EQ vs IQ

Austria proves again why the EU needs to listen more and talk less


God gave us two ears and one mouth so that we’d listen more and talk less,’ so the old saying goes This is what the EU gets for trying to bully its member states. It wasn’t long ago that EU President Jean-Claude Juncker was telling Austrians that if they democratically elected Norbert Hofer of the right wing FPO then the EU would remove Austria’s voting rights and cut off any transfers. Well the Austrians have voted for a conservative anti-immigrant party (which wants a programme to get immigrants to assimilate with the local culture) with a 31yo leader, Sebastian Kurz. His People’s Party garnered 31.4% (+7%) of the vote with the far-right wing FPO coming in second at 27.4% and incumbent Social Democrat Party coming in third with 26.7%. The Greens will probably not make the cut off of 4% to make a party, So once again the EU has had yet another major repudiation of its totalitarian ideals.

CM has been making the point for ages that forcing one’s beliefs onto others must be done in a way that listens to the other side. Otherwise it delivers results like Trump. It seems the EU hasn’t learned a thing.

So what have we had?

-Le Pen garnered 1/3rd of the French vote (double the best ever achieved by Front National),

-the far right Freedom Party’s (FPO) Norbert Hofer still managed 46% in Austria farcical re-run presidential election),

-Geert Wilders’ 25% increase in seats for the anti-immigrant PVV in The Netherlands,

-the surge in the Sweden Democrats to the top of the recent polls, Elections in 2018.

-Italy’s referendum which turned into a backdoor vote to oust PM Renzi. Elections in 2018 likely.

Brexit (although PM May is handling negotiations in true British efficiency – Fawlty Towers ring a bell?),

the Swiss handing back a 30yr standing free ticket to join the EU,

-the AfD in Germany getting 13% of the vote (Merkel may have won but it was her party’s worse showing in 7 decades)

…these don’t look like promising trends for an EU which is already badly listing. Despite ample warnings the EU refused (and still refuses) to change its course or exercise due care. It just issues more threats.

While the left openly voices its rage at these ‘right-wing’ parties growing in support, they never bother to seek reasons why. The right are generally just dismissed as racists, bigots or worse.  Major party loyalty has never been worse. The fabric of the loyal party voter base is wearing thinner. Take Australia’s One Nation Party led by Senator Pauline Hanson. The popularity of the mainstream LNP and Labor Parties is at record lows. One Nation is now 10% of the vote from 2% several decades ago. While some parties may claim their loyal base has abandoned them the stronger case to be made is the clear shift of the parties away from their once faithful constituents. Why?

Incumbent governments seem to cower at receiving negative news from the 24-7 polling cycle that is social media. Being careful to avoid inviting attack, they pander to all of the socially acceptable agendas – climate change, gender fluid bathrooms, laws clamping down on free speech, open borders and afffirmative action.

However political correctness is clearly not the answer as these results across Europe and elsewhere show. People are sick of the brow beating by socialist activists. Tired of the constant protests and social justice bleating. The NFL might find that most of its fans are against police brutality but they aren’t wanting a weekly lecture in grievance politics with the price of entry or their cable TV channel. Growing weary of the idea that it is ‘free speech’ and anything against those ideals are deemed ‘hate speech’. It is not to deny some positions are not necessarily palatable but in the marketplace of free speech, ridiculous positions can easily be disproven. Better to give extremist voices a chance to talk and invite public opinion on them at their own peril. Shutting it down forces it underground., making it inherently more dangerous.

Too many mainstream political parties are moving off the policy reserve that defined them so their once loyal followers are actively seek ones that will. While Hanson’s One Nation or Senator Cory Bernardi’s Australian Conservatives may not tick every box to existing LNP voters, they cover enough of the positions that matter to them that they’ll tolerate some of the more out there ideas. It is not uncommon to hear the left complain at One Nation’s is growing popularity at the expense of the Greens but it is a devil of their own making.

