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Friday, 30 January 2015

Budgeting - breaking bad behaviour

The budgeting process never stops to amaze me. Who is really interested in a budget? Either a budget is too soon and misses important Q3 or Q4 trends or a budget is that late that preparing the first full year forecast makes more sense for controlling the business. Auditors are hardly interested in the budget as it is beyond their scope. Some bankers may like receiving it but mostly for updating an internal checklist. For management the budget may already be past due while still preparing it. Supervisory directors seem to be the only exception to the above.

If you are really lucky the annual budgeting process process is swift and finalised well before the year-end. However, the budgeting process typically starts bottom-up, the outcome is usually rejected, and then a top-down approach comes instead with a limited alignment to the former bottom-up process. After many weeks of overtime, both managers and staff tend to be frustrated by the result.

Maintaining within - or surpassing - budget usually entitles various levels within the organisation to layered bonus schemes. The level of transactions before/at quarter-end or before/at year-end may even be explained by these bonus schemes. Managerial behavioural may actually change when a next bonus layer becomes within reach or when it's totally out-of-reach.

Another frustration is the monthly variance analysis and the accompanying explanations. Most explanations tend to be dull and meaningless as transparant communication is either not welcome at the management board or at the supervisory board. These dull and meaningless explanations can be a recipe for time consuming discussions at management or supervisory board level about minor items. A special distraction is reporting variances due to errors in the budgeting process.

Disappointing net results cause a lot of discussions, meetings, questions and ad-hoc calculations regarding remedial actions. Unfortunately, management reporting (let alone financial reporting) is not a tool for establishing remedial actions. Most likely the information is available but the required data quality dimension (see next paragraph for example) of that information is not - readily - available.

In each (cost) controlling situation, another frustration comes to light: the unknown level of future committed and uncommitted cost (e.g., marketing cost). Contracts may be registered but usually in a fully independent database (e.g., Excel). I cannot recall that I ever saw a working interface from contracts to the General Ledger. Future - committed - cost are thus like an iceberg. Most is invisible.

Accounting (a.k.a bookkeeping) is focused on recording actuals (e.g., bank statements, invoices, salaries) and financial reporting (e.g., annual accounts). Controlling is focused on budgets, forecasts and management reporting. Major future (un)committed cost might be controlled by Accounting or Controlling in Excel spreadsheets. Timely, correct and complete information from other departments on future cost - or future turnover - is essential in establishing reliable forecasts.

In my view, the budgeting process needs to be replaced by a combination of contract management, scenario management, and ongoing full year forecasting. This would bring the required focus during challenging times and could help preventing the common chaotic human behaviour during crises.

Contract management would replace the essence of budgeting and would imply an annual agreement on the main business drivers: volume, average gross margins, marketing expense per unit sold, #FTE, total overhead. Substitution is allowed within each business driver. Variance reporting - while using thresholds - is only with respect to these main business drivers.

Scenario management would imply that management has pre-approved back-up plans for both rapidly deteriorating or booming market conditions. These back-up plans pre-identify areas for cost reduction - or cost expansion - following substantial changes in sales volume. In this way, little time is lost in implementing remedial actions. Usually lots of precious time is lost on discussions, meetings, questions and ad-hoc calculations.

Ongoing full year forecasting should become the key focus of the Finance Dept. including a brand new focus on committed and uncommitted future cost and turnover. Any forecast should comprise of year-to-date actuals, expected committed cost and turnover, and expected uncommitted cost and turnover. Thus the forecast would also become a tool rather than being a vital report.

This may well require a different aptitude and attitude within Finance as the Accounting domain and the Controlling domain will really need to cooperate regarding (recording) future cost and turnover. 

Monday, 26 January 2015

Google, the future Apple in automotive industry

Automotive has been buzzing for some time now as technology is reshaping the business. To me it seems that most people are micro managing these seemingly unrelated issues: cybersecurity, self-driving, self-parking and telematica. Probably I even omitted a few buzz words.

The introduction of the first car caused a lot of uproar as it left stinking exhaustion fumes and caused loud noises. People tried to forbid this new machine but in vain. While the first car was for the happy few, mass production of cars changed the automotive industry and owning a car became available to millions. The history of the passenger car took off.

Henry Ford's slogan 'You can get any colour you want as long as it's black' (1909) was not sustainable. Product differentiation - and resulting higher margins - became a huge success.

Overcapacity and increasing fuel prices caused the first demise in the automotive industry. Several brand names and some car producers did not survive. Overcapacity maintained itself however, mostly due to new market entries (e.g., Japan, Korea and China).

The difference in American and European fuel prices have long caused two almost separate markets: small, low cost, highly taxed, fuel efficient cars in Europe with low margins and big, inexpensive, low taxed, fuel inefficient cars in the USA with high margins.

Overcapacity and low margins caused a second shift in European automotive in which former independent importers became factory owned and car retail outlets (dealers) received lower margins and ever increasing demands regarding the quality of their location. Many car dealers did not survive.

Technology in cars became more and more important: airbags, air conditioning, automatic brake systems (ABS), automatic gear boxes, burglar alarms, car audio, car lightning, car phones, climate control, cruise / speed control, motor management systems, navigation, park distance control, etc. Nevertheless, a slogan like BMW's 'Freude am Fahren' (since 1965) was never questioned.

Even the computer game and video game industry profited from the 'fun of driving' with clear examples such as Daytona, Gran Turismo, Need For Speed, and the famous Grand Theft Auto series (since 1997). Let's also not forget the movie industry with blockbusters like Days of Thunder (1990), Speed 1+2 (1994, 1997), The Fast and the Furious (2001 onwards), Pixar's Cars 1+2 (2006, 2011), Gone in 60 seconds (1974, 2000), Drive (2011) and #1 Bullit (1968).

The technology that is now on its way will cause another fundamental shift in automotive industry as the fun part - driving - will be taken away from us. A car will become a tool and a means of transport but will no longer be an emotional item as it was branded in advertising for decades.

I expect a similar situation as in computers and telecom: technology or software (Apple, Google's Android and MicroSoft,) will earn the revenues while the hardware (all current car makers) will have a hard time surviving except for the future Apple in automotive.

While rereading my article, the Google (self driving) Car suddenly makes perfect sense............

Sunday, 25 January 2015

The Truth

"Your kids will reconcile with you once they know the truth", my friend said to me. I disagreed. To the second part: knowing the truth. Not to the first part. There is not such a thing as the Truth as we always lack full information. In the absence of complete information we need to make some assumptions. The alternative is being indecisive as new information might find its way to you.

I live by two mantras: Assumptions are the mother of all mistakes (Eugene Lewis Fordsworthe) and Trust but verify (Ronald Reagan). I tend to think in probabilities and thus leaving all options open. When probabilities shift then my thinking shifts too. Truth thus becomes a flexible concept rather than a crusted one. I can live with this though it is tiresome as I revisit the options and probabilities on an ongoing basis. I just never stop thinking, as one of my former colleagues once said to me.

My truth is not everyone's truth. My mother and I may argue heatedly as we both firmly believe in our own truth. Sometimes we have a rare moment that one convinces the other. Everyone has his/her own version of the truth and these various truths are not necessarily false. They are based on our core values, the (partial) information we receive, and the assumptions / interpretations we make.

In the field of auditing we use data quality dimensions with respect to Information: completeness, correctness / accuracy, and timeliness. To a lesser extent there are other data quality dimensions like consistency, validity and relevance. These data quality dimensions also apply to the Truth. The Truth is based upon complete, correct, timely, relevant, consistent and valid data.

Finding the Truth may thus take a lifetime - or longer - and that would not serve the needs of many. Hence the 'true and fair' view opinion in auditing. The word 'true' comes awfully close to the word 'truth' but the 'fair' immediately undermines that assumption.

