AIG, more facts, and more framing

Thursday of last week I pointed out that the truth of the AIG situation is significantly different from the public frame in which it has been presented.

Yesterday, the NYTimes published an Op-Ed piece that was the resignation letter of Jake DeSantis, an AIG Vice President. The online version is here: http://www.nytimes.com/2009/03/25/opinion/25desantis.html?_r=2&pagewanted=1 (probably requires registration. bugmenot is your friend.)

DeSantis points out several facts:
- people who ran very profitable business units within AIG are being penalized, despite having no association with the group that created the financial disaster
- most of the people who created that disaster are now long gone and so are escaping the barrage.
- the monies paid were not bonuses; as noted, they're deferred compensation, contractually owed to individuals who took much lower salaries (some as low as the symbolic $1) in an effort to prove that they could do well.
- crippling the profitable parts of AIG, including driving out the people who made those parts profitable, makes it much harder for AIG to repay the taxpayers' monies.

I continue to believe that these facts will have no impact on the broader debate.

It's also interesting to see how the "house fire" frame is being used. I believe it was Barney Frank who first made the analogy of the AIG situation to that of someone who smokes in bed and sets his house on fire. No matter how culpable that person is, the reasoning goes, it's still in everyone's interest to put out that house fire lest it endanger the lives of other people in the house or the houses of neighbors.

The "house fire" frame invokes a notion of immediate emergency, requiring all-out response. Even in cases of arson (Bernie Madoff, anyone?) you put out the fire first and then search for the arsonist afterward. Fires bring to mind the idea of a public hazard, which is a useful tool for people like Frank who have to explain to ordinary Americans why they should care about the collapse of big Wall Street firms full of overpaid white guys.

DeSantis attempts to fit his situation into this framing, making the analogy that his group was like the plumbers who did their job properly and are not responsible for the careless electricians whose faulty wiring burned down the house. I'm not sure if this is a deliberate act of framing or just DeSantis responding to the prevailing frame.

AIG, more facts, and more framing

Thursday of last week I pointed out that the truth of the AIG situation is significantly different from the public frame in which it has been presented.

Yesterday, the NYTimes published an Op-Ed piece that was the resignation letter of Jake DeSantis, an AIG Vice President. The online version is here: http://www.nytimes.com/2009/03/25/opinion/25desantis.html?_r=2&pagewanted=1 (probably requires registration. bugmenot is your friend.)

DeSantis points out several facts:
- people who ran very profitable business units within AIG are being penalized, despite having no association with the group that created the financial disaster
- most of the people who created that disaster are now long gone and so are escaping the barrage.
- the monies paid were not bonuses; as noted, they're deferred compensation, contractually owed to individuals who took much lower salaries (some as low as the symbolic $1) in an effort to prove that they could do well.
- crippling the profitable parts of AIG, including driving out the people who made those parts profitable, makes it much harder for AIG to repay the taxpayers' monies.

I continue to believe that these facts will have no impact on the broader debate.

It's also interesting to see how the "house fire" frame is being used. I believe it was Barney Frank who first made the analogy of the AIG situation to that of someone who smokes in bed and sets his house on fire. No matter how culpable that person is, the reasoning goes, it's still in everyone's interest to put out that house fire lest it endanger the lives of other people in the house or the houses of neighbors.

The "house fire" frame invokes a notion of immediate emergency, requiring all-out response. Even in cases of arson (Bernie Madoff, anyone?) you put out the fire first and then search for the arsonist afterward. Fires bring to mind the idea of a public hazard, which is a useful tool for people like Frank who have to explain to ordinary Americans why they should care about the collapse of big Wall Street firms full of overpaid white guys.

DeSantis attempts to fit his situation into this framing, making the analogy that his group was like the plumbers who did their job properly and are not responsible for the careless electricians whose faulty wiring burned down the house. I'm not sure if this is a deliberate act of framing or just DeSantis responding to the prevailing frame.