Hudson on the Piketty Phenomenon

[Milton Kuo]

Re: Hudson on the Piketty Phenomenon

What befuddles many who are not wealthy, including myself, is why anyone with high income and/or net worth is attacked for success.

The counterpart to that question is: Why would anyone support laws that create dynasties of wealthy when most of those people are likely to be harmed by such policies? The answer to that, I believe, is because estate taxes are framed as the government taking away the pittance of an estate that most people leave their heirs. It's my understanding that in the vast majority of cases (over 90%), there are no inheritance taxes at all since the estate isn't large enough to cross the threshold for taxation to come into effect. This is similar to how people who have a $200,000 mortgage falsely believe that eliminating the mortgage interest rate deduction would increase their tax burden.

I've found two lines of thought among people who are calling for some sort of legislation to prevent dynastic wealth. The more extreme thought is along the lines of, "I don't see why anyone would ever need $70bln. The government should take away $X from everyone and allow them to have a maximum net worth of $Y." This argument also calls for modifying income tax laws such that every dollar of income over a certain amount is taxed at some extremely high rate, say 99% or so. A wealth tax (I believe Piketty supports wealth taxes as a policy but admits that it's politically impossible) is another common idea among this line of thought.

The second line of thought is to allow people to accumulate as much money as they want while they're living and tax the the estates heavily once the wealthy person dies. If the nabob doesn't want the government piddling his money away on $100,000 hammers and other such silly things, he should use his exceptional abilities to deploy his money to improve society as Andrew Carnegie suggests in The Gospel of Wealth. Whether a certain amount of money can be inherited by heirs tax-free or not is not something I've run across.

Of the two lines of thought above, I am a proponent of the second. I also support the ability for exceptionally wealthy people to bequeath something like $20mln, adjusted for inflation, tax-free to each of their beneficiaries so that the beneficiaries would never have to worry about money in their lifetimes. (Buffett's, "Enough that they would feel they can do anything, but not so much that they could do nothing.") Anything above that amount should be punitively taxed to prevent dynasties of wealth that ultimately get bored and start buying politicians.

[vt]

Re: Hudson on the Piketty Phenomenon


"he should use his exceptional abilities to deploy his money to improve society as Andrew Carnegie suggests in The Gospel of Wealth."

The richest are already planning to give away most of their wealth to philanthropy:

http://givingpledge.org/

Go to this site and see huge commitment to society that the top .001% is giving back.

The Giving Pledge is a commitment by the world's wealthiest individuals and families to dedicate the majority of their wealth to philanthropy.

Bill and Karen


.

[Thailandnotes]

Re: Hudson on the Piketty Phenomenon

The richest are already planning to give away most of their wealth to philanthropy:

Sorry, buying none of it.

First of all, most of the extremely rich did not earn their billions. Read Joan Didion’s Where I Was From for an eye opening account of how the rich stole the public’s land and money and gave back a pittance. Many of the colleges and universities we take for granted are named for scoundrels. Thaksin Shinawatra maybe the only man on earth who was a cop in his thirties and a billionaire in his forties. The US has many such characters. Bill Gates may be giving much or even most of it away, but what a tax he put on individuals, schools, governments, and businesses to get that rich.

[Woodsman]

Re: Hudson on the Piketty Phenomenon

Sorry, buying none of it.

First of all, most of the extremely rich did not earn their billions. Read Joan Didion’s Where I Was From for an eye opening account of how the rich stole the public’s land and money and gave back a pittance. Many of the colleges and universities we take for granted are named for scoundrels. Thaksin Shinawatra maybe the only man on earth who was a cop in his thirties and a billionaire in his forties. The US has many such characters. Bill Gates may be giving much or even most of it away, but what a tax he put on individuals, schools, governments, and businesses to get that rich.

It's total, unmitigated bullshit, this idea that the very rich are "giving" their wealth away. It's part and parcel of the long discredited notion that philanthropy is a sufficient replacement for public action and investment.

One would imagine most anyone considering putting forth such an argument would self-censor to avoid certain embarrassment at revealing their credulity, but such is the heady mix of ideology, self-interest and faith that lies at its base. In my opinion, there's not a popular article, speech, video, book, or scholarly monograph that would put the slightest dent in the certainty of the people who advance this idea.