Looking for the Truth is also looking into a rearview mirror. Life goes on ahead of us. Finding the Truth is not always a blessing especially when it collides with your own truth. I do not even intend telling my version of the Truth to my kids. I have accepted the consequences of that decision for a long time. Sometimes it is better not knowing. Ignorance is bliss. Knowledge may be a burden.

The audit profession lives by definition in the past. Quite often they are criticised for applying hindsight knowledge to earlier (management) decisions. It can sometimes be difficult to accept the rather fundamental differences in roles while still looking at the same picture.

Some 20 years ago I visited one of my audit clients. One look at their draft financial statements was enough for me to realise there was a serious problem. The Work in Progress (WIP) balance sheet section - which had always been a (pre-invoiced) liability - had suddenly changed into an asset (to be invoiced). Some unusually high project completion factors supported that assertion. Management's behaviour to my ongoing questions became more and more anxious and even hostile. I knew I was right but could not find the compelling evidence to support my claim. I advised the audit partner not to sign off. Several months later we were notified that management had been fired as they had requested for urgent loans as they could no longer hide the accumulated project losses. Cash is Truth.

Show Me The Money !!! (Cuba Gooding Jr. to Tom Cruise in Jerry Maguire, 1996)

Saturday, 24 January 2015

ECB - government bond purchases - part 2

Well the plan has changed a little bit: Euro 60 - rather than 50 - billion per month until September 2016 (= 21 months) rather than a 12 to 24 month operation. Each national Central Bank will buy its own government bonds rather than - f.e. - the Dutch buying Italian government bonds. Interest levels went further down and the Euro too. Share prices went up.

ING has already publicly stated that it will not sell any government bonds to the Dutch Central Bank as ING does not need any further liquidity. Not a surprise given existing and abundant ECB liquidity schemes. Furthermore, liquidity hardly gives any yield as any bank - or its customer - is aware of.

Supporters of this ECB decision refer to earlier UK and US successes. Although these successes may be valid, the comparison is not. UK and US markets (e.g., capital, housing, labour) are extremely relaxed compared to "several" continental European countries. Pumping money into such economies does help boost their economy. Pumping money into rigid markets will merely create price inflation (more money while same volume of goods and thus the price per unit must increase).

Common sense dictates that companies do not start new ventures if interest - or taxation - is low. New business is based on expected profit predictions. A lower interest in Discounted Cash Flow calculations does indeed increase the outcome but higher volumes or higher gross margins have much more impact.

Someone once said to me that if you cannot earn a profit with an interest level of - back then - 6% then you should not even be in business in the first place. Indeed that is the heart of the matter.

This week it was announced that the Dutch are European champion in saving money. Balances have increased despite growing unemployment and despite very low interest levels. From a behavioral angle this makes perfect sense: saving money is related to expecting a negative future (e.g., unemployment) and the future need for cash. The now is far less important than the future.

So now what??

If the EU wants to make this massive money injection work then member states should A.S.A.P. remove obstacles for companies to start new business. The most important one is the labour market. Some European countries make it almost impossible - or cost prohibitive - to fire employees. These countries typically work with short term labour contracts that keep being renewed but almost never into a permanent contract. In such countries permanent is permanent indeed. Consequently, young people no longer join labour unions as these only represent elderly people with permanent contracts.

The majority of employment usually is within a huge number of (very) small companies. If labour regulations would genuinely be relaxed for small to medium sized (SME) companies then the results might be spectacular. Relaxing them for large companies would probably be even counter productive as they would finally have a way to loose excess capacity.

As always the future is in SME companies. Help them for a change rather than making their lives miserable with excess regulations.

Grexit - Back To The USSR (Beatles, 1973)

Tomorrow the Greek voters have a chance writing history in their 2015 general election. Let's assume that the radical left-wing party Syriza will win. This idea is not too far-fetched by the way. What would be the consequences?

Second assumption: Syriza will opt-out of the EU and the Euro. That is widely expected anyway.

Such an opt-out would leave the ECB with significant doubtful Greek (bail-out) receivables. If these are collateralised then a long process of law suits may follow. No immediate impact however.

Syriza will need to re-introduce the Greek Drachme as Greece will no longer be allowed to use the Euro as national currency. It is likely that the Greek Central Bank will push lots of Drachmen into the economy - similar as the ECB is now doing with government bond purchases - to boost the Greek economy. The Greek economy has been very rigid since decades however. It is more likely that the abundance of Drachmen will cause a high inflation (more money while same goods) rather than kick-starting the economy.

Greek imports will not be in Drachmen as no foreign supplier will want to receive illiquid Drachmen in exchange for its goods or services. Only the USA has that competitive advantage since decades. The Greek will need to pay in Euro and in US$ (oil). Tourism is a great way of getting foreign currencies. Sale of government properties too. Even sale of small Greek islands.

The international demand for Greek Drachmen is likely to be very small given the existence of highly liquid and thus highly marketable currencies like Dollars and Euros. Hence the exchange rate between the Greek Drachmen and the Euro or US$ is likely to be poor. While this is excellent news for boosting tourism and real estate (buying a 2nd house in the Greek sun), it is very bad news for importing food, oil, cars or anything else that is not produced domestically.

Any company that is highly dependent on (Euro denominated) imports - or has its debts in Euro - may not be able to survive as it is unlikely that a left-wing Syriza government will let those companies increase its customer prices to reimburse the huge currency losses. Commercial banks would have a similar fate but the biggest of them are likely to be bailed out by the new Greek government and will become government owned banks.

The Greek economy is likely to find an equilibrium after a period of rocketing inflation and deteriorating exchange rates. In the meantime they are most likely to turn to an old friend. Either China or Russia will be asked for funding a Greek left-wing government in despair. Given the limited size of Greece I would expect help from Russia - despite their own current Rouble troubles - as some small geo-political power game may be welcome to the Russian President. Military access to ports and airfields may be the Greek prize to pay as well as becoming a haven for money laundering.

The future of Greece may well become a copy of Cuba.

We all know how that one is unfolding right now: Back In The U.S.A. (Bruce Springsteen, 1975)

Friday, 23 January 2015

Common sense is not for the common man

This week I was talking to a Kenyan friend and during my conversation I got the following remark: "Common sense is not for the common man". This remark puzzled and intrigued me. I asked my friend what does apply to the common man?? I couldn't resist suggesting the following with a smiley: "Food? Beer? Sex? Today rather than tomorrow?"

"Mostly food" was the answer. "Food, sex, beer. In that order. And definitely today/now." And also: "For a 'common man' tomorrow is vague. Tomorrow is a distance thus [he/she] lives for now".

During my 2 visits and my many conversations, I had clearly noticed that it is rather common in Kenya to hustle for today's food and today's bills. So far I had assumed that this behaviour was poverty related. My friend however is not poor at all and therefore this comment made me wonder whether my poverty assumption might have been out of context.

My friend's remark left me thinking if this comment would also apply to other countries including The Netherlands. And also left me puzzled whether thinking about tomorrow is a luxury - rather than a neccesity - for those who can afford it. I am now inclined to believe that it actually indeed is.

Recently an interesting behavioural study, conducted by Prof Gijs van Houwelingen, was published. His dissertation is about the question why some people are more inclined to adhere to their core values in a certain situation while others are seduced by short-term temptations. In our timeframe this is indeed a very relevant issue.

Behaving morally requires the ability to act on long-term goals and commitments, and to overcome the lure of short-lived joys. How are we able to do that? In his dissertation he argues that cognitive abstraction allows us to concentrate on what we find important in the long run (‘stable drivers’). On the other hand, concrete cognition, enhances the effect of short-lived influences (‘fleeting drivers’).

