And if an already neutered government is run by men and women too timid to actually regulate private business for fear of being labelled a socialist, we are going to continue to see salaries that completely ridiculous.
In addition, Steverman astutely points out that the very wealthy in this country further consolidate their power by sitting on boards of other companies. If you are a Bill Gates or Warren Buffett that's not such a bad thing given their stated goals and actions towards social justice. But not everyone is Gates or Buffett. Many are like MacGuire above. Their only interest is money and power.
20 comments:
If you are a Bill Gates or Warren Buffett that's not such a bad thing given their stated goals and actions towards social justice.
Translation: You can do whatever you like as long as you pay lip service to what I believe are "good" goals. Whether or not that has any actual relationship to reality (See: Warren Buffett thinking "people like me should be taxed more", but not "I should be taxed more" since we all noticed he's not fighting to reduce his own deductions) is completely beside the point, right?
consolidate their power by sitting on boards of other companies
You want to put a barrista or landscaper on the board of GM?
Their only interest is money and power.
Because that's their job! If I invest my money in ACME Co. I sure the hell don't want Marxy on the board of directors because my investment would not be safe in the hands of someone who's interests are in social justice rather than money.
In fact, Buffett is asking for his own deductions to be reduced, along with the deductions of all wealthy fat cats like him. He's not saying "it's terrible how all those rich guys are living high on the hog." His specific example is that it's wrong for him to be taxed at 17.7% and his secretary to be taxed at 30%.
The problem is that most forms of long-term capital gains are taxed at the absurdly low rate of 15%, where the average person pays federal taxes of 25-35%, and then pays Medicare, Social Security and state taxes on top of that. The wealthy can claim citizenship in a low-tax state or the Caymans on a whim, payroll taxes only apply to the first 100K or so in salary and don't apply at all to capital gains.
Any wealthy person worth their salt can arrange things to make the majority of their income come out in the form of long-term capital gains.
In general, all forms of income should be taxed at the same rate. But I could go along with the idea that some forms of long-term investment should be taxed at the 15% rate -- investments that provide for the common good. Hedge fund manager salaries should not fall into that category. We shouldn't be giving tax breaks to companies that invest abroad. Yet the Republicans blocked the 9/11 responder bill because House Democrats wanted to pay for it by closing foreign investment tax loopholes.
I just don't get why regular guys swallow the lies that Beck and Limbaugh keep pumping out. These guys are screwing you and the rest of us by not paying their fair share. Yeah, I know you hate Obama and the Democrats. But sometimes they're right and Beck and Limbaugh are just dead wrong. This is one of those times.
Oh, and your Bill MacGuire jab?
First, the company back dated stock options, not stocks.
Second, you have no idea what that means and could not explain to us why that is even a bad thing.
Third, at the time it was a common practice among corporations. And as is common, the government comes along, decides something isn't legal now and changes the rules as they are to be applied.
Fourth, why the hell shouldn't the board pay MacGuire that much money? Do you have any idea of what he did to that company while CEO? In seven years he took an unprofitable company that grossed $400 million a year to one of the top companies in the field that grossed $70 billion a year. That's a 17,500 percent percent increase in revenues. Seventeen thousand, five hundred percent! As a former salesman, what kind of commission would you get on a years sales of 69.6 billion? You complain on his half billion? That's less than 1% of 1% of what he was responsible for bringing into the company. I wouldn't feel my investment dollar was unsafe if placed in a company he was running.
How do you know what Mark knows, Guard Duck? Are you calling him stupid? Both Mark and I live in MN so we know very well all that went on with UHC. Bill MacGuire broke the law and wasn't punished for it because Republican lawmakers didn't want to prosecute their pal.
Ah, more proof of CEO worship courtesy of Guard Duck and it's still all the government's fault.
Yay! oojc is back! Let's pick up where we left off in a previous thread...
oojc said...
This is the part, Mark, where dw (and others) fault you for their own ignorance-willful or otherwise. Mark has "tremendous hubris" because ideologues refuse to accept things they don't like. What a pathetic joke.
12:30 PM
Anonymous said...
Perhaps you can enlighten us oojc. Exactly which part of my comments did you find ignorant? What did I 'refuse to accept'? Did you read anything I wrote, or is my writing so incomprehensible that you somehow got the impression that I was an ignorant ideologue?
What is the pathetic joke? That a person can be self-governing?
Please continue your train of thought. I'd hate to spend the rest of the day wondering if I was an ignorant ideologue.
dw
How do you know what Mark knows, Guard Duck? Are you calling him stupid?
Mark just posted that Steverman was 'astute' for pointing out that the sky is blue...errr corporate boards are populated with people who have experience working on corporate boards. If he thinks that is an 'astute' observation...well then he doesn't need me pointing out the obvious.
You and Mark both know 'very well' what a back dated stock option means and why that is a bad thing? OK, prove it. I can explain it in two sentence's and less than 40 words - can either you or Mark?
Yay indeed! Now surely oojc or brendan will be able to tell the world about that time [at band camp] when this wealthy person abused them - and how that made the wealthy person even wealthier.
Because the wealthy have to fuck you over to get and stay wealthy - so sayeth M.
C'mon kids, you know we don't blame you - you were victimized, and we'd love to see the victimizer held to account! We just need to know for what.
How do you know what Mark knows, Guard Duck?
