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Apple's new retail chief Angela Ahrendts receives 113K restricted stock units worth $68M - Page 2

post #41 of 76
Quote:
Originally Posted by SpamSandwich View Post

Eliminate the income tax entirely.

How is a country going to pay for 'everything' then? How will roads and infrastructure remain maintained? Education? Health care?

Sorry, totally OT, but I don't get your statement.
post #42 of 76
Quote:
Originally Posted by PhilBoogie View Post


Thanks for the link. I think the makers of that video don't seem to realise that the wealth that top 1% has is gained by having money to invest and therefore grows exponentially once they have money to burn. They invest and gain more money because they are able to. The poor do not have the means to get there, and should understand that one can 'only' get more rich once all the primary necessities are in place: food, shelter, safety and so on. That's not to say that one cannot get rich while being poor, I mean that Angela Ahrendts gets her RSU bonus based on previous achievements. Whether the amount of RSU is too high is another discussion altogether.

While they narrator makes a good point on showing the difference between perception and reality, they totally missed the point on why things are the way they are. Personal opinion, obviously, but that article/video gets a thumb down from me.

I don't think there's any injustice or brutality in the system of capitalism. It's the way things work. What could be considered injustice is how the rich got rich. Just read that article on Samsung that @SolipsismX @GTR posted; they certainly didn't become rich and successful by doing an honourable job.

What the video illustrates well is 'reality' v what people think 'reality' is, set against what people across the board think 'reality ought to be'. I am not sure it tries to explain how such a state of inequality came to be. In my view, when capitalism as a system governs social policies it becomes unjust and brutal, almost by definition. It is deluded to believe in 'self regulation', in my opinion. If on the other hand, social policies are arrived upon and governed free of market forces, capitalism needn't be problematic. 

post #43 of 76
Quote:
Originally Posted by Carson O'Genic View Post

Nice first day on the job!  

Really, is any one person worth that much?

Yes. She looks hot, so she's worth it.
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post #44 of 76
Quote:
Originally Posted by Bergermeister View Post

Quote:
Originally Posted by paxman View Post

I am sure you are right. My point was a general one about the ridiculousness of hyper wages.

Watch this.  I can't get the nerve to buy the book; it might be too depressing.

http://www.upworthy.com/what-the-1-dont-want-you-to-know?c=huf1

331 to 1

CEO vs average employee salary

And the upper income earners pay lower taxes.  Sometimes half.

It's important to consider what form the payment is in. Stock options are taxed and valued differently from cash.

Take CEO Elon Musk, he owns 28% of Tesla stock so when the stock price changes, his determined wealth changes rapidly:

http://business.time.com/2014/02/26/elon-musk-1-1-billion-tesla-tuesday/

As the following example shows, it can decline rapidly too:

http://www.businessweek.com/articles/2013-10-03/eike-batista-how-brazils-richest-man-lost-34-dot-5-billion

Not everyone who owns stock paid the latest price so the market caps that some of these companies have doesn't exist in monetary terms. That amount of cash hasn't been exchanged for stock, it's just based on what new investors are willing to pay for their small share. It's the same with things like Bitcoin. Bitcoins were being created years ago on computers and no money was exchanged for them. The value of the total coins only rose to where it is now due to what people were willing to pay to start using them but all that cash doesn't exist.

This is where the finance industry is becoming extremely dangerous because they are creating these huge amounts of wealth that are legally recognised but are only based on perception of worth and there's very little link to anything tangible. Tesla hardly makes any profit at all and yet because new investors are willing to pay over $200 for one share of the company, that makes Elon Musk a billionaire but he doesn't have the billions in cash. He has an asset that currently has that value and that value is so fragile being based solely on perception that it can be wiped out tomorrow if traders decided to.

I'd say this is one of the biggest reasons for wealth inequality because average workers don't have the kind of assets that are valued this way. That is where PhilBoogie's comment comes in about asset growth. The volatility of stock options creates a scenario of very fast growth. Owning stock is the fastest way to become super rich because it's probably the only way you can get rich from someone else's hard work and future promises.

Some might suggest that everyone should own stock then but there's risk and risk needs to be managed. Full time employees don't have the time to manage the risk and don't have the capital to risk anyway. People at the bottom take out loans and mortgages they pay interest on. The people at the top earn interest on the financial assets they own. The interest that the people at the bottom pay contributes to the profits of the companies that the wealthy own stock in.

The whole system is designed to shift wealth from the poor to the wealthy and keep the poor with no upwards mobility. The fictional wealth known as stock options act as a means of leverage.

In cases where the stock option values actually match closely to the company profits, that's at least closer to tangible cash values so the money either goes to the employees, the shareholders or it sits in a financial institution in the form of stock in other companies (again some fictional values) or treasuries. Whatever happens, someone's going to get wealthy from it. They could volunteer to increase the salaries of the people at the bottom but they'd have to justify to shareholders why. The roles at the bottom are deemed replaceable because of the lack of uniqueness in the skills required.

The system is broken by design, there's no coercion possible. There needs to be a fundamental change in how the whole system works. The people at the bottom shouldn't be forced into debt and subsequently have no asset growth. If people are working and contributing, they should have a high rate of asset growth, which is an incentive to work. People who are wealthy should have little to no asset growth and an incentive to spend. People who aren't working or contributing should have no asset growth, which is the disincentive to avoid work. Right now, people who don't work can see that no matter how hard they try, they get nowhere so they may as well sit at home watching TV than stressing at work.
Quote:
Originally Posted by PhilBoogie 
Quote:
Originally Posted by SpamSandwich 
Eliminate the income tax entirely.

How is a country going to pay for 'everything' then? How will roads and infrastructure remain maintained? Education? Health care?