Now there's no question that nominal amount of dollars going into philanthropy has increased along with the fortunes of the top out of sight rich, but so has every metric associated with that tiny minority community. And all things being equal - which they certainly aren't - it is better to encourage philanthropy than to discourage it. It can and has been transformative when focused on specific organizations and select groups of people.

But in terms of resolving vexing social challenges like extreme inequality, it makes the problem worse. The very rich may be selfish and immoral, they may be small minded and provincial, but what they are not is ignorant of those actions and arrangements that keep them wealthy. Does one imagine they actively pursue lines that threaten their position? Of course they don't. They use philanthropy to strengthen those arrangements that make extreme inequality possible in the first place. To them it is part of the arsenal of class warfare. The very rich use philanthropy as a carrot to win people over to their ideology and as a complement to their stick of political largess.

By far the finest example of this approach are those charities and advocacy groups founded by David and Charles Koch. The tens of millions they spend yearly on federal and state lobbying goes hand-in-glove with their nonprofits’ public advocacy, and all for reasons having everything to do with the brothers’ sprawling business and ideological interests. Far from helping the public, this brand of misanthrope philanthropy is a form of self-therapy for the world’s very rich. The world’s wealthiest in the end give to nobody but themselves.

[DSpencer]

Re: Hudson on the Piketty Phenomenon

But no one here is advocating that?

I'm referring to the position that Piketty and Hudson apparently advocate:

“Well, you need to somehow tax the wealth away”. Well, that’s true, but that’s for another book in the future.

Or maybe you take issue with the "give it to ourselves" part of my comment. If so, all I can say is that is implied because it is always the M.O. Whether directly or through reduced taxes for others the end goal is always the same. This isn't like the scene from Batman where the joker burns a pile of money. They obviously want to redistribute it. Even if they did burn (or delete) it, it would be a deflationary way of accomplishing the same thing.

[DSpencer]

Re: Hudson on the Piketty Phenomenon

Whoops. In my case, yes, it was all for nothing and I'm sorry for having a brain glitch that didn't see that. However, the article does say that PPP is not a very precise way of measuring things and there's going to be some hand-waving. Hand-waving by economists always lights up the "fiction" sign in my head. That said, even if PPP is an accurate way of measuring purchasing power across nations, it's my opinion that it's not good enough to say, "We here in the U.S. have a standard of living comparable to places like India and China if we factor in PPP. Good enough. There's no real reason to want any better."

Whatever happened to the ideal that had 1950's billboards in the U.S. proclaiming, "The highest standard of living in the world."? Are we also going to be content if our universities become comparable to other universities in typical countries of the world? Should Kennedy have said, "Let's not bother going to the moon because, heck, it's not like anyone is close to landing a man on the moon!"?

I hardly consider myself a liberal and I positively detest giveaways but it really bothers me that there are citizens in this country who want to earn a living but can only find work that pays about $8.00/hour. Yes, these people are unskilled but at $8.00/hour, they'll be hard-pressed to amass enough money to pay for everyday living expenses (rent, food, transportation, utilities) and still have the time and monetary resources to pursue additional training that will allow them to earn more money.

One of the things I like(d) about the U.S. is that even truly wealthy people can walk among regular people without much worry about getting kidnapped, robbed, or murdered. This is only possible in a nation where the regular people are generally well-off. If the U.S. continues on its road of impoverishing the vast majority of its population, it will end up being like South America where the wealthy live in concrete houses surrounded by concrete walls topped with barbed wire with armed guards patrolling the premises. If that should happen, who are the prisoners? The people inside the walls or the people outside the walls?

Sorry to be a jerk on the PPP issue but I was frustrated. I agree it's not a perfect way of comparing things, but I don't know of a better one.

It may be worth remembering, this is not a book written by an American about how America can retain a higher standard of living. This is a book written by a Frenchman who is advocating a GLOBAL system of taxation to combat inequality.

My point is that someone in the US who is making $10 an hour should thinking carefully about what it means to push for global wealth equality when they are already in the top half.

[DSpencer]

Re: Hudson on the Piketty Phenomenon

I agree with you there is a particular relationship between a person's income and their value to society. It's inverse. The more useful a person is to society the less they generally get paid. As for the supply and demand argument it doesn't really hold up. In some countries a surgeon earns 10x a manual worker whilst in others they may earn less. There was no shortage of people who could have been or wanted to be CEO of APPLE. Tim Cook could stay at home 365 days a year and Apple would still make billions-so why does he get paid 365 million dollars a year? I would have done it for far less. If he was taxed 90% on that it would be called "government robbery". Yet he along with the board are are allowed to rob the shareholders for their own personal gain and be respected for it?

