backdating is alot simpler than it appears

the conservatives are just thrilled that steve jobs of apple has gotten roped into the backdating controversy . not so much because it is Apple (which is a pretty liberal place), but that al gore is on apple's board. al has been shooting his mouth off recently about corporate excess and has been using backdating as one example, however he is rather silent on the issue at Apple.

note to al: you have to come down on the side of the law in this case, even if it means stepping down from the board of Apple. this is not politics, it is principle. remember what the point of "an inconvenient truth" was?

anyhoo - the "liberal press" is using backdating as an easy way to bash rich capitalists who have been desctibed as retroactively picking a day that their options were effective (as opposed to the one that is on the calendar when the stock options were issued). and the "liberal press" does have a point here....however backdating is probably not a capital offense. the conservative press argues that the majority of backdating cases are actually honest, unintentional bookkeeping errors and backdating doesn't really affect the earnings of the company anyways. the conservatives have a point here. how to expense stock options on the corporate balance sheet has been an on-going battle for many years.

the "liberal press" is trying to exploit this issue but their explotation has nothing to do with backdating in the narrow sense. the has everything to do with broader concept of rich people making themselves and their friends richer using the dubious practice of an accounting sleight of hand. most people never have the option to backdate their 401K (wouldn't that be nice??) or backdate their job compensation (i should have been paid my current rate all along), so, to the common person, backdating is just another example of how the rich stay rich. the conservative press just cannot seem to find a suitable response to this point. backdating requires premeditation (the date is certainly not chosen by throwing a dart). so one really cannot plead ignorace of the law or accounting principles (which was argued by Holman Jenkins this morning in the WSJ) because traditional stock options are generally given the date they were granted and not subject to revision and the premeditated change in date proves that this change was intentional - particularly because the changes are always beneficial (true errors would be beneficial and detrimental in equal proportions).

the backdating issue is really straightforward and both sides are dancing about the point: even if it is technially legal (or at least not illegal), the practice of backdating is not applicable to all employees. rather backdating seems to only be available to the very highest echelons of companies, ergo, it is not applied equally. when opportunities are not equally available and these opportunities are only available to a small subset, the opportunities involve increasing compensation, and those who benefit are already perceived as well-compensated, you can see the cause of the populist revolt.

if capitalists want to avoid government regulation and public ire, then they ought to live by a simple precept: pigs get fed, hogs get slaughtered.