Scientifically, this situational sensitivity of cognition is called construal level. Abstract cognition, or high-construal level, implies taking a ‘mental step back’ from the here and now. Because of this, high-construal level facilitates the expression of stable drivers in behaviour. Thinking concretely, or low-construal level, makes us more susceptible to situational influences.

In his doctoral research, Prof Gijs van Houwelingen discovered that people in high-construal level apply moral rules and norms to decide on punishment. People in low-construal level, however, use situational factors to determine appropriate levels of discipline. Additionally, he validated that construal level differs between individuals; some people tend to think more abstractly, whereas others tend to think more concretely.

So, construal level works a little like a ‘filter’. High level construal facilitates the expression of stable moral principles and norms while muting the influence of the situation. Low construal level has the opposite effect.

I see a clear parallel between common sense, cognitive abstraction, and core values while hustling is a clear synonym for a short-term focus.

Common sense is not for the common man. Wow...........

Wednesday, 21 January 2015

FT Breaking News Alert on ECB government bond purchases

Today I received the following FT Breaking News Alert:

"The European Central Bank is mulling buying around €50bn-worth of government bonds a month for between one and two years as part of its quantitative easing programme set to be unveiled on Thursday. The central bank is yet to formally table the proposal to the 25-member governing council, but has discussed the idea of a target monthly amount in phone calls with policy makers, according to two people familiar with the matter. The council will meet for dinner late on Wednesday before voting on QE on Thursday. More opposition has emerged to the ECB’s idea of asking the 19 national central banks of the eurozone to shoulder the risk for purchases of their government bonds. A decision on whether or not policy makers break with the tradition set by earlier bond-buying schemes and scrap commitments to sharing risks between central banks is expected to go down to the wire, with several national central bank governors set to voice objections."

This may look like gibberish to many but it would feel entirely different when it would read like: ECB intends to raise Dutch taxes. Or German taxes. Or any other EU member's taxes.

How is that even possible? Well the ECB is still not satisfied with the lack of impact of earlier ECB interest decreases and now intends to buy government bonds of 50 billion Euro per month. Euro 50,000,000,000 x 12 = Euro 600 billion per year. A 2 year program would imply 1.2 trillion or Euro 1,200,000,000,000. A loss of only 1% on these purchases would imply a loss of 12 billion Euro.

Purchasing governments bonds will indeed drive interest further down but will also drive bond prices up. Given the very low interest levels that we already have, future ECB government bond sale prices will - no doubt - be lower than the ECB purchase prices. A loss of just 1% is nothing in such a case. The ECB losses will either cut its dividend to shareholding countries or cause a need for new share capital due to losses incurred. I fear the magnitude of such losses. Each share capital increase will cause an increase of taxes in shareholding countries. Guess who are the big shareholders?? Indeed.

Yesterday I heard the Dutch Secretary of Treasury saying in the 8PM news that he is aware of the complaints of Dutch parliament on this issue but that he cannot do anything. Seriously??? Resign !

There are several angles from which I object to this plan:
- monetary: the correlation between low interest and increased economic activity is thin;
- economy: rigid regulations, inflexible labour markets, and lack of competition will remain the same;
- democracy: it is absurd that an "independent" EU organisation can start such a program without the explicit consent of EU members who will need to pay for the expected massive losses;
- ECB mandate: this program is far beyond the ECB's objective of maintaining "price stability".

I am genuinely pissed.

Tuesday, 20 January 2015

Private versus Public companies

Yesterday I was notified about an interesting article in my favourite newspaper. One of my favourite FT columnists, Lucy Kellaway, had written about the fear within companies of being found out and the lack of common sense.

"The trouble with business today, he complained over coffee, was that there was no common sense any more. Such sense, he insisted, had always been uncommon — but now was extinct." A beautiful fragment at the start of the article following her interview with a former senior London banker.

She states the enemies of common sense being: insecurity (fear of being found out), self importance, and "departments such as HR and PR [which] routinely eliminate any lurking pools of rationality, while interdepartmental rivalries, budgets and regulations of any kind all tend to ensure that few things are ever done sensibly".

Indeed it is a common phenomenon but usually only in companies with a clear separation between ownership and management. Such companies may be public companies (e.g., banks), foundations, (building) societies, and (semi) governmental or municipal organisations.

During my entire business life I have noticed that many people use goods, money, services, or time within public companies in a very different way than they would be doing if they would own that company themselves. None of these persons would ever acknowledge that it may also be seen as theft. Most likely they would see it as an informal labour agreement item or that they deserved it. In all fairness this cultural behaviour usually starts at the top and then spreads like a cancer.

Another phenomenon in the same area is the lack of accountability in public companies following violations of any kind. The public image is almost sacred. The corporate fear of being found out may even be leading. In the absence of clear accountability, a work culture is doomed.

Another public company issue is interdepartmental rivalries or even warfares. The bigger the company, the worse it gets. It's an utter waste of time but a main part of the job. These rivalries often continue as CEO's come and go and do not take sides. Perhaps using the saying "divide and rule".

Lucy Kellaway and I both see the solution in private companies although both of us are coming from a different angle. Owners of private companies tend to value common sense and dislike hiring pompous managers. I do recognise Lucy's statement that abundant cash may cause erratic behaviour. At least the owner is then spending her/his own money rather than investors' money.

This is why I prefer private above public companies. With the backing of the owner it is actually possible to make a difference and add value.

Big data, data ownership and data privacy

When I was a teenager, shops were usually run by a single person and that person was aware of the reason of your visit and capable of advising you anything else. Nowadays it's called Customer Relationship Management (CRM). I also recall that my father sometimes got a call from the local banker informing him which property would soon be up for sale. Times have changed since.

The size of companies, the volume of transactions, the need of servicing clients, the state of technology, in combination with the relevant regulations, create lots of opportunities and risks.

Early March 2014 ING Bank Netherlands announced that they were planning to sell customer transactional data to other companies for commercial use. This announcement caused a national uproar and the plan was swiftly withdrawn.

The uproar was about data privacy while the debate should actually have been about data ownership. Data privacy is a rather useless concept as nothing would work if data are strictly private. We need to accept that some data are in the public domain especially as we put them there ourselves in most cases. Just think of Facebook, Google+, LinkedIn, any other social networking site - or this blog.

The real issue at stake is who owns data? Could ING Bank just sell customer transactional data to any other interested commercial party? Clearly ING Bank's alleged ownership of customer transactional data was genuinely disputed as privacy issues rarely cause such an outrage.

Customer transactional data are already widely used by companies to advise their - and not other - customers on other goods and services. It has always been that way in sales. Nothing new at all. Customers - either consciously or subconsciously - know and fully accept this.

Selling public customer and company data to other companies is also an accepted business conduct since long (e.g., Dun & Bradstreet).

Selling private customer transactional data to other companies is new. These data have never been in the public domain. The legal ownership of such data is far from clear. You cannot not sell what isn't yours in the first place. That would be a clear violation of law.

The way forward is an entirely different concept. Rather than keep on pushing data privacy laws, we should have a law on data ownership. Customers must own their own - permanent and transactional - data. Any company or business must offer an annual compensation to its clients before being allowed to sell such data to third parties. Customers may decline any use or allow detailed partial or full use. The more interesting a customer is, the higher the annual compensation will become.

A data ownership concept matches the interests of people. Data privacy is just an academic topic.

Monday, 19 January 2015

Overbodige management lagen in Rijksoverheid

Als we de Rijksoverheid met Ahold NL vergelijken, en de gemeentes met AH winkels, dan vallen vooral de Provincies op. Het zijn overduidelijk geen regionale logistieke distributie centra. Welke toegevoegde waarde hebben de Provincies eigenlijk?