The law of supply and demand "doesn't really hold up" because you claim that in "some countries" a surgeon earns less than a manual worker? With no actual data or source, no indication of the supply and demand of either profession in those countries and without even specifying which countries you make this claim. Why should anyone take that kind of "argument" even remotely seriously?

So in your personal opinion the CEO of Apple has no impact on Apple's performance as a company? That's wonderful. It's ironic given that in many people's opinion Apple is the perfect example of how much impact a successful CEO can have, but since a random person on the internet claims it's all BS I guess we should all be convinced.

Maybe Tim Cook will be a failure as CEO, but that doesn't prove that you or Joe Blow off the street would do any better or that paying high salaries to attract talent is robbing the shareholders.

I'll be the first to admit that I don't always like how public companies are run. But guess what! Nobody forces you or I to own shares in Apple. If you don't like that Apple pays Tim Cook millions of dollars then don't buy their stock! It's not really robbery if you willingly go along with it. It's not like this was some surprise move where suddenly they hire the chairman's 20 year old nephew who works at McDonalds and pay him 2 billion dollars a year.

[gwynedd1]

Re: Hudson on the Piketty Phenomenon

It's total, unmitigated bullshit, this idea that the very rich are "giving" their wealth away. It's part and parcel of the long discredited notion that philanthropy is a sufficient replacement for public action and investment.

One would imagine most anyone considering putting forth such an argument would self-censor to avoid certain embarrassment at revealing their credulity, but such is the heady mix of ideology, self-interest and faith that lies at its base. In my opinion, there's not a popular article, speech, video, book, or scholarly monograph that would put the slightest dent in the certainty of the people who advance this idea.

Now there's no question that nominal amount of dollars going into philanthropy has increased along with the fortunes of the top out of sight rich, but so has every metric associated with that tiny minority community. And all things being equal - which they certainly aren't - it is better to encourage philanthropy than to discourage it. It can and has been transformative when focused on specific organizations and select groups of people.

But in terms of resolving vexing social challenges like extreme inequality, it makes the problem worse. The very rich may be selfish and immoral, they may be small minded and provincial, but what they are not is ignorant of those actions and arrangements that keep them wealthy. Does one imagine they actively pursue lines that threaten their position? Of course they don't. They use philanthropy to strengthen those arrangements that make extreme inequality possible in the first place. To them it is part of the arsenal of class warfare. The very rich use philanthropy as a carrot to win people over to their ideology and as a complement to their stick of political largess.

By far the finest example of this approach are those charities and advocacy groups founded by David and Charles Koch. The tens of millions they spend yearly on federal and state lobbying goes hand-in-glove with their nonprofits’ public advocacy, and all for reasons having everything to do with the brothers’ sprawling business and ideological interests. Far from helping the public, this brand of misanthrope philanthropy is a form of self-therapy for the world’s very rich. The world’s wealthiest in the end give to nobody but themselves.

Yeah I love that whole give away crap. I have a lot in common with this idea. As one who consumes wild , feral and weedy sources of food, I have lots of assets around me that are not in my name. A name is often as much a source of malediction as it is a blessing. Parking tickets in your name; property in you name, that can become the bases of the enforcement of ordinances, regulations, taxes due and law suits. I do not use my name here, knowing its typically nothing but an essential ingredient in spells and incantations, the music for the dancing ritual calling for the storm clouds of my doom. An address is a coordinate for a cross-hair, and a target's maw eats from the spring tips of arrows.

These foundations created by the rich are the fields of their Elysium, not in their name but provided for their benefits by the gods. They pick from the tree as they please but are not responsible to maintain it.

[Woodsman]

Re: Hudson on the Piketty Phenomenon

I'm referring to the position that Piketty and Hudson apparently advocate:

“Well, you need to somehow tax the wealth away”. Well, that’s true, but that’s for another book in the future.

Or maybe you take issue with the "give it to ourselves" part of my comment. If so, all I can say is that is implied because it is always the M.O. Whether directly or through reduced taxes for others the end goal is always the same. This isn't like the scene from Batman where the joker burns a pile of money. They obviously want to redistribute it. Even if they did burn (or delete) it, it would be a deflationary way of accomplishing the same thing.