The solution that some people see is to remove any barriers to wealthy people becoming as wealthy as they choose (income tax would currently be the biggest tax that the wealthy pay - sales tax is paid by customers) where they'd then be free to privatize pretty much all forms of service. When it inevitably leads to a monopoly due to the distribution of large amounts of wealth between so few people, it would cause complete chaos but that's when they would suggest being armed and civilzation as we know it would fall apart. At this point some would listen out for the harbingers of the apocalypse oblivious to the fact they're the ones bringing it about.

One form of taxation I'm interested in is transaction tax. Transaction value is far higher than the amount of assets in circulation. If they have a very low transaction tax, it gets compounded and the people hit worst are people trading most frequently but the values can be so small that you wouldn't really notice it. I'd have to see more data on who it would affect most but it could eliminate all forms of explicit taxation (income tax, vehicle tax, sales tax, property tax, the whole lot) and tax returns. The values would be collected during transactions by financial institutions and used to fund public services.
post #45 of 76
Phil: any reaction to the Krugman interview over Piketty's book I linked to above?  
 
The thing is we are rapidly moving towards to a society for and by the rich few.  Sure, because they can afford it, but we trumpet capitalism, perhaps at our own peril.  Unless we have wealth, where we trumpet it because it helps us.  The system has now been rigged to benefit the wealthy, making it ever more difficult for the poor to jump up, or even just live a quality life (the latter doe not mean being wealthy).  At the same time, the wealthy can get wealthier more easily, and stay that way.

 

Your = the possessive of you, as in, "Your name is Tom, right?" or "What is your name?"

 

You're = a contraction of YOU + ARE as in, "You are right" --> "You're right."

 

 

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Your = the possessive of you, as in, "Your name is Tom, right?" or "What is your name?"

 

You're = a contraction of YOU + ARE as in, "You are right" --> "You're right."

 

 

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post #46 of 76
Quote:
Originally Posted by PhilBoogie View Post

Thanks for the link. I think the makers of that video don't seem to realise that the wealth that top 1% has is gained by having money to invest and therefore grows exponentially once they have money to burn. They invest and gain more money because they are able to. The poor do not have the means to get there, and should understand that one can 'only' get more rich once all the primary necessities are in place: food, shelter, safety and so on. That's not to say that one cannot get rich while being poor, I mean that Angela Ahrendts gets her RSU bonus based on previous achievements. Whether the amount of RSU is too high is another discussion altogether.

While they narrator makes a good point on showing the difference between perception and reality, they totally missed the point on why things are the way they are. Personal opinion, obviously, but that article/video gets a thumb down from me.

I don't think there's any injustice or brutality in the system of capitalism. It's the way things work. What could be considered injustice is how the rich got rich. Just read that article on Samsung that @SolipsismX @GTR posted; they certainly didn't become rich and successful by doing an honourable job.

I fear that capitalism is turning into warped form of socialism, and that worries me a lot.

Having some friends and relatives in ex-socialist/communist countries, I have observed a common case of people on the top with huge salaries and very little real responsibility. Often incompetent, and always part of some sort of privileged circle, usually with (but not exclusively) political background.

I'm seeing a lot of similarities with recent CEO trends and disasters in western world. People like Leo Apotheker, taking over large companies for obscene amount of money, screwing up royally and bailing out with even more obscene golden parachute... just to resurrect in another high-profile job. Ex-politicians suddenly re-spawning in directors boards of successful companies, working in their own interest, or interest of some shady circle who supports them, instead of interest of company and consumers.

VIPs should have solid but unremarkable salary basis, everything else should come based on performance and results. Period. Give them opportunity to make hundreds of millions, but only if they make much more for the company; basically, a commission system. And no golden parachutes. If you screw up, you are out. You should give money back, not leave with another couple of dozen millions just because you were not let to enjoy your privileged contract all the way.

But as it is, they have warped the system to reduce their personal responsibility, and enable them to help their buddies from the circle, knowing that tomorrow their buddies will help them; hand's washing hand, and there seems to be nothing to chop hand off on occasion, if required.
post #47 of 76
Quote:
Originally Posted by hmurchison View Post

No

She tripled the value of Burberry in 7 years. Could you or i have done that? Probably not. So, if anyone is worth that much, she is.
post #48 of 76

The money that executives are paid is a complete f*&^)*ing disgrace — a worldwide, disgusting, disgrace. Pay them for results, not to have their over-entitled asses sit in a damned chair.

AppleInsider = Apple-in-cider. It's a joke!

I've used macs since 1985 when I typed up my first research paper. Never used anything else never wanted to.
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AppleInsider = Apple-in-cider. It's a joke!

I've used macs since 1985 when I typed up my first research paper. Never used anything else never wanted to.
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post #49 of 76
Quote:
Originally Posted by Bergermeister View Post

Phil: any reaction to the Krugman interview over Piketty's book I linked to above?

Just watched it. An eye-opener, for sure. I thought I had 'reasonable knowledge' on the American economy, but there are many things I didn't know. In order to give a worthy response I really should be reading up on what has changed, read more in depth stories rather than my newspaper articles on the front page of the international economy section.

Thanks for the link! (also like that Vimeo is getting/publishing more and more of these kinds of videos)
Quote:
Originally Posted by nikon133 View Post

I fear that capitalism is turning into warped form of socialism, and that worries me a lot.

Having some friends and relatives in ex-socialist/communist countries, I have observed a common case of people on the top with huge salaries and very little real responsibility. Often incompetent, and always part of some sort of privileged circle, usually with (but not exclusively) political background.

I'm seeing a lot of similarities with recent CEO trends and disasters in western world. People like Leo Apotheker, taking over large companies for obscene amount of money, screwing up royally and bailing out with even more obscene golden parachute... just to resurrect in another high-profile job. Ex-politicians suddenly re-spawning in directors boards of successful companies, working in their own interest, or interest of some shady circle who supports them, instead of interest of company and consumers.

