a convoluted and questionable way to do business. It may be “the way it’s done” but it smells to me, and I’m sure many other people. I suspect Congress was reacting to the ire of their constituents, isn’t that their job? BTW, I don’t believe it was Congress who let this cat out of the bag. Wasn’t it the press?

Posted by: womanmarine at March 30, 2009 9:04 AM
Comment #279207

I want more details. Were these “contracts” written when the company knew it was failing? Who wrote them and when? What, exactly, was the point of the $1 salary and the later “bonus”? Why not just name the salary? Perhaps none of this angst would have happened if they had been more straightforward.

Just a few of the questions I have.

Posted by: womanmarine at March 30, 2009 9:07 AM
Comment #279212

A couple of news excerpts to help clarify the AIG thing. “We forget that Wall Street is supposed to be a support function. Its primary role was intended to be helping CEOs come up with cash to make investments. But since Ronald Reagan, Wall Street has become the tail that wags the economic dog. Today, Paul Krugman highlighted this by pointing out that in the 1960s Wall Street accounted for just 4% of GDP — by 2007 that figure had doubled to 8%. Reagan began the process of deregulating Wall Street, and in 2004 the SEC accelerated it. The result is an unprecedented economic catastrophe, including an American International Group (AIG) bailout that will cost another $1.6 trillion.
A.I.G.’s problems rest in its London-based financial products unit, part of its financial services group, which is exposed to securities tied to the value of home loans. The financial products group sold credit-default swaps, complex financial contracts allowing buyers to insure securities backed by mortgages. As home values have fallen, the value of the underlying mortgages has declined, and A.I.G. has had to reduce the value of the securities on its books.”

I have some recall of a few years back when the insurance biz was clamoring to get into financials. That was at the height of when greed was rampant. The FP division of AIG should never have approved to begin with. No company should become to big to fail. Republic Sentry advocates for busting up any company with over 50 or 100B of assets at risk.

Otherwise, we have the government we deserve.

Posted by: Roy Ellis at March 30, 2009 10:40 AM
Comment #279215

Why you cheer for Upper Management to be paid where is the same fight for the individuals who did nothing wrong and lost their jobs because of AIG exploits of a System? Where is the writer of the letter when it comes to those people being paid for others making mistakes?

No, Labor is working with “We the People” in order to come to terms with the problems facing America so why hasn’t those in Upper Management learned the same lessons of responsiblity?

Posted by: Henry Schlatman at March 30, 2009 10:56 AM
Comment #279238

About that test that someone was talking about.

Posted by: Rodney Brown at March 30, 2009 2:44 PM
Comment #279239


it’s interesting that geithner, and the obama admin. new about these bonuses, and never said a word. then all of a sudden when attention was focused on the 5+ bil. in earmarks in the omnibus spending bill, and people were starting raise thier eyebrows, congress decided the bonuses were suddenly an earth shattering event. “we need to get to the bottom of this” now thats fishy. the problem is that there’s no reasoning with people who subscribe to class warfare, because they will never be able to evaluate this situation objectively.

Posted by: dbs at March 30, 2009 3:08 PM
Comment #279240


“I am totally unsympathetic about someone complaining they didn’t get their bonus who can afford to work for only $1 a year, and still give their “earned” bonus to charity.”

sounds like class envy to me. i can’t afford to do it so why should i care about being fare to someone who can.

Posted by: dbs at March 30, 2009 3:17 PM
Comment #279241

The bonus thing was floated to accomplish just whats going on in this thread. Get people bitching about the bonuses and less about the wherabouts of the read bucks. It’s worked pretty well. Heck, even the social democrats in Europe are making more noise. The US person has just had 10-15 trillion removed from their children and grandchildrens bank acccounts with hardly a whimper. Thats a neat trick to say the least. Along with being appaling, sickening, and other similar terms.
Note that UBS is taking their secrecy issue to the G20 intimating that should they have to give up tax havens then so should the carribean, Leichtenstein, British Isles, and other tax havens.
The British have been a major source of trouble for the US since inception. The NAU concept, insurance in the banking business, tax havens for the wealthy, all have come through the Brits. Even now they are going to ‘fix us up’ with a new financial plan at the G20 and I suppose our govies will go along as usual. That tiny little country has played the US for the patsy and won soundly.
Well, the Republic Sentry Party will end tax havens.

