Big improvement or ripping people off ?? Not sure which it i

[Olaf Hart]

I'd give him 30 seconds in the ring with Trudeau.

If it seems too good to be true, it generally is.

[Bull City]

Yeah, I would vote for Beau! We seem to share many common views.

Same for me, and besides that, Beau has a record of getting important things done, like MAYAN.

Exploratory Committee!

[kimbottles]

I'd give him 30 seconds in the ring with Trudeau.

I think if we arranged such an event Beau and Justin would get along so well they would drop the gloves and go out for a sail and beers on Mayan.

We would be so lucky to get Beau as our Prez.

Count me in for the committee Bull!

[Orestes Munn]

I would vote for Beau, but we have a pretty good second rate president whose opinions probably align with Beau's about 85% and it's not helping much with these particular issues.

[LarryHoward]

I would vote for Beau, but we have a pretty good second rate president whose opinions probably align with Beau's about 85% and it's not helping much with these particular issues.

I would agree with second rate (and I voted for him the first time and neither candidate the second) but offer his actions on economic issues rarely match his rhetoric. Even when his party had a majority across the government they fiddled rather than acted other than shoving a massively flawed ACA down our throats. Given the choices we are facing for next fall though, I think President Obama's reputation will improve no matter which of the assembled clowns replaces him.

It is worth noting that raising personal taxes on the top wage earners would be a drop in the bucket compared to the deficit. Cutting spending or generating significant economic growth outside of Wall Street has to happen or we are rearranging deck chairs. A bipartisan and fundamental reform of the tax code would be nice to see.

[Orestes Munn]

I didn't meant to imply that Obama had been an effective president, except perhaps by keeping the barbarians of both stripes at bay. No politician of national standing has been serious about fiscal issues since Paul Tsongas. Almost everything since has been identity politics or special interests, disguised as giving a shit. I did read something about the Concord Coalition somewhere recently, but I forget what it was.

[kimbottles]

I didn't meant to imply that Obama had been an effective president, except perhaps by keeping the barbarians of both stripes at bay. No politician of national standing has been serious about fiscal issues since Paul Tsongas. Almost everything since has been identity politics or special interests, disguised as giving a shit. I did read something about the Concord Coalition somewhere recently, but I forget what it was.

Back when I was an established member of the business community I attended a conference on social security. I found myself sitting next to Paul Tsongas. He was a VERY impressive guy. I very much enjoyed the couple hours I spent with him. I am not easily impressed, but I sure was impressed with his mind. He might have made a very good president, he sure had plenty of smarts.

[kimbottles]

A solid bipartisan income tax reform is way over due.

[Bull City]

A solid bipartisan income tax reform is way over due.

I'd settle for a "solid bipartisan" anything - other than a raise for themselves. Fixing the highway trust fund should be do-able.

[Ish]

A solid bipartisan income tax reform is way over due.

I'd settle for a "solid bipartisan" anything - other than a raise for themselves. Fixing the highway trust fund should be do-able.

Funny, isn't it? The first thing politicians of any stripe do when they get elected is raise their own pay.

[LarryHoward]

A solid bipartisan income tax reform is way over due.

I'd settle for a "solid bipartisan" anything - other than a raise for themselves. Fixing the highway trust fund should be do-able.

I'd even go for a major pay raise for them. Just make it predicated on a few things.

Pass the budget on time without fail

A total prohibition on accepting more than 100 dollars from any donor, individual or corporate. No super pacs. No election committees and no national party funds. The Broadcast stations hold federal licenses. Any candidate with XXX endorsement signatures gets equal time. Any candidate polling less than 10% 1 year out, gets cut off

Term limits with an absolute prohibition for 5 years on lobbying (and expand the definition of that) or accepting a position directly or as a paid consultant to any industry he or she served to regulate during their term. I had a 2 year, a 5 year and a lifetime prohibition from working for companies I managed contracts with when I was a Major Program Manager for a Navy Program. Spelled right out in title 10. Surely they should be just as accountable.

[kimbottles]

A solid bipartisan income tax reform is way over due.

I'd settle for a "solid bipartisan" anything - other than a raise for themselves. Fixing the highway trust fund should be do-able.

I'd even go for a major pay raise for them. Just make it predicated on a few things.

Pass the budget on time without fail

A total prohibition on accepting more than 100 dollars from any donor, individual or corporate. No super pacs. No election committees and no national party funds. The Broadcast stations hold federal licenses. Any candidate with XXX endorsement signatures gets equal time. Any candidate polling less than 10% 1 year out, gets cut off

Term limits with an absolute prohibition for 5 years on lobbying (and expand the definition of that) or accepting a position directly or as a paid consultant to any industry he or she served to regulate during their term. I had a 2 year, a 5 year and a lifetime prohibition from working for companies I managed contracts with when I was a Major Program Manager for a Navy Program. Spelled right out in title 10. Surely they should be just as accountable.

