Should a Windfall Profits Tax be Applied to Politicians?

[Toro]

Today's New York Times reports on Sen. Barack Obama's record-breaking fund-raising spree to finance his bid for the Presidency. Last quarter Sen. Obama raised, as the Times puts it, "a whopping $31 million." ...

In May, however, the very same Sen. Obama called for Senate hearings into allegedly excessive pay for CEOs of corporations.

The Senator is either ethically inconsistent or intellectually inconsistent (or both). The pay of private-sector CEOs is determined by market forces. No one -- absolutely not a soul -- is forced to contribute money to fund CEO salaries. Those who pay such salaries do so voluntarily.

It's the same with those who contribute to political campaigns such as Sen. Obama's. Everyone who does so, does so voluntarily. I wonder how Sen. Obama would react to someone suggesting that his bulging campaign chest is the result of "greed" and behind-closed-doors deviousness by him and his campaign staff. I wonder if he thinks that government should hold hearings to "investigate" the unprecedented ummph and possible anti-social consequences of his fund-raising success?

http://cafehayek.typepad.com/hayek/2007/07/sen-obamas-gree.html

 

[RetiredGySgt]

Personally, if I knew a way to do it legally and consistantly I would dump contributions from all sources to individuals. I would require contributions be put into a single pot and divided up amongst the eligable contenders.

Of course that doesn't work in practice, since how do you determine who and how many can run? How do you get people to contribute when they know all their money is not going to "their" candidate? And you sure as hell probably wouldn't get "special Interest" groups and corporation to donate in such a system.

I would further require that all contenders be given a set amount of air time, both cable, TV and radio ( the air waves ARE our property after all) and that they recieve x amount of space in newspapers and magazines of their choice.

And I do not mean just Democrats and Republicans. Perhaps a national signing drive with a requirement for x number of signatures from registered voters through out the US every 2 years to certify what Parties or groups would get these funds and time.

Wishful thinking, it will never happen.

 

[red states rule]

http://cafehayek.typepad.com/hayek/2007/07/sen-obamas-gree.html

Gee, I hear libs saying what a rotten economy we have and yet they are able to raise this much money for their candidates

How will they explain this one?

Seeing all the money people are handing over to the Dems - it is true - a fool and his money are soon parted. (As if Dems did not take eneough of their money in taxes)

 

[Care4all]

http://cafehayek.typepad.com/hayek/2007/07/sen-obamas-gree.html

Political Fotter.

First, Obama is running for President and those that donated to his CAMPAIGN have every right to choose to do such.... none of this is his own money, right Toro?

Second, CEO's are PAYING THEMSELVES these huge, and in some cases, unelthical salaries along with company monies paying for things like $6000 dollar shower curtains, and 40th birthday parties for their Trophy Wives with all invited flown to the Carribean, out of STOCK HOLDER'S PROFITS, via the Cronie loaded board of Directors whose fiduciary duty is to the Stock Holder and NOT to their buddy who is the company's CEO, I can understand the inquiry and the need for change, even if the change came from within the specific industry itself, instead of the gvt.

This is what was being investigated, from what I had read?

Care

 

[red states rule]

Political Fotter.

First, Obama is running for President and those that donated to his CAMPAIGN have every right to choose to do such.... none of this is his own money, right Toro?

Second, CEO's are PAYING THEMSELVES these huge, and in some cases, unelthical salaries along with company monies paying for things like $6000 dollar shower curtains, and 40th birthday parties for their Trophy Wives with all invited flown to the Carribean, out of STOCK HOLDER'S PROFITS, via the Cronie loaded board of Directors whose fiduciary duty is to the Stock Holder and NOT to their buddy who is the company's CEO, I can understand the inquiry and the need for change, even if the change came from within the specific industry itself, instead of the gvt.

This is what was being investigated, from what I had read?