Otherwise, we have the government we deserve.

Posted by: Roy Ellis at March 30, 2009 3:43 PM
Comment #279248


No class envy, if they hadn’t had to be bailed out they could have it with my blessing. Those who caused the problem should be the ones to sacrifice before the people negatively affected. Sorry, if you work for AIG or any of the bailed out companies you’re probably making enough of a salary to take it on the chin, certainly more than the folks suffering the most from this downturn. If we need to suck it up, so do they.

The man’s complaint is arrogant at best, and I’m being kind.

Posted by: womanmarine at March 30, 2009 6:28 PM
Comment #279261

Newt and the GOP have rushed to fill the populist void. Sez he would put troops on the border and send drug users to rehab school. That should play well in Peoria.

Meanwhile, the manager of the AIG FP division is retired and living well in England.

McClusky (sic) of Maryland is pushing a bill to increase the number of temp workers allowed in. Last year over 1 million came in on temp visas. I guess they feel they will need some folks to take the jobs Americans won’t take that are created by the Recover Act.

Otherwise, we have the government we deserve.

Posted by: Roy Ellis at March 30, 2009 8:26 PM
Comment #279267

I think this man made the right decision. I read the letter several days ago and thought that is exactly what I would have done.

First of all, this guy was not a part of the problem.

Secondly, he most likely didn’t even want to work for AIG anymore, and had other offers.

Third, it probably wasn’t about the money although some was appreciated.

Then you have the Government pass a bill without reading it, and all of this blows up in the press.
They you have AIG not defend you.

I would do exactly the same thing. Here is the money and here is my resignation. It would be a matter of personal pride. Neither the government nor AIG would be worth working for. It would be beneath my dignity to work for such organizations and allow myself and my family to be in such a position.

Here is my pay check and my resignation, good bye.

No amount of money would be worth public ridicule without protection. Especially with how stupid Congress is behaving right now.

Posted by: Craig Holmes at March 30, 2009 11:03 PM
Comment #279270

If you had offers from other businesses why would you sign a contract for $1.00/ year unless the soocalled Bonus was a guarantee paycheck? Does the words “paid even if the company loses money” set off red flares to anyone, but me?

No, AIG is by the same Law they seek protection under guilty of Corporation Stupidity. And why this is not the first time in Americas’ History, it certainly will not be the last. For by the very Nature of the Beast a company takes risk and with that comes personal responsibility.

So why you can say you would do the same thing as Mr. Santis. Are you willing to quit your job today because your Corporation stood by silent and allowed your pay to be cut in half?

Duty, Pride, and Responsibility goes hand in hand so if Mr. Santis and others were willing to sign a contract they should have known could be challenged by the Stockholders of AIG in a Court of Law than they should be Adult enough to live by the Sword they claim protects them.

Posted by: Henry Schlatman at March 30, 2009 11:35 PM
Comment #279274


If he were me, I wouldn’t tolerate what you are saying. The reason I would have taken the contract would have been because it was the right thing to do. The value of the contact (million dollars) would have been irrelevant. It would have been to clean up the mess others had made.

No one was in a better position to clean up the mess than current employees. By clean up the mess, I mean liquidate parts of the business to be able to return funds to the US Treasury.

In the end, it doesn’t matter. There is so much ill will, that anything a person does is viewed with contempt. At some point an employee has to figure out the nobility is a waste. No one will care. By that I mean if employees at this point, work tirelessly to get the best return on equity for the taxpayer, there will be no reward. Actually there will only be contempt.

So here a person is looking at his family, and his future, and the US Congress with Barney Frank and Senator Dodd, and the management of AIG. It’s useless. Keep your money and here is my resignation.

I wouldn’t spend any time trying to save the taxpayers millions, not when Congress is spending billions without even reading the bills they are voting on. It’s all a huge waste. It’s better just to simply point out the obvious and move on.

Posted by: Craig Holmes at March 31, 2009 12:22 AM
Comment #279280

Well since Mr. Santis has already admitted that he does not work in the department that caused the AIG downfall I believe he loses that side of the debate by defualt doesn’t he?

For why he can claim to have helped the company and syockholders over the year save money where was his voice and values when he and the other Upper Management found out that their 5-10 year business plan was in trouble?

