Naming Rights

I may piss a few people off here, but so be it.

There have been many articles in the news lately about the prospect of Allianz, the largest German insurance company, buying the naming rights to the new stadium in New York. Huge protests and outcry have arisen, as apparently Allianz had ties to the Nazi party back in the 1930s and 1940s, helping them transfer funds and insure concentration camps. People are outraged that such a firm would be considered to be allowed to buy the naming rights of a stadium, let alone in New York where there is a very high Jewish population.

I don't understand it. Any company that wanted to survive the 1930s and 1940s in Germany had to support the Nazi party or risk being shut down (or killed). We have no idea if everyone who ran the company jumped on board happily with the Nazi party or went along (in horror) just trying to keep the company alive. While I certainly don't advocate forgiving and forgetting, there is a point where we have to move on and realize that we are a few generations removed from the atrocities that took place in the World War II era and that we cannot hold grandkids and great grandkids accountable for actions of generations past.

This may sound condescending (and certainly isn't meant to) but I was proud of Rabbi Rosenbaum when he said that we need not live in the past and to move on. The fact is that we could look in most American companies and find things each one is not proud of or something done illegally. Should we eliminate GE and Halliburton from naming rights as well because of evidence of corrupt practices in their past?

They were just one of many companies that existed at that time that supported the Nazi party. It would be different if the stadium was to be named Eichmann, Goehring or Mengaleh Stadium, as these names bring up memories of horrible atrocities. But does the name of Allianz really provoke such memories and pain?

German taxes and social services

It's been 8 days since my last post. Rebecca was sick in the hospital (definitely fodder for another blog post) and there was little time the past week to write.

I was filling up my gas tank this morning, amazed that each time I do so it costs me about $125. And that's for a small car like an Accord or Camry. Based on yesterday's exchange rate, I paid $8.47 per gallon. So I started thinking about why the cost could be so high - the oil producing countries are closer to Germany so not a transportation issue - when I saw a note that said $5.02 of taxes is levied on each gallon. That's 59% of the cost of gas! So an enormous source of revenue for the government.

Then I thought about my paycheck here, as I just got my second one today since my arrival. My paycheck included 34% for taxes (all included - federal, city, local, etc) and 5% for social security. So in all, I actually pay higher taxes here (due to fewer allowances and credits) than I do in the US (though, thankfully, this increase is paid by my firm). And that ignores health care costs (as we have private insurance), but the average German pays about another 6% for health care, which is state run.

So I started wondering where all this tax money went and it became pretty clear - Germany doesn't have the social security and poverty issues we have, their roads and infrastructure are above US standard (approaching fantastic) and the health care system (certainly not as coddling as the US, as will be described in another writing) is efficient and run by the government. Everyone has healthcare.

I would gladly pay the tax rates that Germans pay in the US to help eliminate the above issues (good god, am I becoming a liberal???). The problem is, I have little confidence that the US government would actually be able to implement these German like systems efficiently and without billions of dollars leaking for other undisclosed items that doom the entire reason for the increases in taxes...

As a quick aside and speaking of fuel price, in the US I watch for the lowest price in gasoline per gallon but within a few cents I am indifferent. But here, due to the exchange rate and pricing in liters instead of gallons, a €.01 change in gas price is equivalent to $.06! So passing a place up and seeing it for €.03 higher down the road is $.18 per gallon higher! Just need to alter the mindset a little...

Passion

Many kids have an idea of what they want to be when they grow up. Often this is rooted in simply doing what their parents do or what certain childhood heroes on TV do. The jobs I most often heard kids wanting to be were policemen, firemen or doctors. The first job that I remember wanting as a kid was a rapid transit train driver (and that was before I knew you got to drink alcohol and text message in the cab). Probably a result of the typical boyhood love for cars and trains. Why do I bring this up? Because I don't think I have figured out what I WANT to do when I grow up. I know what I am going to do...which is continue down the career path I have started and am getting closer to achieving what is considered to be the end goal - partner. I go to work, I like what I do, I like the people I work with and know the work I do adds a tremendous amount of value. But I don't love it. I don't get that gleam in my eye when teaching junior staff about what we do or talking to kids about careers in accounting. I don't have a passion for it. In fact, I don't know that I have a passion for anything (besides my lovely wife and children).