And why should we be content with the decisions on how it is currently redistributed?

Remember the context of this discussion is wealth created and maintained by massive, systemic fraud as part of a giant criminal enterprise. It is wealth that to date has stymied and distorted the law, its enforcement, our electoral politics and democratic institutions, and even how the news of it all is reported.

And fundamentally we are talking about wealth based on rent, land rent, natural resource rent, monopoly rent and the disasters of FIRE. We speak here of multi-generational wealth deep in black pools largely free of the scrutiny of economists and the tax man, and certainly not subject to the degree of taxation suffered by the wage earner and small business owner. And wealth employed to goals and tasks contrary to the country's social and economic development.

I think what some dislike most about Piketty, Hudson and others who share their view is that they have opened the conversation on how this wealth is created and maintained. Knowing what we do about that, it seems to me thinking about how to redirect economics to meet human ends is entirely appropriate given how terribly misdirected it continues to be. In my view raising the specter of redistribution seems not at all appropriate if our goal is to maintain and advance the incentives of a healthy and sustainable economy. It seems more appropriate to maintaining the status quo.

Neither Hudson nor Piketty (and certainly no one here) call for a broad brush confiscatory taxing of fortunes, but rather a focus on particular kinds of wealth and particular kinds of fortune making that are predatory, deflationary and guaranteed to produce mass misery. iTulipers don't need a lesson on the pitfalls of rentier economies and the virtues of productive ones. I mean, EJ wrote the book on it and for God's sake I wish the world were discussing the ideas in The Post-Catastrophe Economy than in Capital in the 21st Century.

[DSpencer]

Re: Hudson on the Piketty Phenomenon

And why should we be content with the decisions on how it is currently redistributed?

Remember the context of this discussion is wealth created and maintained by massive, systemic fraud as part of a giant criminal enterprise. It is wealth that to date has stymied and distorted the law, its enforcement, our electoral politics and democratic institutions, and even how the news of it all is reported.

And fundamentally we are talking about wealth based on rent, land rent, natural resource rent, monopoly rent and the disasters of FIRE. We speak here of multi-generational wealth deep in black pools largely free of the scrutiny of economists and the tax man, and certainly not subject to the degree of taxation suffered by the wage earner and small business owner. And wealth employed to goals and tasks contrary to the country's social and economic development.

I think what some dislike most about Piketty, Hudson and others who share their view is that they have opened the conversation on how this wealth is created and maintained. Knowing what we do about that, it seems to me thinking about how to redirect economics to meet human ends is entirely appropriate given how terribly misdirected it continues to be. In my view raising the specter of redistribution seems not at all appropriate if our goal is to maintain and advance the incentives of a healthy and sustainable economy. It seems more appropriate to maintaining the status quo.

Neither Hudson nor Piketty (and certainly no one here) call for a broad brush confiscatory taxing of fortunes, but rather a focus on particular kinds of wealth and particular kinds of fortune making that are predatory, deflationary and guaranteed to produce mass misery. iTulipers don't need a lesson on the pitfalls of rentier economies and the virtues of productive ones. I mean, EJ wrote the book on it and for God's sake I wish the world were discussing the ideas in The Post-Catastrophe Economy than in Capital in the 21st Century.

If the wealth is created through a criminal enterprise and we know who the culprits are then the solution is very simple: Put them in jail and fine them.

If we refuse to enforce the laws then it doesn't matter what they say anyway so why debate how to precisely construct them?

I didn't miss the news about Jon Corzine going to jail did I?

[llanlad2]

Re: Hudson on the Piketty Phenomenon

The law of supply and demand "doesn't really hold up" because you claim that in "some countries" a surgeon earns less than a manual worker? With no actual data or source, no indication of the supply and demand of either profession in those countries and without even specifying which countries you make this claim. Why should anyone take that kind of "argument" even remotely seriously?

So in your personal opinion the CEO of Apple has no impact on Apple's performance as a company? That's wonderful. It's ironic given that in many people's opinion Apple is the perfect example of how much impact a successful CEO can have, but since a random person on the internet claims it's all BS I guess we should all be convinced.

Maybe Tim Cook will be a failure as CEO, but that doesn't prove that you or Joe Blow off the street would do any better or that paying high salaries to attract talent is robbing the shareholders.