So will the EU listen to the Austrian call? Will it pay attention to the Hungarians who voted over 98% against accepting forced migrant quotas? Think through the logic. If you were an asylum seeker, would you think your chances of unincumbered settlement would be best placed where 98.4% of the population doesn’t want you? It is irrelevant whether we think the Hungarians are insensitive brutes not to extend a welcome to those that are legitimately in need. It is their country and their democracy has spoken. If Brussels assumes to dictate to Hungary how it wishes to protect its culture and whatever it holds precious, why shouldn’t the EU have the same rights to enforce income tax, housing benefits and anything else it sees fit? Of course it is a preposterous notion.

It will not be long before the EU will be front and center on Greece. Let us not forget that the EU colluded with Goldman Sachs to ‘fiddle’ the accounts to make Hellas much prettier optically than it was. Was this pig without lipstick it wouldn’t have gained acceptance to the club. So the EU is not in a position to claim innocence over a deliberate ploy to ram-road the Greeks into its federal state yet have no qualms treating it with disdain. Talk about double standards.

In all seriousness the treatment of the Greeks by the EU is despicable beyond words. So for all of the left’s blind love for the EU and its socialist agenda, 36% of Greeks live below the poverty line and 58% of the youth are unemployed. So for all of the EU’s shared sense of purpose and equality, that means many can’t access affordable healthcare because it is generally provided by corporates and when you lose a job you lose the healthcare. This means many are forced to use A&E of major hospitals which are now overcrowded and understaffed as more doctors are leaving to seek better fortune for their services elsewhere.

If that wasn’t enough, mothers who had given birth were being restricted from taking their new-borns home if they couldn’t pay the hospital fees. While the government has banned this practice they have introduced new laws to allow the seizure of assets (e.g. homes) if debts are not settled.

Shortly, the Greeks are coming up for discussion over its debt position and austerity. With just months left before Greece’s latest lifeline expires, officials directly involved in the country’s bailout say they don’t have the stomach for contingent aid program when the current one expires in August 2018. While the EU and Athens are battle worn after 7 years of this knife edge rescue,  Greece will need to show it can go it alone but it’s eurozone creditors will be reluctant without further strings attached.

Here is betting that the EU doesn’t heed the lessons that have been ringing loud and clear for years. Sincerely hoping Greece leaves the EU and lets market forces revive its economy. Better to die on its feet than live on its knees.

4 more years


Start laughing. It is ok. It is the same thing heard time and time again since forecasting it back in mid-2015. Yes, at this rate he is staring at another 4 years should his health hold out. This week capped off yet another mad push for so called ‘progressive’ (regressive) values will only drive the wedge of division ever deeper. People are growing sick and tired of being told how they must think. When liberal TV host Bill Maher admits openly that “Democrats, this movement to childproof the world has made Republicans the party of freedom and Democrats the party of poopers.” you know they are in trouble. Yet they can’t help being victims. Have you already forgotten how the liberals turned on Rachel Maddow over the tax returns? Yet one can guess they won’t run a more centrist candidate like Bill Clinton in 2020 but one pushing the thresholds of the identity kit. If they can find a genderless Dreamer who was raised by a North Korean Muslim lesbian couple they’ll have their ‘person’.

Sure liberals can celebrate the admission of girls into the Boy Scouts. It will probably become Scouts of America where tying knots will be replaced with wearing a rainbow scarf, learning gender fluidity while being banned from rubbing two sticks together to make fire because it is harmful to the environment.  No doubt they’ll learn the correct use of genderless pronouns which in reality will be of high value because the State of California would sooner jail citizens for incorrect use of language than properly vetting illegal immigrants. By the way how silent has the media been now that the Supreme Court ruled 8-1 to approve the revised travel ban? No matter how one might hate it or view its insensitivity, many of those that voted for him will happily chalk it up as a win. He ran that as part of his election campaign. Get over it.

