Don't Overlook The Train In Your Summer Travel Plans

Have you already made your Summer Travel Plans?  If you haven't don't overlook the possibility of using trains to get there.

With wife and daughter getting ready to embark upon a trip to Zürich to visit friends, my wife was thinking about driving from Frankfurt to Zürich and hadn't thought about the other possibilities.  She jokingly said that they could take the train and I said why not.  The logic had been that for one person the train might be cheaper than driving by car but for a trip with multiple people, going by car was bound to be the cheaper way to go, especially after you buy all the tickets for everyone.

Since we're now in the middle of Summer Vacation in our region of Germany, many other families are on vacation and so the various autobahns are busier with people going here and there and what was going to be a simple simple leisurely drive could now turn in to a traffic nightmare where you're parked on the autobahn wondering when you'll be able to drive a few feet, let alone actually get there.  Then there comes the next course of how much longer till we get there.  All the fun can quickly disappear on such a drive.  This was also forgetting that while I have often enjoyed some of the longer car trips that I've taken, my wife isn't very fond of them.  I can't blame her.  She's joked about it being an American thing, I don't know maybe it is.  I do remember coming back from a trip to Austria that took us about four hours longer than it should have due to holiday traffic that I now try not to underestimate it. 

Another factor that is sometimes overlooked in the planning/calculations is the wear and tear on your car.  For my wife she was thinking that the cost of the trip would have been a couple of tanks of gas there and a couple more on the way back, end of story.  Since our cars are getting older, we need to consider the wear and tear on our vehicles.  Also, if your someone that is leasing a vehicle with definite mileage restrictions, that trip might very well cost you more than the price of the gas to get there and back.

In the U.S. I didn't travel by train very often, but since moving to Germany I've traveled in them from time to time, taking one daily to downtown Frankfurt for almost a year.  While some trains are nicer than others, they're a definite means of getting places.  A few years ago I did two different train trips in Switzerland and found that that the Swiss take pride in their trains and they can be very enjoyable.  The scenery can take your breath away.  In one one trip we went from Zürich to Jungfraujoch- The Top of Europe (the highest point in Europe that you can get to by train) and you go by this one church from three different points of elevation, if a friend hadn't told us about it, I might have thought that I was seeing things.  Once you're at the top, you can go into a glacier and be warned it is very cold, even in the Summer (burrrr!).  To contrast this trip, we went to Lugano, which borders Italy, so the temperature is more tropical. Both trips were a blast by train and while driving them would most likely not taken us along the same path anyways, the driver can't really enjoy the scenery.

The trains oftentimes offer family packages or other promotions, so it might just be cheaper than you think to go by train.  My wife looked online and found that the price was about the same as she had figured for gas, so she booked a couple of train tickets.  I'm sure that our daughter will enjoy the trip.  Hopefully you can use the train for some of your Summer travels. I hope that you all are able to have a happy and safe Summer vacation.

Photocredit:  Lakeside Retreat courtesy of davidpound.Technorati Tags: travel, europe, Italy, Switzerland, Jungfraujoch, Top of Europe, Lugano

Happy Birthday, America

As America celebrates it birthday, I've given some thought to the Declaration of Independence, the U.S. Constitution, and the Gettysburg Address and the impact that they've had on Democracy throughout the world and on history.

Within the Declaration of Independence you'll find the following text...
"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security." The text used here can be found in Declaration of Independence at the ushistory.org website.

Within the Constitution it is introduced with "We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America." The text noted here can be found within the Constitution at the house.gov website.

In his famous speech at Gettysburg, President Lincoln concluded "that we here highly resolve that these dead shall not have died in vain - that this nation, under God, shall have a new birth of freedom - and that government of the people, by the people, for the people, shall not perish from the earth." The text note here can be found in Gettysburg Address at historyplace website.

A quick survey of some of Declaration of Independence, U.S. Constitution, and the Gettysburg Address do not expressly mention corporations and in fact the development of the modern corporation ocured much later than these documents, although you could argue that corporations have existed prior to the founding of America and did wield some influence, but certainly not the influence that they've wielded since the onslaught of the Industrial Revolution.