I'll be the first to admit that I don't always like how public companies are run. But guess what! Nobody forces you or I to own shares in Apple. If you don't like that Apple pays Tim Cook millions of dollars then don't buy their stock! It's not really robbery if you willingly go along with it. It's not like this was some surprise move where suddenly they hire the chairman's 20 year old nephew who works at McDonalds and pay him 2 billion dollars a year.

Ok it is fair enough to ask for evidence. I chose Hungary because I know a Hungarian anaesthetist who told me what he earned in Hungary compared to the UK and the average wage in Hungary. Anyway here is the evidence below from this website http://medlines.org/they-pay-less-fo...laries-europe/

1. Here is the chart for minimum and maximum wages for medical doctors across the EU





And here are the average wages of workers.The average worker in Hungary earns more than a doctor. My friend informed me that this was the case for GPs and surgeons. Surgeons did however supplement their income by taking bribes to move people up waiting lists. However these bribes did not make their way through to the anaesthetist.



As for Tim Cook's salary. Ok he took home 46 milllion dollars but he was given 365 million dollars worth of options some of which vest in 2016. It's true I do not have to own Apple's stock but it is absolutely not true to state that there is no consequence to him being paid that much. There are huge ramifications and knock on effects.Disharmony is created. Every CEO demands higher pay. Public sector bosses demand huge compensation for their unmeasurable pen pushing performance. He does not receive his pay in a Apple sealed vacuum packed box. Apple did not become a successful company by paying large amounts of money to its CEOs. No company gets wealthy doing this please, show me one that has. It's interesting that Steve Jobs is given as as an example as it is well known that his salary was $1 a year. I don't deny Steve Jobs deserved his wealth-but he is the exception rather than the norm. His original share options were not worth anything like so much when he took over and clearly earned it over a number of years. His goal was not personal wealth but a by-product of intellect, leadership, innovation and good fortune.

I've been asked to show evidence of how CEO pay does not lead to improved shareholder performance. Almost every bank boss would have seen his shareholders and bondholders wiped out without government intervention and yet we are told they need to be compensated for their unique talents. Survey after survey shows that CEO pay is not a predictor of performance and several show that there is no real market for CEOs because successful companies generally do better when they promote from within.I would link but wouldn't know which one to choose.

Another polluting aspect of high CEO pay is the power and influence they wield with it. A good example is the disgraced Chairman of Enron Ken Lay. He had the ear of politicians, was on government energy advisory boards and donated(bribed) political parties.Enron was 5 times Fortune innovative company of the year. Its executives were nothing short of rock stars and yet it was fraudulent. I am not jealous of wealth fairly gained however if it is allowed to accumulate to excess it will damage society and is used to bribe officialdom.

[DSpencer]

Re: Hudson on the Piketty Phenomenon

And here are the average wages of workers.The average worker in Hungary earns more than a doctor. My friend informed me that this was the case for GPs and surgeons. Surgeons did however supplement their income by taking bribes to move people up waiting lists. However these bribes did not make their way through to the anaesthetist.

Explain how you think this disproves the law of supply and demand. Hungary's healthcare system is controlled by the government including physician salaries. The result is that physicians are underpaid and many are leaving the country.

It's interesting you point out the bribery/gratuity system that is widespread. This is the law of supply and demand finding a way, albeit illegally, around the artificial constraints put in place by the government. The people of Hungary are willing to pay more for physicians but because of the centrally planned system they have to break the law to do so.

This is a textbook case of central planning failing because it tries to supersede the law of supply and demand. Yet somehow you reach a totally different conclusion. It boggles the mind.

[DSpencer]

Re: Hudson on the Piketty Phenomenon

As for Tim Cook's salary. Ok he took home 46 milllion dollars but he was given 365 million dollars worth of options some of which vest in 2016. It's true I do not have to own Apple's stock but it is absolutely not true to state that there is no consequence to him being paid that much. There are huge ramifications and knock on effects.Disharmony is created. Every CEO demands higher pay. Public sector bosses demand huge compensation for their unmeasurable pen pushing performance. He does not receive his pay in a Apple sealed vacuum packed box. Apple did not become a successful company by paying large amounts of money to its CEOs. No company gets wealthy doing this please, show me one that has. It's interesting that Steve Jobs is given as as an example as it is well known that his salary was $1 a year. I don't deny Steve Jobs deserved his wealth-but he is the exception rather than the norm. His original share options were not worth anything like so much when he took over and clearly earned it over a number of years. His goal was not personal wealth but a by-product of intellect, leadership, innovation and good fortune.