Now, throw down the money, walk out of the office, and Blow the Wistle on the Corporation than we can talk Duty, Pride, and Responsibility. For why My Peers are busy bailing out the Banks, where was all this concern by Upper Management when the American Farmer needed bailed out in the 80’s? To quote a song “Saying it’s your job sure doesn’t make it right.”

Posted by: Henry Schlatman at March 31, 2009 2:55 AM
Comment #279288


Do you think this guy might have had anything to do with AIG’s problems?

Posted by: gergle at March 31, 2009 7:10 AM
Comment #279290

Waa,Waa,Waa. Poor baby. Agood union plunber in a high wage state might,if lucky, earn that $742,000 in about ten or twelve years. How long would civilization last without financial product salesmen? How long without plumbers?
Again with the “class warfare” tripe. A little fairness is not “class warfare”. The French Revolution was class warfare. The Bolsevik Revolution was class warfare. A little economic parity and justice for working people that actually do something besides hustle nickels from people is not class warfare.

Posted by: bills at March 31, 2009 8:08 AM
Comment #279296

The facts of this issue are clear. Mr. DeSantis quit when he learned that he would not be able to keep the over $1,000,000 earned under his retention contract with AIG.

The idea that he was working for a $1.00 per year out of a sense of loyalty to the company from which he had earned millions was nothing but a sham. He makes it very clear in his letter that the retention payout was the primary motivation for staying to unwind the Financial Products Division. He states that he was encouraged when Liddy (CEO) confirmed a commitment to the contracts. He was further encouraged when he moved up the payout date by three months.

The fact that this man thinks he was abused speaks volumns about the mind set of the financial sector executive class. He may not have been directly involved in selling CDSs but he was an executive within the division that did so and benefited from AIGs run up during that period. Yet, there is no sense of shared corporate responsibility for the catastrophe and obligation to mitigate the damages. It is all about money for DeSantis. Pay me substantially or I will leave. Period.

Posted by: Rich at March 31, 2009 9:35 AM
Comment #279297

“”Agood union plunber in a high wage state might,if lucky, earn that $742,000 in about ten or twelve years”“”. Said Bills, Yes they Might and i support them , But with Inflation so high and a low dollar and a bad economy and free trade and a shrinking Middle class call one to have a toilet installed not an expensive one $600 I’m not rich so i DIY for $150. and just about everything else see the conundrum if you want all union you need to have an ecomomy like the 1950s and 1960s and up till the mid 1970s.

Posted by: Rodney Brown at March 31, 2009 10:01 AM
Comment #279300

Claiming you’re going to give it to charity is nice PR. I wonder if he’ll ever release proof of such a giveaway.

I would only agree to work for a dollar if I believed in my mission. I would not be derailed by political bickering or painting some at AIG as evil. They were. If I don’t get that, then I shouldn’t be working there, period. I would be working for the employees and clients who are getting screwed because of AIG’s uncontrolled greed.

It’s clearly about the money, until he offers proof of his giveaway. It’s clearly about a narcissist’s image of himself as a martyr, even if he does. A hero does the work inspite of the criticism and without reward. He clearly wants to paint himself a hero with this PR. Guess what? He isn’t. He’s a quitter, and I’ll bet a Starbuck’s Latte, a liar.

Posted by: gergle at March 31, 2009 10:20 AM
Comment #279301
After the huge losses became known, Cassano was fired from AIG in early 2008, but he still received a salary of $1 million a month until Congress intervened. AIG has received about a $180 billion in bailout funds so far.

Yet, DeSantis, feels that even though the company failed miserably, he still deserves to participate in the profits he helped generate, right? What profits? The company is in hock to the taxpayers. Would DeSantis offer his million to pay that back? A bonus is a non-stock means to participate in success. The company failed. It did not succeed in spite of how immaculately the janitor kept the floors or the IT department ran great software. In spite of DeSantis’ glorious vision of himself, he fails to see the big picture. In business, when your company fails, you lose, even when the taxpayer has to bail your oversized company out. Sorry. No Soup for you!

Posted by: gergle at March 31, 2009 10:31 AM
Comment #279305

Some guy made the point that Wall Street types almost obsessively follow each other’s deals, so it would be very unlikely that somebody like DeSantis would be ignorant of what was going on.

