Friday, September 07, 2007
Annals of Excessive Compensation: Pension Funds Throw the Greenwich Ferrari Dealer Under the Bus
by Tom Bozzo
Here's an interesting quote from Sen. Max Baucus:
Yesterday's NYT included a refreshing moment of sanity as Stephen Labaton and Jenny Anderson (I've praised Ms. Anderson's work in an earlier installment of this series) report on Senate hearings on the tax treatment of "carried interest." The lede:
Pension fund and tax specialists told Congress today that a proposal to more than double the tax rate of executives at private equity firms and hedge funds, which invest money from pension funds, would have a negligible effect on the returns provided to pensioners.I could pick a nit or two with the "more than double the tax rate" wording. It would not have decreased the accuracy of the statement to have said "proposal to close a tax loophole used by executives at private equity firms and hedge funds to pay less than half the tax rate on ordinary income." But that's about all the beating of the press here. [/Dean Baker] The rest of the piece is an unrelenting demolition of the funds' rather incredible claims that the special tax treatment of the managers' income benefits Joe and Jane Six-Pack and preserves the Entrepreneurial Spirit of America. Read the whole thing.
Here's an interesting quote from Sen. Max Baucus:
“The data says to me that hedge funds and private equity funds may need pension funds more than pension funds need private equity or hedge funds,” Mr. Baucus said. “And that means that hedge funds and private equity funds may not have the economic power simply to pass along increased costs to pension funds.”
To the first part, I can only say "no kidding" or "heh indeedy." On the second, Baucus's causal link may be questionable, but if he's otherwise right, it would be good for Econ 101 economics, which otherwise would have some 'splainin' to do as to how the 2-and-20 fee structure could withstand such massive entry.
Oh, and the hedge fund managers' incomes could be taxed at Clinton-era marginal rates for ordinary income without hurting the Ferrari dealers any more than the pension funds, really.Labels: hedge funds, High Finance, Inequality
Friday, August 24, 2007
The Ultimate Driving Machine...
by Tom Bozzo
This 1/2-scale Auto Union Type C pedalcar is yours for $13,300, with 999 copies to be built.
...for the hedge fund manager's preschooler (assuming the fund hasn't blowed up!):
This 1/2-scale Auto Union Type C pedalcar is yours for $13,300, with 999 copies to be built.
Labels: Inequality, toys, Trains Planes and Automobiles
Thursday, May 10, 2007
And All Students Are Above Average...
by Anonymous
Sometimes, though, it's just a leeetle out of touch. From its flier for the annual fundraising gala:
It takes quite a bit of squinting to see much evidence of economic diversity in an occupational roll call like this.
FYI, annual tuition is almost identical to the pre-tax earnings of a minimum wage worker in CA as of Jan 1 2007, assuming s/he works 2000 hours per year.
We really like our son's day care, a nonprofit organization that's linked to and subsidized by the USGS. It's not quite as good nor as convenient as the university-run program Quinn attended Back Home, but the teachers are top-notch, the facility is great, and the parents are highly involved.
Sometimes, though, it's just a leeetle out of touch. From its flier for the annual fundraising gala:
Our children and families come from diverse social and economic backgrounds. Almost half of our parents work for [i.e., are scientists or administrators in] the Menlo Park campus of the U.S. Geological Survey or the broader Federal Government, and the other half are [college] teachers, doctors, lawyers, and business leaders.
It takes quite a bit of squinting to see much evidence of economic diversity in an occupational roll call like this.
FYI, annual tuition is almost identical to the pre-tax earnings of a minimum wage worker in CA as of Jan 1 2007, assuming s/he works 2000 hours per year.
Labels: Day Care, Inequality
Wednesday, April 11, 2007
Mamas, Do Let Your Babies Grow Up to be Health Economists
by Tom Bozzo
Holders of doctorates in other social sciences, don't despair. A possible way to close salary ranks with Those Darn Economists is to get out of "The Academy." Among non-academics, the economics PhD doesn't command a statistically significant premium over other doctorates. [*] However, to get on the real gravy train probably requires sufficient quantitative skillz to get on the expert-witness circuit. [**]
[*] Assuming, it stands to reason, that your doctorate gets you in the door in the first place.