VIPs should have solid but unremarkable salary basis, everything else should come based on performance and results. Period. Give them opportunity to make hundreds of millions, but only if they make much more for the company; basically, a commission system. And no golden parachutes. If you screw up, you are out. You should give money back, not leave with another couple of dozen millions just because you were not let to enjoy your privileged contract all the way.

But as it is, they have warped the system to reduce their personal responsibility, and enable them to help their buddies from the circle, knowing that tomorrow their buddies will help them; hand's washing hand, and there seems to be nothing to chop hand off on occasion, if required.

Agreed, especially on the bolded parts. I don't know much about Leo Apotheker, but he's certainly smart (Fluent in five languages: Dutch, English, French, German and Hebrew >) and climbed up the ladder at SAP but Meg Whitman had to undo his wrong-doing at HP.

Over here in The Netherlands our government has put a maximum salary in place for high level politicians. And they'e working on doing the same in the public sector, which is happening in several other European countries as well.
Quote:
Originally Posted by Eluard View Post

The money that executives are paid is a complete f*&^)*ing disgrace — a worldwide, disgusting, disgrace. Pay them for results, not to have their over-entitled asses sit in a damned chair.

If you think all these high paying executives are merely 'sitting in a chair' you may not have had the experience in doing business with an executive...they all have great responsibilities, especially public companies.
post #50 of 76
Quote:
Originally Posted by KPOM View Post

Quote:
Originally Posted by hmurchison View Post

No

She tripled the value of Burberry in 7 years. Could you or i have done that? Probably not. So, if anyone is worth that much, she is.

How do you know that she tripled Burberry's value though? All you can say for sure is that Burberry's value tripled while she was CEO, which has an entirely different meaning. It's just how we simplify things like saying an army general or country president won a particular war. Without the people at the front line delivering the work then they couldn't deliver any results. This happened with Apple too where Steve Jobs would ask the marketing teams and product teams to bring ideas and product concepts to him but to people on the outside, it was all Steve. You'd never know at the time that it was Phil Schiller that came up with the iconic click-wheel on the iPod or some random guy looking for a job that came up with the Dock magnification.

Some people have the idea that great leaders can be put into any circumstances and succeed. To an extent this is true but take the example of Pixar. It wasn't Steve Jobs making the movies or the software required to produce the movies, it was the artists and technicians at Pixar. Steve was mostly keeping the funding coming in and doing the business deals. The buyout from Disney is what gave Steve most of his billions. Was Steve more important to Pixar than Ed Catmull, Larry Gritz, John Lasseter, Alvy Ray Smith, Jim Blinn? Look at the following videos where Steve gets an occasional mention but isn't doing any of the pioneering graphics work:

http://www.youtube.com/watch?v=1TOD6oV1cnY
http://www.youtube.com/watch?v=3-8C1x4tXAQ
http://www.youtube.com/watch?v=I2-kw6y3w0E

Without the leadership and investment, the business might never have happened but similarly Steve Jobs could have invested in and managed another group of people and the business also would never have happened. It's not right to say that one individual injecting cash is worth 1000x more than one of the pioneers delivering the products. It just happens to be that's how the reward system has evolved.

Often, people at the bottom of a company hierarchy can be replaced easily so they are in no way equal to the people at the top but sometimes the people at the top do a really bad job too:

http://www.forbes.com/sites/susanadams/2013/04/23/the-ceo-revolving-door-is-speeding-up-study-shows/

The difference is that people at the top doing a bad job still make millions.
post #51 of 76
The executive class has moved from the greed stage to the gluttony stage.

Even if you think that her stock options are appropriate you can't defend the crazy front loadibg of her options...seriously she can't be encouraged to complete just five years of employment to get the bulk of the options!

This reflects poorly on APPL.
post #52 of 76
Quote:
Originally Posted by coolfactor View Post

Does she go by "Angel" instead of "Angela" or was this a typo in two different places by the author of this article?

Both and neither.

“I wasted time, and now doth time waste me.”
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“I wasted time, and now doth time waste me.”
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post #53 of 76
Quote:
Originally Posted by Carson O'Genic View Post
 

Nice first day on the job!  

 

Really, is any one person worth that much?

She is.

“I wasted time, and now doth time waste me.”
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“I wasted time, and now doth time waste me.”
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post #54 of 76
Quote:
Originally Posted by Rot'nApple View Post
 

 

If she's not a proper fit and is "shown the door" as was John Browett, will she have to give the money back? </s>

/

/

/

Yep, in dollar bills.

“I wasted time, and now doth time waste me.”
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“I wasted time, and now doth time waste me.”
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post #55 of 76
Quote:
Originally Posted by mstone View Post
 

She was already making millions per year. Perhaps she wants this job as an opportunity for personal accomplishment or to make a difference in the world, not necessarily for the money.

Probably a bit of everything, plus she was headhunted.

“I wasted time, and now doth time waste me.”
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post #56 of 76
Quote:
Originally Posted by semi_guy View Post

There is a humongous pool of individuals that are highly qualified and can perform the same responsibilities and duties for a lot less money. In fact, I would argue that many work harder, have higher responsibilities, and could be fired at any time for being in the wrong product line (due to some VP shortsightedness) than most of these VPs. It is sickening to see so much money being handed about with little vesting time. Most typical company workers get RSU that start to vest at 5 years, not in 1 month.

Sad to see that people that risk their lives everyday like police, armed forces, firemen, etc. get paid such paltry salaries for risking their lives. Then, see some senior VP get paid over 1000 times more when their lives are not even at risk. Those that risk their lives should be worth a lot more!

’Twas ever thus, at least, unless you are a mercenary. But imagine if the US army got paid the same. Your taxes would need to go up somewhat.

“I wasted time, and now doth time waste me.”
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post #57 of 76
Quote:
Originally Posted by InteliusQ View Post
 

 

In corporations, you are paid according to your expertise and the relative value you bring to the company. This woman came from a similar background when she was with Burberry, and Apple chose her as Senior Vice President over Apple's Retail and Online Stores, a multi-billion dollar operation.