Of course celebrating  Columbus Day 2017 was yet another chance to bash colonialists for things that modern day descendants had nothing to do with.  The City of Detroit wants to replace it with Indigenous People’s Day. Well truth be told that Michiganites born in America are indeed indigenous. We had this debate in Australia this year where socialist and Greens city councils in the Marxist state of Victoria went beyond their remit of collecting rubbish and keeping park amenities clean by announcing they would be scrapping Australia Day. Instead of asking their 240,000 residents for their opinion they rigged a poll by asking 80 activists and even then couldn’t muster more than 60% in favour of their preferred name of ‘Invasion Day’. Talk of pathetic when they can’t even get all of the victims onside. Yet the mayor of one of the councils decided to speak down to those who couldn’t accept it by telling them they lacked ‘education’. The irony was that many prominent aborigines are in favour of Australia Day because it celebrates togetherness and how far the nation has come rather than rake over coals that happened  230 years ago. Yet the socialists made out that calling it Australia Day for aborigines was the equivalent to the Jews as Germans celebrating ‘Holocaust Day’. Seriously?

This year statues of former Confederate generals like Robert E Lee sparked outrage when nary we heard a peep beforehand. Even people like basketball legend Charles Barkley said he has never driven past any statues and associated them with any excuse to grieve today. So once again Australia copied suit. Calling for the removal of statues of Captain James Cook, Governors Phillip and Macquarie, because they weren’t discoverers and settlers but ‘invaders’. Yet liberals will happily find this as another excuse to play the victim by erasing the history they don’t like. Get rid of the statues and it won’t be long before the next victim case arrives in the in-tray to protest over. Once again, people are tired of the lectures. Sick of being told they should feel guilty for things they had no control over because they weren’t even born at the time. How can we possibly move forward if they’re forever wanting people not responsible for things to apologize and be wracked with guilt? Move on!

Then we have had the NFL saga. The original BLM protest started by Kaepernick kneeling has been so diluted from its original purpose that the controversial quarterback promises to stand during the anthem if he can have a multi million dollar contract again. The initial shirt fronting bluster of NFL Commissioner Roger Goodell has turned into a 180 degree retreat after Trump tweeted about considering cutting the generous tax breaks the league receives. Money talks greater than protests in the end. Fans were sick of the in their face protests when they wanted to unwind in front of the ball game. While progressives scream the right to ‘freedom of speech’, fans merely exercised freedom of consumption – burning memorabilia and season tickets. The very money that pays the multi million dollar salaries of the players have a right to get what they handed over their hard earned dollars for. Even if they want to draw attention to a worthy cause do fans require it drilled into them every game? This is the problem with the left. It bangs on incessantly that it ends turning people off. I have not heard of fans complaining of any players protesting on their own time. Whether we like it or not, NFL players are employees. If any of us took a knee to our boss who told us to manage a difficult account you shouldn’t be surprised if you’re demoted or worse. It is not a violation of free speech. It is dissent – pure and simple. Just like those openly using tax-payer funded websites to vilify their boss. Once again, send a mail to your boss cc-ing the firm and tell him or her what a complete jerk they are and see how long you last.

Now we have Weinstein. Liberal celebrities are trying to cover up their own impropriety (Affleck, Kimmel et al) post the exposure of ‘one of their own’ by turning on POTUS. There has been tweet and post after post on Trump’s ‘p*ssy grab’ tape (which by the way he was elected in full knowledge of voters) being just as bad as Weinstein. While once can cry foul that these are double standards to OK the president but vilify Weinstein for disrespecting women, his legion of followers have more of an issue with Hollywood hypocrites try to push their heightened sense of values on them when they so blatantly hid a monster that served their lavish lives. The deplorables are sick of these liberals lecturing them. It is not a question of who is worse – Trump or Weinstein- but having actors talk down to them in such sanctimonious fashion.

Then it was only a few weeks back that Michelle Obama was bludgeoning American women for obeying their husbands at the polling booth and abandoning the ‘sisters’. Does Mrs Obama honestly believe she will sway female Trump voters back to being Democrats by calling out their supposed lack of intelligence. What a slap in the face to all women to have her patronize them. I do not recall her making those sweeping statements to get a woman in the Oval Office when Hillary ran against her husband in 2008?

