Confessions of a TARP Wife

Attention, angry mobs. The wife of the CEO of a company that was one of TARP's biggest recipients, penned a piece in Portfolio magazine's May issue. This downturn has affected her too.

I'm late to the party, as this has already made its way across the internets and back. My first reaction upon reading it was that it had to be satire. Alas, no. The anonymous author has been outed as Liz Peek, wife of Jeffrey Peek, the CEO of CIT Group that accepted $2.33 billion from the government last year.

Consider how Liz's life has changed, then ask yourself if we aren't so very different:

1. She has had to modify her behavior.

I haven’t even looked at spring clothes; God forbid someone catches me out in something new... If I buy a present for someone, I have the package sent to their home. I don’t want to be spotted climbing into a taxi, laden with Bergdorf Goodman shopping bags.

We’ve picked up new habits, like making donations anonymously and sneaking in late to black-tie galas after society photographer Patrick McMullan has packed up his camera and gone home.

2. She is living the Cultural Revolution.

We’re part of the community... whose fall from grace has been swifter and harsher than any since Mao frog-marched intellectuals into China’s countryside.

I'm going to go out on a limb here and suggest that what happened to Chinese intellectuals in the countryside was a tad worse than someone whose primary hardship is "hang[ing] on to some remnant of our former lifestyle."

3. She had to exercise tremendous restraint in choosing a venue to host her husband's birthday party:

Choosing Versailles to host World War I peace negotiations could not have been more complicated than my attempt to select the perfect spot for our annual dinner... At the end of the day, it came down to a choice between an especially accommodating (and well-known) high-end restaurant and a less expensive, clubbier spot. We ultimately picked the cozier restaurant... because our chosen place is distinctly low-profile and rarely mentioned in the press... Really, not even President Obama spends this much time looking after his image.

4. She has learned to enjoy simpler things.

Staying home and watching Law & Order reruns has become our new guilty pleasure. It’s a far cry from opening night at the Metropolitan Opera, but it’s not bad.

Bring on the Jerry Orbach / Bryn Terfel grudge match. My money's on Orbach.

5. She has made necessary sacrifices.

Needless to say, we fly commercial. Using the company plane is now out of bounds; we’ve heard there are reporters staking out the private airports.

6. She is reflective, and finds compassion in the process.

On some level, I feel I’m being punished for too many thoughtless years of assuming that the trappings of success were earned and not given. I’m constantly knocking on wood or offering little good-citizen sacrifices, like manically recycling or chatting with telemarketers.

7. The psychological stress is taking its toll. Her husband is experiencing low self-esteem for the first time in his life:

For a person whose life has been punctuated mainly by success—from perennial class president and high-school sports star to Ivy League MBA—failure is the worst of all nightmares. He seems off balance, as though self-confidence were a physical ballast that he is slowly losing.

8. She is hopeful. These recriminations cannot last. (Perhaps she's right):

The good news is that Americans have short attention spans. Before long, some other group will come along to absorb all the frustration and anger. Meanwhile, I’m off to the tailors to get some clothes altered.

(via kottke.org)

Recession in a Lexus

This story on Andrew Sullivan's site about a homeless family bathing their young children at an Orange County gas station is heartbreaking.  A curious detail is that they were driving "a nice sedan - maybe a Lexus."  

If it was indeed a Lexus, does the car speak to years of one family's overspending and undersaving leading to this terrible situation?  We'll never know, but the irony of finding a homeless family in a Lexus is stark.

A Cloud for Marie

For a great coffee break, a cool site called Wordle allows you to upload text from a document or any url to create a word cloud.   This is what came up for MA+M.  Fun stuff.

(hat tip: Manhattan User's Guide)

Lost in Translation

Yesterday, in his NYT blog, word meister Ben Schott tagged the Chinese phrase, guo jin min tui ("the state advances as the private sector retreats") as one now frequently being used throughout Beijing's beltway.  Call it China's economic policy tagline.

We in the US might have to adapt it, too.  "The state advances as the private sector retreats" accurately describes the present ebb and flow of our economic tides.  With the global financial services industry in disarray, our government has had little choice but advance into the sucking vacuum our decimated private sectors have opened up.   

