The video below comes from the article Real World MIA in Elections Rhetoric.

This interview is a follow on to the interview in the previous post The Trouble with Billionaires.

One example Linda McQuaig uses to demonstrate the shift in wealth to the wealthy was not just a natural occurrence but came from deliberate policy changes is the change in regulations governing Stock options. I wish she had been more specific about exactly what that change was.

I did find the paper The Taxation of Executive Compensation by Brian J. Hall, Jeffrey B. Liebman. The paper is 44 pages long and so far I have only skimmed it. In the summary, I found:

First, there is little evidence that tax [rate] changes have played a major role in the dramatic explosion in executive stock option pay since 1980.

Second, we find evidence that the million dollar rule (which limited the corporate deductibility of non-performance-related executive compensation to $1 million) led firms to adjust the composition of their pay away from salary and toward “performance related pay,” although our estimates suggest that substitution was minor.

I added the clarification that the tax rate changes are what the authors mean.

Later, in the body of the paper, I found

Unlike cash compensation, which is expensed against earnings, there is generally no expense recognition (at grant, exercise, or sale) for options, whether they be NQSOs or ISOs. As a result, compensation consultants often point out that stock options are the only form of compensation that are free in an accounting sense, but still deductible for tax purposes.

You or I will have to read the paper more carefully to see if this is the missing explanation for the large increase of the use of stock options.

From Bloomberg News comes the story Koch Brothers Flout Law With Secret Iran Sales. My interest in the Koch brothers stems from their leading role in the right-wing politics of class warfare. They are mentioned numerous times on this blog. You can search for “Koch brothers” in the search bar above.

There is some good news about the Koch brothers, sort of.

Integrity and Compliance

Koch Industries’ political action committee, KochPAC, donated $50,000 to Texans for Rick Perry last year for his gubernatorial campaign, according to the Texas Ethics Commission. It has also donated to support Bachmann’s congressional campaigns, Federal Election Commission records show.

The company tells all of its employees around the world that its top two values, which it calls Guiding Principles, are integrity and compliance. Koch Industries and its subsidiaries have won 436 awards for safety, environmental excellence, community and customer service and innovation since January 2009, Cohlmia says.

The U.S. Occupational Safety and Health Administration has recognized several of the company’s units for their commitment to the workplace, the company says. Koch Industries has also supported charitable causes in Wichita and beyond, including the Kansas Special Olympics and Big Brothers Big Sisters. The company has also helped enlistees in the U.S. Army Reserve.

Koch Industries has donated millions of dollars to the Nature Conservancy, the Red Cross, the Salvation Army and victims of the March 11 earthquake and tsunami in Japan.

Reputation is Critical

David Koch has contributed more than $135 million to cultural institutions, including Lincoln Center for the Performing Arts in New York and the Smithsonian’s National Museum of Natural History.

Koch Industries zealously guards its public image.

“A company’s reputation is critical to how it will be treated by others and to its long-term success,” Charles Koch wrote in “The Science of Success: How Market-Based Management Built the World’s Largest Private Company” (Wiley, 2007). “We must build a positive reputation based on reality, or others will create one for us based on speculation or animus and we won’t like what they create.”

The illicit payments uncovered by Ludmila Egorova-Farines raised the specter of a new blow to the company’s effort to improve its reputation following criminal convictions and civil penalties.

Then there is lots of bad news. One item that I found striking was the following:

Twin Brother

The Senate held hearings in May 1989 after Bill Koch, David Koch’s twin brother, told a U.S. Senate special committee on investigations that Koch Industries was stealing oil on American Indian reservations, cheating the federal government of royalties.

Bill Koch had a long-standing feud with his brothers after his failed attempt to take over the company in the early 1980s. He sold his shares in June 1983 and later lost a lawsuit claiming he’d been shortchanged.

The Senate committee sent investigators to Oklahoma to secretly observe oil companies, including Koch, buying crude on Indian land. The federal agents hid in ditches, crouched behind scrub cedars and ducked behind cows to avoid detection by Koch Oil’s purchasers, FBI agent Richard Elroy testified to the committee in May 1989.

The Boston Globe has the article Economic protest gains steam: Aims to highlight plight of struggling Americans by Maria Sacchetti, Globe Staff.  Unfortunately, The Boston Globe has seen fit to put their news behind a subscription paywall instead of using micropayments as I have suggested.

As seen by the following quotes from the article, even The Boston Globe is able to figure out what the protest is about.

But the demonstration, largely fueled by social media, has generally been a peaceful attempt to call attention to what protesters call the “bottom 99 percent’’ of Americans, who are strapped by rising costs for education, housing, and health care.

…

Susan Chivvis, 61, an accountant from Concord, said she jumped in her minivan with a sleeping bag and a rubber mat and rushed to the protest Friday, after she read about it on the Internet. The self-described former hippie is a long way from her days at Wellesley College, when she was tear-gassed at a march on Washington to protest the invasion of Cambodia.

Now, decades later, she has an MBA and a sincere appreciation for corporations that create jobs. But she is troubled that so many families slip into poverty, and the nation does not pull them out.

“I like to be a citizen in an orderly democracy and I like the government to handle certain social issues,’’ she said.

“We are sick of the growing disparities and the contempt for people’s needs.’’

The news has even reached Forbes by way of the Associated Press in Wall Street protesters dress as zombies in NYC.

Protesters speaking out against corporate greed and other issues in New York City are dressing as corporate zombies and greeting Wall Street workers as they head into the office.

Patrick Bruner, a spokesman for the group, says Occupy Wall Street demonstrators are being urged to dress in business wear with white faces and blood, and will march while eating monopoly money. He says financial workers should see them “reflecting the metaphor of their actions.”