Een deel van het antwoord ligt in de Noordvleugelprovincie die ook wel superprovincie werd genoemd. In 2012 werd dit plan voorgesteld door het Kabinet en na veel weerstand medio 2014 weer ingetrokken. Het is duidelijk dat ook het Kabinet worstelt met deze management laag.

De weerstand was te verwachten en bovendien ook redelijk. Een onduidelijk compromis voorstel verdient het inderdaad om te worden afgeschoten. De redenen daarvoor zijn secundair.

Tot op zekere hoogte kan ik me de aanwezigheid van regionale hoofdkantoren enigszins herinneren vanuit mijn vroegere leven als controlerend accountant maar dat fenomeen bracht duidelijk te weinig toegevoegde waarde, kostte teveel en deed teveel aan interne bedrijfspolitiek. Al schrijvende zie ik meteen de parallel met Provincies.

Voor een klein land als Nederland zijn 12 provinciale bestuurslagen in meerdere opzichten bovenmatig. Bovendien is hun zichtbaarheid - en dus toegevoegde waarde - onder burgers minimaal aangezien er vrijwel geen contactmomenten tussen burger en Provincie zijn. Althans ik ken er geen.

Ik verwacht trouwens niet dat er veel ambtenaren hun baan zouden verliezen bij afschaffing van de 12 Provincies. Een deel van de ambtenaren zou naar de provincie hoofdstad gaan, en een deel naar de landelijke overheid, afhankelijk van de aard van hun activiteiten. 

De te verwachten hernieuwde weerstand zit onder de Bestuurders. Dit zijn deels landelijke politici die zijn verplaatst van het spotlicht naar de coulissen. Om het maar eens netjes te zeggen.

Weggepromoveerde managers in het bedrijfsleven zullen problemen blijven veroorzaken omdat ze de hoop niet zullen opgeven om op het podium terug te keren. Een nieuwe CEO biedt nieuwe kansen op een terugkeer. De parallel met de politiek is duidelijk.

Resteert de 1e Kamer. Zullen we die dan ook maar meteen afschaffen of laten kiezen zoals we de 2e Kamer kiezen? Enerzijds prefereer ik een duidelijk mandaat voor 4 jaar maar anderzijds is de mogelijkheid van een tussentijdse tik op de vingers soms toch ook wel nuttig. Een corrigerende tik op de vingers kan ook met andere middelen zoals een adviserend of zelfs bindend referendum.

Als de burger de Provincie niet nodig heeft, het Kabinet reeds twijfelt, wie heeft dan de moed om na ruim 200 jaar eindelijk afscheid te nemen van onze Provincies?

Sunday, 18 January 2015

Guns don't kill people. Bullets do..... (USA only)

Outside the USA it could be hard finding someone actually believing the title of this blog article. It would be easy making fun of gun crazy, trigger happy, NRA supporting Americans but that is not the essence of this article.

The root of the American lack of gun control stems from the 2nd Amendment of the US Constitution which was adopted on 15 December 1791. Hence more than 200 years ago in a timeframe usually referred to as the Wild West. Despite some limited sales regulations, basically nothing has changed.

Almost no civilised country gives its citizens the constitutional right to keep and bear arms. The USA does. Most countries would use a permit system if even allowed at all.

Mid 2014 Forbes magazine published the results of a study amongst the most and least peaceful countries in the world. The USA ranks 101 out of 162 while 88 in 2012. Syria is last at #162. Even notoriously violent Haiti is ahead of USA at #99.

It would be easy to explain the need for owning guns given the violence in the USA. In my view, this valid argument also provides a chicken and egg dilemma. What came first?

Except for Northern Ireland, police officers in the UK do not carry fire arms (e.g., guns) except for special circumstances. This situation originates from the 19th century and slightly later than USA.

Nowadays US police officers look more and more like military commandos using former military High Mobility Multipurpose Wheeled Vehicles (a.k.a. Humvees) to transport their troops.

Late 2014 USA Today, a popular national newspaper, published the results of a study into fear amongst Americans. The result was that Americans have taken it to heart: Be afraid, be very afraid. People are scared of a lot of things, with their biggest fears include walking alone at night, being the victim of identity theft and being a victim of a mass shooting. The level of pessimism was astounding to us, said the lead researcher and sociology professor.

I have visited the USA some 10 times mainly during the 90's. I do not recall feeling any fear apart from visiting downtown San Diego which used to be a bad area back then. However, America feels very, very, different when you start watching their many (local) TV news stations. I can imagine that people get scared. When people are scared for a prolonged period of time then fear kicks in.

Fear is an excellent manipulator of human thought. I refer to Michael Crichton's book State Of Fear.

Violence creates violence. Bullets only kill people when guns - and bullets - are freely available.

Friday, 16 January 2015

Euro 101

Some country leaders confuse the fall of the Euro with their own popularity and in doing so confuse their voters too.

The depreciation of the Euro mirrors the appreciation of other currencies like the US dollar. This appreciation stems from positive economic news while the Euro depreciation is related to continued negative economic news.

The real issue is whether an appreciation or a depreciation is good or bad news.

While some political leaders suggest that a currency depreciation is bad news, the real bad news is the underlying economic development causing this depreciation. A currency depreciation allows an economy to recover.

If a currency is not allowed to depreciate (e.g., Russian rouble) then the Central Bank needs to increase the interest in order to stop money from fleeing to safe foreign harbours. Increased interest levels may be interesting for saving money but certainly not for lending money. Using a sky high interest level to maintain a stable currency level is like treating a patient with a delayed overdosis.

Depreciating currencies cause more expensive imports of goods (e.g., cars, oil) and thus increase inflation. The flip side of this coin obviously is that exporting goods becomes cheaper for foreign customers. The balance of import and export is decisive for the overall economy.

One of the main benefits of the Euro zone is that most imports and most exports are within the Euro zone and priced in Euro and thus a Euro depreciation has no immediate impact.

Some important imports are not priced in Euro. Oil is predominantly quoted in US dollars. Historically, there's been a pretty consistent correlation between oil prices and the US dollar. When the dollar strengthened, oil prices would fall and vice versa. For the longest time, this relationship has been explained by the huge flow of US oil imports. However, more recently this rationale has broken down in the wake of the American shale oil and gas revolution. (source: UK Business Insider)

Given the above it is likely that the Euro zone will now only see the benefits of a Euro depreciation while the normal disadvantages (inflation through a.o. oil prices in US$) stay away.

The only danger that is looming is deflation. When prices fall then customers delay purchasing (e.g., houses). A remedy could be applying negative or penalty interest on bank deposits. This used to be a hypothetical concept but since mid 2014 several European central banks already applied this.

Negative or penalty interest on consumer banking deposits would be another revolution but it may be closer to home then we would like. It would be introduced to force savers to spend their money rather than continue saving. Initial feedback learns that it is far less effective than presumed.

There is also an interesting correlation between introducing negative interest rates and the accelerated Euro depreciation. (source: UK Business Insider)

Using interest levels for changing consumer behaviour may be a kill or cure remedy.

Thursday, 15 January 2015

Internet - dependency, fragility, and protection

Although we may not fully realise, we have become extremely dependent on electricity and the Internet. There is hardly any moment in our daily lives where we do not use either one. Obviously, the Internet itself is fully dependent on electricity.

The predecessor of the current Internet used to be a closed US military network (1960s). Its successor was a semi open scientific network of interconnected university computers that was mainly used for exchanging messages. Notwithstanding this, its popularity increased by the mid 1980s. Public demand was still minimal given the poor user interfacing. It took the introduction of the Mosaic webbrowser (later renamed into Netscape Navigator) to attract the general public. Netscape lost the webbrowser battle to MicroSoft (IE) and MS then to Google. Google's current dominance (e.g., Chrome, Gmail) is very much related to this webbrowser battle and the surge in internet usage.