 

It is easy to say that anyone else is qualified to do the job, and that they are overpaid. Apple is a multi-billion dollar corporation, and their retail operations and online stores are critical to the company. Apple is not just going to entrust such responsibility to just anyone. To devalue this woman's experience and expertise relative to the overall value she brings to the company is arrogant - when you are not qualified yourself to walk in her shoes.

 

She was already successful at Burberry, which is why she was chosen.

 

As for the public servants that you speak about, they are not paid by corporations, but by taxpayers. If they are worth more than they are paid, you are welcome to directly contribute to their salary voluntarily. There is nothing stopping you. This isn't socialism, but capitalism - a free market by which the public voluntarily pays the corporations for the products and services it provides - which in turns, pays its employees for the value they bring to the company.

 

If you want the public service employees to make more money, then find a way for them to be directly funded by the very public that they serve, rather than through government organizations who takes the public's money and decides how to spend it. If you see a problem, offer a solution to the problem, and then do it. Otherwise, your complaint is nothing but noise without taking responsibility to do anything about it.

Of course lots of public service employees deserve to be paid more, but we can't afford to. Capitalism isn't the answer, nor socialism.

“I wasted time, and now doth time waste me.”
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post #58 of 76
Quote:
Originally Posted by PhilBoogie View Post


Just watched it. An eye-opener, for sure. I thought I had 'reasonable knowledge' on the American economy, but there are many things I didn't know. In order to give a worthy response I really should be reading up on what has changed, read more in depth stories rather than my newspaper articles on the front page of the international economy section.

Thanks for the link! (also like that Vimeo is getting/publishing more and more of these kinds of videos)
Agreed, especially on the bolded parts. I don't know much about Leo Apotheker, but he's certainly smart (Fluent in five languages: Dutch, English, French, German and Hebrew >) and climbed up the ladder at SAP but Meg Whitman had to undo his wrong-doing at HP.

Over here in The Netherlands our government has put a maximum salary in place for high level politicians. And they'e working on doing the same in the public sector, which is happening in several other European countries as well.
If you think all these high paying executives are merely 'sitting in a chair' you may not have had the experience in doing business with an executive...they all have great responsibilities, especially public companies.

Look at Thorsten Heins-it's highly contestable whether he was good for Blackberry, and yet he had a huge golden handshake.

“I wasted time, and now doth time waste me.”
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“I wasted time, and now doth time waste me.”
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post #59 of 76
Quote:
Originally Posted by Marvin View Post


How do you know that she tripled Burberry's value though? All you can say for sure is that Burberry's value tripled while she was CEO, which has an entirely different meaning. It's just how we simplify things like saying an army general or country president won a particular war. Without the people at the front line delivering the work then they couldn't deliver any results. This happened with Apple too where Steve Jobs would ask the marketing teams and product teams to bring ideas and product concepts to him but to people on the outside, it was all Steve. You'd never know at the time that it was Phil Schiller that came up with the iconic click-wheel on the iPod or some random guy looking for a job that came up with the Dock magnification.

Some people have the idea that great leaders can be put into any circumstances and succeed. To an extent this is true but take the example of Pixar. It wasn't Steve Jobs making the movies or the software required to produce the movies, it was the artists and technicians at Pixar. Steve was mostly keeping the funding coming in and doing the business deals. The buyout from Disney is what gave Steve most of his billions. Was Steve more important to Pixar than Ed Catmull, Larry Gritz, John Lasseter, Alvy Ray Smith, Jim Blinn? Look at the following videos where Steve gets an occasional mention but isn't doing any of the pioneering graphics work:

http://www.youtube.com/watch?v=1TOD6oV1cnY
http://www.youtube.com/watch?v=3-8C1x4tXAQ
http://www.youtube.com/watch?v=I2-kw6y3w0E

Without the leadership and investment, the business might never have happened but similarly Steve Jobs could have invested in and managed another group of people and the business also would never have happened. It's not right to say that one individual injecting cash is worth 1000x more than one of the pioneers delivering the products. It just happens to be that's how the reward system has evolved.

Often, people at the bottom of a company hierarchy can be replaced easily so they are in no way equal to the people at the top but sometimes the people at the top do a really bad job too:

http://www.forbes.com/sites/susanadams/2013/04/23/the-ceo-revolving-door-is-speeding-up-study-shows/

The difference is that people at the top doing a bad job still make millions.

It's hard to define worth. AA was, I believe, the impetus for turning Burberry around and was therefore the central stimulus for their success, but as you say, that doesn't mean she did it single-handed, any more than Steve Jobs designed the iPhone single-handed. But presumably Burberry felt she was worth whatever they paid her.

“I wasted time, and now doth time waste me.”
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post #60 of 76
Quote:
Originally Posted by KPOM View Post


She tripled the value of Burberry in 7 years. Could you or i have done that? Probably not. So, if anyone is worth that much, she is.

 

Whether you or I could do it is irrelevant when the context is "Is Ahrendts worth 68 million in stock options" .  The more pertinent question is how many people could could do the job overall.   I have my doubts that Ahrendts is in such an small and Elite group of retail Execs that it would be prohibitively difficult to find a suitable replacement.   

 

Apple tends to make executives look better than they really are as witnessed by the abject failure of departing execs in finding success in other companies. 

 

Ron Johnson at JC Penney -  colossal failure 

Rubinstein at Palm - Failure 

 

I have NO IDEA why John Browett was hired but I do know that Angela is looking good because Tim Cook cannot afford another blunder like the Browett hiring. 

 

Tony Fadell of all people found success by getting Google to overpay for one trick pony company but by and large Apple execs never find success when they leave. Angela will do well but it's really hard to not have success at Apple a company near 40 years of solvency.  