Some would argue (I think my wife would, as we had this discussion a while back as we discussed careers) that one doesn't need to have a job or hobby for which they are passionate about. She would rather I work 9 to 5, Monday-Friday, make $35k a year, not travel and be home every night. However, in my mind (and I know in many others), to have a job I didn't enjoy and looked forward to 5 pm every day because I hated it so much, would slowly kill me and the depression from the job would leech into my personal life.

As I think back over the past 10-15 years, I consider two areas that I had a passion for. One was working at the fire department and the other was flying. I absolutely loved the 5 years that I spent as a firefighter/EMT. There was little I didn't like and I couldn't wait to get to work in the morning. I often went in the previous night and slept there to add additional help if needed. Mind you I worked in a town with 3-4 calls a day and don't know that I would want to work in a huge city. But I loved it. Initially I got into it as a precursor to going to medical school. However, the first time I ran in a burning building, I was hooked to both aspects of that life - providing emergency medical care and firefighting. I typically spent 90-100 hours a week at the fire station - working, training new recruits, community education, whatever needed doing. Maybe it was the rush of driving the ambulance lights and siren, the rush of administering IVs or defibrillating patients like my heroes on child hood show Emergency did or maybe the fantastic brotherhood/camaraderie that comes with working at the fire station and an intense feeling of belonging. However, I didn't follow through with my goals of becoming a doctor and dreams of greater wealth than working at the fire department pulled me in a different direction. I have followed up with several communities in the Cleveland area to see what I could offer in the way of volunteer services, but I no longer had the certifications and was too far away from volunteer departments. And god knows I don't have the time for that type of commitment anymore with two young kids. At times I toy with the idea of going to medical school, but trying to figure out how to keep a house, two cars, etc. and paying for medical school is a dead end...

In 2002, I began taking flying lessons and got my pilot's license in 2003. There is no greater feeling than flying a plane. Phenomenal. It opens up a whole new realm of exploration that few people get to experience. I loved every minute of it. It was a cautious love as I was very conscious of the concept that any mistake could lead to injury or death. I often read through flying magazines now and see ads that offer to train you to become an airline pilot over a 3 month period for $50k or so. While the money could be worked out, the idea that I start at the bottom of the seniority list (at less than $40k per year) once again leads to a dead end...

So what is my point? My point is that it is important to follow your passion, your dreams at an early age. While there are always opportunities to back track and try something new, there are often road blocks that make it much more difficult (financial, relationship, geography). While I hope to one day get back into flying and follow this passion (as I have not flown since my kids were born, partially due to time constraints, partially due to some subconscious concern about killing myself and my kids becoming fatherless), it won't likely be for a long time. And the civil service tests for firemen usually stop at age 33. Don't get me wrong - I adore my family and the time I spend with them, I like my job and it provides a fantastic living. Just a part of me misses having a passion, specifically when I see others speak or write about things that they are so passionate about. I wish that I had that same feeling about something. Perhaps my passion is yet to be discovered...

Dual Responsibilities of a Parent

The PRIMARY job of a parent is to take care of their kids, shield them from pain, both emotionally and physically. The minute that child is born, there is no greater responsibility than shaping that child to grow into a caring, self-supporting and responsible adult, capable of raising their own family and making a contribution to society.

Reading the newspaper over the past week has brought tears to my eyes several times. Reading about the Israeli girl who was abused and killed by her grandfather, the woman who carried her boy's dead body in her car for several months and the NY woman who let the stepfather of her daughter beat and leave her for dead has just infuriated me. I could never raise a had to my children, nor can I stand it when I see them hurt physically or emotionally. I commented to a friend the other day that seeing the hurt look in my 20 month old's eyes when she says hello to someone and they don't respond is awful. And I don't understand how someone could ever hurt their (or anybody's) children. There is so much pain caused in kids that is preventable. I want to shield my children from every possible bad thing that could ever befall them - physical or emotional. I want to take them away to some deserted island where no one could possibly hurt them.