The second surge in internet usage resulted from companies using websites to communicate with their customers and suppliers. A third surge is on its way as appliances (e.g., TV) are now being connected to the internet for remote control and monitoring (e.g., home heating). Rather sooner than later our entire life will be connected to the Internet. The consequences of that are like Sci-Fi.

However, my interest is - and my concerns are - about the dependency, fragility, and protection of the Internet. While we use the Internet daily, there is no single company, country or (global) organisation responsible for the Internet, let alone any global governance apart from a few technical areas. In some ways, however, that may even be a blessing in disguise.

In most networks (e.g., airlines, internet) there are hubs (transfer points) as full interconnectedness would not be cost efficient. While hubs create efficiency, they also create risks and threats. One of the main global internet hubs is the Amsterdam Internet Exchange (AMS-IX), a not for profit NGO. The top 3 of global internet hubs are in Germany, The Netherlands, and UK.

If these 3 hubs would not be in business for a longer period then one could only wonder about the consequences for Europe or even for the entire world. Although the probability may be low, the impact might be immense or even catastrophic.

Given current developments and their importance to everyone, internet hubs should be treated as strategic (military) objects with similar protection levels. In other words, Back To The Future.

My only thought of comfort is that the Internet would most likely be used as much - or more - by the same people that might be interested in its disruption.

For them it could be like pissing against the wind.......

Pardon my French.

Wednesday, 14 January 2015

ZZP pensioensparen ?? Willem Drees (1886-1988), AOW (1957) en AFM (2015)

Bevoogding is terug op de politieke agenda. Zelfs instituten zoals de AFM laten zich nu gebruiken om een politiek standpunt te verkondigen. Willem Drees vond het in 1947 nodig om de voorloper van de AOW (1957) te introduceren voor werknemers. In 2015 willen de Staatssecretaris voor SZ en de AFM verplicht pensioensparen voor ondernemers introduceren. ZZP'ers zijn geen werknemers. Ze waren het ooit.

De belangrijkste manier van sparen gaat nog altijd via het eigen woningbezit. Sinds Willem Drees is eigen woningbezit toegenomen van onder de 30% (1900), tot iets boven de 60% (vlak na WO2), dalende naar iets boven de 40% midden jaren 70, en vervolgens stijgende tot ruim 50% in 2010. Kortom, bijna een verdubbeling.

Verkoop van het eigen bedrijf is ook een veel gebruikte manier om het opgebouwde (pensioen) vermogen in contanten om te zetten.

Verplicht pensioensparen miskent daarom andere vormen van sparen (eigen woningbezit, eigen bedrijf), past totaal niet bij ondernemers, en past niet in een tijd waarbij mensen eigen keuzes maken.

Ik realiseer me terdege dat de groei van ZZP'ers de houdbaarheid van ons sociale stelsel steeds verder ondermijnt. Helaas is de politiek - zoals bijna altijd - slechts bezig met dweilen terwijl de kraan volop open staat.

De echte oplossing ligt in het terugdringen van schijnzelfstandigen. Meestal gaat het hierbij om personen die onder druk van hun werkgever hun dienstverband (moeten) omzetten in een ZZP constructie waarbij ze hetzelfde werk blijven doen maar tegen andere - meestal slechtere - voorwaarden. Indien ZZP'ers dus hetzelfde werk blijven doen als ze in loondienst reeds deden dan is er een gerede kans dat het in die situaties om schijnzelfstandigen gaat. Hoe moeilijk kan het zijn om het overheidsbeleid daarop in te richten??

Het is tevens onthutsend dat dit soort discussies kunnen plaatsvinden in een kabinet waarin de VVD - als veronderstelde belangenbehartiger van ondernemers - is vertegenwoordigd. De enorme groep ZZP'ers wordt overduidelijk niet adequaat politiek vertegenwoordigd ondanks haar immer groeiende omvang (zie eerdere blogs).

Indien bestaande politieke partijen de ZZP'ers niet als doelgroep willen zien dan resteert slechts 1 optie: het oprichten van een eigen politieke partij (PZZP). Het organiseren van ZZP'ers is echter moeilijker dan het lijkt. Zoveel is me inmiddels wel gebleken.

Toch blijf ik in dit idee geloven.

Monday, 12 January 2015

Robots and AI

My mother is worried about robots. Stephen Hawking too although in combination with artificial intelligence (AI). People were worried too during the Industrial Revolution (around 1800) and after the introduction of computers (since 1938). However, both mechanisation and automation resulted in a substantial increase of prosperity. Are the current concerns on robots and AI any different?

Prof Stephen Hawking, possibly the world's leading scientist, has warned that robots in combination with AI could end mankind. The same theme may be found in famous movies like 2001: A Space Odyssey, Battleship Galactica, Matrix, Terminator and Transformers. In short, from (science) fiction to non fiction.

I suspect that Stephen Hawking's worries about AI, ultimately deal with the expected impossibility to adhere to the 3 Laws of Robotics as outlined in 1942 by the famous Sci-Fi author and scientist Prof Isaac Asimov:
1. A robot may not injure a human being or, through inaction, allow a human being to come to harm.
2. A robot must obey the orders given it by human beings, except where such orders would conflict with the First Law.
3. A robot must protect its own existence as long as such protection does not conflict with the First or Second Law.

Prof Hawking says the primitive forms of artificial intelligence developed so far have already proved very useful, but he fears the consequences of creating something that can match or surpass humans. "It would take off on its own, and re-design itself at an ever increasing rate," he said. "Humans, who are limited by slow biological evolution, couldn't compete, and would be superseded." (source: BBC News, 2 Dec 2014)

Global communication tools, like internet, would be required for AI robots to combat humans. Without this they would just operate as mavericks. This also applies to mankind and its armies though. As long as unlimited energy storage is out of reach, machines will need new energy supply just like humans will always require food and water.  Planes, vehicles and weapons which are part of a (communication) network will prove to be very vulnerable. Access to communication and energy (including food and water) will ultimately be decisive. Weapons will be far less decisive.

When we disregard friendly and helpful AI robots (Transformers), time travel (Terminator), a saviour (Matrix) then only running and hiding remains as shown in Galactica. A gloomy prospect. After ample consideration I conclude that Stephen Hawking is probably right. No surprise there. Curiosity killed the cat. Greed and lack of ethics the demise of man and mankind. 

The 2nd Commandment reads: Thou shalt not make unto thee any graven image. 

Sunday, 11 January 2015


Mijn moeder maakt zich zorgen over robotisering. Stephen Hawking ook. In de Industriële Revolutie (rondom 1800) maakten mensen zich ook grote zorgen. Computers (sinds 1938) hebben ook altijd geleid tot grote zorgen. Mechanisatie en later Automatisering hebben echter vooral geleid tot een verhoging van de welvaart. Is er nu meer aan de hand?

Prof. Stephen Hawking, een van de grootste levende wetenschappers, maakt zich grote zorgen over de invloed van Artificial Intelligence (AI) in combinatie met robotisering. Hij voorziet het einde van de mensheid zoals ook het thema in SF films zoals: 2001: A Space Odyssey, Battleship Galactica, Matrix, Terminator, en Transformers. Kortom, van (science) fictie naar non-fictie.