There seems to be a problem with high rates of long-term unemployment that politicians didn’t count on.  With so many people unable to find jobs and knowing that their long search for jobs seems to be fruitless, they suddenly realize they have plenty of time to take to the streets.  The best way to end these protests would be to put many of these people to work.  An outcome that I am sure they would love.  Of course, it might require solving some of the problems they are protesting about.

If some politicians have trouble seeing the connection, then we can also work to elect politicians that don’t have that vision problem.

In case you are wondering if there is a local branch of Occupy Wall Street, look at the website of #OccupyBoston at Dewey Square. If you want to participate, read Directions/Visiting FAQ.

Why Do You Occupy? Interviews with the Occupiers – watch the video below.

In other parts of the country go to www.occupytogether.com to find a location.

Finally More than 500 arrested in Wall Street protest makes it to the lame stream media.

400 ‘Occupy Wall Street’ protesters arrested on Brooklyn Bridge shows how Raw Story covered this.

Protesters claimed that New York police officers had purposefully led them onto the bridge roadway so that they could arrest them en masse.

Robert Reich has written the post, The American Jobs Depression, And How to Get Out of It.  After explaining why any economic stimulus to prime the economic pump won’t be lasting until we have some structural changes, he goes on to explain what those changes are.

Any long-term strategy for rescuing the American economy must therefore seek to reverse the widening gap in income and wealth. One place to start is tax reform. The earned income tax credit – a wage subsidy for lower-income workers – should be enlarged and expanded. Taxes on the middle class should be reduced – including social security payroll taxes (80% of Americans pay more in payroll taxes than they do in income taxes).

Taxes on the wealthy, on the other hand, should be increased. The president has proposed closing some tax loopholes that allow the super-rich to reduce their tax liability, and to end the tax cut on the rich put in place by George W Bush in 2001 (thereby increasing the top marginal tax rate to what it was under Bill Clinton – 39%).

But the nation should go much further, particularly in light of the large budget deficit projected several years from now. We need more tax brackets at the top, with higher marginal rates. The capital-gains tax (now at 15%) should be raised to match the income tax rate. And a wealth surtax of 2% should be applied to all wealth in excess of $7 million.

I left a comment on his post:

You are now catching up to where I was on August 26, 2010 (Time For A Wealth Tax?), when I blogged about the need for a wealth tax. On July of this year, I reblogged (We Really Need a Wealth Tax) after reading your book,  Aftershock.

Other taxes we could consider in addition or as alternatives are taxes on unrealized capital gains. The IRS could just insist on a mark to market evaluation of your net worth and tax any increase on a yearly basis.

What about the zero taxes the wealthy pay on their government bond interest?

I am sure we can come up with enough ways to tax the wealthy that they might just accept a reasonable tax level to quiet down the restless natives.

You’ve heard this story a lot on this blog. Here is yet another attempt to explain this. Maybe this author and her graphics can make the point to the few who have not been convinced yet.

Watch full multipart Rich Getting Richer in Ontario

See the video of the debate at my later post, Warren shines in debate debut.

We plan to be at the debate on Tuesday night. See you there.

RichardH provided the link Democratic Senate candidates to debate Oct. 4 which describes the debate format.

For those unfamiliar with the location, below is a map:

RichardH tells me he called the UMass Lowell Police Department who recommended the Riverside Lot at the corner of Broadway St and Pawtucket St. I am having trouble remembering just where the hills are on Wilder St, so I think walking along Pawtucket St to Durgin Hall may be the best route. Certainly walking along the Merrimac River will be scenic. It’s been so long, I don’t know how the sidewalks are. The university has done a lot of building there since my days in Lowell.

Before RichardH’s call, I had noticed that there is parking in what is called the Wilder Lot. I don’t know if it will specifically be open for people attending the debate. When I drive 90 minutes to get there, I am assuming that this is where I will park. DYOD (better known as do your own due dilligance)

The interview is split up into a 30 minute video clip and a 12 minute concluding video clip.

An explosive new book that draws a searing portrait of the Obama administration’s failings, and early management of the economic crisis, has been met with sharp objections from officials within and outside of the White House. We speak with veteran journalist Ron Suskind, author of “Confidence Men: Wall Street, Washington, and the Education of a President.” He writes that U.S. Treasury Secretary Tim Geithner ignored an order from President Obama to consider dissolving the debt-ridden banking giant Citigroup as part of a reconstruction of major banks in March 2009. Suskind argues that Citigroup was one of several incidents where President Obama’s authority was “systematically undermined or hedged by his seasoned advisers.” In the book based on interviews with more than 200 people, including former and current members of the Obama administration, as well as the President himself, Suskind also says the White House is a hostile workplace for women.

In part two of our interview with veteran journalist Ron Suskind about his explosive new book, Confidence Men: Wall Street, Washington, and the Education of a President, Suskind discusses the challenges faced by President Obama and his evolution as a leader. “You see the President grappling…to try to get his arms around what is often an untenable situation,” says Suskind. “He has a team around him with long Washington experience and long histories with one another. The President, meanwhile, is ramping up at Mach speed on very difficult, and often very complex, national issues, economic issues, for which there is no recent precedent.” According to Suskind, Obama muses he has “policy wonk’s disease” and now aims to be more dynamic in telling the American people “who we are and where we’re going.”

It looks like I may have to slog through this book. Economist Brad DeLong seems to like the factual content of the book, but thinks Suskind has drawn the wrong conclusions. I am particularly focused on the view that Obama had that the high level of unemployment is caused by the rapid growth in productivity and there is nothing the government can or should do about this, He specifically rejects the advice of Romer and Summers on this issue. None of this comes up in this interview.

My previous posts Errors Dealing With Economic Recovery Originate With Obama and Riffing on Obama’s Economic Follies cover Brad DeLong’s take on the book.