So the only message to liberals is that if they want to get rid of the President then they ought to pay attention to all of the things which cost them the election in 2016. If anything they’ve amplified the noise which turned people away in droves. One can see the 2020 election campaign by the Democrats. It will crank up victimhood, identity politics and focus on trying to get people married to the state. Isn’t it telling that Trump said if politicians don’t want to overhaul Obamacare then they can switch from a bountiful taxpayer healthcare plan to the system they are resisting  change – how silent they’ve become…then again how many from both sides of the house are on the payroll of big pharmaceutical companies…? This is the thing – it is no longer GOP vs Democrats – both are not behind POTUS. If he ran as an independent he’d win.

The way the liberals can win is to encourage open, rational debate (like the Trump rally which gave their stage to BLM protestors to wonderfully unify them on many levels), allow conservatives to speak on campus on issues without causing trigger warnings, micro aggression and safe spaces and to refrain from shoving every political issue in the electorate’s face at every opportunity.  Failure to do so will practically guarantee a return of the incumbent in 2020. All the signs point to an even bigger defeat. Keep up the good work. The only fear is that any the rate your expending grievances you may run out of things to moan about when the next 4 years eventually arrive.

Edward Scissorbrains


Johnny Depp joins the list of out of touch celebrities to suggest harm to the sitting president. Instead of accepting a democratic voting process he openly suggests assassination by an actor has happened in the past ( John Wilkes-Booth assassinated Lincoln). Is the word of an alleged wife-beating drunkard who ignored quarantine law to smuggle his dogs into Australia because he thought the rules didn’t apply to him (their video apology was so pathetic) worth listening to? The Secret Service should honestly take actors who threaten the president’s murder (jokingly or otherwise) into custody for thorough interrogation. Hollywood celebrities aren’t above the law. Hypocrites who were sadly ignored again in the recent Georgia election. Nobody cares what celebrities  think! Never a more out of touch bunch.

If Trump is so stupid how come the media keep getting fooled? Now they demand an insurance payout


I used to read Der Spiegel. I even paid for a subscription but eventually the journalism lost its edge. This week’s article calling for Trump’s removal makes my decision sound. Read the following section several times and honestly ask yourself is this journalism? Put aside personal views of the President and objectively look at what the article ‘Donald Trump is a menace to the world’ written by Klaus Brinkbäumer is suggesting, if not demanding.

“He is a man free of morals. As has been demonstrated hundreds of times, he is a liar, a racist and a cheat. I feel ashamed to use these words, as sharp and loud as they are. But if they apply to anyone, they apply to Trump. And one of the media’s tasks is to continue telling things as they are: Trump has to be removed from the White House. Quickly. He is a danger to the world.”

So how would you suggest we do it? No, that is not an option. Should we ignore the democratic process by which he was elected?  Should we ignore the fact that even if he was a ‘liar, a racist and a cheat’ people voted in full knowledge of all of his ‘pussy grabbing antics’? The problem with this type of article is that it ignores reality on so many fronts. As I’ve written many times, if you are not a citizen of a country your input on their citizens’ voting intentions is irrelevant. Essentially what you are pleading for is the same as making a willingly high risk investment in a stock which goes bust then complaining to your broker you were misled and ask for your money back.

Elections are much like stock markets. Your voting intention is akin to investing in your country. In the case of America you had two stocks to choose form. One was the hedge of the other. If you wanted to reinvest in the diminishing returns of the last 40 years you bought Clinton Inc. If you wanted to bet on higher risk with potentially higher high return with a start up you voted for Trump Corp.  The media were slimeball stockbrokers trying to persuade investors (voters) to buy into the safety of Clinton Inc because they knew that the commission pay-off would be larger for them. However investors had enough of struggling through decades of exceptional losses, downgrades, dividend cuts and incompetent CEOs. Even worse they got sick and tired of the shareholder meetings where CEO Obama would talk about how successful his stewardship had been when an increasingly dissatisfied shareholder base kept on checking their statements and questioning the dud investment let alone disapproving of his suggested successor.

Mr Brinkbaumer, your article is exactly the problem with the media. You claim the media’s task is to ‘continue telling things as they are’ but you’ve failed on so many levels so many times that your trust rating is even lower than President Trump which stands in the early 40% range. The problem is that the only insurance you can buy in politics is the opposition. None other exists because the premiums would be too high and the payouts too low.