I find it hard to believe that the great men that founded and forged America and died for her very existence, would be happy with CEOs making $42 million in a year while planning to layoff thousands of workers and moving more and more work to cheaper labor market where workers have little protections and it is easier to fire them. To these men I didn't believe that "the people" were corporations but the overall population of America. The large corporations and their leaders have become modern day aristocracy, controlling and influencing much of what happens in American government (as well as governments around the world). Much like colonial America overthrew British aristocracy, it is time to overthrow our American aristocracy. Because corporations have grown beyond the reach of the various governments around the world, it is time for cooperation amongst the various world governments to reign them back in. The Declaration of Independence lays the ground work for changing governments when they don't server the needs of the people any longer, by logical extension we should apply this to corporations that are looking after "maximizing shareholder value" all else be damned.

Capitalism and Communism are at opposite ends of the economic spectrum and can be seen as ying and yang. When much of the world headed down the road to Communism, the pendulum shifted back towards Capitalism. At the moment the pendulum has shifted too much in the direction of Capitalism and forces will eventually swing things in the other direction as the focus of various social issues will move things that way. Debates are being held about health care, retirement benefits, and so on. People will eventually realize that there are some basic benefits that if not provided by employers, can't be paid by the employees (because they don't have the needed extra money to fund such things) and therefore will need to be provided by the government. It should be noted that Health Care and Retirement are complicated items that require more discussion and explanation that I can give them at this point, maybe I can go further into them at a different time.

I'm not arguing that corporations shouldn't exist, but that corporate laws need to be revised to make them more responsible. Corporations should have a feeling of responsibility to the communities that they do business in. While this should be common sense, it seems to be often forgotten. Most businesses work hard to develop some sort of brand image through advertising, marketing, and so on, but by doing harm to the communities that they do business, they can do harm to their brand image. The people in the communities that have been harmed by these companies can and should start publicly boycotting goods and services of these companies and make the companies aware of why they're doing so.

Corporations should have a feeling of responsibility to their employees. Employees are typically one of the greatest resources that they have, but now a days management keeps trying to eliminate benefits, move jobs to cheap labor countries where the employees are easier to fire, and in general demoralize and demotivate the employees. While employees don't need to be given everything under the sun, most of them would like to earn a decent wage with some sense of security that their jobs will be there next year. Employees know their companies products and services, have lots of idea about how they can be improved, and even how sales could be increased, and possibly ideas about getting into new market areas where additional profit could be made. Employees can give management a sort of sanity check on ideas, policies, and so that should be discussed further before being implemented, but these need to happen in an environment where employees are respected, not loathed.

The tenet of maximizing shareholder value needs to be reviewed as well as compensation that top executives receive. When someone starts a company, most people will do so for a variety of reasons, but most people want to see their company exist for the long-run, they're willing to invest their own blood, sweat, and tears to grow their companies and are willing to make investments in programs that shareholders might view as costly and not providing return quickly enough. Many of the IPOs (Initial Public Offering) that have gone public are on companies that have already made a name for themselves, but how many of the people that got in on the IPO would have invested any money into the company at initial start up, when the risk was a lot higher, probably not. The point here is that a mechanism needs to be in place where the long-term health and viability of companies is looked after. Would companies be so willing to off-shore so many jobs if they knew that there'd be a public backlash in a few years with irerupuble damage done to their company image, possibly even making the company's position weak and ripe for takeover or failure? Executives are rewarded for driving up the share price, but this is so often a game today. Stock prices can and often are manipulated, so that executives get their bonuses and Wall Street rewards them for cutting jobs. Since most executives don't plan on staying at their current jobs for the long term, they have a short time horizon and aren't concerned so much about the long term health and viability of the company, in fact many exectutives receive bonuses if they "sell" their company. So they can play some games to get the stock price up, sell the company, get their bonus and leave with a nice "golden handshake". One departing CEO from a company received $50 million for "selling" his company to another and leaving by the end of last year. This same CEO was only CEO for a year, if that.