Ik vermoed dat de zorgen van Stephen Hawking omtrent AI, uiteindelijk te maken hebben met de verwachte onmogelijkheid tot het kunnen naleven van de 3 wetten van robotisering zoals in 1942 vastgelegd door de beroemde science fiction auteur en hoogleraar Prof. Isaac Asimov:
1. Een robot mag een mens geen letsel toebrengen of - door niet te handelen - toestaan dat een mens letsel oploopt.
2. Een robot moet de bevelen uitvoeren die hem door mensen gegeven worden behalve als die opdrachten in strijd zijn met de Eerste Wet.
3. Een robot moet zijn eigen bestaan beschermen, voor zover die bescherming niet in strijd is met de Eerste of Tweede Wet.

Prof. Hawking stelt dat primitieve vormen van AI tot dusverre zeer succesvol zijn gebleken maar hij vreest de consequenties van het creëren van iets dat mensen zou kunnen evenaren of voorbij zou kunnen streven. Het zal een zelfstandige vlucht nemen en zichzelf herontwikkelen met een steeds grotere snelheid. De mensheid, die wordt beperkt door trage biologische evolutie, zou niet kunnen concurreren en het onderspit delven. 

Universele communicatieprotocollen, zoals Internet, zouden onontbeerlijk zijn voor AI robots in hun strijd tegen mensen. Zonder communicatie zouden het slechts eenlingen zijn. Dit geldt trouwens ook voor de mensheid en hun legers. Zolang de mogelijkheden van opslag van energie beperkt zijn, zullen machines elektriciteit nodig hebben net zoals mensen voedsel en water nodig hebben. Voertuigen, vliegtuigen en wapensystemen die onderdeel zijn van een (communicatie) netwerk kunnen makkelijk worden uitgeschakeld. De (on)mogelijkheden van toegang tot communicatie en energie (incl. voedsel en water) zullen echter de strijd uiteindelijk beslechten. Wapens in veel mindere mate.

Indien we afzien van vriendelijke robots (Transformers), tijdreizen (Terminator) of een Verlosser (Matrix) dan resteert het vluchtgedrag zoals we dat zien in Galactica. Een weinig hoopvol beeld. Na lang nadenken kom ik tot de conclusie dat Stephen Hawking waarschijnlijk gelijk heeft. Geen verrassing. Curiosity killed the cat. Hebzucht en gebrek aan ethiek de ondergang van de mens.

Saturday, 10 January 2015

United States of Europe

In some ways I envy the United States of America as its nature can be most impressive. Seeing the Grand Canyon is something beyond imagination. Hearing and actually seeing the sound of hot air in the midst of a prairie is almost impossible to explain. The idea of combining 50 individual states into one Federation still appeals to me as I am confident that only this is the way forward with Europe. 

Each US State has it own identity which is stressed by the short phrase on most car license plates. The identity also stems from the languages, the climate, the tax system, and national parks. The federal government is solely responsible for citizenship, national defence, foreign policy, and monetary affairs. Nevertheless, in most policy areas the individual States are still leading.

While I appreciate that it is difficult to hand over power to someone else, the pros of the USA blueprint more than outweigh the cons of the current European chaos. 

In the 1970s Henry Kissinger, then US Secretary of State, asked his famous question: "If I want to call Europe, who do I call?". In 2009 Mr Barroso, then President of the EU's executive European Commission, proudly announced that the EU had solved Mr Kissinger's question. 

Former EU leaders have expanded the EU without any voter consultation and with countries that had little to no sympathy amongst voters. EU inefficiency is legendary. EU bureaucracy too. In my view, Turkey's application of EU membership may have caused the pendulum to start swinging the other way. Anti EU protests have only grown since then. EU and national leaders should only blame themselves for this EU antipathy. 

Today the EU faces the risk of a Grexit and - more serious - a Brexit. After a departure of Britain from the EU (Brexit), some political parties in other nations will most likely leverage on the UK exit route to ask national voters in a referendum for their exit consent too. Rather sooner than later this would jeopardise the legitimacy of the entire remaining EU. 

There are 2 options: either break-up the EU (and possibly go back to the 6 original members of the EEC being Belgium, France, Italy, Luxembourg, Netherlands and Germany) OR use the US blueprint and create the United States of Europe. It would imply huge shifts in power: from Brussels back to the member states and from national parliaments to Europe. Not shifting back the regulation powers from Brussels to the member states would create a European Soviet Union and thus a total disaster.

It's still possible to sell the European dream to the public but not this way forward. Europe is now a monstrum for which no voter has ever expressed his or her opinion. This is a dead end road. 

I believe in a United States of Europe similar to the USA blueprint though the abbreviation sucks...

Le Roi Est Mort, Vive Le Roi! Angela Merkel for President !

Thursday, 8 January 2015

Charlie Hebdo and Ahmed Aboutaleb

Some 200 years ago many Dutch people moved to other countries like Australia, South Africa and the USA. While individuals had to blend into their new society, larger groups of immigrants tended to cling on to their past. In case of South Africa, the difference could not have become bigger as The Netherlands became the worst adversary of the then ruling white minority of which many still carried Dutch names.

A similar situation is happening in Europe. While secular Arabs had to flee to Europe, their offspring is causing major problems. While thousands of Arabs are still trying to escape the violence and intolerance in their home countries, the second and third generation in Europe is oblivious of the reasons of their (grand) parents to escape.

The pendulum is about to swing the other way as Western people are getting more and more fed up with the intolerance and violence expressed by the (grand) children of immigrants that were once welcome in Europe. Soon politicians will leverage on this long existing undercurrent which is already manifesting in more and more countries right now (also see my earlier PEGIDA blog). This pendulum swing is about to bring intolerance to Europe too. Intolerance to minorities. However, ultimately everyone is a minority when you zoom-in long enough.

In his blog Geert Wilders has said that we are at war. Remarkably, the assassins of the Charlie Hebdo office staff would indeed agree with him. However, we are not at war. Islam extremists only hope that we will start thinking that we are at war with Islam. That is their only way to leverage 2.37 billion Christians against 1.57 billion Muslims (source: Wikipedia). The consequences of such an escalation would be very, very dire.

Ahmed Aboutaleb, the mayor of Rotterdam, came to a very different conclusion on national TV. A conclusion that makes much more sense. He stated that there is no place in The Netherlands for people who object to our set of freedoms. He told those people to leave this country if they are not able to blend in. If you don't like that some cartoonists make a paper then - pardon my French - bugger off! He added that while he is the mayor of Rotterdam, he is also a raging Muslim. He concluded that it is very important for Muslims to object at large.

Aboutaleb indeed comes to the core of this issue. If Muslims want to continue enjoying the European set of freedoms then they have no choice but to follow Aboutaleb's words. It is the only way forward to prevent some politicians from limiting our set of freedoms.

Real change comes from within. Not from outside pressure. Outside pressure usually works counter productive as defence mechanisms then get fully activated.

Indeed it is very important for Muslims to object at large else their fate in Europe may be doomed.

Wednesday, 7 January 2015

Nieuw beleid voor immigratie, vluchtelingen en Nederlanderschap

Hoewel Fort Europa formeel gezien behoorlijk op slot zit, worden de zuidelijke grenzen van Europa bijna dagelijks bestormd door Arabische en Afrikaanse vluchtelingen. Tegelijkertijd vergrijst de Europese bevolking als gevolg van een gemiddeld kindertal van 1,57 (2011) terwijl 2,1 kind noodzakelijk is voor een gelijkblijvende populatie.

Vluchtelingen worden opgevangen in kampen die soms doen denken aan andere tijden. Werken is verboden. Wachttijden voor een beslissing over toelating zijn vrijwel overal lang. In die tussentijd hadden die mensen werk kunnen doen en inkomen kunnen verdienen.

Een systeem van tijdelijke en permanente verblijfsvergunningen zonder mogelijkheid tot aanvraag van het Nederlanderschap zou een heel ander proces geven.