This outrage on behalf of the folks in Wall Street is silly. Sure, there might be some innocent folks caught up in the outrage against their industry’s excesses, but the outrage has validity. The bad apples are starting to behave like bad pennies(always turning up), and and those bad apples have been allowed to spoil the barrel, whatever the quality of the individual pieces of fruit.

We can see this in terms of a superheated liquid. You’ve kept the pressure up, pushed and pushed on the political point, scaring people into accepting it. But there’s a leak, and the temperature of discontent is such, that the failure of containment flashes the contents quickly to steam. This kind of phase change is similar to the way political systems behave. Republicans have tried to force the system to work, tried to push everybody and force everybody to stick with their agenda for business, and business has been pushing back with them, arguing that their ideas are the best for the economy, even while the average person often sees less prosperity on their account.

Years, though, of failed policies and policies whose success hasn’t made people any more prosperous have corroded the structural integrity of the Republican’s containment of public opinion.

The conditions of Republican dominance have been somewhat artificial for some time now, but they intensified things during the Bush administration, which put more pressure on them to keep the party on top. But faced with practical failures, people’s sense of Republican leadership and the rewards of letting business have its way have eroded, and the pressure that once kept the Republican party on top now is driving people away from it.

I have to wonder. How does calling a policy socialism help? How does it help to make the same threats of what would happen back when folks believed you, now that you have less trust, less crediblity, and less power to impose your wishes? Putting more pressure on people now only drives more out, strains the sense among people already out there that the party’s learned anything from its explosive experience of supercritical change.

People like DeSantis just don’t get it: people may have defended your right to make a buck, but that was while your company was making, not costing the American people money. You have a problem with people’s outrage? That’s your problem. You could have avoided it by helping to curtail the risks when the risks were smaller, when the company wasn’t running the hamster wheel of overleveraging.

But that’s not what you did.

Until Wall Street realigns itself to the new magnetic field of public sentiment, it will only provoke puzzlement and even anger by suggesting that somehow Wall Street is unfairly being painted as reckless and dreadful in its excess.

Posted by: Stephen Daugherty at March 31, 2009 11:36 AM
Comment #279311

From Rich and Craig are thrown words like ‘loyalty’ and ‘nobility’ inre: DeSantis. Does anyone really believe that someone who climbs to the austere air of AIG upper management team, has a loyalty to that company, and is noble in motive when he cries about his boss doing something he disagrees with?

Posted by: Marysdude at March 31, 2009 1:12 PM
Comment #279327


You are correct. It is the absence of loyalty and common decency that is so disturbing about the letter of DeSantis. No stiff upper lip for DeSantis. He doesn’t get his million, he walks. Too bad about the company, the country and, for that matter, the world. He made his millions. No need to try to salvage a sinking ship. And these are the captains of our financial industry?

Posted by: Rich at March 31, 2009 3:39 PM
Comment #279347

Rodney Brown
The point I was trying to make was that the amount of money that the “masters of the universe ” recieve is so unreal compared to what the average ,hard-working American earns that we have a danderiously unbalanced economy and social structure. I just used the example of a union plunber because they are solidly in the middle class.For another example, For a minumum wage earner(Heritage Foundation:$16,800 per year) to earn that bonus would take 44.16 years. There is a whole segment of the population that is badly out of touch,and their blind greed has hurt us all.

Posted by: bills at March 31, 2009 9:50 PM
Comment #279352

It is not a case of ‘class envy’, it is more a matter of common sense and common decency…America has lost sight of both.

Posted by: Marysdude at March 31, 2009 10:49 PM
Comment #279353

Let me address this notion of “class envy” or “class warfare” What’s the basic idea?

Essentially, that people want the rich’s money.

Yeah, news. I know.

But taking it further, the political implication is that liberal policy is all about soaking the rich, out of that envy. In a moral sense, the holders of this theory are saying, all this regulation and all this taxation are the equivalent of the poor and middle class climbing in through the window to take the rightfully owned profits that the Rich take in from their work and talent.

The saintly worker does not ask his employer for more money until they agree on the raise, or until he makes himself indispensable. The saintly worker guts out the increases in workload. The saintly citizen understands that pollution and misbehavior on the corporation’s part is the price of a prosperous economy.

Let’s apply the brakes here.