There is, however, a distinct choice of words in the Chinese phrase that bears pointing out. Here's a direct translation of the characters:

As someone fluent in Mandarin, I thought it particularly striking that the character min — a word primarily used to mean "people, public and citizenry" and secondarily, "private"— was the character chosen to represent "private sector" in this phrase.  This min is also the root character for min zhu, the binary-character word for "democracy."  A more common choice for "private" would have been si, the root word for all things private, like si chan, the word for "private property."

So, is this a question of usage or is there a cloaked meaning in this tagline?  As the state advances, do the people - and democracy - necessarily retreat?  Is the Chinese government communicating something to its citizenry with guo jin min tui?  (i.e., Is this a vaguely threatening and oblique response to the hilarious and subversive Grass Mud Horse Cao Ni Ma (aka, F-- Your Mother) YouTube videos that proliferated throughout the intertubes like a hundred dirty flowers last month?)

Jake the Plumber, Part Deux

A reader responds:

Oy, Oy. Why is this guy complicit in a "bonus scam?" He signed a contract for services and his letter rightly points out the hypocrisy of Messrs. Liddy and Cuomo. To that list he could have added gutless congressmen, hysterical newspersons and bloggers, and those economic experts organizing bus trips to burn crosses in the lawns of bonus recipients. This obsession with a minute blip in our economic crisis, and one that is mostly misunderstood, is actually going to end up causing long term damage. Sounds like Rush of the left.

If you are conducting business with an intent to deceive, that qualifies as a scam in my book. That's why people are so angry. We're told one thing is happening to our money, when reality is quite another. We trusted that everyone invested in one, open market, when our money was really in some back room with a bunch of bookies making bets in bespoke suits.

By the same token, a scheme in which you sell your services to the public for $1 and fashion yourself a martyr when you're in fact a million dollar mercenary (because, let's face it, $750,000 after taxes means $1 million plus, before taxes), and obscure that fact under a ton of fine print -- doesn't exactly strike me as transparent. Worse yet, it plays the taxpayer for a dupe.

And just because it may be technically legal doesn't make it right. Many confidence games are perfectly legal. DeSantis had clever lawyers who, in cooperation with Geithner, helped him dance between the raindrops, is all.

That said, I don't begrudge DeSantis his intelligence, competence and work ethic that lead to his success. I give him credit for having the courage to take a stand for what he believes is true, even if it's an opposing point of view in a decidedly hostile climate.

Unfortunately, he only corroborated that he and his ilk exist in a rarefied bubble of entitlement. It is not the man himself, but the entire culture, of which he is a product, and for which he proudly stands, as evidenced by his defiance, that is being implicated here. He may be a lovely person, kind to small children and animals, but that's beside the point.

A true show of character might've been to return the bonus, thank his lucky stars he's comfortable enough to take some time off, book a flight to Aruba and STFU. Rather, he chose to grandstand in the New York Times, using his resignation letter to demand moral restitution from all the people who have wronged him, and to trumpet his noblesse oblige.

He may not have killed the goose that laid the golden egg, but that goose was good to him for a very long time, and for him to use a major media platform to whine about being misunderstood is so very... Marie Antoinette. Even if he was treated a little unfairly, suck it up. The people standing on line at food pantries and unemployment offices don't want to hear it.

To say we're missing the point, misses the point. AIG has become a potent symbol, and symbols have a habit of transcending the signifier. It's not about DeSantis or his cohorts, but what they represent. This can be dangerous, of course, and I don't agree with the posturing of certain lawmakers and attorneys general who leverage it for political gain, but to pooh-pooh the public's justified frustration is also not the answer. People become angry when they think they are not being heard.

You suggest we've lost the forest for the trees, but the reaction to AIG and all its subplots IS the big picture. Dragging ourselves out of this mess will require restoring confidence -- winning the hearts and minds of the people, if you will -- and responding with a patronizing "Calm down," or, "There are more important things to think about," or, "It's all perfectly legal," isn't going to accomplish that.

