Robert Reich published a piece of look-back on his blog this week that encapsulates WHY Clinton solutions are not trusted. It lays out how taxation of executive compensation was finessed to quiet the critics without angering the elites.
“The measure became section 162(m) of the IRS tax code. It was supposed to cap executive pay. But it just shifted executive pay from salaries to stock options.
After that, not surprisingly, stock options soared – becoming by far the largest portion of CEO pay.”
Was Clinton a party to the play or conned by his advisors, many of whom are still members in good standing with DNC? Still have the ear of policy makers.
This was further discussed on Naked Capitalism….
“Naked Capitalism readers are familiar with the fact that CEO compensation exploded starting in the 90s, and that this explosion was related to a shift towards companies providing compensation in the form of stock options. A major cause of the shift was Bill Clinton’s 1993 move to make executive comp deductible from corporate income taxes only when given as stock options.
[…]
When Bill Clinton first proposed his plan, compensation for CEOs at America’s 350 largest corporations averaged $4.9 million. By the end of the Clinton administration, it had ballooned to $20.3 million. Since then, it’s gone into the stratosphere.
Did Reich realize what a striking story he was telling? In the name of eschewing “social engineering through the tax code,” Clinton and his advisors engineered a major shift in corporate culture. In the name of not “declaring class warfare,” they struck a dramatic blow in favor of… a certain social class. If they had been Republicans, this story would have entered the canon as evidence for what that party really cares about. They were liberals, though, and so it is instead a mournful tale of irony and unintended consequences.”
http://www.nakedcapitalism.com/2016/09/the-bill-clinton-teams-secret-meeting-on-ceo-compensation.htm
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From the comments:
“Reich doesn’t name his fellow economic advisors who came up with this, but it’s not heard to guess from the press coverage at the time.
… Lawrence H. Summers, a Harvard economics professor on leave to be chief economist at the World Bank, will oversee work on economic policy, including tax policy and whether fiscal stimulus is needed. Mr. Summers is often mentioned as a possible future chairman of the President’s Council of Economic Advisers. …
… several other experts would work with Mr. Summers on economic policy. They include Robert Shapiro, an economist at the Progressive Policy Institute; Robert Rubin, co-chairman of Goldman Sachs, and Roger Altman, a friend of Mr. Clinton’s from their Georgetown University days and now a partner in the Blackstone Group, a New York investment bank.”
(Larry Summers long ago earned the distrust of leftists and that is why I suspect Kabuki. Were the Clintons pwned or party to it? Does it matter? Have they gotten wise is today’s question. Guess we get to find out.)
