Stock option scam

Stock options are a great deal for people running companies. Pay your self lots of money and you'll find yourself taxed at the highest rates or even subject to the AMT. Take a small salary and take stock options, well, you pay less in taxes than your secretary. This is a bad deal for the little people because it allows wealthy people to cheat the system by collecting a paycheck and not being taxed as much as the little guys. I think stock options as salary should be treated as salary and taxed as salary.

Stock options are a bad deal for investors. It's a way to pay people when you don't want to use up your cash. The stock market effectively pays the salaries of those people you give the stock options to and it dilutes the shares of the company. For the company, it is a great deal because it doesn't cost anything when compared to salaries. Companies should be made to declare stock options as "salaries" with the full cost of the stock on their books since they are effectively selling shares in their company on the open market, using the money to buy back the new shares and hand them to people. Funny how selling shares and using that to pay salaries is treated differently from granting stock options since they are effectively the same thing. The only difference is that when you have stock options, you can choose when to cash them in.

Close the loopholes. The companies will be run better and perhaps shareholders will look carefully at the true cost of issuing millions of dollars of options to the CEO.

After the crash

After the election, there's a few things that need to be done.

Tax the rich more. Even Warren Buffet says he's undertaxed. People who can afford to be taxed and have benefited these last few decades should be a bit more. They're benefiting from the bailout more than the average person so there's no reason they can't pay a little more.

Increase the gas tax. Now that gas prices have come down, we should push the prices back up so we don't go back to our energy consuming ways. We could afford $4 gas and now it's back to $2.50. Throw another 25 cents of taxes on it and use that to pay for alternatives. Better to pay Joe the solar panel guy or Joe the windmill repair guy than pay Putin for oil. Keep the money at home where it belongs. This would create jobs.

Lend money to the car companies for a cost. The cost is a significant increase in the CAFE standards and elimination of many of the loopholes for trucks. Kill the Hummer loophole that has people like real estate agents buying hummers because they can write it off because it exceeds the weight limit put forth by the IRS meant to be used by construction companies.

Regulate the market and the insurance industry. If you're selling something that looks like insurance, you should have reserves for it instead of spending the money on bonuses. (Think AIG's.) Don't allow private unregulated exchanges. This seems to lead companies (ENRON) into manipulation. Sunshine is the best disinfectant. Keep things open.

Don't bail out mortgages. If you try to waste money to help people to stay in their homes, you will artificially inflate the value of the homes. Let them deflate to the point where they're affordable again. Sure, some people will lose value, but many more will be able to afford homes again. The sooner this imbalance is corrected, the sooner we can move past this.

Bring the troops home. That's a big waste of money. I'd rather spend the billions of dollars becoming energy independent than securing foreign sources of oil and losing lives.

Need to have some stronger independent oversight in congress. The Republicans and Democrats have made sure that no ethics investigations can go forward. This is a real shame. I have no doubt that many member of congress in both parties are corrupt. We need sunshine here too.

Stop subsidizing ethanol. It drives up the price of food and costs as much in fuel to produce as it generates.

Stop restricting imports on sugar. So much of our food is laced with corn syrup because the price of sugar is artificially high. Let the price of sugar come down so we can all be healthier. If that means imports, so be it. We can't let some sugar companies benefit from the high price of sugar while consumers pay.

Tackle the Social Security time bomb. Right now, the more you pay in, the more you get. This should be a safety net. We should reduce the gap between the minimum and maxinum Social Security payments for the health of the system. This should be a safety net, not something you can live on your yacht with. If you want a yacht with Social Security, save for it.

Health care is a mess, but I don't know what can be done with that. Between insurers, providers, consumers, and drug companies, there's so much opposition to anything. The only thing that can be done is to allow the government negociate drug prices downward. If insurance companies can do it, so should the largest insurance company (US Govt) be allowed to do it. If the drug companies spent as much on creating drugs as they do on marketing, perhaps they've had some blockbusters lined up to keep themselves more profitable. Not our fault their drugs are losing patent protection.

Outsourcing in the global age

Outsourcing your IT infrastructure is pitched as a great way to save money. Imagine that you can focus on your core competency while someone else handles all that techno-babble that goes on. Having seen how this works, I have to say that it really sucks.

First, there is no savings. In the old days, you hired technology people and they got to work with you so they knew the company. They were interwoven into the company. Developers, architects, database administrators - they all worked for you and knew how things worked. Sure they cost you money and if one left it was a pain to replace them, but you had other people to help. In the end, it wasn't so bad.

Then outsourcing came. You're going to save lots of money by moving those servers into their datacenter where they have lots of staff trained to do stuff. No longer worrying that Joe the hardware guy was on vacation. Perhaps the outsourcing team "hired" your IT staff. Looking great so far. You're paying less. Fantastic.

Now you need some work done. Why, they're going to rent you a complete seasoned IT team. Fantastic. Except the people are green. Those guys that worked for you, they're off doing other projects and aren't available. These new guys don't know your business at all or the infrastructure or even the language that the current stuff is written in. The work is a complete failure. Turns out, the outsourcing company gave you whatever they had available, which were people none of their other clients wanted.

Oh, did I mention layoffs? The outsourcing company announced some layoffs and turns out they did a "workforce reduction" and some of the senior IT guys you respected lost their jobs. They've been replaced with Joe the "I just graduated from a 30 day IT class" because it's cheaper. They just saved lots of money and you got nothing but more delays because the people scheduled to do work for you are not capable. You spend more and more of your time managing the relationship and the work that the outsourcing company is supposed to be doing.

But you know what? They need another set of cuts. Joe is almost competent after a couple of years, but the outsourcing company is trying to cut costs again and Joe got the sack. His replacement is from somewhere in Asia. Oh, and they got him really cheap. You think Joe was green after his IT class? Ashwani is now trying to do Joe's work and is screwing it up. To make it worse, accents are hard to understand and his workhours are not 8-5. He's sleeping when you need him. Of course, you could pay extra to have someone there during your 8-5, but the outsourcing company warns that no one wants to work that shift over there so they'd get someone even WORSE then Ashwani during your 8-5.

In the end, the outsourcing company rakes in money from you. You end up spending more and more time (and money) managing their people and their mistakes. Let's not mention the hours on the phone that you need to spend talking with their management about how they've screwed up again and the impact it has on your company. They don't really care.