However, it would be irresponsible of me to do so as it is my role as a parent to help prepare my children for the hurtful (and good) things in life and help them minimize the opportunity for something bad to happen to them. Taking them away and not teaching them about these things would just increase the chances that they do get hurt when they are away from my watchful eye. The dichotomy of trying to protect my kids and letting them experience the real world as well is a role I struggle with. How much do you let them see and when? Do you watch a bit removed to see how they react to things and then swoop in when they are closer to the line of getting hurt? Or do you let them get hurt (a little of course!) to experience and realize certain dangers?

And it is one thing when we as parents know of the dangers and try to keep our kids from getting hurt - hot stoves, mean kids on a playground, streets. But my heart goes out to these parents in China who were only trying to feed their children and eating food of the shelves in grocery stores, who now have kids in intensive care with kidney stones or worse. The failure that I imagine you would feel as a parent would be oppressive, but it is a failure that could not be avoided. What were they supposed to do? Pull out their home chemistry set and test everything in the grocery store? So incredibly sad that so many parents are now placed in such a situation.

Kids are so helpless and don't understand danger and cruelty. Yet they are faced with it every day in this world. I feel so incredibly grateful that my kids are some of the lucky ones who have parents (primarliy their mother) that are so diligent and observant and are with them constantly protecting them from this cruel world. I just wish all kids could be so lucky...

Is being nice less efficient?

I work in the fast-paced M&A arena where hundreds of millions of dollars (at times even billions of dollars) are on the table and can be made or lost with one mistake. This often requires very long hours, being at the client's beck and call and very stressful situations. However, everyone in my company typically treats each other with respect. In my mind (and most others'), we are all one team and, though one person ends up making final decisions, all equals who should be treated with respect and dignity.

The clients we work for often have their jobs on the line (or even more, their entire net worth) as they decide whether to continue to pursue an acquisition target based on our analysis and recommendations. As such, they are often under enormous pressure. Specifically, our very large private equity firm clients, where hundreds of high powered wealthy people have trusted the PE firm with investing their money and providing superior returns (often greater than 15 and 20% annually). As a means to incentivize the PE team, most of them have equity in the firm as well and will be handsomely rewarded if the deals they end up closing achieve high returns. And vice versa, of course.

We often spend quite alot of time with our clients, many times in a "war room" at the client or target site with the PE team doing the deal. While it is not immediately apparent who is on the PE team and who is the advisor (as we are all typically 25-40 year old white males, dressed and groomed well), spending 10 minutes in the room would allow a bystander to easily differentiate between the two teams. How? The interaction between members of the PE team is hostile, at best. It is so hierarchical in nature that rarely would you see a lower level team member even addressing his immediate superior. And when superiors (the 30 year old VP who has been in the business 5 years) talk to their juniors, (the 27 year old analyst who just finished his MBA) they are so derogatory, insulting and condescending that I am often embarrassed to be in the same room listening to the discussion. Let me give an example:

I sat in a conference room with 5 other people, 3 on my team and 2 on the PE team as we delivered our report. The senior person on the PE team was making a point about some issue and made a reference to a number provided by the target company. The junior person spoke up and corrected him, as he used the wrong number. The senior guy then got up, without a word, went to the chalk board and drew an organizational chart. He was at the top of the chart, his wife and kids were below him, his dog was below his kids and then he wrote the junior guy's name below the dog. Didn't say another word, sat down and continued the discussion. The point being that this team member/co-worker who had a few years less experience in the industry and in life was lower than a dog. Even though the junior guy was actually right, the senior guy would not stand for such insubordination. Nice eh?

Now it is readily apparent where the culture comes from - from the top. I have watched the very senior executives treat everyone below them like dirt as well. And of course once someone gets promoted, they treat those below them like shit because that is how they were treated. I was on a conference call on a large automotive transaction with 278 other professionals on the call. I bill $540 per hour. If the others averaged only $400 an hour, the hour long phone call cost the client $111,000. But I digress....the senior guy was telling everyone how important it was to work their asses off the next few days before the deal closed. And he didn't say it nicely or implore people to finish the deal in a strong performance with great results, such as they have done so far. He said, on Monday, "The deal is supposed to close Thursday. If anybody so much as leaves their desk to sleep, shit or eat in the next 72 hours, you are fired. If you are not available when I look for you, you will be dismissed immediately."