What your article painfully overlooks is that had the previous mob, who no doubt you think is the solution, was actually the problem. That 40 years of painful neglect led to record numbers on welfare, food stamps and income inequality. The investors knew that backing Clinton Inc, whose entire manifesto spoke to helping the needy that had been neglected by her own party (by deduction including the man she intended to replace), was such a palpable untruth that had the Democrats so brazenly lied in a stock prospectus she would really have been jailed.

After Comey’s decision to testify, my social media feeds lit up like a Christmas tree. I deliberately held back from making any call at the time because there was no evidence other than speculation. Yet social media had already made up its mind – “impeachment! – the orange buffoon is going down!” “The smoking gun!” Of course it turns out that the knee-jerk reaction was proved a falsehood. The media once again let its subjectivity rule the day. Like Rachel Maddow’s scoop on his taxes. She sold it as grounds to get him on tax evasion like Al Capone in The Untouchables. She essentially said “we’ve got the book keeper.” Yet she was gunned down in the elevator by her own leftist journos. You know when the media attacks its own that even it from time to time has flashes of objectivity, albeit too brief because lessons are never learned.

Sadly for the rest of the world, as much as we may despise Trump (he has flaws) and protest at his actions we have absolutely no rights to lynch a democratically elected President much less encourage his downfall. This type of reckless behavior is indeed more disturbing. It essentially says you don’t respect the democratic rights of Americans. What is worse is it the same downright condescending attitude people had during the elections that completely ignored the plight of those that voted for him remains. I remember reading one article suggesting that there be an intelligence test required to have voting rights.  That is totalitarian behaviour if there ever was!

The leftist media continues to forget that the one sure way to help him do another 4 years is to keep up the same broken record dialogue. Indeed in the next 3+ years the Americans will have the opportunity to sack him if indeed they see a better alternative. Trump was always the start-up IPO bet. American voters knew full well he was a risk and they took it. His volatile stock performance is not a big surprise.

Klaus, you conveniently forget that Trump is a by-product of decades of neglect. Had the past four decades of the incumbent political class done a sound enough job he never would have seen the light of day. Instead of putting blame on the causes you simply place it all on him. Instead of some introspection on asking why he is where he is you can’t remove yourself from the group think of attack dogs. That anything he may achieve will be discredited and anything he does wrong will be given full thermonuclear uranium tipped coverage. That my dear friend is shame on you.

It would be nice to see some balance in coverage because if you don’t social media will drag up example after example for you further discrediting your supposed ‘telling things as they are’. We must all remember that digital media has a half-life of infinity. Is it any wonder 25% of the workforce in media has been culled in recent years. It isn’t that advertising revenues are falling it is because you don’t provide enough value for advertisers to warrant posting ads in your publication. Guaranteed if the journalism attracted readers the ad revenue would climb with it.

So once again, the bigger danger to the world is you not him. We should never encourage the overthrow of democratically elected governments because we dislike the outcome. Don’t forget that Clinton had 99% of the mainstream media on her side, leaked debate questions to give her an advantage, a pussy-grabbing video against her opposition and more but still lost. Why? The attitude of expecting a coronation and frankly Hillary Clinton didn’t put in the work.

Suppose no dirt is found on Trump? That constant media mud slinging fails to stick. Evidence surely that maybe he is just a brash, uncouth, narcisstic bully rather than someone that must be removed as a danger to the world. Sure, he doesn’t exactly act in a manner very befitting of the most powerful office in the world but he got there legitimately.  Indeed if he is as unhinged as you imagine surely Pyongyang would be under a mushroom cloud and Assad would be a victim of SEAL Team 6. In fact you might point out that the incredible weakness of his predecessor on foreign policy makes Trump’s more assertive stance a welcoming relief rather than a terrifying prelude to WW3.