He's a mod so he has a few extra vBulletin privileges. That doesn't mean he should stop posting or should start acting like Digital Jesus.
- SolipsismX
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He's a mod so he has a few extra vBulletin privileges. That doesn't mean he should stop posting or should start acting like Digital Jesus.
- SolipsismX
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post #61 of 76
Quote:
Originally Posted by Benjamin Frost View Post

Look at Thorsten Heins-it's highly contestable whether he was good for Blackberry, and yet he had a huge golden handshake.

Indeed, $22M seems ridiculous for his short-lived tenure at the company, declining take-over offers and leaving the company worse than it was before his appointment. Maybe he should've stayed as COO but that's difficult to tell, after the fact.

How the mighty have fallen. But who could have been appointed as their new CEO? "Nobody wants to catch a falling knife."
post #62 of 76
Quote:
Originally Posted by PhilBoogie View Post

How is a country going to pay for 'everything' then? How will roads and infrastructure remain maintained? Education? Health care?

Sorry, totally OT, but I don't get your statement.

All your questions are answered here: www.fairtax.org

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #63 of 76
Quote:
Originally Posted by SpamSandwich View Post

All your questions are answered here: www.fairtax.org

A good read, something to dabble on. Thanks
post #64 of 76
Quote:
Originally Posted by PhilBoogie View Post

Quote:
Originally Posted by SpamSandwich View Post

All your questions are answered here: www.fairtax.org

A good read, something to dabble on. Thanks

You can see immediately why that makes the system much worse because people can survive on the same amounts of expenditure. A person on $30k a year can live on $20k of expenses and so can someone making $100m a year. If you remove the income tax rates, it just allows the wealthy to grow their income to even more obscene levels while contributing hardly anything to public services. It's dressed up to look like it's 'fair' by suggesting someone who earns $100m should contribute similar amounts to public services as someone on $30k and they shouldn't. They should contribute more because the system has rewarded them more and the additional expense is still a fractional amount of their earnings and doesn't affect their quality of life one bit.

A transaction tax can take away income tax too but it taxes every transaction as it goes into someone's assets so someone doing enough transactions should pay enough through compound transactions to pay an actually fair amount. They may have to scale the rate based on individual transaction size to even it out but it would mostly be transparent.
post #65 of 76
Quote:
Originally Posted by Marvin View Post

^ post

Thanks for your take on this. Yes, it indeed seems ridiculous and preposterous to throw our current whole system out the window and implement an untested system, in any country for that matter.

I think we're all better off with the current system and keep on refining it. Adjust it to (global) changes accordingly, all with the understanding that we might never 'get the perfect system' in place - it's all we can do, really.
post #66 of 76
Quote:
Originally Posted by PhilBoogie View Post

I think we're all better off with the current system and keep on refining it. Adjust it to (global) changes accordingly, all with the understanding that we might never 'get the perfect system' in place - it's all we can do, really.

I think the current system is bad too. It relies on companies being ethical and has an arbitrary timeframe implemented. Everybody just accepts that financials and taxes are to be sorted on a yearly basis but there isn't much reason to do this. Relying on businesses tracking their own expenses and then reporting them honestly/accurately isn't working as they exploit international laws. If the taxes were taken off during every transaction, there's no timeframe. Shops have to keep revenue for the year and then right at the end work out the profit and take a chunk out of it for taxes and pay it manually. With a transaction system, as soon as you pay for some soup, 1% of it can get skimmed and sent by a financial institution to fund public services. Every single day tax money would be collected to fund public services. Someone doing a $100k transaction would have to pay a percentage immediately or wouldn't be allowed to do the transaction. There's no volunteering of financial reporting, it works internationally, it works if you switch currencies. There's no notion of theft any more than sales tax and the percentage could be lower than sales tax. It could put an end to high frequency traders trying to compound their growth percentages because they'd have to pay 1% on each transaction, which might be more than their profit.

This system could be implemented in a single town to see how it works and scale it up but they have to get rid of physical cash. They'd have to switch to paying by mobile phone or something.
post #67 of 76
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Originally Posted by PhilBoogie View Post

Thanks for your take on this. Yes, it indeed seems ridiculous and preposterous to throw our current whole system out the window and implement an untested system, in any country for that matter.

I think we're all better off with the current system and keep on refining it. Adjust it to (global) changes accordingly, all with the understanding that we might never 'get the perfect system' in place - it's all we can do, really.

As the saying goes, "you can't fix 'stupid'."

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post #68 of 76
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Originally Posted by Marvin View Post

I think the current system is bad too. It relies on companies being ethical and has an arbitrary timeframe implemented. Everybody just accepts that financials and taxes are to be sorted on a yearly basis but there isn't much reason to do this. Relying on businesses tracking their own expenses and then reporting them honestly/accurately isn't working as they exploit international laws. If the taxes were taken off during every transaction, there's no timeframe. Shops have to keep revenue for the year and then right at the end work out the profit and take a chunk out of it for taxes and pay it manually. With a transaction system, as soon as you pay for some soup, 1% of it can get skimmed and sent by a financial institution to fund public services. Every single day tax money would be collected to fund public services. Someone doing a $100k transaction would have to pay a percentage immediately or wouldn't be allowed to do the transaction. There's no volunteering of financial reporting, it works internationally, it works if you switch currencies. There's no notion of theft any more than sales tax and the percentage could be lower than sales tax. It could put an end to high frequency traders trying to compound their growth percentages because they'd have to pay 1% on each transaction, which might be more than their profit.

This system could be implemented in a single town to see how it works and scale it up but they have to get rid of physical cash. They'd have to switch to paying by mobile phone or something.

Marvin, you have a problem with almost anyone you consider "rich."

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post #69 of 76
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Originally Posted by SpamSandwich View Post

Marvin, you have a problem with almost anyone you consider "rich."

I'm not sure how that came from what I wrote there but it's clear that the whole system needs a balance. It's not about hating on anyone for being rich any more than hating on a pimp for exploiting impoverished women. The circumstances shouldn't exist for the exploitation to take place. The rich would still be rich under a more balanced system and still live a very lavish lifestyle.