Care

who are you to judge when a CEO is making to much money? Are we headed to a maximum wage law in the US? The pay for a CEO is determined unusally by a contract and approved by the Board of Dorectors

Hillary has bellowed how her government will "oversee" CEO pay - my sound like the old Soviet Union to me

 

[Care4all]

who are you to judge when a CEO is making to much money? Are we headed to a maximum wage law in the US? The pay for a CEO is determined unusally by a contract and approved by the Board of Dorectors

Hillary has bellowed how her government will "oversee" CEO pay - my sound like the old Soviet Union to me

WHAT RIGHT DOES THE CEO HAVE to TAKE the stockholder's profits and pay for his wifes 40th birthdasy party in the carribean with all invited's airfare and hotel paid for by STOCKHOLDERS, THE OWNERS of the company, without at least notifying or telling them?

Or the CEO taking stockholder's profits to pay for a $6000 dollar gold plated shower curtain for the CEO'S HOME, in the guise of it being his salary??

 

[red states rule]

WHAT RIGHT DOES THE CEO HAVE to TAKE the stockholder's profits and pay for his wifes 40th birthdasy party in the carribean with all invited's airfare and hotel paid for by STOCKHOLDERS, THE OWNERS of the company, without at least notifying or telling them?

Or the CEO taking stockholder's profits to pay for a $6000 dollar gold plated shower curtain for the CEO'S HOME, in the guise of it being his salary??

Care, the pay is APPROVED by the Board of Directors. If the CEO is is misusing company funds (as you are giving examples of) he can be charged (and he was)

Libs have this wealth envy phobia and it is really sad

Do you want the government to "oversee" CEO pay? If you do, where will it stop?

 

[Toro]

WHAT RIGHT DOES THE CEO HAVE to TAKE the stockholder's profits and pay for his wifes 40th birthdasy party in the carribean with all invited's airfare and hotel paid for by STOCKHOLDERS, THE OWNERS of the company, without at least notifying or telling them?

Or the CEO taking stockholder's profits to pay for a $6000 dollar gold plated shower curtain for the CEO'S HOME, in the guise of it being his salary??

He doesn't.

That's why Dennis Koslowski is in prison.

 

[red states rule]

He doesn't.

That's why Dennis Koslowski is in prison.

and other CEO's as well

 

[JeffWartman]

Well, look at the situation that the Ben & Jerry's Ice Cream Corporation was in.

Ben & Jerry are well known liberals, so when they had to hire a CEO, they put all these limits into CEO pay, i.e. The CEO could not be paid more than 5 times the amount of the lowest paid Ben & Jerry's employee.

Guess what happened? With that pay, they could not get a decent CEO and lost business and had to drop it's limits for executive pay.

 

[red states rule]

Well, look at the situation that the Ben & Jerry's Ice Cream Corporation was in.

Ben & Jerry are well known liberals, so when they had to hire a CEO, they put all these limits into CEO pay, i.e. The CEO could not be paid more than 5 times the amount of the lowest paid Ben & Jerry's employee.

Guess what happened? With that pay, they could not get a decent CEO and lost business and had to drop it's limits for executive pay.

Liberal economics in action

Besides their ice cream costs to much to begin with

 

[Toro]

The problem is that for many CEOs, they get paid for incompetence, and there is very little incentive for boards - which are often times controlled by the CEO - to not give what the CEO wants.

Wages, which have grown something like 60-70% over the past decade, lag CEO pay, which has gone up something like 250% over that same time period. Yet profit growth of American corporations over the last 10 years has grown at about the same rate as the growth in profits over the previous century.

That is why people are upset.

There has been a breakdown at the board level as absentee shareholders in the form of pension funds, mutual funds, insurance companies, etc., are not holding board accountable for their actions.

 

[red states rule]

The problem is that for many CEOs, they get paid for incompetence, and there is very little incentive for boards - which are often times controlled by the CEO - to not give what the CEO wants.

Wages, which have grown something like 60-70% over the past decade, lag CEO pay, which has gone up something like 250% over that same time period. Yet profit growth of American corporations over the last 10 years has grown at about the same rate as the growth in profits over the previous century.

That is why people are upset.