Elke immigrant en vluchteling krijgt een tijdelijke verblijfsvergunning van 6 weken maar heeft geen recht op een uitkering of tegemoetkoming van welke aard dan ook. Opvang dient uitsluitend door familie of vrienden te gebeuren. Bij aanraking met Justitie vervalt de vergunning onmiddellijk.

Na 6 weken ontstaat er een mogelijkheid tot verlenging van de verblijfsvergunning met 3 maanden maar alleen indien de immigrant of vluchteling werk en onderdak heeft gevonden, zelf in haar/zijn levensonderhoud kan voorzien, en niet in aanraking met Justitie is geweest. Het soort werk maakt niet uit. Na 3 maanden ontstaat er een mogelijkheid voor een tijdelijke verblijfsvergunning van 1 jaar maar alleen indien de immigrant of vluchteling kan aantonen dat hij/zij vast werk heeft. Permanente verblijfsvergunningen worden alleen uitgereikt aan personen die kunnen aantonen dat ze in Nederland belasting betalen en niet in aanraking met of onder verdenking bij Justitie zijn geweest.

Aanvraag van Nederlanderschap is niet mogelijk. Een permanente verblijfsvergunning wel. Er bestaat dus geen mogelijkheid tot het verkrijgen van een basisinkomen (zie vorige blog), of politieke participatie.

Tijdelijke verblijfsvergunningen van 3 maanden of langer vallen onder een 3 strike = out regel. Een permanente verblijfsvergunning verandert in een tijdelijke verblijfsvergunning na 1 strike. Een strike kan diefstal, geweldpleging of erger zijn. Geen lichte overtredingen. Na 3 strikes wordt de immigrant of vluchteling vervolgens toegang tot Nederland ontzegd.

Aangezien er geen enkele vorm van opvang - of inkomensoverdracht - is door de Nederlandse overheid, zal de immigrant of vluchteling een economisch rationele afweging moeten maken of het zinvol is om hier een toekomst te zoeken.

Mede door de voortdurende vergrijzing ontstaat er een grote behoefte aan relatief laaggeschoold en laag gesalarieerd werk. De oplossing ligt voor het grijpen indien we het proces in goede banen leiden.


Lang heb ik het onderwerp basisinkomen als typisch links gedachtengoed gezien in het kader van het Sinterklaas willen spelen met andermans geld. Meer recent zag ik pas de enorme mogelijkheden om middels een basisinkomen de overheidsprocessen te herinrichten en vooral enorm te laten afslanken.

Complexiteit in processen ontstaat normaliter door de hoeveelheid uitzonderingen in processen en de noodzaak tot het inbouwen van controle systemen om die uitzonderingen te beheersen. De overheid heeft complexiteit tot haar specialiteit gemaakt.

Vrijwel elke Nederlander krijgt direct of indirect een uitkering of tegemoetkoming van de overheid. Al die uitkeringen en tegemoetkomingen hebben andere benamingen en zijn specifiek gericht op bepaalde groepen: bijstand, kinderen, ouderen, werklozen, zieken, zwangere zelfstandigen.

Alle uitkeringen kennen ingewikkelde - en dus arbeidsintensieve - aanvraag protocollen, (her)keuring, en controle systemen. Telkens komen er nieuwe regelingen bij en zelden verdwijnen ze. De Belastingdienst mag vervolgens telkens de rotzooi opruimen die door ons Parlement werd gecreëerd. Vanzelfsprekend ligt de Belastingdienst vervolgens zwaar onder vuur omdat ze moeite hebben om al deze complexe regelgeving tijdig ingebed te krijgen in hun legacy systemen.

Mijns inziens ligt de oplossing in eenvoud en simpelheid: geef elke Nederlander een basisinkomen en schaf alle specifieke regelingen en tegemoetkomingen af. Ook de aanvraag, (her)keuring, en controle systemen zijn niet langer noodzakelijk. Ik sluit niet uit dat de directe kosten (lees: uitkeringen) hoger zullen zijn dan voorheen maar de indirecte kosten (lees: ambtenarensalarissen) dalen dramatisch. De totale kosten voor de overheid zullen naar mijn overtuiging veel lager zijn dan voorheen.

Het basisinkomen zal onderdeel zijn van het belastbaar inkomen voor de IB. Voor wie het basisinkomen gelijk is aan het totale inkomen geldt geen belastingheffing. Voor anderen geldt het hoogste marginale IB tarief. De hoogte van het basisinkomen zal variëren per leeftijdscategorie gezien het verschil in de kosten voor levensonderhoud. Het basisinkomen zal een bestaansminimum geven (kleding, onderdak, voedsel) maar zeker geen luilekkerland. Autobezit past er zeker niet in.

Het basisinkomen zal dan - al dan niet tijdelijk - het totale inkomen zijn voor bijvoorbeeld: artiesten, bijstandsmoeders, kinderen, kunstenaars, muzikanten, schrijvers, sporters, studenten, langdurig werklozen, zieken. Ook ouderen zonder aanvullend pensioen. Voor alle duidelijkheid: er zal geen (her)keurings of sollicitatieplicht zijn. De uitkering start automatisch bij bereiken van een leeftijd.

De Belastingdienst beheert het basisinkomen zowel qua uitkering als qua belastingheffing erover.

Zowel links als rechts zullen hun gelijk vinden in bovenstaand voorstel.

Tuesday, 6 January 2015

PEGIDA - Patriotic Europeans against Islamisation of the West

A small movement from the German city of Dresden (formerly in communist DDR) has been able to leverage its anti Islam sentiments towards a national level.

Yesterday a Dutch TV reporter made a reference to Pim Fortuyn (1948-2002), the assassinated populist political leader and potential PM, who very well understood the vibes amongst the Dutch voters. Pim Fortuyn has caused a major shift in Dutch politics as mainstream political parties finally had to accept the demands of its voters as losing power was not an alternative. The same is bound to happen in other major European countries like France, Germany and UK. They never learned from what happened in The Netherlands some 15 years ago. They must have seen it as a typical Dutch issue. Well, it is not.

In my view, it is not Islam in general which is driving this movement but it is ISIL, the ugly face of Islam, that is driving this. ISIL has been a wake up call for all of us. As few - Western - people see the difference between ISIL and Islam, it makes sense that these protests are directed against Islam in general. The limited and timid Islamic protests against ISIL do no help.

The current situation in Turkey does not help either. This formerly secular country has applied for EU membership in 1987. The rise to power of Erdogan's Islamic party has caused a major controversy about whether Turkey actually fits in the European culture which is largely of a Christian nature. In my opinion, Erdogan is behaving more and more like Putin: erratic, paranoid, and eliminating any opposition of any nature.

In my view, there is nothing wrong with defending your freedom (e.g., expression, religion, speech). The only issue may be that the PEGIDA cause is ambiguous.

In my view, time is pressing for Europe to clearly express its core values. These values include full secularity, Christianity as main religion, a clear tolerance for other religions, and a clear compassion for (genuine non economic) refugees. In that view, Turkey's application for EU membership should be denied at least until Turkey's secularity is restored.

Voters have the right to know where their leaders stand. Now they vote with their feet but soon they will vote others to power. Germany has seen this before. Main stream political parties should not ignore voter sentiments. It is a recipe for disaster. Ignoring voter sentiments implies that you treat voters as ignorant people. They are not. A democracy is built on voters whether right or wrong. However, they do sometimes elect the wrong people as their leaders albeit with hindsight.

Remarkably, it was even politics that created the following famous saying:

If you can't beat them, join them.

Monday, 5 January 2015

Accountancy - een nieuw model

Van 1981 tot en met 1994 heb ik in de Accountancy gewerkt: via IAD, groot nationaal, regionaal naar klein internationaal. In de jaren daarna kwamen ze bij mij op controle bezoek en zag ik ze van een totaal andere kant werken. Dat laatste beeld creëerde een duidelijk andere perceptie.