Who the hell is this saintly worker? The worker has his own interests to look after. Read Adam Smith: the pressures do not, and cannot merely be downwards on wages. The wage earner has to pay for their needs and wants.

This is not merely about the desire for people to become rich, to get more money from the rich. There’s a certain level of need there as well, especially as the rich, in their own interests, raise prices on the goods and services their salaries and wages pay for.

At some point, prices cannot be reasonably increased. At some point, wages and other conditions of interest, healthcare included, cannot simply be ignored. Yes, it will likely cost the rich more than they are accustomed or sympathetic to paying. But that’s the breaks of a market, the very idea of a market: each side moderates the other.

At some point, it must be recognized that economic strength cannot be recovered at the top alone, nor preserved and kept there. Compromises must be made. The GOP and business have drawn compromise after compromise for the last few years from those on the lower rungs of the income ladder, but the time when Americans can endure that has come to an end. Now it’s the rich and the corporations who must compromise, if they wish to guard their interests well. If not, if they try to stonewall, they will only inspire further resistance, and further crystalization of opinion against them.

The vast masses of Americans will see to their interests one way or the other. They are best advised to accomodate.

Posted by: Stephen Daugherty at March 31, 2009 11:53 PM
Comment #279355


“Now it’s the rich and the corporations who must compromise, if they wish to guard their interests well. If not, if they try to stonewall, they will only inspire further resistance, and further crystalization of opinion against them.”

“The vast masses of Americans will see to their interests one way or the other. They are best advised to accomodate.”

are you suggesting there’ll be another bolshevik revolution? vladimir lenin would be proud of you. spoken like a true communist. who says the left is stoking the fire of class warfare? do you realize how these two comments sound.

Posted by: dbs at April 1, 2009 12:29 AM
Comment #279356

I do believe that if you look at History what Mr. Duagherty is refering to is the fact at some point in the future the average American Paycheck will not be able to cover the basic bills and needs of their family and thus make it unprofitable to work.

And given the expanded influence of the Drug Trade and Gansters of Society in the recent years plus adding the fact that Al Qaeda is actually paying their people more than America and other Nations are paying their people. At what point does the Establishment win the Race to the Better World since it takes money to live in any Community or Tribal Area?

Posted by: Henry Schlatman at April 1, 2009 1:55 AM
Comment #279358

You are missing the point here. The Obama administration knew all about the bonuses from the beginning, they even encouraged them. Now they are using the problem of this minute amount of money to hide the billions they are wasting. Funny how Obama is looking hard at less than 200 million, but admits that they were probably wasted billions in the stimulus bill, but that couldn’t be helped. he says we need ot reduce the deficit but later. sounds like Bill Clinton claiming he balanced the budget when the truth was he wanted to take 8 to 12 years but republicans under newt forced him to do it right away. Too bad thise same republicans are not in charge now. We need ot stop the huge spending, it will only cause inflation down the road. we need to instead instill confidence in the american peoeple who will invest and get things rolling.

Posted by: Bruce Peterson at April 1, 2009 4:38 AM
Comment #279360

Just because President Obama and Congress knew about the so-called bonuses, to say that they encouraged it when at best they refered to them as a matter of law is nor a ringing endrosement. No, this problem is a matter of preception and reality coming to a crossroad with the Upper Management of AIG not knowing or worse yet not caring about the damage they did to the rest of the Market. For why most Americans would be statisfied to see the employees loss this year bonuses, as a presumed stockholder I think that the Government needs to look at their bonuses over the last 5 years. Since rewarding failure should never be a reason for giving a bonus.

Yes, AIG did make some sweet deals in order to keep their employees in 2007; nevertheless, by using the word bonus instead of another form of compensation they put themsekve in deep water. For as long as the words Buyer Beware exists for the American Comsumer so should the same bar exist for the American Corporation when dealing with Labor and Management issues IMHO.

And why I can take mercy on the average American Auto Worker for having to give up part of their contracts in order to help keep the American Car Manufactures afloat. Seeing that folks like Mr. Santis have the means to afford the best lawyers of society I see no need to wonder why he accepted the terms of his employee contract knowing that the stockholders could and probably would question such a bonus when the company is so far iun debt.

