StarWars: Josh Marshall vs AIG
I read with amazement Josh Marshall's longer-then usual post on the social contract today.
He acknowledges the amount of objection and disgreement over the way he covered AIG bonuses, but his post-rationalization is rather startling to me.
First of all, Josh, some people objected not only to your sensationalizing of the story and engaging in cheap populism. It's great that you recognize this but it's not clear that you care, because today's installment on AIG is not much better than yesterday's.
Most importantly, in my view, people objected to the kind of reporting that deliberately and therefore dishonestly leaves the reader misled and misinformed, while fanning the flames and feeding anger.
Your rationale today is that some people in the financial services industry are tone-deaf and context-blind, while the social contract is under strain. This has been going around the blogosphere for a couple of days now so it's not a novel theory anymore.
But the true essence of that pseudo-argument is this: if the taxpayer money is involved in running AIG, then the taxpayers have the right to change their mind about your compensation at any point in time, for any reasons, without warning. Basically, whenever they feel like it. Or whenever Fox News gets sore throat from stoking anger 24/7. Written legal contracts about AIG compensation have no power, even if we, taxpayers, signed them. Don't like it? Tough shit, don't work for us.
Your (mis) coverage of the AIG mess is dishonest because it purposefully conflates the issue of the specific bonuses with the larger issue of limits on executive pay. It's your choice to follow the blind rage or to see the forest behind the trees.
The DeSantis point is about the taxpayer's anger destroying the company they own. It wasn't about $1.5 million dollars, which he isn't going to keep anyway. Of course, that's not how you reported this, you lumped it with the general "fuck you from Wall Street to DC" as if DeSantis defiantly refused to give up the money he is legally due.
So, when all is said and done, Josh, you own AIG now too. What do you want to see happen with it? And who would do it, under the conditions you suggest the social contract implies?
The taxpayer did not destroy AIG. DeSantis, and the people who worked for him did.
We should have just let it burn.
March 26, 2009 5:34 PM | Reply | Permalink
How exactly did DeSantis destroy AIG ... by not making enough money to offset the losses generated by other people's trades?
March 26, 2009 6:25 PM | Reply | Permalink
What I hate about Josh's response is that he doesn't answer any of the genuine questions about the lack of journalistic integrity in his site's coverage. He has done things as bad or worse than what they do on Fox.
He relies on a false premise to create his strawman. And his reporters engaged in blatantly dishonest use of quotes to create a false impression specifically to advance their (his?) pet concept. The presentation ... even in Josh's rebuttal, is factually questionable.
Nowhere does he acknowledge that DeSantis received no other compensation other than this "bonus". Nor does he acknowledge that the $1 salary and other features of the terms of employment represent a POST-BAILOUT negotiation that involved AIG, Congress, The Treasury, and Andrew Cuomo himself.
Nor does he acknowledge the reality that the terms of these contracts came into being in a direct response to his last holy crusade against AIG'S "excessive compensation.". Last year he demanded they get no salary ... this year he demands that an agreement approved by everyone be broken and the workers be given literally zero compensation. But yet denies knee-jerk bullshit populism.
He's slipping into that same bubble they all do. Engaging in dishonesty to advance the narrative he prefers. The most screwed up thing about it is that one can use TPM's own archives to prove that TPM is being intentionally dishonest.
March 26, 2009 6:47 PM | Reply | Permalink
First of all, I'm very openly jealous of your ability to pack a lot of great thoughts into very articulate and surgically precise sentences.
Secondly, I don't know what to think about Josh quite frankly.
I agree with you that he seems to be pushing the narrative he preferes (he sort of admits to it in his rebuttal to criticism today). But the rebuttal itself is simply parroting a dkos diary that was advancing the same basic (and flawed) premise.
It's also possible that he's in a bit of a bind, because such whipped populist anger provides excellent political cover for nationalization and all these ideological talking points, even though it costs him his journalistic integrity with this "end justifies means" approach.
March 26, 2009 9:31 PM | Reply | Permalink
When you're right, Lalo, you're right. The perspective has been very disappointing. Even if I agreed with it, which I largely don't, the mean-spiritedness of it would sadden me.
March 26, 2009 8:57 PM | Reply | Permalink
The argument isn't that because AIG or any institution has taken tax dollars that they can be wildly micromanaged at any point in time without warning. If the government wanted total control, it could have taken banks into FDIC receivership and it could have let AIG seek the protection of a bankruptcy court. It didn't, it built a partnership model.
The argument against the AIG bonuses is this: when a company is insolvent, nobody gets their bonuses, whether they earned them or not. If a company goes bankrupt, employees who haven't been paid have to line up behind all the other creditors. Bondholders get there's before anyone gets a promised bonus.
The taxpayer infusion of capital into AIG distorted things. Remember, the infusion of money is the only reason AIG is solvent. If Desantis had worked for a bankrupt auto parts supplier he'd be flat out of luck.
