I hate politicians who pander. I consider myself a member of the anti-pandering crowd. So it is refreshing to see a politician pander to the anti-pandering crowd by taking a strong stand on a matter of principle that will earn him negative votes and dollars from an important constituency.
This week’s anti-panderer is Edwards. As Clay Risen writes in the New Republic, Edwards has come out strongly in favor of the expensing of stock options. This will hurt Silicon Valley firms (who wanted to record such options on balance sheets, and thus make it seem as if the firms were more profitable), but Edwards is plainly right about the policy. This issue is symptomatic of why Silicon Valley has been so awful at lobbying: TechNet, for example, has made this its primary policy objective. Yet of all the policies that would spur growth and innovation, special tax deals are the last that the Valley should be pushing.
Bravo for right policymaking, Senator Edwards. Maybe the Valley will learn something about what battles they ought to be fighting.
The “Right Thing” is actually probably too complex for a Politician. That would be to count stock options as a potential dilution of stock, not as an expense. Expensing them is simply inaccurate.
http://www.fsa.org.corpgov/intel.pdf
The other thing that Edwards has supported (announced at an event in Iowa recently) is the equal treatment of executive and worker pension plans of public companies. At a lot of these corporations that crashed and burned in the bubble the executives had much more latitude to move their money, access to more timely information, hedging strategies, even insurance against losses. The whole point of rewarding workers with stock is that everyone should sink or swim together.
I’ll really believe he is a politician who is anti-pandering when he supports legal reforms to stop frivolous lawsuits, but considering most of his finacial support is from lawyers I won’t hold my breath.
Edwards is a good man in a field of good men. I love his emphasis on the value of *earned* wealth. Unfortunately, Edwards has a facile understanding of intellectual property, as he did an absolute fly-by-numbers on a (timid) software patents question in New Hampshire.
The patent system is overflowing with intellectual fraud. Software patents in particular are a boundless supply of disgrace and embarrassment.
Thomas, Edwards does support reforms that would curb frivolous law suits. He has said so, and he has made proposals. The caps in the Bush proposal on medical malpractice suits are simply way too low to weed out bad doctors. And Edwards correctly is skeptical of the bills written by big business trade groups which are seeking to use the tort reform issue as a trojan horse to indemnify grossly negligent corporations. Tort reform may be necessary, but to pull down the entire system of checks provided by jury awards would be a mistake. The specter of a jury award is a powerful force for good corporate citizenship, and one of the only means for redress of grievance at the disposal of the individual.
I agree with many of Edward’s points, however, there’s a few that bug me. His emphasis on “work” over “wealth” is neat, but the current tax system is so thoroughly progressive that the wealthiest citizens pay a ridiculous amount of the government’s paycheck.
” Yet even with all those zeroes, the true cost of the administration�s approach isn�t what they�ve done with our money, it�s what they want to do to our way of life. Their economic vision has one goal: to get rid of taxes on unearned income and shift the tax burden onto people who work. This crowd wants a world where the only people who have to pay taxes are the ones who do the work. ” Sen. John Edwards
His three main tax gripes, according to the post above, are the abolition of capital gains and dividend taxes. As a middle-class American who owns a small business, I see that this is a problem. I know two entrepreneurs who have a 4 million dollar/year business. They don’t get paychecks, yet they work 50+ hour weeks. (My business ain’t that good yet.) Their only income are the year-end dividend checks, plus their investments in stocks and real estate. They make good money, but in order to get good compensation for their work and business, they’ve got to take a disproportionate amount of their corporate profits as dividends.
I wholeheartedly agree with Sen. Edwards stance on coporate responsibility, and eliminating unfair tax shelters. This is a Good Thing. I also agree with his plan on restoring tax benefits to middle-range income earners. However, I do remember about a year and a half ago when the Democrats, as a party, voted as a bloc to obstruct a bunch of economic reform bills. Someone please tell me that’s not politics as usual.
For what it’s worth, I’m a moderate voter who leans libertarian, but I’m open-minded enough to listen to all sides. I’m just dired of the partisanship that’s derailed the country since Reagan’s days. Republicans and Democrats alike.
I thought only the National Review types thought expensing stock options was a tax issue. Most proponents of expensing stock options insist that it’s merely an accounting issue.
I’m not sure how it hurts him. Didn’t Microsoft, to choose one prominent example, announce that it is now offering stock, instead of stock options? And aren’t most companies planning on a change in the accounting treatment?
Exactly how is Edwards hurt by promoting this initiative? Oh, yeah, California is really in play and he needs those critical Silicon voters. Good grief.
I’m not an accountant (Larry, you may be, though my recollection is that you’re not). I wouldn’t claim to know whether this initiative is a good idea, and I don’t think many outside the corporate accounting sector have a clue. But when you’re entire campaign is built on the idea that most wealth isn’t really deserved (putting aside the merits of that position, which no one, including Larry, has bothered to address), taking this view isn’t exactly an example of principled politics.
Not pandering means opposing ethanol subsidies when you go to Iowa. See John McCain. Edwards is a big proponent of such subsidies. Of course, I’m sure Larry would say that the reason for this is not his desire to gain votes in Iowa but instead his sincere belief in the merits of such a policy.