[**] Or, maybe, get a business school job; Cawley and Morrisey find that B-school assistant professors are lavishly compensated. In a fascinating W$J article from a couple weeks ago on the Law and Economics Consulting Group, the firm's econ professor founder claimed that a few dozen of LECG's experts pull down mid-six-figure salaries. Making corporate executive-level pay at a publicly-traded consulting firm may, however, require certain ethical compromises — e.g., testifying on the tobacco company's side in tobacco-related litigation.
According to John Cawley and Michael Morrisey ("The earnings of U.S. health economists," Journal of Health Economics, Vol. 26 [2007], No. 2., 358-372), the mean annual earnings of health economists surveyed in 2005 was $119,499. Among the not-overly-surprising details, non-academics outearn academics (with median earnings of $118,500 and $100,000, respectively) and holders of actual economics PhDs make more than holders of "other academic doctorates."
Holders of doctorates in other social sciences, don't despair. A possible way to close salary ranks with Those Darn Economists is to get out of "The Academy." Among non-academics, the economics PhD doesn't command a statistically significant premium over other doctorates. [*] However, to get on the real gravy train probably requires sufficient quantitative skillz to get on the expert-witness circuit. [**]
[*] Assuming, it stands to reason, that your doctorate gets you in the door in the first place.
[**] Or, maybe, get a business school job; Cawley and Morrisey find that B-school assistant professors are lavishly compensated. In a fascinating W$J article from a couple weeks ago on the Law and Economics Consulting Group, the firm's econ professor founder claimed that a few dozen of LECG's experts pull down mid-six-figure salaries. Making corporate executive-level pay at a publicly-traded consulting firm may, however, require certain ethical compromises — e.g., testifying on the tobacco company's side in tobacco-related litigation.
Labels: Economics, Health Care, Inequality
Thursday, March 22, 2007
Just the Facts...
by Anonymous
Awful, if true, but note the charges: kidnapping and making terroristic threats. Setting aside whether "terroristic" is even a word, why this charge, and not something like, oh, assault and battery? Has the USA Patriot Act so skewed the justice system that DAs see a better payoff to trying to prove "terroristic threats," demonstrable only through "he said/she said" evidence, than to proving assault and battery, for which relevant evidence is physical?
Truth be told, that's not what initially caught my eye about the story. It's this bit of reporting:
Either the AP journalist is practicing for a second career as an author of airport-kiosk fiction or he/she wanted to be sure that readers understand that abuse doesn't happen to Nice Folks Who Live in Nice Houses in Nice Neighborhoods. No classism here, nope, just reporting the facts, move along...
From CNN, a brief story of alleged kidnapping and physical abuse:
GREENSBURG, Pennsylvania (AP) -- A couple and their three teenage children held a woman captive for six months, referring to her as their "slave" as they beat her, forced her to do chores and threatened her life and the lives of her relatives, police said Wednesday.
All five members of the [Pollard] family, ranging in age from 43 to 16, were arrested on charges of kidnapping and making terroristic threats. They had not entered pleas Wednesday but denied wrongdoing.
Awful, if true, but note the charges: kidnapping and making terroristic threats. Setting aside whether "terroristic" is even a word, why this charge, and not something like, oh, assault and battery? Has the USA Patriot Act so skewed the justice system that DAs see a better payoff to trying to prove "terroristic threats," demonstrable only through "he said/she said" evidence, than to proving assault and battery, for which relevant evidence is physical?
Truth be told, that's not what initially caught my eye about the story. It's this bit of reporting:
No one was home Wednesday at the Pollard house in a dingy alley. The front door was open and had no doorknob; its white aluminum siding was covered with dirt. [emphasis mine]
Either the AP journalist is practicing for a second career as an author of airport-kiosk fiction or he/she wanted to be sure that readers understand that abuse doesn't happen to Nice Folks Who Live in Nice Houses in Nice Neighborhoods. No classism here, nope, just reporting the facts, move along...
Labels: Inequality, Journamalism, Social Class