The danger in how the system works now is that the reward system is heavily weighted towards certain job roles, more and more towards roles in the financial industry and executives/managers. These job roles typically create nothing of direct value, they just place bets on or direct the people who do. That creates the perception that these people are the value creators. Let's have an experiment then and ship them all off to their own little island with all their riches and executive titles and see what happens. What happens is they realize that without the people at the bottom, they can't do anything at all. They aren't engineers, artists or anything else. They'd all die within a week because the money they have is only as good as what they can exploit with it and with no one to exploit, they have nothing.

The way this message gets through is with labor strikes:

http://money.cnn.com/2014/05/07/news/companies/fast-food-worker-strikes-150-cities/

This can bring their companies to a standstill and that's when they see that without these people going about their business every day, they don't get the billions in profits so give something back. Rather than minimum wage increases, perhaps there ought to be laws that say a company should give workers shares in the company so that it's a reward based system. If the company profits are down, there's no increase in wages. If the company makes billions off the backs of these workers, they get a dividend reward. It can be non-voting shares but the share amount should be based on their role in the company. There would have to be safeguards in the event that shares go up dramatically and the workers all just cash in and retire but that wouldn't be such a bad thing as it creates new jobs for new workers to go through the same process.
post #70 of 76
Quote:
Originally Posted by Marvin View Post


I'm not sure how that came from what I wrote there but it's clear that the whole system needs a balance. It's not about hating on anyone for being rich any more than hating on a pimp for exploiting impoverished women. The circumstances shouldn't exist for the exploitation to take place. The rich would still be rich under a more balanced system and still live a very lavish lifestyle.

The danger in how the system works now is that the reward system is heavily weighted towards certain job roles, more and more towards roles in the financial industry and executives/managers. These job roles typically create nothing of direct value, they just place bets on or direct the people who do. That creates the perception that these people are the value creators. Let's have an experiment then and ship them all off to their own little island with all their riches and executive titles and see what happens. What happens is they realize that without the people at the bottom, they can't do anything at all. They aren't engineers, artists or anything else. They'd all die within a week because the money they have is only as good as what they can exploit with it and with no one to exploit, they have nothing.

The way this message gets through is with labor strikes:

http://money.cnn.com/2014/05/07/news/companies/fast-food-worker-strikes-150-cities/

This can bring their companies to a standstill and that's when they see that without these people going about their business every day, they don't get the billions in profits so give something back. Rather than minimum wage increases, perhaps there ought to be laws that say a company should give workers shares in the company so that it's a reward based system. If the company profits are down, there's no increase in wages. If the company makes billions off the backs of these workers, they get a dividend reward. It can be non-voting shares but the share amount should be based on their role in the company. There would have to be safeguards in the event that shares go up dramatically and the workers all just cash in and retire but that wouldn't be such a bad thing as it creates new jobs for new workers to go through the same process.

 

You can quote any source you want, but when it comes down to stealing the fruits of someone else's labor for your own selfish desires or needs, that is just plain wrong. The US should adopt the FairTax and eliminate all attempts at social engineering and political payback with the use of exemptions, write-offs, incentives, etc. The tax code is a disgrace and by allowing politicians to corrupt things to the point of endangering the economy and viability of businesses that operate in the US, things must drastically change.

 

Fast food workers who push for higher wages will be replaced with automation. Their labor is not worth what the president and these unions (the real source behind this "movement" to increase wages) are pushing. As costs of labor exceed the alternatives, the alternatives will be used.


Edited by SpamSandwich - 5/9/14 at 1:56pm

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post #71 of 76
Quote:
Originally Posted by SpamSandwich View Post

when it comes down to stealing the fruits of someone else's labor for your own selfish desires or needs, that is just plain wrong.

You're describing the same problem I am but redefining the theft and labor. If someone invests capital in a successful company like Apple (e.g Icahn) and the tens of thousands of employees work away while Icahn is off lying on a beach, how can you call any gain he makes from the stock going up fruits of his labor? He's on the beach, he's not contributing to the value increase in the stock at all.

http://dealbook.nytimes.com/2014/05/06/hedge-fund-moguls-pay-has-the-1-looking-up/?_php=true&_type=blogs&_r=0

Hedge fund managers are betting with the money from their investors, they don't have to pay for losses, they just gain hugely from the profits.

If that's the only industry that eventually makes a reasonable work/reward ratio, is everyone supposed to migrate to being a hedge fund manager? We just end up with a whole world filled with gamblers passing each other's money around.

Having risk-free job roles like hedge-fund management are the kinds of job roles you would condemn in government and yet you'd applaud a hedge fund manager for taking home billions in a year doing only good for himself and especially if they paid no tax. This obviously makes no sense because you promote self-interest so why would you feel better about someone doing no good for you and condemn the government taking money from them to support you? The latter is in your self-interest.
Quote:
Originally Posted by SpamSandwich View Post

The US should adopt the FairTax and eliminate all attempts at social engineering and political payback with the use of exemptions, write-offs, incentives, etc. The tax code is a disgrace and by allowing politicians to corrupt things to the point of endangering the economy and viability of businesses that operate in the US, things must drastically change.

Businesses helped put the incentives into the tax code so I don't see how businesses are going to struggle. I agree with changing the tax structure but not the way you'd like as your suggestion is designed to skew income inequality far worse than it already is.
Quote:
Originally Posted by SpamSandwich View Post

Fast food workers who push for higher wages will be replaced with automation. Their labor is not worth what the president and these unions (the real source behind this "movement" to increase wages) are pushing. As costs of labor exceed the alternatives, the alternatives will be used.

I'm all for robots replacing menial jobs but for some reason you have a desire to punish poorer workers and create a whole class of destitute people. I don't see what's to be gained from that. Do you think that the world would be a better place if you have just a fraction of the population with more wealth than they know what to do with and over half of the entire population in poverty and homeless? This is close to the situation now taking into account the whole world, not just developed world. People don't just die y'know, that would just create a completely unmanageable situation for the wealthy and poor alike and assets would be seized by the government one way or another to fix it because that's what they are there to do - maintain a civil society.