No one is advocating burning down houses. (Okay, some are, but they're in the vast minority and reactions to it are just as hysterical -- how many people showed up for that bus tour of AIG exec homes... 20?) The mere sight of a few unwashed investors expressing disapproval over contracts prompted AIG's captains of industry to gather up their skirts and run screaming into their secure compounds. With the exception of Mr. DeSantis, of course, who appeared briefly in a window to shake his fist at the crowd before quickly drawing behind the curtain.

Maybe what they actually fear is that the public reaction will bring about something scarily radical like a measure of finance reform that helps protect and strengthen the market. Or even more terrifying, perhaps it will encourage Geithner to drive a slightly harder bargain next time.

As for the comparison to El Rushbo, all I can say is he fills out pit boss attire -- all 40 yards of it -- better than I do.

Anonymous, thanks for your comment. It's nice to know someone out there is reading.

Jake the Plumber

There's an Op-Ed in today's Times that will surely be the talk of the next 24-hour newscycle, and provide fodder for those with AIG ADD.

Jake DeSantis, an AIG executive and a recipient of a bonus amounting to approximately $750,000 after taxes, has up and quit. In it, he blames everyone for his woes -- CEO Liddy for betraying him, Cuomo for stoking populist rage for political gain, and Congress for listening to their constituents and asking questions on their behalf. 

He takes the opportunity in his resignation letter to tell Mr. Liddy a little bit about himself because they have never met, see, and he wants Mr. Liddy to know he's the child of humble school teachers. He just happens to have cc'd his letter to the New York Times, so if millions of other people read that too, he's cool with that. 

Oh, and btw, he's donating your tax dollars to a charity of his choice. But tax that too much, he warns, and you'll be screwing them over, not him.

The best part is listening to Mr. DeSantis wax righteous about working for $1, when he knew full well he would be handsomely compensated in exchange for touting that line.

For him to assert that he did it for the good of the company, indeed the country, is absurd. In lieu of a reasonable salary, he opted for an outrageously high, guaranteed bonus, to be issued regardless of performance. He argues that he was given repeated assurances on that point, and for the company to renege on it, well, his resignation is nothing less than a matter of honor.

Please. He wasn't working for $1 any more than Bernie Madoff accepted clients out of the goodness of his heart.

But don't even think about shaming him into returning that bonus. He writes:

"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."

Hm. More like the electrician burned down the house, and then the company had no choice but to call in a plumber who leveraged his position to charge usurious rates to fix a toilet sitting in ashes. What is it with this country and plumbers anyway?

Mr. DeSantis may not have been a culprit of the collapse, but he was complicit in a bonus scam, and hell if he's sorry about it. Why didn't he jump ship if, as he claims, all his colleagues were receiving attractive offers left and right? Surely dozens of companies were enticing him with better deals than the paltry $750,000 after taxes the government was offering.

It doesn't take much to see that the culture of entitlement and greed that created the villains of AIGFP also created the likes of this twerp.

Knocking on Marie Antoinette's Door

I could not resist clicking on this amusing piece that flashed before me today from Reuters:

A small political party angry at bonuses paid to staff of bailed out insurance giant American International Group is organizing a bus tour to the Connecticut homes of several AIG executives.

"We're all mad at AIG," the Connecticut Working Families Party, a small liberal party, said on its Web site, inviting people to sign up for its "Lifestyles of the Rich and Infamous" bus tour and a rally at the company's Wilton, Connecticut, headquarters, on Saturday.

While we pile on and pull knitting needles out of our bags ala Madame DeFarge, I'll also point to Thomas Friedman's op-ed piece from Sunday.  

The blogosphere went atwitter about the oh-so-liberal NYT's finally critiquing President Obama, but I think Friedman's piece was more sober than that:

Had Mr. Obama given A.I.G.’s American brokers a reputation to live up to, a great national mission to join, I’d bet anything we’d have gotten most of our money back voluntarily. Inspiring conduct has so much more of an impact than coercing it. And it would have elevated the president to where he belongs — above the angry gaggle in Congress.

I'm countering the venting agenda of this blog by saying so, but once the venting is done, all of us - Marie Antoinettes, regular folk and everyone in between - must appeal to the "better angels of our nature" to collectively pull out of this Economaggedon.

Can Marie Antoinette be inspired to donate her millions in a fit of public good will?  Now that would be a feat indeed.

photo courtesy of: Connecticut Working Families