You know brendan you actually are close to having a point there. We don't know what M knows - we only know what he says/writes. It could be that he is very smart but can't write worth a lick. Or, what he writes might be a very clear reflection of what (and how) he thinks. I leave it to the gentle reader to draw his/her own conclusion.
Bill MacGuire broke the law and wasn't punished for it because Republican lawmakers didn't want to prosecute their pal.
From what I read he actually cut a deal with the SEC, the people who are in charge of enforcing securities laws (not "Republican lawmakers") which ironically enough, for this post, included him not sitting on any corporate boards for 10 years.
However, since we're talking about evil rich people, perhaps you can elaborate on how he harmed you. Did he defraud you of money? Did he assault you? Were you a shareholder of UHC and you believe he could have delivered more shareholder value? What, aside from an improper stock transaction did he do to you that harmed you?
Show me on the doll where the Evil Rich Fat Cat touched you.
[stolen brazenly by]
dw
Probably in his swimsuit area!!
Guard Duck-what a fine example you are of the PROBLEM.
As long as a company makes money, then everything must be alright. The government comes in and always fucks everything up, right?
I'm going to ask you kindly to research UHC and MacGuire a little more thoroughly. It shouldn't take you more than a half hour or hour. Tell me what you think at that time.
Classic M - please go research UHC/MacGuire and then tell me everything he did that was bad.
Rather than you tell us (with links of course).
C'mon M, can't you put up one thing that harmed you? How did UHC or MacGuire fuck you over.
I'll expect your response in the next half hour.
Mark, that's their job... what more do you want?
Your job is to teach - should your community be upset that you can't also build a self-contained bio-fuel powered carbon dioxide storage facility?
I did research UHC and MacGuire - He massively improved that company.
Here's a question for you Mark. Back dating stock options is nothing more than 'accounting tricks'. Not more than a month ago you advocated for the US government to utilize 'accounting tricks' in order to show a better budget. What the hell is the difference between what MacGuire did and what you advocate?
"Mark, that's their job... what more do you want?"
This is the exact mentality that brought us to the collapse in 2008. Legality, morality, common sense...all out the window...with profit as the end all and be all of everything. I have students, Guard Duck, who wonder why they need to do their homework when they can just game the system, rip people off, and make it rich. This is what they see on real life. And you think that should be held up as a standard to them?
"So what has McGuire done to warrant his $1.1 billion farewell package? He's done what Wall Street investment banks have done for decades. He positioned himself and his company at the choke point of money. UnitedHealth and other managed care providers have essentially become medical brokers, making money at the expense of an inefficient system.They may allow doctors to make treatment decisions, but they ultimately decide who gets paid and who doesn't. They are the arbiters of capital in the medical community, and for that, they extract a hefty price.On Wall Street, brokers get their price from us in the form of commissions. On Med Street, it's in the form of premiums.
The end result is the same. "
http://www.chron.com/disp/story.mpl/business/steffy/4318193.html
Understand what I am talking about now?
Did you read the series the WSJ did on MacGuire? Scroll down and you will see the links.
http://online.wsj.com/article/SB119697535545316199.html
Further reading...
http://www.businessweek.com/magazine/content/06_28/b3992075.htm
When did I advocate that the US use accounting tricks? Sounds like more word smithing tinged with anti government sentiment.
From the chron article:
"This is based on a myth known as moral hazard"
Well that was a short walk off the pier of credibility. Long on rhetoric, short on facts - no wonder you should link to it.
You still haven't said what ANY rich person has done to abuse you, let alone McGuire in particular.
Aside from the stock transactions, what did he do that was bad? The company value to shareholders increased about 120 times over the value when he was appointed CEO. Is that a bad thing M - it is bad to run a profitable and growing company? That is the core of capitalism - and you don't like that? That is NO different from what Buffett or Gates have done - are they evil too?
When did I advocate that the US use accounting tricks? Sounds like more word smithing tinged with anti government sentiment.
...If adjustments are made to the system similar to the several that are suggest by Simpson-Bowles, the Esquire guys, or the Times puzzle we did...
Adjustments. Such as:
Use an alternate measure for inflation (accounting change)(equivalent to changing depreciation rates unilaterally)
Gradually raise the retirement age (this is essentially back dating benefits)(changes the rules after people joined the game - what would you say if Maddoff 'changed' his scheme and stopped paying people?)
Increase years used to calculate benefits (accounting change)
I apologize for using the term 'accounting tricks'. More appropriate would have been a simple accounting change.
why they need to do their homework when they can just game the system, rip people off, and make it rich
MacGuire is a doctor. I'm pretty sure he did his homework.
Game the system? Back dating stock options is not illegal marxy. Did you know that?
Rip people off? Who got ripped off here? How were you or I harmed?
Make it rich? If you were doing your job you could easily engage your students in an exercise of logic where they would see and compare how their actual odds of being rich or poor or somewhere in between is most impacted by the doing of their homework. Apparently its easier to blame McDonalds and Micheal Jordan though.
Warren Buffett is a vicious dickhead who hates the poor.
Think about it. If the US raises the top tax rate like he wants, he'll still get all his deductions. But anybody who wins the lottery and suddenly becomes wealthy, and doesn't have all of Buffett's deductions... Warren Buffett thinks they should have to pay through the nose.
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