How Japanese companies are wiping out shareholder value?

Just how many times have we heard that Japanese equity markets have been stagnant for last two decades? Analysts and economists around the world have elucidated various reasons behind it and occasionally suggested solutions on how Japanese companies and its respective management can improve the situation. Many upbeat economists have highlighted that Japanese equities are one of the cheapest in the world and trading below their net asset values, citing fundamental ratios such as Price-to-earning, price-to-book value etc.  Recently Financial Times wrote a big piece on how investors are relinquishing Japanese equities due to equity dilution and lack of focus on shareholders’ value. Shareholders, especially foreign shareholders, have often castigated Japanese companies for not caring about its shareholders and treating them like a third cousin.

We may look at the structural and fundamental problems, but the issue is more chronic. It is like layers of onions and as one peels a layer only to discover yet another layer and then some more. The problem is cultural than structural. The problem is behavioral than benightedness. The problem is about rigidity than ineptness. The problem is about challenging the status quo than lack of creativity. And finally the problem is more about complacency than objectivity.

Any amount of data crunching, reading balance sheets and meeting company management would not explain why the Japanese companies continue to falter. Failure to adapt to the changing world is like a sharp razor blade that is killing profitability and share holders’ value. One would think the problem persists in smaller or newer companies, but surprisingly it is predominant in established, larger firms that are not only unable to create shareholders value but even destroy the century old brand value that was once created on the same principles of strong leadership, efficient operation and maximizing shareholders value.

In next few series, I’ll try to peel some layers of issues within the Japanese financial & services industry. Let’s start with the very top layer - the management layer. I think everyone would agree that having the right leadership and management is a key to success for any company.

Japanese companies work within a very rigid framework, so human resource management, consensus-based-decision making, ineffective communication style etc is impossible to change, irrespective of how grave the company situation is. Naturally only a Japanese manager can adapt to such rigid structural framework, and so Japanese companies do not want to put a foreigner at its helm. Japanese corporations have an inherent distrust for foreign employees and executives. Not surprising that Foreign-to-Japanese executive ratio is very low, and even when a firm occasionally decides to hire foreign executive, it is often viewed as a transient role. The result - only a handful of foreign executives in Japanese corporations compared to companies in any other developed country.

Without any prejudice, Japanese executives are equally competent to their foreign counterpart, so Japanese executives should be evaluated at par with foreign executives equally during the selection process, especially when a company decides to expand its operations beyond its traditional realms, or has been reeling under losses for years.  In such cases it should appoint executives with the deepest experience to turn around. Take for instance, the board of all listed companies in Japan and compare their background with their global counterparts. The result is shocking – almost 95% of the management has no experience of working with any other company outside that specific employer.

Japanese companies strongly believe that employees who have worked in only one company for their life and done his rounds within various departments of the organization have the best knowledge on the company and its problems. Yes, that is true in certain industries such as assembly, manufacturing, industrial design etc but not in a dynamic services industry. Undoubtedly, it is always useful to have an insider who is groomed to take the helm of the company, but if the company does not have an eligible candidate, companies should certainly seek the right candidate externally rather than picking someone just because he belongs to the fraternity.

Companies, especially larger corporations have a profound impact on any economy, so it is critical for the top management to have a deep understanding of the culture, language, political and regulations which a foreigner might not have. In such cases, companies can adopt a Co-CEO policy, clearly defining the responsibilities and boundaries within which each CEO would operate in.

An interesting point to note is that Japanese companies believe that it is crucial for Japanese executives to understand the culture and business style in Japan but that doesn’t hold true for its overseas operations. Almost all Japanese companies put Japanese executives to run its overseas affiliates and subsidiaries irrespective of the country or product. With an exception of extremely few managers, can someone explain on how a person who has never worked outside Japan nor has a track record of building successful businesses can suddenly go and contribute to run its Chinese or Brazilian or Nigerian operations?

Japanese management have diluted its equity on many occasions in its quest for expansion and acquisitions, only to pay extremely high premium for targets and wiping off the value of the target company and its own shareholders; just by one simple act - replacing the management of the target company with its own employees.