So what do I take from all this? The fact is that the guys in the PE firms make alot more money than anybody below partner in our firm. Many of the 27-30 year olds walk home with $1 million a year due to strong performance of acquisitions. So they tolerate the long hours and working environment. And then they leave after several years and become one of those "command and control" leaders that existed in the 50s-80s that have taken a back seat to leaders promoting a healthy work/life balance.

However, the environment I work in and relationships with my co-workers are excellent. We travel together, eat together and spend time together with our families outside of work as we enjoy each other so much. The collegiate atmosphere fosters learning, camaraderie and harmonious relations, teaching our future leaders and partners the importance of working together with positive attitudes of respect. We always get our work done and are successful in meeting our clients' needs. And our people walk away happy to be doing what they are doing and look forward to coming to work the next day. I can't help feeling that an enormous amount of time and intelligence is wasted in the PE firms due to resentment towards ones' peers and not speaking up for fear of being derided and ridiculed, as well as the creativity that is stifled over the careers of these people as they become leaders of large multinational firms.

Use of Obama's $66 million August donations

So I have been thinking about what the best use of the $66 million in donations Obama recorded in August would be. Is it smear campaigns? Derogatory ads? Or is there another way to spend it that would influence votes more? Let's forget the ethical and legal ramifications for a minute (I will address those in a minute). But what if Obama distributed some of this money to constituents - essentially bought people's vote?

So first of all, I tried to think about logistics and how much money that would mean if distributed to a certain group of people (also to be discussed in a minute). If we take just the amount of money he recorded in August of $66 million and assumed the total voting population is the same as it was in 2004 (just over 62 million votes), we can see below the amount of money that could be distributed, how many people that would effect and the percent of the total voting population.

$1,000 - 66,000 people - 0.1% of vote
$500 - 132,000 people - 0.2% of vote
$250 - 264,000 people - 0.4% of vote
$100 - 660,000 people - 1.1% of vote
$10 - 6,600,000 people - 10.6% of vote

So we can see, based on 62 million voters, that to really influence a large portion of the vote (greater than 1% in my mind, which means 1% more for one candidate and 1% less for another, essentially a 2% swing), you would only be able to distribute $100 to each person. Or $250 per person if you wanted only a 0.8% swing. The question is whether people would be willing to cast their vote for someone (no matter how they felt about that person) for $100 or $250?

Let's say the answer is yes, that there are large groups of people in the US that would be happy to sell their vote for $100. Their view may be that their vote doesn't matter in the grand scheme of things anyhow, or that no matter who they vote for, $100 in cash is more than any benefit they might accrue in the future based upon that person's leadership. Is 1-2% of the popular vote enough to sway things? I would say yes. For Gore that likely would have been the deciding factor, especially if these 660,000 votes are strategically bought, i.e. in a swing state or two where this would guarantee a victory.

One consideration, however, would be the opportunity cost. Where would the candidate have spent the $66 million otherwise and are potential voters lost as a result? For example, does it mean one less campaign trip because the cost of the charter plane was borne by the $66 million? Or perhaps one less TV ad to combat a claim made by the opposition?

So let's talk legal. I certainly have no idea about campaign rules, but would assume a candidate can not simply cut checks or give cash to constituents. This would be the way to do it if it was not illegal as everyone prefers cash. But what about giving out gift cards at rallies or in the mail? While you are certainly not guaranteed to get the person's vote, I would say you would influence a large number of people. So give out 660,000 gift cards to Walmart or Target for $100. Would this be legal? I don't know, though there has to be a point where you could provide something tangible to constituents to get their vote. Candidates provide rides to the poles which is a benefit. So even if providing gift cards would be illegal, there has to be something that could be provided that would influence a vote - something between providing a ride and giving out cash.

Is this ethical? I am sure my ethics professor in grad school (whom I hated and fought with daily, and who walks by my house in Cleveland Heights with his wife all the time, with me wishing I had a little bb gun) would say absolutely not. But why not? How is it any different than Bed, Bath and Beyond sending out their 20% coupons each week to influence you to shop there vs. Target?

So the question I pondered this morning when I was awake at 4:30 am was how much would a candidate have to pay me to vote for them if I was not going to vote for them anyhow? $100? No. $1000? Not likely but depended on how desperate I was. $10,000? They would have my vote. But there are a whole lot of people in this world who are less well off than I that would do it for a whole lot less.