I like Larry's ideas, all of them!

[Orestes Munn]

A solid bipartisan income tax reform is way over due.

I'd settle for a "solid bipartisan" anything - other than a raise for themselves. Fixing the highway trust fund should be do-able.

Funny, isn't it? The first thing politicians of any stripe do when they get elected is raise their own pay.

Our legislators make considerably less than many of us here and it is extremely difficult politically for them to raise their pay. I happen to think what they do is important enough to pay them more. They might take the job more seriously then.

[BeauV]

Thank you all (I think) for a vote of confidence.

My Mom once said: "I don't care what else you do with your life, but if you ever become a politician I'll never forgive you."

I personally don't think our various problems are with the politicians, I think our problems are with the voters.

Once I happened to be in Nicaragua, a small Central American country, on election day. Everyone voted! It typically took 4 hours of standing in line after a 2 to 30 hour walk to get to the polling booth, but they all voted. That night they partied together with their ink stained fingers as PROOF that they had voted. They gave me a pass on no stained finger only after I explained I wasn't one of them.

How do we get people in the US to VOTE!???! I simply can't accept that the country would be this screwed up if we all voted and took it seriously.

Larry is right with a lot of his proposals, but at the root of this is that we need a population that gives a shit, learns what the issues are and feels obligated and duty bound to really make good, even GREAT, decisions about who should be running our country.

As a people, we are fat and lazy and generally refuse to think much. So we have the gubmnt we deserve.

[LarryHoward]

I'm not so sure that I'm in favor of compulsory voting. On one hand, having to vote may convince folks to research and make considered decisions. However, given the attention span and intellectual depth of a not insignificant proportion of the populace, we could elect Elmer Fudd - who admittedly might do better than any of the current candidates.

[Ish]

I'm not so sure that I'm in favor of compulsory voting. On one hand, having to vote may convince folks to research and make considered decisions. However, given the attention span and intellectual depth of a not insignificant proportion of the populace, we could elect Elmer Fudd - who admittedly might do better than any of the current candidates.

I could see Elmer winning on a write-in campaign. The gun crowd would be all over him.

[Bull City]

A solid bipartisan income tax reform is way over due.

I'd settle for a "solid bipartisan" anything - other than a raise for themselves. Fixing the highway trust fund should be do-able.

I'd even go for a major pay raise for them. Just make it predicated on a few things.

Pass the budget on time without fail

A total prohibition on accepting more than 100 dollars from any donor, individual or corporate. No super pacs. No election committees and no national party funds. The Broadcast stations hold federal licenses. Any candidate with XXX endorsement signatures gets equal time. Any candidate polling less than 10% 1 year out, gets cut off

Term limits with an absolute prohibition for 5 years on lobbying (and expand the definition of that) or accepting a position directly or as a paid consultant to any industry he or she served to regulate during their term. I had a 2 year, a 5 year and a lifetime prohibition from working for companies I managed contracts with when I was a Major Program Manager for a Navy Program. Spelled right out in title 10. Surely they should be just as accountable.

I'm with Larry on each of these except any raises. I used to be against term limits, feeling that voters should be able to re-elect the same bum term after term, but money has changed all that. The re-election rate of incumbents is ridiculously high and their accumulation of money is no doubt a factor.

I think Beau makes good points about the ignorance and apathy of the American public. I would add that the Republicans and their deep-pocketed backers have succeeded in capturing the votes of many working, middle class and retired voters by getting them whipped up on social issues (opposition to gun control, abortion choice, same sex marriage, Obamacare, etc.) and then selling them down the river on tax and economic policies.

At the same time, the Dems have done a pitifully inadequate job of educating the public about what their opponents are doing to them, and how their own policies can improve their situation.

- Ravings of a former Republican living in a formerly Democratic state

[kdh]

Larry, I too voted for Obama the 1st time and not the 2nd.

Beau, you write: "These long term policy shifts in our government are the real cause of the 1% wealth concentration that folks complain about. It has been designed into our tax codes and the very structure of our commercial activity, many times as an unintended consequence of some benighted policy that is supposed to create jobs for labor."

I respectfully disagree. I think competition in the labor markets created by globalization and automation is the primary cause. A lot of the 1% ($400k and up, pay 35% of taxes) are there because they have an education or a skill that's hard to find, like your software guys.

We loved Paul (RIP) and still love Niki Tsongas around here.

We have a (truly) hedged investment product--market and risk neutral. Hence I'm a "hedge fund guy." I pay 43.4% of investment gains to the federal government, 39.6% of my salary. No one in my firm has a secretary but our office manager pays a lower rate than I do. Warren Buffet is not a hedge fund guy. Within reason I'm happy to pay more in taxes, especially if we stop waging wars.