Your article is so typical of the snowflake culture. The type of attitude that seeks to ban people from making addresses at universities, once the cradle of free speech. You ignore what you don’t want to hear and pass judgement on those who fail to hear you. Once you learn to listen to others you may find that you come to understand why even people like Van Jones can eventually see why Trump won’t be outed so easily. For indeed if he is as big a fool as everyone makes out the media won’t be needed to point it out. It will be painfully clear and in 2018 Americans will get a trial IPO and 2020 the opportunity to buy or sell stock in Trump Corp.

I should thank you for this article for helping confirm why I didn’t bother renewing my subscription.

Why don’t firms hire staff like they’d choose a heart surgeon?


How many times have I heard over my career senior management talk incessantly about the need for new blood yet when it comes to doing anything about it with regards to new hires 99% of the time  the safe cookie cutter is favoured over the left field choice. It is ever more so the truth in the post GFC world. Managers seem afraid to take calculated risks because the left-field candidate may jeopardize their own positions if he/she fails.

As an example managers in finance often fall foul of hiring exclusively within the industry. The level of inferiority complex can be so overwhelming that they fawn at the idea a Goldman Sachs employee will work for them for some ridiculous sum. Invariably they forget that Goldman hires duds too and usually those that get cast off are in that bucket. If you are properly good, there is no incentive to leave Goldman as the salaries, opportunities and product capabilities are too wonderful vs peers.

Yet many financial firms set upon trying to change the firm into a wannabe Goldman Sachs. They forget that their clients can already deal with Goldman directly should they feel the urge. Why on earth would they choose to deal with a wannabe copy? Surely each firm has a unique selling property that is of value to clients. Why not invest and promote that rather than overlook the talent within. Who honestly values flattery? Besides, there are so many cautionary tales with hiring ex-bulge bracket employees who are so used to being spoon fed every possible product line that they struggle immensely when they are required to actually put elbow grease into the job. It is uncanny.

Some firms occasionally hire from outside the industry with huge success. Instead of financial analysts pontificating about a stock, someone who has worked within the industry has a far better feel for cycles, internal decision processes and strategy that formulates under different points in the cycle. Clients glean that value. They couldn’t care less about the stock target or valuation metrics because that ultimately is the investor’s job. Besides the history of brokers behind the curve is etched in stone. Unique context and perspective trumps commoditization every time.

Some financial (and other) professionals have such checkered histories that one wonders how on earth they get rehired. If companies viewed their hiring decisions as akin to selecting a heart surgeon for a life threatening operation, many of these people would never make the cut (no pun intended) given the body count from previous poor execution. Yet many firms continue to put quacks in their ‘surgeries’ with expected disastrous results. Generally hiring managers run interference on these bad choices to cover their own mistakes.

Many HR surveys (including Harvard) show that bad hires end up costing way more than the salary when the cost of onboarding is included. Not only do companies potentially have to foot the cost of a headhunter (25-30% of salary is a standard fee) , what follows is poorer output, the potential for incumbent employees to become disgruntled at the new hire’s lack of ability and most worryingly an increase in dissatisfied customers. If they land a toxic employee that can damage team productivity to such an extent the best performers will seek challenges elsewhere.

So in a world that is getting harder and harder to succeed in, on what basis does conventional thinking bring anything to the table but more of the same? What does hiring a competitor do other than bring similar tactics? In fact, the more telling question is if they were knocking the lights out their success would permeate within their current employer. Unseating happy employees requires dynamite way over and above what they can probably afford.  What hirers often forget is the extent to which internal human capital plays a part. How awful does one’s human capital creation have to be to consider jumping ship?

That is where the left field choice comes into its own when hiring. A person genuinely looking for career change may well be doing it because they’ve tired of several decades of the same industry. They’ll likely come full of fresh ideas, out of the box solutions and lessons from a completely different background with the passion of a new graduate.

Many companies fail to adapt because the stupid questions don’t get asked by the incumbent staff for fear of ridicule. Yet someone eager to learn may ask the most basic of questions and ask “does it work?” One company I consult had a new boss join from HQ and he questioned why staff had meetings on such trivial matters? One staff member said “we’ve been doing it for 15 years!” When the boss said “does it work?” all replied ‘not really”. Yet they offered little in the way of proposals to change what was broken.

