Truth Victimized By Outrage

I was struck by an open resignation letter printed in the New York Times written by one of those vilified AIG bonus recipients to AIG Chairman and CEO Edward Liddy. 

The letter, written by Jake DeSantis, an executive vice president of the American International Group’s financial products unit, basically communicates his feelings of betrayal in terms of the perceived duplicity of Mr. Liddy, noting that while Liddy had on multiple occassions reiterated his intention to honor bonus payments to be made to people who had nothing to do with the meltdown associated with credit defaul swaps, he changed his tune in the face of congressional and public outrage and threw the employees under the bus.

The letter, assuming that the facts contained within it are all true, is a sad commentary of how easily public opinion can be manipulated by selective dissemination of the facts. Either duped themselves or seeing an opportunity to sound spectacularly populist to Joe Taxpaper, politicians line up at the podium to bash the greedy businesspeople, the newspapers put it on the front page and the cycle perpetuates. Some of the tabloid headlines included "A.I.G. IS A P.I.G." (New York Daily News); "OUTR-AIG-E" (San Jose Mercury News); "BONUS BLOWUP" (am New York); and "OH NO YOU DON'T" (New York Post).

I had written in an earlier post that I was concerned of the lynch mob mentality of the backlash. The problem with lynch mobs is that emotions sometime get in the way of the truth. It seems that some of that might have happened here.