I know many hedge fund guys who are not wealthy. Like many businesses it's a tough game and relatively few succeed.

[Orestes Munn]

I used to think that a class conscious electorate who voted their economic interests, rather than identity politics, could reverse the fortunes of the working/middle class in this country, but I no longer believe it's possible. The value of labor has been so eroded by the forces Keith mentions that nothing is going to hold back the slide from yeomanry to proletariate. People forget how brief and anomalous the postwar period has been. It will be interesting to see if parts of Europe can keep the American Dream alive under all this and the pressures of immigration.

[SemiSalt]

When I was at PepsiCo (86-84), Don Kendall was the CEO. His salary was $7 million. He got other compensation, but that was much less than the salary. And he owned a ton of the stock which paid a good dividend. That was pretty typical of similar Fortune 500 companies.

A company named US Surgical was HQ'ed near here. I'm not sure how big it was, but not bigger than PepsiCo. The CEO decided to give himself $40 million a year. In the ensuing rush of greed, all the compensation committees of sizable corporations tried to make sure their CEO got above average compensation.

Now, its a mathematical fact that it's not possible for everyone to be above average, and executive compensation rose dramatically. You could call it a bidding war for talent, but it was really out of control. The worst effect was that the beneficiaries thought they were worth it, so there have been a lot of sordid scenes like at guy at AT&T who was so bad he was fired aft 18 months and needed a $25 million package to sooth his wounds.

[Jamie]

Globalisation is part of it, but automation plays an even bigger role. You can see real wage stagnation even in jobs that aren't exportable.

Corp. taxes: It's been a really been a race to the bottom globally, though the opportunity to lower a company's tax bill through tax structures is slowly being eroded with policy initiatives like BEPS. Your tax structure better have operational substance or you are going to spend a lot of time and money defending it. US corporate income taxes are high, especially when you add in the local and state portions, but I think you'll find few companies in the US paying the full statutory tax rate.

That said, if tax and regulation were the biggest barriers to business growth, then no one would do business in China, or many countries in Asia. These are with few exceptions, highly taxed, highly regulated environments with very labor friendly labor laws. Labor is cheaper, but those costs are growing double digits and very few other costs are cheaper.

Individual taxes: Taxes have not been less progressive then they are now in a long, long time, especially when it comes to the upper end of the 1%. I don't see how those lower marginal rates are improving job creation or job quality. Most studies show no link. Capital generally grows faster than wages and also gets a lower marginal rate. Some entrepreneurs who have amassed great wealth, have done so partially by extracting concessions out of the government.

A couple last thoughts: De-burring was a labor intensive job that required a reasonably skilled person. A mistake could cause a lot of re-work or even ruin a piece. This job has now been replaced by a robot. Once the process gets refined, these robots will be installed in all of our Asia plants as well. This change is coming for the rest of the world too.

What happens when my plant in Asia is just as automated, or even more automated than my plant in the US? And what happens when those plants are plugged into better infrastructure? We have partnered with Intel and are embedding IoT functionality into our air compressors which should lower operating costs for our customers and lower our service costs. All that is getting launched in Asia first.

I may have posted this before, but I think this guy make well researched videos with a good sense of humor.

[youtube]http://www.youtube.com/watch?v=7Pq-S557XQU[/youtube]

[kdh]

Great thoughts here.

Semi, to me, two things need to get fixed:

1) Executive pay. Boards should pay for what they get in skills. As shareholders themselves, frankly, I don't understand why boards go along with this massive shift of earnings from shareholders to executives.

2) The carried interest loophole for private equity managers. To me this is just not fair and a tax law change is the fix. A good example of the power of lobbying in keeping this alive.

[SemiSalt]

Great thoughts here.

Semi, to me, two things need to get fixed:

1) Executive pay. Boards should pay for what they get in skills. As shareholders themselves, frankly, I don't understand why boards go along with this massive shift of earnings from shareholders to executives.

2) The carried interest loophole for private equity managers. To me this is just not fair and a tax law change is the fix. A good example of the power of lobbying in keeping this alive.

I was never sure why the mutual fund managers couldn't or wouldn't put a brake on executive compensation. It was their job.

[LarryHoward]

I'll take a contrary view for a moment. Let's look at LM for a moment. "World's biggest Defense corp" Capitalization of 64B and annual sales of $45B. Since Hewson took over, stock price has doubled and profits have risen to record levels. As a shareholder, you would appreciate those results.

SO, what does she make? $34M last year. $1.5M in salary, $7m in incentive (non equity), $9M in stock award and $15M in deferred comp that remains a corporate assert (and liability. Usually held for 5-10 years and paid out over 5-10 years. Little chance she will not collect it unless the company goes totally bust, but it is not"guaranteed").