Revolution did happen in America in 1776 and can happen again. If enough people lose their jobs and aren't able to find good ones to replace them and enough people lose their homes, companies doing business in America (and since America is the biggest economy in the world, this is a lot of companies) should worry. Companies need to see the writing on the wall and make the necessary changes before changes are forced on them.

Photo credit: American Pinwheel courtesy of reznor70.

Changing Corporate Royalty

In the 90’s management realized it was more profitable to screw the employees than to sell more product- Scott Adams ”The Joy of Work”

Employee happiness and the company’s stock price are inversely related- Scott Adams “The Joy of Work”

I don’t know about you but I’m tired of today’s heartless multinational/global corporations that don’t seem to care about anything other than generating profit that is largely unsustainable and unrealistic. Companies seem to be running on Dilbert logic and common sense seems to have been thrown out the door with the bathwater. In an era where General Motors and its one-time subsidiaries are taking drastic actions in their fight for their very survival, we have other companies laying off workers (and moving the work to cheaper off-shore locations) when they’re making decent profits and it isn’t necessary for the company’s survival, but only to make profit look better this quarter. The larger the companies get, the less innovative they become and the more focused they get on gobbling up competition.

Remember back when the Berlin Wall and communism fell? I was probably naive back then to think that the world had evolved into a better place. While I never really thought that one of the two super powers would push the “button”, it was a big relief to know that the U.S.S.R was no longer trying to “bury” us. The euphoria of the demise of Communism (Soviet style anyways) has given way to panic induced by globalization and the quest for profit at any cost and a quest to “maximize shareholder value” no matter the cost and long term ramifications and Wall Street speculation has shown that it needs more regulation or at least regulators that are doing their “jobs”.

For a while now I have felt that there is more to life than the functional economic terms that we’re all labeled with. After all, don’t we all feel that we’re more than “consumers”, “workers”, and “tax payers”? Don’t we all want to be more than “users”? Before drug use permeated our society, being a “dealer” wasn’t a bad thing. People could argue that Communism as practiced by the Soviets and Chinese was not what Marx had in mind, but Communism minimizes the role of capital and without people willing to take a chance and invest their capital in the hopes of being rewarded for their investment, many of the things that we’ve taken for granted over the years might not have come to fruition (or would they?) But Capitalism tends to belittle the contribution of the “worker”, who is largely responsible for the creation of many of the products and services that we all need and use. The system largely creates an “us” and “them” between management and the employees, with management more and more focused on reducing the cost of employee compensation and benefits, more and more moving work to “off shore” locations where labor is generally cheaper and there are less protections and rights for such workers, in an effort to “maximize profits” and “reduce the bottom line”. Management seems to have forgotten what an “asset” their employees can be and tends to look at them solely as a resource or a commodity needed to create their product or service, one of the largest expenditures on the cost side of the ledger.

Capitalism is largely Darwinism (survival of the fittest) applied to economics and largely an aristocracy based on the divine right of kings, where the king has the largest say in government. At the center of today’s economic aristocracy is the corporation, whose authority is based on the divine right of capital. Shareholders are king and their interests dictate and control all (along with the greed of top executives). The primary goal for sometime has been to pay shareholders (and executives) as much as possible while paying employees as little as possible, moving work to cheaper and cheaper labor markets (whenever possible, regardless if it is truly a good idea or not and if it is even in the long-term interest of the company) and all the while the public good is ignored. Stepping outside of the forest, it can be seen as quite a departure from democracy and often at odds with it.

There has been a lot of discussion about executive compensation in the last several months. Dirty deeds…done by chiefs discusses how the Government requirement to disclose CEO pay has resulted in more comparisons between CEO pay and more and more CEOs comparing up and driving up the compensation. It also pointed out how shareholder votes held over CEO compensation packages are non-binding and it is hard to get a no vote among the institutional investors. Malcolm Turnbull has suggested that the shareholder vote be binding and that over turning it would require a special (and expensive) shareholder session where the directors come back with a more acceptable package. This would act as a deterrent, making directors present something more acceptable the first time. New CEOs would be hired on what the previous made pending shareholder approval. The article also mentioned that governments could voice their community’s disapproval for excessive pay by removing the company's tax deduction for salaries in excess of (the desired limit) or salaries in excess of (set limit) could be taxed in the executive's hands at the penalty rate (the desired rate).