In a sense I see many businesses that operate in status quo mode where change if ever happens on a trivial or traumatic basis not through consistent due diligence and proactive leadership.

Think of it like asking an elderly person “if you had one more day to live what would you do?” “Well I’d play golf, take my wife to an expensive dinner and drive a Ferrari” If you asked Athenia”why don’t you do it now” the response would be “well I’m not dead yet!”

Look at the successful businesses around the world today and invariably the corporate culture is likely to be open and flexible. Bosses are prepared to hire people more qualified than them because they want to learn. Show me a company where inferior staff are hired to protect a manager and I’ll show you a dud business.

Which then goes back to the most important ingredient in a tech savvy smartphone world. Analog relationships. Look at the latest recruitment sites which ask candidates to fill in fields where a computer will sift through algorithms to screen. These systems remove the most important skill in selecting good candidates – gut feel. A good recruiter can understand a client’s needs far better than a computer. Besides if a computer is searching for terms fixated on what you’ve done and not what you want to do it will screen you out every time. What a wasted opportunity!

Human nature is uncanny. Risk taking is inevitable but instead of most people becoming  victims of change only a mere few will end up being agents of it and there will be no second guessing who dares wins! So instead of screening for the textbook definition of identity based diversity how about focus on diversity of thought!


Trump’s tax cuts – how much does corporate America pay? You’ll be surprised by the necessary evil


How can Trump cut taxes to 15%? For those greedy corporates! Interestingly when one deep dives into the data two things emerge. One is that in 2016 net corporate tax receipts fell to around $444bn. Second US corporate taxes have slumped from 6% of GDP in the 1960s to around 2.4% of GDP today. Income tax and payroll taxes make up around 65% of the tax that fills the Treasury Department’s coffers. Of the $2.2 trillion that the government gets through squeezing us, they splurge around $3.6 trillion (see below).  Since the tech bubble collapse, the budget deficit has becoming a gaping chasm. It is a massive hole to fill.


Naturally people scream that giving corporates massive tax breaks is obscene. What they tend to forget is that US corporations hide an obscene amount of taxable revenue (some estimate around $500bn p.a.) overseas. Apple’s €13bn tax bill fight in the EU should spring to mind. In any event we should look at corporate tax in the US that brings in around $444bn p.a. Slashing tax rates does not automatically imply that the $444bn will fall to $200bn. Looking at corporate profitability before tax one wonders are businesses really struggling? Pre-tax profits are hovering at around $2.2 trillion.


There is a whiff of Poland about Trump’s plan. Poland faced similar corporate tax avoidance issues but in 2004 introduced sensible taxation reform which cured the problem. To lure tax avoiders/evaders from their lairs, Polish athorities introduced a flat business tax (19%) and its impacts were so favourable that the government saw a 50% increase in income reported by those corporates in higher tax brackets before the change and a 50% increase in reported income from individuals that fell into upper income tax brackets. In 2009 income tax rates at the top were slashed from 40% to 32% Despite this income tax receipts jumped 17%. Since 2004 tax receipts soared 56.4%. It clearly proved that lowering taxes created much higher tax compliance. There was a psychological factor at play – the cut ‘encouraged’ honesty.


When breaking down the tax take by the Polish government we see that all levels of tax collection rose. Consumption, corporate, personal income and other tax categories jumped  45% or more.


So there is method to the madness. Talks of a $2 trillion deficit that will need to be funded if it goes ahead is not based on reasoned economics if the Polish example is anything to go by. Besides we live in such a debt-fueled world now that central banks will just print the gap if others won’t step in and buy it. So this is a risk Trump sees worth taking. Lower taxes, encourage US corporates to repatriate income abroad, create jobs and get small business (50% of employment in America) to expand and create a virtuous circle. Whether he can pass these taxes through remains to be seen. What we can say is that corporate taxes are a measly % of GDP and total tax take compared to income and payroll taxes. However if US corporates aren’t encouraged to build at home then it is harder to squeeze the workforce for the bulk of the revenue pie. Pretty simple really and there is actually very little to lose. So quit the angry ‘evil corporates’ tag line and change it to ‘necessary evil.’