Nobody is saying that Desantis has really done anything wrong. He's just failed to recognize that he happens to work for a favored industry and has been treated differently than every other worker in America as a result.
In my job I get a salary and bonus. If my employer goes under, the government is not going to come to the rescue. My salary and bonus will have to be lumped into all the other broken promises of life. But not for Desantis. A reasonable question is: "what makes him so much better than me?" Another is, "What makes AIG so much more important than my employer?"
But the big question is: "if this is going to be how they spend our money, shouldn't we stop giving it to them?"
March 27, 2009 8:02 AM | Reply | Permalink
Hush, Destor, you are ruining a perfect self-indulgent, sophomoric rant.
I say, leave AIG and others to the mercies of the "FREE MARKETS" they have all championed all these years. Let them fail and complain about not getting their "bonuses." Let them have a whiff of the reality they've been pushing.
FREE AIG!! Let them worry about their "bonuses" sans taxpayer dollars.
March 27, 2009 8:14 AM | Reply | Permalink
You just don't get it, do you?
If you blame people who work for AIG for anything they may have done, then fire them when you takeover the company.
If you think they did something illegal, then charge them in the court of law.
March 27, 2009 8:28 AM | Reply | Permalink
Sorry destor, but this makes no sense. Your second paragraph directly contradicts your first paragraph.
The taxpayers HIRED DeSantis and (via Treasury) negotiated the compensation, his contract has the same structure as Liddy's.
But now the taxpayers changed their mind because they lapped up misleading stories from Fox, CNN and Josh Marshall and are like bulls seeing red.
Your argument is the same as if you said it was OK to persecute Japanese Americans in the 1940s because of Pearl Harbor.
March 27, 2009 8:25 AM | Reply | Permalink
That's not technically true, Lalo. The taxpayers fund AIG but they don't control it. Uncle Sam has warrants that can be converted into an 80% stake but they have not been converted into equity as of yet. We have no voting rights and no direct control over AIG (with the banks we took non-voting dividend paying preferreds all of this a giant dance to avoid nationalizing anything).
Now you might say "But Destor, that's the government's fault" and I agree -- we negotiated a bad deal where we hand over unlimited amounts of money and unless we convert our warrants they do whatever they want with it.
But Desantis should spare me his whining. No other industry outside of finance would get this treatment and Desantis was not hired to come in an clean up AIG -- he'd worked there more than a decade and absent our bailout would have been as out of luck as any other employee of an insolvent company.
March 27, 2009 9:31 AM | Reply | Permalink
I hate to contradict you so often but I simply have to.
The CEO of AIG has been appointed by the taxpayers. The management team, charged with cleaning the mess, has been appointed by Liddy (i.e. taxpayers).
The taxpayers have been directly managing this company since last fall - on top of getting monthly interest payments on the bailout loan.
And James Cole is a government-appointed lawyer, has been sitting on the AIG board meetings - get this - for the PAST FOUR YEARS with the explicit purpose of monitoring AIG.
March 27, 2009 9:53 AM | Reply | Permalink
It's okay Lalo, friendly disagreement.
Not sure but if there's been a government appointed lawyer sitting in on board meetings for 4 years probably had more to do with the Re-Insurance scandals that involved AIG and Buffet's General Re (that wound up with Greenberg stepping down in the first place).
AIG is a public/private concern and I think a lot of what we're arguing about is the direct result of having such a badly defined relationship. Nationalize or don't. When you try to walk the middle like our government has with AIG, this kind of thing is inevitable.
March 27, 2009 10:10 AM | Reply | Permalink
One massively distracting problem in reporting on this story is, there's nothing worse than a whiny millionaire.
Doesn't matter what shape the economy is in, or whether the millionaire is justified in being whiny. No one cares what a millionaire's problems are. (This seems fairly obvious to me, but maybe it needs stating.)
Some witnesses just shouldn't be put on the stand. DeSantis is one of them, apparently. He put himself on the stand (with an op-ed in the NYT no less!) and blew it. The complaining is what stands out.
I think it's important to marshall the facts of any story or call Josh out for bias or misreporting when necessary. But expecting a sympathetic reaction to DeSantis's "plight" is futile. He's still a millionaire. So, boo hoo? I don't think so.
The worst part is, he's clueless.
March 27, 2009 9:44 AM | Reply | Permalink
Bingo.
I don't care for DeSantis. I care for the money that I, the taxpayer, now hold in AIG. I have a stake in fixing AIG, not driving it into the ground by witch-hunting anyone who can actually help me.
Unless Josh Marshall is going to fix it with his own hands, he should stop exploiting the cheap rage and go back to honest reporting he's been known for.
March 27, 2009 10:03 AM | Reply | Permalink
And there you've summed up my position. Well said.
March 27, 2009 10:34 AM | Reply | Permalink