Response to Fisher's "Too Hard on AIG?"

Here's the email I sent to Patty Fisher, a columnist at the San Jose Mercury News, in response to her column "Too Hard on AIG?"

Dear Ms. Fisher,

Your column entitled "Too Hard on AIG?" contains quite a few dubious comments. For example, you trot out the fact that John Chambers makes 861 times as much money as the average janitor who works there. I'm sure that that's probably true, but show me any janitor who could do Mr. Chambers' job? Mr. Chamber's business savvy has clearly lead Cisco through good times and bad to continue to make tremendous profits for its owners—owners who include a lot of pension funds and individual investors throughout all sectors of the economy. $11.2 million in compensation seems to be generating a pretty good return for everyone.

Similarly, you paint the AIG "bonuses" as if they were given based on the financial performance that drove the division responsible for the collateralized debt obligations (CDOs) into the ground. My understanding is that the "bonuses" were actually retainers used to ensure that the people with the best knowledge of how to unwind the CDOs and recover as much money as possible would stay on with AIG until AIG could finish disposing of those toxic assets and shut down the entire division. Without those "bonuses" most of those people would have moved on to other jobs long before the assets were disposed of, meaning AIG would loose the institutional knowledge necessary to recover most of that money. By investing $165M AIG was able to recover nearly $1,500,000M dollars. Now that's a good return on investment.

Then you resort to the good ol' politics of class envy by crying that you haven't had a bonus in 10 years, so by implication it's unfair that anyone else should enjoy a bonus. What poppycock. If you don't like your compensation, do something about it—even in this down economy it's easier than ever to start your own blog and monetize your knowledge capital. The writing on the wall couldn't be any more clear that your industry is declining and won't exist as we know it within a decade. Get entrepreneurial and stop playing the victim!

Finally, you mis-represent the Bush administration as being anti-regulation by forgetting that his administration proposed sweeping regulatory reform—and stronger oversight—over Fannie and Freddie (New York Times, Sept. 11, 2003) that likely would have curtailed their market-distorting lending practices. Note that Democrats, led by Rep. Barney Frank, shot this legislation down and claimed there were no problems with Fannie and Freddie's practices. (Wall Street Journal, Sept. 9, 2008)

You also trot out the old canard that Bush passed huge tax cuts for the "wealthy," but when the "wealthy" are the only ones paying taxes, who else could benefit? The bottom half of all wage earners pay only 3.6% of the entire tax bill (U.S. Treasury's Office of Tax Analysis).

I guess about the only comment we do agree on is your high esteem for Alvaro Urbina.

Sincerely,

Blake Sobiloff

Comments

[Curt]

I read this same article in the Mercury News and had much the same thoughts with respect to response. However, I was too busy being ignored by the Mercury News for my response to their article on Mount Um, in which, Representative Honda invoked class warfare when none was present. It seems that the Mercury News is plenty able to post this sort of drivel, but not so able to stand the heat when they are called on their foolishness.