You don't place an upper bound on how much an individual needs to own and I don't understand why. The world has limited resources, what's the benefit in ownership of most of it going to a tiny fraction of people? The whole reason the resources are there is to improve the quality of life so if someone has an amazing quality of life then taking significantly more than that is unnecessary and only serves to create a lower quality of life for someone else. That just seems sadistic.
post #72 of 76
Too difficult to respond to your post from an iPhone Marvin. I'll have to look again later.

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post #73 of 76
Quote:
Originally Posted by Marvin View Post

Quote:
Originally Posted by PhilBoogie View Post

I think we're all better off with the current system and keep on refining it. Adjust it to (global) changes accordingly, all with the understanding that we might never 'get the perfect system' in place - it's all we can do, really.

I think the current system is bad too. It relies on companies being ethical and has an arbitrary timeframe implemented. Everybody just accepts that financials and taxes are to be sorted on a yearly basis but there isn't much reason to do this. Relying on businesses tracking their own expenses and then reporting them honestly/accurately isn't working as they exploit international laws. If the taxes were taken off during every transaction, there's no timeframe. Shops have to keep revenue for the year and then right at the end work out the profit and take a chunk out of it for taxes and pay it manually. With a transaction system, as soon as you pay for some soup, 1% of it can get skimmed and sent by a financial institution to fund public services. Every single day tax money would be collected to fund public services. Someone doing a $100k transaction would have to pay a percentage immediately or wouldn't be allowed to do the transaction. There's no volunteering of financial reporting, it works internationally, it works if you switch currencies. There's no notion of theft any more than sales tax and the percentage could be lower than sales tax. It could put an end to high frequency traders trying to compound their growth percentages because they'd have to pay 1% on each transaction, which might be more than their profit.

This system could be implemented in a single town to see how it works and scale it up but they have to get rid of physical cash. They'd have to switch to paying by mobile phone or something.

That's an interesting take you have there. That might work; are there any people in government dabbling on this idea?

Getting cash out of our system is another thing entirely; its ramifications will be vast, but I've heard it before, many times actually. The first European country to adopt cash was Sweden, and now it looks like they might be the first to drop it, with Bjoern Ulvaeus (ABBA) being a proponent:

http://www.cbsnews.com/news/sweden-moving-towards-cashless-economy/

I got that link from this article:

http://seekingalpha.com/article/1697102-the-future-of-money-is-digital-not-physical
post #74 of 76
Quote:
Originally Posted by SpamSandwich View Post


Marvin, you have a problem with almost anyone you consider "rich."

 

 

Quote:
Originally Posted by SpamSandwich View Post
 

 

You can quote any source you want, but when it comes down to stealing the fruits of someone else's labor for your own selfish desires or needs, that is just plain wrong. The US should adopt the FairTax and eliminate all attempts at social engineering and political payback with the use of exemptions, write-offs, incentives, etc. The tax code is a disgrace and by allowing politicians to corrupt things to the point of endangering the economy and viability of businesses that operate in the US, things must drastically change.

 

Fast food workers who push for higher wages will be replaced with automation. Their labor is not worth what the president and these unions (the real source behind this "movement" to increase wages) are pushing. As costs of labor exceed the alternatives, the alternatives will be used.


There's a problem in responding to anything like this. You essentially put forth a line in the sand mentality, so you aren't really discussing any of it, merely rationalizing preconceived notions. I've done the same thing without realizing it, but it's so obvious here. I'm surprised you don't see this in your own words. As for automation (not sure why you mentioned that), it's inevitable in some areas. I would suggest to you that it's important to consider what will constitute either entry level work or (in relative terms) unskilled labor for the next generation rather than focus on protectionism and whether something can be automated. I'm also with Marvin on high frequency trading. Its purpose is merely to siphon currency, much like other modern financial products. I also don't understand why you respond that way to Marvin. He's one of the most polite people on here, far more than myself.

post #75 of 76
Quote:
Originally Posted by PhilBoogie View Post

That might work; are there any people in government dabbling on this idea?

I doubt the government would be considering such a setup because for one thing, they've demonstrated they are in the back pocket of the financial industry so I expect them to maintain a system that doesn't harm them. The tax system also has controls in that they can tax certain products more highly than others like fuel, cigarettes, alcohol. They could still do this with a transaction tax but that would need to be accounted for - in a supermarket bill for example, cigarette and alcohol products would have to slightly increase the transaction fee.

The government also gets some benefits from yearly reporting because they can see which businesses are doing best and which are doing worst and which might be up to no good and make decisions on ways to help grow ones that are doing badly. This can also be done with transactions but there would have to be some privacy implemented.
Quote:
Originally Posted by PhilBoogie View Post

Getting cash out of our system is another thing entirely; its ramifications will be vast, but I've heard it before, many times actually.

I think it could be very simple to get rid of cash, even for older people. Consider a small device less than 1/4 the size of a pocket calculator, very thin and with a thumbprint scanner or pin code buttons (thumbprint is better to prevent over-the-shoulder pin code stealing). Every transaction terminal would have a cellular or wifi connection of some sort. If someone needs to send cash to someone, they can just type the amount and validate with the pin and/or thumb. In a store, the amount would show on the device and again just type a code or use the thumb to validate it. An old person can easily press their thumb on a scanner and there can be similar withdrawal limits you get with a bank e.g $250 per day. If someone tried to mug an old person, the worst they could do is force them to send $250 to another digital device but they'd have to be near a data connection and the digital destination would be known.

The cash would come from an account with a bank or even things like Paypal. It would be like online banking, which currently uses small devices to log on but it would just be direct. Obviously people with smartphones can use those but for others, there can be this device and it can store multiple account links in different institutions.
Quote:
Originally Posted by SpamSandwich 
I also don't understand why you respond that way to Marvin. He's one of the most polite people on here, far more than myself.