So why “We the People” need to invest in a Better Future for your children instead of listening to those citizens who believe that the Status Quo can solve the problem. I urge my fellow Americans to find ways to keep the prices in the world low by finding new ways to become Self-Sufficient. For why I do not believe that the American People will ever lose their confidence I do believe that they deserve to hear from their duly elected officials on how investing $3.6 trillion dollars over the next year fits in with Every Americans’ Desire to be Economically Viable and Financially Independent by the Principles and Standards set forth by the Founding Fathers of America and the Ancient Ones of Songs.

Posted by: Henry Schlatman at April 1, 2009 7:30 AM
Comment #279362

I appeal to Adam Smith’s principles of market economics, and you call me a communist!

I’m saying that the market doesn’t necessarily let you push wages downward forever. And in a situation where people have for some time now, defered to the masters of the markets, sacrificed their own interests to some degree in the hopes of common prosperity, they are now reweighing how much and in what ways they will continue to defer, if at all.

Under Reagan, people got considerably more willing to let the “creative destruction” go on, to allow the market to take greater risks. But as time has gone on, those risks, and that creative destruction, have turned out not to be so profitable for the average person. And then they see the profits of those on top go higher.

They see the prices of things go up, see wages and benefits lost, and at some point, not only does rational market thinking encourage them to react, it may even require them to act to stay above water, or maintain their standard of living.

Given that this is not a pure market, that regulation and unions are available as measures for the masses to use, prices and purchases aren’t the only means for them to look to their interests.

You appeal to Communism and Socialism, trying to make it seem like people like me are ready to line up at Lenin’s tomb to pay our respects.

Give me a break. Look at history: Pure Capitalism ultimately means the Golden Rule. You know the one about who makes the rules? In practical terms, that’s not something most people can live with, anymore than they can live with any other kind of tyranny. As such, America developed a progressive legal tradition, which regulated capitalism, but certainly didn’t destroy it. We defeated Communism under a liberal, New Deal-style economic system, with tax rates and regulations higher than what the Republicans are now saying will lead to World Socialism. The irony is thick.

I’m all for a capitalist system, with certain sensible constraints applied. If you read Adam Smith, he’ll tell you that the butcher doesn’t cut your meat for your sake, for your profit. He does it for his.

To extend the metaphor: the butcher has been accepting pay cuts and benefit cuts, and has seen retirement savings and investments cut in value. He sees prices go up and his bills rise. At some point, he’s going to stop hoping that his interests will be taken care of by the whims of the CEOs and investor class, and he’s going to start pursuing means, both within government and outside of it, to see to this own interests.

We already saw some of this with the catastrophic slump in the auto market. They relied on SUVs, vehicles that worked spectacularly in times when gas was cheap. Now, though, we’ve been through a period of intensely high gas prices, and we can’t count on the current drop in prices lasting forever. People aren’t going to just buy SUVs for the sake of the auto market. They’re going to look for more fuel efficient vehicles, so they don’t end up with a vehicle that sucks money out of their wallet.

This kind of calculation is going on all over the place. People are going to make choices, and people running businesses, if they know what’s good for them, should make their own calculation about how they can serve their own interests by serving ours.

Posted by: Stephen Daugherty at April 1, 2009 8:24 AM
Comment #279365

Lost in all the conservative blather about losing capitalism to some dark, foreboding socialist conspiracy, is that part of capitalism is the buyer. It takes both buyer and seller to make a ‘free market’ economy. Big business and their toadys in government failed to realize this. If capitalism is blind to its own needs for survival, perhaps it is time for an awakening.

The awakening may be coming in the form of a ‘changing’ in the attitude of capitalists toward consumers (workers). That attitude shift, in both business and government is the ‘change’ our new President was talking about during his campaign and has been insisting on ever since the election.

Capitalists had better pray he gets the job done. He may very well be their only salvation.

Posted by: Marysdude at April 1, 2009 9:53 AM
Comment #279372

bills, I think we both said it !

Posted by: Rodney Brown at April 1, 2009 11:46 AM
Comment #279374


re read your last two paragraphs, and then tell me they don’t read like some diatribe at a communist pep rally. in other words, how would someone who doesn’t know you interpret them.

i read your stuff, and even though i don’t generally agree with you i’m fine until you start the republicans this, and the republicans that. the last two paragraphs are really just off the hook. but hey thats just my opinion.