A problem that I’ve noticed at many of the publicly traded companies is that the CEO and Board of Directors are only looking to “maximize shareholder value” but this means that nobody is really looking after the long-term interests of the company. In companies where an owner or owners exist, the owners care about the long-term success of their companies because they’ve invested their lives into the company. But in publicly traded companies, the CEO and other top executives are compensated for driving up the company’s stock price (often this is done on a short term basis); where investments, research and development, and the company’s long term health are often stymied. Companies also don’t seem to care for the communities where they’re located and do business as well as their customers and clients. Many companies don’t even think twice about off-shoring thousands of jobs and what effect that will have back home (and the families that can be devastated by those lost jobs). They also don’t seem to take into account the quality of service that they provide to their customers will likely be degraded, at least while the new location gets the necessary experience to do the job. Many of these companies have squeezed their communities for tax brakes, only to move the workforce away when the tax breaks and other incentives were near expiration and the community might actually see a return on those tax breaks. Never mind, that the communities needed to find their tax revenue elsewhere while waiting for the tax breaks and incentives to end and now they need to find other revenue (something more and more challenging for communities today).

Toppling the Corporate Aristocracy is an interview with Marjorie Kelly, author of the “Divine Right of Capital: Dethroning the Corporate Aristocracy” as well as the cofounder and publisher of the bimonthly Business Ethics publication (http://www.business-ethics.com/), in it she explains how she believes that corporate law will be changed and Democratizing economics is inevitable. Kelly says that corporations exist today only because we have passed laws that allow them to. The Declaration of Independence asserted America’s right to change or eliminate government that doesn’t serve the public interest any longer and that this same right can and should be applied to corporations: to change the rules governing the corporate form itself, making corporate governance more democratic rather than aristocratic.

Marjorie Kelly indicates that there can be a difference between publicly traded companies and private companies, saying “I prefer to make the distinction between private companies and public companies. When an individual or a family own all the shares of a company they have the option of managing in a humane way, putting quality of life for employees or the good of the community ahead of shareholder gain. But when a company goes public and its shares are widely held, managers don't have this option. Managers reluctant to make layoffs, for example, can be forced out in a hostile takeover or fired by the board. Public companies often pursue profits even if at the expense of the public interest and employee interests. Private companies can do the same, but at least they have the option of something else.”

When talking about socially responsible business, Marjorie Kelly says, “Over and over again I've seen the failure of voluntary change by individual companies. They might announce family-friendly policies only to turn around and lay off tens of thousands of workers. They pursue environmental stewardship, but only to the extent that it enhances their bottom line. Companies become generous corporate citizens, but then demand far more in tax breaks. I had hoped socially responsible business would have caught fire by now, but in fact, the reverse is happening. Companies are becoming more ruthless, more focused on the bottom line. After more than a decade of seeing the promise of socially responsible business thwarted, I came to ask myself, "What is blocking this change?" I believe there is one obstacle-the legal mandate to maximize returns to shareholders. When the interests of capital are primary, it's wealth discrimination. Until we turn and challenge this premise as illegitimate, and change the institutions that support this premise, all our efforts of social responsibility will fail.”

When asked how legally mandating maximizing shareholder profit stopped companies from being socially responsible, Marjorie Kelly says “Corporate law as enforced by state courts dictates that corporations maximize profits for shareholders. This law requires directors and officers to put shareholders' interests before all others. The law says nothing about companies protecting the public interest, the health of the environment, employees or the community. Executives who want to manage responsibly can find themselves fired or subject to hostile takeover-so the idea that enlightened CEOs can really manage in a responsible way is a fantasy. It's a system-design issue, and we are all caught in it…The premise is that good people using the tools of ethical analysis will make socially responsible decisions. But moral individuals only take us so far when the rules they are legally bound to follow say they must put shareholder interests above all others. At some point you have to look at system ethics: what behavior does the system encourage or require? To rest our hope with ethical leaders is like waiting for the philosopher king. At some point you wake up and realize aristocracy itself is the problem-and you move to democracy-you don't wait for justice and equality to show up in some noble leader, you build them into social structures.”