And that’s when you know you’ve become an apologist — when you buy such drivel because you happen to like a particular candidate. I expected a little more from a guy with Larry’s intellect. I don’t care if you support John Edwards or not, but the sanctimony is simply unbelievable.
Keith Hudgins for President. He has put his finger on the causes of our discontent. Politics is built into our system of government, even into its organization in our national and into all but one state legislature. That’s where majority and minority caucuses come from. Attaining the majority is the essential means to setting the agenda and promoting policies held dear and important.
When the policies are the means and the end of holding office held too dear and too important, resultant policy is haphazard and merely coincidental. There is meant to be a line between politics and policy. Someone erased the line.
As to pandering, Senator Edwards has merely picked the much greater constituency. There are a lot more voters suspicious of options than those who have them. How better to showcase your courage than to defy the lion? Especially when the lion is really only a small pussycat?
As to expensing options, I know a fella who, in lieu of director fees the company was unable to pay, holds tens of thousands of options so deep under water that they are certain to drown. Worthless options must be accounted for as such and probability built into the reporting formula.
Kim could you link to examples, I’d honestly be open to seeing them, while I am not holding my breath I am willing to give issues a fresh look.
John Edward’s had already given up the Tech Community and has no support in Silicon Valley as his base is the trial lawyers, and people who are not in companies with stock options, so his decision exhibited little courage, it merely catered to his constituency.
John Kerry showed tremendous courage on Thursday by also coming out in favor os expensing stock options for public companies. Of all the Presidential candidates, he had the laregst base of supporters in Silicon Valley. In Q1, he raised 1.5X more money in Northern California than all 8 candidates combined, so his position is very courageous and just the opposite of pandering. He has been a huge tech leader and Business Week previously declared him one of the Digital Dozen, so his stance here is simply because he feels strongly that it is right. Since we will now see checks dry up in Silicon Valley, I hope he will get the appropriate kudos for his convictions!
“The specter of a jury award is a powerful force for good corporate citizenship”
Not true, in my experience. What I’ve found is that many corporations are so afraid of such lawsuits that they have overreacted and many stupid internal policies result that are actually employee-hostile and make the workplace less friendly. Sensitivity training? What bs — like that is going to change someone’s attitude in a day or two. It’s a good way to make employees feel like stupid children, though, and does wonders for morale.
I now help run a corporation and am deathly afraid of such a suit because my own capital is on the line, and a stupid lawsuit could take it all away. Some laws shouldn’t apply to small corporations, which are more likely to act nice because they are owned by the people who birthed it. Large corporations don’t have to worry because they large stables of lawyers and cash to back them up. But many seem to love to demonize all corporations without realizing that their beloved local bookseller or mom&pop is also incorporated.
US accounting fraud is destroying the US economy. The harshest possible measures should be taken up to and including the Chinese way (bullet in the back of the neck, bill to the family).
OK, just bankrupting their entire families and barring them from getting welfare or any assistance at all, ever. And a federal boycott of any company that ever deals with any of them –
that should relegate the White Collar Criminal to flipping burgers.
Cheers for the National Rifle Association. When I learned that Howard Dean is much respected by the NRA, because he panders to the NRA, and when I learned that College Democrats on my college campus hate the NRA as if its a Satanic Organization, but they like Howard Dean, I wondered how many Democrats have changed there minds on the NRA?
If I remember correctly, Edwards has made some proposals to help small businesses. If I’m wrong, I wouldn’t worry about if I were you because I’m sure he’ll come out with some more soon considering the fact that in the Senate he works on the COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP. He is working on it.
http://www.senate.gov/~sbc/members.html
Also, Republicans are trying to manipulate the public. The reason premiums are skyrocketing is because of losses by INSURANCE COMPANIES in the stock market, so they raise them.
It has nothing to do with lawsuits…MOST OF WHICH ARE LEGITIMATE LAWSUITS…and we know that is the case because the juries agree that the doctor was at fault. Remember, in those cases where the plaintiff’s trial lawyer wins, he has to convince a jury. You can’t call trial lawyer’s the scum of the earth, because juries agree with them, and juries represent…YOU…the people. So are you saying that…WE THE PEOPLE…have the mental capacity of dirt, to let the…”SCUM OF THE EARTH”…manipulate us? That’s what Republicans are saying.
And Edwards supports reforms of frivilous lawsuits, because he didn’t do any frivilous lawsuits when he was a practicing attorney. He had a screening system to weed them out, and that’s why LAUCH FAIRCLOTH could not win that argument against Edwards in 1998 when he ran for Senate. Besides, North Carolina has measures in place like having a licensed physician prove that malpractice had occurred.
Those are the types of reforms that Edwards proposes.
I think that considering the current state of affairs, gun control is hardly the most pressing issue for Liberal-Centrist America.
Howard Dean’s pro-gun position will have to be tolerated by the lefties if they want to dump Bush. Dean’s gun position can help him peel off socially liberal hunter types who see Bush as bad for the economy.
He is a scum sucking ambulance chaser.
I’d love to see Edwards, man of the people, explain why he created a corporation to shield his earnings and avoid paying $500K+ in Medicare taxes. It’s amazing that he wants to end ‘loopholes’ but uses them himself to avoid paying taxes that are used to fund healthcare for the elderly and poor.