Ik herinner me een uitspraak van Prof. Van Hulsentop die ooit in een college zei dat als je 10 vakantiegangers op een rij zet dat iedereen dan de accountant zal herkennen. Zet je echter 10 accountants op een rij dan krijg je 10 verschillende meningen. Kortom, als groep zijn ze goed herkenbaar maar als individu zijn ze zeer divers. Dat beeld herken ik wel.

Met zoveel verschillende meningen is het bijna een mirakel dat het partner of maatschap model het zo lang heeft weten vol te houden. Ik vermoed dat de toekomstige historie van het accountantsberoep mede zal aangeven dat de afwijkende meningen c.q. gedragingen de kern vormden van belangrijke fiasco's in het beroep. Accountants zijn bij uitstek personen die het beter denken te weten dan anderen, inclusief hun leidinggevenden. De professionele nadruk op onafhankelijkheid zal hen in hun eigen mening sterken.

Wat is eigenlijk het verschil met andere beroepen? Het werken met je hoofd in plaats van je handen?? Vrijwel elk beroep steunt op deskundigheid en (klant) onafhankelijkheid. Professionaliteit en objectiviteit zijn ook de normaalste zaken van de wereld. Geheimhouding misschien? Er zijn voldoende beroepen te vinden die ook werken met belangrijke data van hun klanten. De opinie dan? Nee, want ook andere beroepen geven een opinie aan het maatschappelijk verkeer.

Vlak voor de grote bankencrisis had ik een discussie met een senior persoon bij de bank waar ik toen werkte. Ik vertelde hem dat ik het aantrekken van geld ook als een bancair risico zag omdat een bank uiteindelijk ook maar een bedrijf is dat geld inkoopt en verkoopt. Of ik gek was geworden........ Net als vele andere beroepen koopt een accountantskantoor mensuren en verkoopt die vervolgens aan klanten. De dienstverlening bepaalt de klanttevredenheid. Het accountantsberoep heeft de Prijs jarenlang laten prevaleren boven het Product. Promotie is nu daarom vooral gericht op naamsbekendheid. Distributie (Plaats) kent zowel centrale als decentrale verschijningsvormen.

Ik geloof in een model waarbij alle medewerkers ook aandeelhouder zijn en financiering ervan uit de beloning volgt. Aanbiedingsregeling aandelen bij vertrek. Interne aandelen markt en prijsvorming. Externe aandeelhouders zijn niet gewenst omdat hun invloed onevenredig groot zal worden. Interne aandeel concentraties zijn slechts beperkt mogelijk. De voorzitter van de Raad van Bestuur komt - liefst - voort uit de aandeelhouders maar anders extern. Deze persoon neemt externe professionals in dienst die de RvB vormen. Geen RvC. Wel een aandeelhoudersraad (AR) met RvC achtige taken. Product/Markt combinaties met standaarden en maatwerk. Specialisatie. Kennisoverdracht en mentorschap van seniors aan juniors. Jaarlijks legt de RvB verantwoording af aan de AvA over o.a. klant retentie, financiering / liquiditeit, (dubieuze) debiteuren, OHW, claims, winstdeling/dividend. De AvA bepaalt de basisbeloning en aandelenbonus van de RvB op voordracht AR.

Motto: eenheid in verbondenheid.

Chinese pollution - the cost of doing business

For some time I have been arguing with others that China is not a rich country at all as the cost of cleaning up pollution should first be subtracted from the sovereign wealth of China in order to get a more proper image of Chinese wealth. I never quantified that opinion. Until today.

The problem with China are its immense dimensions with respect to size, wealth and pollution. Last weekend I had been thinking how to scale back these immense dimensions. I decided that the only way forward is to divide China's immense foreign exchange reserves by the immense size of the country. The outcome should then be compared with the cost of clean up efforts (e.g., the notorious Volgermeerpolder near Amsterdam).

According to WolframAlpha (a site which I highly recommend), the foreign exchange reserves of China amount to 2.033 trillion US dollars while the size of China is 9.597x10^6 km2 which is 9.5 trillion m2. The size of China is including water areas which makes sense given the enormous water pollution (e.g., rivers).

Dividing these two ridiculously big numbers gives a ridiculously small number: 0.21 dollar cent per m2. Even if Chinese pollution would "only" amount to 1% of its immense size - or 1/1000 - then the outcome of $ 0.21 would only be multiplied by 100 or 1000.

Obviously, I should also include air pollution (in m3) and I should have been using cubic metres of soil as waste may be well hidden under the soil. Contamination of ground water will further increase the number of cubic metres that will once need to be cleaned.

However, what is the use of decreasing the $ 0.21 to a whatever lower number ?? No country will ever be able to clean up pollution with such an expense per m2. Even when multiplied by 100 or 1,000. Technology should of course help driving down future clean up costs. Inflation works the other way around however.

The real beneficiaries of this situation are the customers to whom China have been supplying for years. It is very clear that the cost price never ever allowed for a clean manufacturing process. Business ethics and greed do not go well together. Après nous, le déluge.

In my opinion, China's sovereign wealth is very much different than the public view. This will have immense consequences once it becomes the new public view.

I reiterate again what Abraham Lincoln once said: You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time.

Friday, 2 January 2015


Soms verbaast de Nederlandse politiek me mateloos. Over onbenulligheden wordt een rel gecreëerd terwijl andere serieuze zaken nauwelijks aandacht krijgen.

Kinderspeelgoed kent tal van waarschuwingen en wordt zelfs uit de handel gehaald bij - bijvoorbeeld - loodhoudende verf.

Dierenwelzijn leidt normaliter tot acties in de politiek en bij maatschappelijke organisaties.

Luchtverontreiniging (o.a. op snelwegen) en zwerfafval zijn normaliter prioriteiten.

Brandvoorschriften binnen woonhuizen, winkels en bedrijven worden steeds verder aangescherpt.

Huizenbezitters met speciale daken vrezen de dagen rondom Oud en Nieuw.

De opslagvoorschriften voor vuurwerk lijken steeds meer op opslagvoorschriften voor springstoffen.

En toch vallen er elk jaar weer zwaargewonden onder kinderen en volwassenen, raken dieren totaal overstuur, branden huizen en winkels af, verliezen mensen hun baan omdat bedrijven geen schade uitkering krijgen voor indirecte schade, raken straten bevuild met afval, en raakt de lucht weer verder vervuild.

En toch zijn het slechts eenlingen die aan de bel trekken. Dit keer de burgemeester van Alkmaar.

Vooralsnog krijgen ze geen steun van de overheid. De overheid die bij uitstek zou moeten waken over zaken als gezondheidszorg, milieu, werkloosheid, dierenwelzijn en natuurlijk ook de brandweer.

Ik ben niet tegen vuurwerk. Wel tegen vuurwerk in de handen van particulieren. Ook tegen vuurwerk dat verhandeld wordt door winkels, particulieren en beunhazen.

Vuurwerk is een artikel dat alleen in handen dient te zijn van deskundige en professionele partijen. En met overheidsvergunning. Het dient gecontroleerd tot ontploffing worden gebracht op een plek waar weinig tot geen schade kan worden toegebracht aan mensen, dieren en huizen. Liefst met een groot feest er omheen zodat er weinig reden is om elders rotzooi te trappen en het vuurwerkfeest zichzelf bovendien kan terugverdienen.

Het spreekwood luidt "als het kalf verdronken is, dempt men de put".

Hoeveel kalveren moeten er nog verdrinken voordat deze bodemloze put wordt gedempt?