When asked how the law could be changed to allow corporations to be more socially responsible, Marjorie Kelly said “Ultimately, we must design a corporate system in which all economic rights are equally protected, not only the rights of shareholders. In keeping with genuine free market principles, we should put wealth in the hands of those who create it, which is employees, and we need a new economic principle that says corporations have a responsibility to the public good. Ironically, our system now discourages public corporations from service to the common welfare. In the future we must require such service. At the very least we must require that the public good not be harmed. As for how we accomplish this, our laws need not prohibit every possible means of harm-pollution, relocation, unfair termination, and so forth. Instead, they can stipulate broad loyalty to sets of interests and subject corporations that violate those interests to lawsuits. That's how shareholders enforce their rights, and we could extend the same tool to others.”

When asked what people can do to make corporations more responsible, Marjorie Kelly said, “We start by changing our minds, by changing our internal pictures of reality that tell us shareholder primacy is normal and legitimate. The way to do that is with pranks. How did the American Revolution start? Not with writing laws, but with folks dressing up like Indians and throwing tea off ships. It started with a prank. Same with the feminist revolution, where women crashed the Miss America pageant, and did a sit-in at The Ladies' Home Journal. We need some great pranks. I'd love to see some folks stage a sit-in at Business Week or Fortune, and refuse to leave until they put out a special issue on economic democracy. Or, in the spirit of Rosa Parks, refusing to sit in the back of the bus. How about employees running John Q. Employee for the board of directors? They could put up bogus campaign posters all over the company and wear sandwich-boards at the stockholders meeting: "No Governance Without Representation." It might lead to some interesting conversations with the press: why can't employees run for the board? Aren't employees part of the corporation? We can think of these as Tea Parties, like the Boston Tea Party. At our web site, DivineRightofCapital.com, we're hoping to encourage Tea Parties like these around the country. I would encourage your readers to visit the site and share their ideas. Pranks help us wake up. And they allow us to have fun along the way-which is the only way to do things, when you are a marginalized group fighting a huge entrenched power. You've got to be light-hearted. You need esprit-de-corps, so you don't feel overwhelmed. The aim is to educate people that the problem isn't greedy executives or evil individual corporations like Exxon. The problem is the system design. The problem is state law that says corporations exist only to maximize gains for shareholders. In the end, we need to get activists focused like lasers on these laws. Most of all, we need hope. We need to know in our heart that economic democracy will prevail, because it will.”

Marjorie Kelly is optimistic about business being able to evolve and be more socially responsible saying “I am optimistic, because democracy is an unstoppable historical force. To quote Alexis de Tocqueville, ‘Can it be believed that the democracy which has overthrown the feudal system and vanquished kings will retreat before tradesmen and capitalists?’ It may seem that financial powers are omnipotent today, but the power of kings was once as great. The monarchy was a nearly universal form of government for two millennia, until a tiny band of revolutionaries in America dared to stand up and speak of equality. They created an unlikely and visionary new form of government which has since spread throughout the world, and today the power of kings can be measured in a thimble. Democratizing economics is no more unlikely a task than democratizing government-in a sense it's only finishing the task. It won't happen overnight, but it's a good bet it will happen. Major system-wide change is possible. It happened when the monarchy fell, and it can happen again. The lesson of history is clear: democracy always wins in the end.”

Like Marjorie Kelly, I too hope that we can see more economic democracy and that we can see some common sense and a focus on the long-term health of our companies and concern for the communities they exist in as well as the people that employ and the companies’ customers. Companies that don’t care about their employees (paying outrageous bonuses to their top executives while getting ride of or off-shoring their workforce en masse) and don’t care about their customers need to be given the message that we won’t stand for this any longer.

Photo Credit: New York courtesy of createsima.