I think he's polite enough too, he just sticks to his opinion, which is fine. Different ways of thinking justify themselves through different outcomes. To people who admire and pursue the acquisition of wealth, systems that promote that would be favored. To people who put the welfare of human beings first would similarly favor systems that promote this. These two systems conflict a lot of the time and probably always will because it's a genetic conflict. Every day we have to make decisions between actions that promote our own success and well-being and ones that promote the common infrastructure that is necessary for that success to be meaningful. We don't all simply act in our own self-interest with no thought to other people because someone who did that wouldn't pay for anything, they'd just take it; they wouldn't be polite, they'd use force.

It's like a sports event. To win a race, someone can easily injure the other competitors and cross the line first. That would be acting entirely in their self-interest if simply crossing the line was the goal. That's how the finance industry thinks. Acquiring money is the goal no matter if weapons are being traded, if they are laundering drug money, if they are manipulating interest rates etc. There's no thought to the damage in achieving the goal. But winning a race like that isn't meaningful and the crowd watching would say it's not fair. This is what the current public opinion is of the finance industry among other things. What makes it worse is that the beneficiaries expect adulation for what they perceive to be success but they only get it from people who respect their goal.

There are criticisms to be made at both ends of the spectrum. There's a documentary showing an outcome where people take advantage of welfare:

http://www.youtube.com/watch?v=CLUrY4JDiCw

There are stories about how self-made millionaires take advantage of the system too:

http://www.dailymail.co.uk/news/article-2541365/EXCLUSIVE-A-new-7-5m-Miami-home-250-000-Rolls-Royce-The-luxurious-life-real-life-Wolf-Wall-Streets-partner-crime-theres-victims-owed-200m-it.html

None of the outcomes there are good but the system we operate under can't unfairly promote one of them. Even if every one of say 50 families in that street lived on £500/month welfare for 50 years, that £15m is still tiny compared to the $200m that the broker there defrauded investors out of. We can't have a system that puts teenagers in prison for walking around with a handful of drugs but look the other way when a stock broker is using huge amounts of class A drugs:

http://www.theguardian.com/film/2014/feb/28/wolf-of-wall-street-jordan-belfort-sex-drugs

"In some respects, my life was even worse than that. Although I'd say I did more quaaludes than cocaine."

We can't put a bank robber in prison for years if they steal only as much cash as they can carry and look the other way when banks defraud customers to the tune of billions. That's an unfair system.

http://www.theguardian.com/commentisfree/2013/nov/13/occupy-wall-st-debt-buying-heart-capitalism

"Debt is how the rich extract wealth from the rest of us, at home and abroad. Western capitalism is running out of serfs, slaves, colonies, immigrants, child labour and women as chattels. A new underclass must be created. Debt is the weapon of choice. Medical bills underlie more than 60% of bankruptcies in the US. The level of student debt has reached an eye-watering $1.2tn.

This is why the debate on the back-door privatisation of medical and education services in this country matters so much. The extraction of profit from these two key areas changes the social contract in a fundamental way. The idea is no longer that the state will educate you and keep you healthy, so that you may continue to contribute with both your work and your taxes. It has mutated instead into "you will borrow money from the state's private partners in order to become educated and stay healthy, so that you may continue to contribute to their bottom line". All of the 99%, in a very real way, work in part for an assortment of financial institutions, largely invisible and certainly unaccountable.

Iceland's – strangely unreported – decision to write down mortgage debt for its citizens, undermines that notion. A rejection of traditional systems of credit and money as a response to austerity, such as in the barter markets of Volos in Greece and Turin in Italy undermines that notion. The Rolling Jubilee project undermines that notion in a significant way, by asking the sizzling question: "If a corporation is prepared to accept five cents on the dollar in exchange for our debts, if that is our debt's open market value, how much do we really owe?""
post #76 of 76
Quote:
Originally Posted by Marvin View Post

I doubt the government would be considering such a setup because for one thing, they've demonstrated they are in the back pocket of the financial industry so I expect them to maintain a system that doesn't harm them. The tax system also has controls in that they can tax certain products more highly than others like fuel, cigarettes, alcohol. They could still do this with a transaction tax but that would need to be accounted for - in a supermarket bill for example, cigarette and alcohol products would have to slightly increase the transaction fee.

The government also gets some benefits from yearly reporting because they can see which businesses are doing best and which are doing worst and which might be up to no good and make decisions on ways to help grow ones that are doing badly. This can also be done with transactions but there would have to be some privacy implemented.

So much for everyone wanting to create a better world for all, in spite of some ramifications it may have that would work out negatively for some. Good point though.
Quote:
I think it could be very simple to get rid of cash, even for older people. Consider a small device less than 1/4 the size of a pocket calculator, very thin and with a thumbprint scanner or pin code buttons (thumbprint is better to prevent over-the-shoulder pin code stealing). Every transaction terminal would have a cellular or wifi connection of some sort. If someone needs to send cash to someone, they can just type the amount and validate with the pin and/or thumb. In a store, the amount would show on the device and again just type a code or use the thumb to validate it. An old person can easily press their thumb on a scanner and there can be similar withdrawal limits you get with a bank e.g $250 per day. If someone tried to mug an old person, the worst they could do is force them to send $250 to another digital device but they'd have to be near a data connection and the digital destination would be known.

The cash would come from an account with a bank or even things like Paypal. It would be like online banking, which currently uses small devices to log on but it would just be direct. Obviously people with smartphones can use those but for others, there can be this device and it can store multiple account links in different institutions.

While that may indeed be a solution, I think you (we?) are looking at this with our IT cap on. The elderly do not like change, in general. Take away cash and they'll be stupefied. No matter how simple tech may be designed, many elderly will adopt it slowly.
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