“You stink!” How the EU could learn from the same denial as musicians and journalists.


“We miss you already.” Those words spoken by President of the European Council Donald Tusk ring deeper than mere sentiment. As much as the almost year long debate of preventing the triggering of Article 50, PM Theresa May has respected democracy. Whether the musings of Sir Bob Geldof, the legal challenges led by Gina Miller or paying attention to polls that showed some wanted to change their original Brexit decision, the UK is doing the right thing. If it is any consolation one can only hope that the EU understands that it is the problem. Was the EU such a no brainer club to be a part of the UK would happily stayed by the campfire singing kumbaya. Did the EU forget the Swiss recently handed back their decades long free pass to enter the EU?

I’ve worked in several organizations where management was in denial. I’m sure many of you have too. When faced with crisis, some managers choose to point to external factors rather than a lousy product offering that no longer matches the needs of the firm’s clients. It is no different in the world of music or journalism.

Musicians used to make a killing on selling albums but Napster opened people up to the idea that you could buy the one song you liked rather than splurge on a whole album which you didn’t. Customers were offered a service which enabled them to choose and they fell in love with the concept. Yet many artists howled at the injustice of no longer being able to live the life of self entitlement. Look at music today and how many artists end up doing stupid stunts to hog the limelight. As the CEO of Avex in Japan said, “Music has changed. Pikotaro’s Pineapple-Apple-Pen has been viewed 100s of millions of times. Ask yourself why?” It is hardly a reflection of musical talent of the likes of Mozart or The Beatles

Journalism is also guilty of denial. The internet has allowed readers to discriminate what they read. Is it any wonder that NYTimes “60% off limited time offer” continues on and that The Guardian has passed around the Guide Dog collection box to keep its product alive, ignoring the fact that it is the ‘poor content’ which attracts users unwilling to pay. Yes, The Guardian is now a charity. To turn the argument on its head, for all of the hatred hurled at Fox News, more people pay for it’s content than CNN and MSNBC combined. Put simply, if people value content they will pay for it.

So to the EU, it is time to realize your product stinks. You can’t forever snub your member states with the same old mentality and expect to thrive. Europe has had a checkered history, Cross a border and the language, culture, cuisine and way of life are vastly different, To try to tell these same people they are “one” is utter insanity. To preach ‘diversity’ is irrelevant. Diversity is about respecting difference yet the ideology essentially preaches there Should be none. Yet the EU is the very antithesis of equality. The EU is happy to sit by and bury Greece’s chance of recovery by imposing hardships until they cede their democracy to Brussels and accept a protectorate status, The founder of ‘democracy’ is forced at gunpoint to hand it over when it was indeed the EU that used Goldman Sachs to fiddle its finances to create cooked books that would allow entry. To threaten Austria that if it democratically elected a right wing President that the EU would remove voting rights. That Italians voted on a referendum as a way to oust a pro-EU prime minister rather than the actual question on the ballot paper. That for all the celebrations and clinking of crystal champagne flutes from the German Foreign Ministry at the Dutch election result failed to realize conservative parties trounced the left. The idea that Wilders was going to PM was never going to happen. Yet he won more seats. Rutte only managed to stem his losses by adopting Wilders-lite.

The reality of Brexit is now formal. It finally seals a promise. It is a message from Brits who have saved Europe countless times that they cannot be part of a group that won’t listen. That individual mistakes like Merkel’s open borders should be a German problem. Why should Hungarians, Brits or French be forced to take a share of the burden of a mistake made by one individual member state? If the EU had voted to do it in a democratic fashion one might have had some sympathy but this was a mistake and it is unfathomable that the EU seeks to appease Merkel for imposing misguided altruism on countries that don’t share her view. It is this type of action that seals the EU’s fate. The idea of one Europe is fantastic. The practical realities are anything but. President Tusk perhaps said more about the introspection that is well overdue in the hallways of Brussels.

Let’s be clear President Tusk, the British do not miss you.