Posted by: dbs at April 1, 2009 11:59 AM
Comment #279375


i was merely pointing out that stephens last two paragraphs were a bit extreme, and sounded like a communist pep rally. you wouldn’t agree?

“the fact that Al Qaeda is actually paying their people more than America and other Nations are paying their people.”

you do have proof to back up this statement right?

Posted by: dbs at April 1, 2009 12:08 PM
Comment #279393

Too bad as much scrutiny on GM and auto-makers is not applied to the real culprits of this massive economic mess and the massive $70.44 Trillion of current nation-wide debt ($57.64T + $12.8T) which has quintupled from 100% of GDP in year 1956 to 508% of GDP today (including the Federal Reserve, Wall Street and those leveraging debt with a plethora of derivatives, and many in Congress and the executive branch for many years).

At any rate, the voters have the government that the voters elect (and re-elect, and re-elect, and re-elect , … , at least until that finally becomes too painful).

Posted by: d.a.n at April 1, 2009 5:12 PM
Comment #279396

Okay, you asked for it. They don’t read like a diatribe at a local communist party. What, did you have confusion on the subject?

The whole point of a market is that kind of calculation, that kind of negotiation, that kind of haggling. If you’re a consumer, you might remember the days of high gas prices and resist pleas from the car company to take those cars off his hands.

Is pointing this dynamic out communism? Or has the right so misunderstood the nature of capitalism that it doesn’t even recognize the way the market adjusts prices? The market doesn’t necessarily lower prices. maybe you can live on a dollar a day where they pay people like that, but hear in America, people need the jobs to pay for goods and services here in America. You can only push wages down so far, and lay so many people off before your prices become impossible to maintain.

Posted by: Stephen Daugherty at April 1, 2009 5:35 PM
Comment #279406

Why some in America believe (and has the right to) that a person needs millions in order to be happy. Other Americans would settle for a penny more than they could spend in their lifetime (which is also their right). So who do we take as being Politically Correct Regardless?

No, Mr. Duagherty is not speaking of a communist pep rally, but more of the fact that with the growing prices of goods and services at what point will the American Businesses lose the majority of American Consumers?

And more important IMHO, at what point will the American Worker realize that laboring for the Corporation is no longer in their Inherent Best Interest? For unlike communism or the EU, check Americas’ History at the turn of the last Century when the Barons of Society waged war against Labor when they refused to go to work.

Now, as far as Al Qaeda and other gangster of the world paying more than Corporate America. I don’t think they give paycheck stubs, but I challenge you to prove me wrong.

Posted by: Henry Schlatman at April 1, 2009 7:45 PM
Comment #279411


“Now, as far as Al Qaeda and other gangster of the world paying more than Corporate America. I don’t think they give paycheck stubs, but I challenge you to prove me wrong.”

sorry thats not the way it works.

you said:

“the fact that Al Qaeda is actually paying their people more than America and other Nations are paying their people.”

you used the word “FACT”, and the phrase ” ACTUALLY PAYING “. i didn’t say it wasn’t true. i said if you are going to make that claim, and call it a fact, you then need to supply the proof. my guess is you don’t have the proof, or you wouldn’t have tried to place the burden of proof back on me.

Posted by: dbs at April 1, 2009 8:41 PM
Comment #279422

Why a quick sreach on google did not provide me with the report that was used by the main stream media journalists that quoted the fact. I am sure that if you want to spend the time and risk setting off alarms to find out what the actual pay is a member of Al Qaeda compared to that of a U. S, Service Person that like all For Hire Warriors the price difference will shock you. Me personally, am not going to take the bait especially since it was reported on the major cable news entertainment channels.

Posted by: Henry Schlatman at April 2, 2009 12:30 AM
Comment #279893


The increased pay of al Qaida may not be in money, but rather the promise of a higher station in heaven…or more virgins? There is no end of monies for terrorist organizations, as they get their monies from many of the things Americans buy on the black market, drug dealing and smuggling. They are, in effect, organized crime…Islam or not.

There is a theory that if all the South American drug lords were to stop the traffic of drugs to the United States, half our Congress would go to the poor-house, and our economy would completely collapse.

There are thugs everywhere, and money galore for nefarious scheming.

It is easy to believe al Qaida pays better than we do…they don’t have to rely on taxation.

Posted by: Marysdude at April 9, 2009 2:10 PM
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