I've been asked to show evidence of how CEO pay does not lead to improved shareholder performance. Almost every bank boss would have seen his shareholders and bondholders wiped out without government intervention and yet we are told they need to be compensated for their unique talents. Survey after survey shows that CEO pay is not a predictor of performance and several show that there is no real market for CEOs because successful companies generally do better when they promote from within.I would link but wouldn't know which one to choose.

Another polluting aspect of high CEO pay is the power and influence they wield with it. A good example is the disgraced Chairman of Enron Ken Lay. He had the ear of politicians, was on government energy advisory boards and donated(bribed) political parties.Enron was 5 times Fortune innovative company of the year. Its executives were nothing short of rock stars and yet it was fraudulent. I am not jealous of wealth fairly gained however if it is allowed to accumulate to excess it will damage society and is used to bribe officialdom.

Steve Jobs didn't need a salary because he was a huge shareholder in the company. It's not like he didn't make an absolute fortune working as the CEO of Apple, he just did it in a different way.

I agree that companies often structure CEO pay in a way that is detrimental to the company. But again, nobody forces me to own those companies. When the government forces me to bail them out with my tax dollars, I have a huge problem with that but that's not the same issue.

Ken Lay was convicted of fraud. The problem now is that nobody ever gets convicted.

[Penguin]

Re: Hudson on the Piketty Phenomenon

I agree that companies often structure CEO pay in a way that is detrimental to the company. But again, nobody forces me to own those companies. When the government forces me to bail them out with my tax dollars, I have a huge problem with that but that's not the same issue...

I've been reading over this thread with interest. And I want to highlight one point and ask a question. Not singling you out D Spencer, you just mentioned something I thought was interesting and wanted to get the take you and others have on it.

I agree that on one makes you own company stocks but OTOH corporations exist at the whim of society, or at least they did up until the Supreme Court invented the fiction of corporate rights and took supervision of them away from the states. But it still stands that as government allows incorporation and grants certain rights to the corporation they also have a vested interest to see that this results in benefits to society.

If structuring tax codes in a certain way results in benefits for society and/or the economy at large doesn't the government have an obligation to do so? An example would be the inverse relationship between very high tax rates at the top and the funneling of corporate capital into R&D and production enhancements. Another might be the very low tax on carried interest and the ways in which very highly paid individuals pay much less taxes for some, tbh, pretty sketchy activities has increased substantially.

Just tossing that out for comment.

Will

[DSpencer]

Re: Hudson on the Piketty Phenomenon

I've been reading over this thread with interest. And I want to highlight one point and ask a question. Not singling you out D Spencer, you just mentioned something I thought was interesting and wanted to get the take you and others have on it.

I agree that on one makes you own company stocks but OTOH corporations exist at the whim of society, or at least they did up until the Supreme Court invented the fiction of corporate rights and took supervision of them away from the states. But it still stands that as government allows incorporation and grants certain rights to the corporation they also have a vested interest to see that this results in benefits to society.

If structuring tax codes in a certain way results in benefits for society and/or the economy at large doesn't the government have an obligation to do so? An example would be the inverse relationship between very high tax rates at the top and the funneling of corporate capital into R&D and production enhancements. Another might be the very low tax on carried interest and the ways in which very highly paid individuals pay much less taxes for some, tbh, pretty sketchy activities has increased substantially.

Just tossing that out for comment.

Will

I think the government (in the US) exists to protect the rights of its citizens and not to simply do whatever it wants in order to benefit society or the economy.

My opinion is that the government telling a company how much to pay it's CEO because they believe it will somehow benefit the public is overstepping it's authority. But all of this is subjective because certainly I would say that if Apple's Board of Directors decided to pay Tim Cook $5 billion a year that would be a breach of their fiduciary duty. I assume most would agree and then the question becomes where is the line drawn.

Certainly there are other instances of this type of breach. I've mentioned on itulip before the options backdating scandal of United Healthcare's former CEO, William McGuire. He at least did have to pay a penalty, although an insufficient one in my opinion.

But again, these situations already have remedies. It is mostly a question of enforcement. Is Jon Corzine really not in jail because he didn't technically break the law? Or because he has connections? I have my opinion. Others may vary in theirs.