What was her "salary? $1.5M. The remainder is all based on results. In my experience, at least 1/2 of the incentives are based on "long term" goals of 3 years running and, as one who works in defense and had a compensation package (not like hers ) that was heavily based on corporate level performance, I can tell you that incentives are not guaranteed income. Most have a "zero level", a "meets goals" level and an "exceeds goals" level. My incentives made up 50% of my "Compensation target" and were made up of a sum of about 20 different metrics and each had an assigned percentage. I think we rang "all the bells" once in 5 years. We also fell done into the single digit percentage one year. Certainly, executives will manage toward what they are incentivized toward and the Board's compensation committee better be setting those incentives toward shareholder and analyst expectations.

Point is after 3 excellent years, she collected 0.075% of annual sales, more than 90% of that based solely on performance.

Compensation for executives and the rationale and metrics are in the annual reports or Proxy Statements. I find them great reading, particularly if I am trying to predict a company's tactical behavior over Q3 and Q4 of their FY.

[Bull City]

Those are some serious raises in percentage terms. Did the rest of the employees fare as well?

[BeauV]

I am always surprised that many folks will apply the mantra of the superiority of the Free Market at setting prices for lots of things, and then back away saying that CEO salaries should be regulated in some way. How does that work for folks?

It's not like there isn't competition between prospective CEOs....

[kdh]

Semi, for fun we run a little mutual fund. Unusually we vote our own proxies, and always vote for shareholders vs management, which usually means voting against raises for executives. But we're just a vote. Shareholders have to act en masse.

Beau, for the record I didn't suggest regulation as the way to limit executive pay, though clearly others have. The problem with the free market for setting executive pay is it's a matter of the board largely spending other people's money, in that all the shareholders are paying, not just themselves.

Larry, I appreciate your thinking. Getting incentives right is everything to me. To me regulation and tax laws and government meddling should always be viewed in this context--shift incentives away when the profit incentive is wrong.

But corporate performance, in my mind, should not be measured using the stock price, as it's mostly unrelated to executive and corporate performance, at least in the short term. Using the stock price managers are typically rewarded when the stock appreciates, but not adequately penalized when the stock goes down.

To be quite general, to me one of our greatest failings as humans is not understanding well the random nature of the universe. To appreciate and measure the probability of events and behave accordingly, to appreciate what we control and what we don't.

[Orestes Munn]

To be quite general, to me one of our greatest failings as humans is not understanding well the random nature of the universe. To appreciate and measure the probability of events and behave accordingly, to appreciate what we control and what we don't.

Randomness is only possible to grasp in the abstract for the great majority of people and impossible for the rest of us animals. Behavioral adaptation involves the "assumption" that things occur for a reason and having a pretty low threshold for trend detection. That faculty is hard wired.

[BeauV]

Keith - I agree that you didn't suggest regulation. As to the shareholder's representatives (board members) spending "Other People's Money", that sounds one heck of a lot like our Congress! With all the same problems of representative government. Activist shareholders, which I have been one of in past years, can have an effect; especially now that communications is so easy over the net.

I'd suggest that there is another problem. The rewards for being a good director of a public company are quite small, but the repetitional damage to that same director for picking what is viewed as a B-Player as a CEO and having said B-Player fail at precisely the same rate as the A-Player are quite large. Because the selection of directors is not a very public process, if at all, most shareholders and other company nominating committees don't even know that a director is become tainted by picking the B-Player.

Because of this asymmetry in the risk, most board will pay up (yes, with other people's money) to get the publicly acknowledged A-Player and that reduces the supply to such an extent that the negotiations to lower salaries fail.

Having been "that CEO" that negotiated with the board and on a board with a CEO who is pushing for more money, I have to say that an additional factor is when one has a CEO who is doing a pretty good job and wants another 0.01% of profits: you give it to her. It is crazy to take the company through a CEO transition for what is a relatively small amount of money. As companies have grown the 0.01% of profits has become a BIG number in some cases and seems absurd in isolation. But Joli is right to look at it as a percentage. Doing the wrong CEO change can certainly damage the company's market cap far more than a bit of overpaying the CEO.

So, we have a lot of CEOs who are over paid. It doesn't help the Board that CEOs are almost a perfect selection of tough negotiators who are willing to fight hard for things, while board members are much less so.

[kdh]

Beau, points well taken.

I might say that the most relevant asymmetry is that the board pay the CEO, the CEO pays everyone else. That additional .01% of earnings can be spent in a lot of ways. It's the CEO's job to spend it in the most productive way.

To me in the end if a CEO is managing the company and not the stock, is compensated based on reasonable performance metrics as are the people under him, then that's a start.