There has been a breakdown at the board level as absentee shareholders in the form of pension funds, mutual funds, insurance companies, etc., are not holding board accountable for their actions.

and the lefts answer - they will oversee the "problem"

 

[Toro]

Well, the best thing governments can do is to make the market work better, which happens when markets break down, assymetric power leads to the extraction of economic rents, etc. And, in this case they can do that by instituting laws that effect the relationship between boards and shareholders, perhaps such as allowing shareholders to vote on compensation packages, eliminating staggered boards and poison pills, etc.

 

[pegwinn]

... I would further require that all contenders be given a set amount of air time, both cable, TV and radio ( the air waves ARE our property after all) and that they recieve x amount of space in newspapers and magazines of their choice. I must disagree. NO ONE owns the airwaves anymore than anyone owns the air we breathe. What is owned is the methods of utilizing the airwaves just as the EMS owns the breathing gear in the amublance.

Wishful thinking, it will never happen. Got to agree with that.

Political Fotter.

First, Obama is running for President and those that donated to his CAMPAIGN have every right to choose to do such.... none of this is his own money, right Toro? It may not be his own money, but he controls it, which can be argued to be the same thing.

Second, CEO's are PAYING THEMSELVES these huge, and in some cases, unelthical salaries along with company monies paying for things like $6000 dollar shower curtains, and 40th birthday parties for their Trophy Wives with all invited flown to the Carribean, out of STOCK HOLDER'S PROFITS, via the Cronie loaded board of Directors whose fiduciary duty is to the Stock Holder and NOT to their buddy who is the company's CEO, I can understand the inquiry and the need for change, even if the change came from within the specific industry itself, instead of the gvt. Key on the words "via the cronie loaded board of Directors". It doesn't matter who they are or how they got there, they are the ones authorizing the pay and perks of the CEO and themselves for that matter. Just like Congress.

This is what was being investigated, from what I had read? From what I read, the Congress is investigating IRT opinion polls. Don't look for anything to change. And in this case, it shouldn't.
Care

The problem is that for many CEOs, they get paid for incompetence, and there is very little incentive for boards - which are often times controlled by the CEO - to not give what the CEO wants. Hmmmm sounds like politics to me. Only with a profit motive instead of a reelection motive. Why is it not ok for CEO's to be paid for incompetence when we keep re-electing the same Congress over and over?

Wages, which have grown something like 60-70% over the past decade, lag CEO pay, which has gone up something like 250% over that same time period. Yet profit growth of American corporations over the last 10 years has grown at about the same rate as the growth in profits over the previous century.

That is why people are upset. Let them eat cake. Or, let them run thier own business. Those who can, do. Those who can't, whine about those who can.

There has been a breakdown at the board level as absentee shareholders in the form of pension funds, mutual funds, insurance companies, etc., are not holding board accountable for their actions. Kinda like the citizens of the nation not voting, and the voters not holding Congress accountable? Distinct parallel I'd say.

Let's see, Ethics and Tax reform, coupled with term limits, and a clear cut mandate for the .gov to get the hell out of the private sectors lives would be a good start. But, as noted above, that would be wishful thinking and not reality based.

 

[red states rule]

Well, the best thing governments can do is to make the market work better, which happens when markets break down, assymetric power leads to the extraction of economic rents, etc. And, in this case they can do that by instituting laws that effect the relationship between boards and shareholders, perhaps such as allowing shareholders to vote on compensation packages, eliminating staggered boards and poison pills, etc.

If the government wants to make the market work better - they should stay the hell out

 

[Toro]

Much of the time, that is correct.

However, here is an example. As an Econ 101 student learns, a perfect market is one where all participants have perfect information. In real life, that is not the case. Government laws which increase the disclosure of information makes markets more efficient and work better.

 

[red states rule]

Much of the time, that is correct.

However, here is an example. As an Econ 101 student learns, a perfect market is one where all participants have perfect information. In real life, that is not the case. Government laws which increase the disclosure of information makes markets more efficient and work better.

That would work if the government had to follow the laws they pass on business

A CEO has to sign off on all financial reports saying he read the report. Now if every member of Congress had to read every page of every bill they vote for

 

[Toro]

Plus the accounting of the US government would land a CFO in prison.

 

[JeffWartman]

Plus the accounting of the US government would land a CFO in prison.