Life-time employment and low compensation is another double-edged sword that Japanese companies dangle on its management. When one knows that one will not be penalized for under-performance or mistakes, nor will be rewarded for its achievement then there is no real motivation to grow shareholder value. The only motivation remains is self-preservation and getting the right role within the right department and office that provides highest perquisites. One reason for such behavior is Japanese executives are paid in cash rather than stocks, and therefore worry less about stock prices and shareholder value.

Surprisingly this is the same country where we had visionary leaders such as Konosuke Matsushita, Akio Morita, Sakichi Toyoda and Soichiro Honda, who not only laid a strong foundation and transformed their respective companies but the whole industry and nation.

It’s about time for Japanese companies to realize that it takes a lot more than knowing its company and Japanese culture to bring true value to a company, shareholders and the nation as a whole. The world has changed and Japanese domestic business is shrinking, so it is better to change than to be forced out. The statement may sound radical and extreme, but if you give it a time horizon of 15-20 years, the reality will slap your face harder than you know.

Sedate your time at Can Dao, Vietnam

Cities I dwell in surrounded by friends
Friends who fill my loneliness
Only to cast away from friends into remoteness
Isolated and desolated islands with sand in my hand and wind on my face
Peace in mind and no more the chase

When I look at the globe, Hong Kong is marked with a small dot, but yet home to almost seven million people. In this vertical city, like many other metros people eat, sleep and breathe chaos. Not surprising that very often I feel like running away from the claustrophobic trains, crowded markets and smelly taxis; run away to far far away islands where all I’ve is Mother Nature.


This time, we decided to once again explore Vietnam and took a trip to of Con Dao, a cluster of 16 island at the southern tip of Vietnam. Islands that served as prison cells during the French Colonial era and later Saigon regime imprisoned the opponents of the regime in its infamous cells known as “tiger cages”.

That was past, but now it serves as life cell to boost life into people like me, searching for isolation and seclusion. The islands have got everything that one can ask for and one could very well live “Eat, love and pray” life on these islands.

Like every other emerging country, there is some chaos in this country but it is good chaos; chaos that makes your trip memorable. Before we even started the trip I got a notification that Vietnam Airlines has canceled the flight from Con Dao to Saigon, forcing me to stay additional day/s on that island. Unfortunately I could get a seat on another airline – Air Mekong, only to cut my stay short by a day.


Ninety percent of tourists in Con Dao are local Vietnamese people who visit the island for its interesting and rich history, and many to visit the graves of 20000 or so prisoners who died here during imprisonment. This means that the island is not spoiled by a splurge of hotels catering to the rich Chinese and Russians. But that was true only until recently when the first luxury resort was opened by Six Senses. And there you go; the island will now be on a fast track to becoming a booming tourist destination filled with McDonalds, bars filled with loud sub-whoppers and “happy ending” massage places. But I shouldn’t be complaining, at least not yet.

Like most foreign ignorant tourists, we booked ourselves at the luxurious Six Senses resort. The resort which is built on a beautiful beach has all water-front villas and most of the all wood villas have private infinity pool. The staff is very friendly and service impeccable. All this naturally comes at a price, but with cheap money funneled by central banks around the world, money is a problem for another day.

The island is also a breeding ground for turtles that come on the island to lay eggs from June to September every year. It is something not to be missed, so I have heard. I was so busy that I didn’t find time to do any activity. My days were packed with beach, pool, nap and beach again. I had to top all of that with good food and beer. Yes indeed, it was tough but I somehow managed to fight it for few days.

With very few tourists the beaches, forests and lagoons are unspoilt and untouched. Mostly you will have the whole beach and ocean to yourself. It’s a natural paradise, at least for now.

“Ja jee le apni zindagi” (Go, live your life) as famously said in a Bollywood movie.

Why Marissa Mayer should close down Flickr?

I’ve used Flickr for years and with every passing year I felt the value of my “paid access” diminishing to the extent that this year I decided to give up my account.

I’m sure Flickr is providing some value to a handful of users, but I’m speaking from a common user’s perspective who seeks good service at a good price, with an important option to switch services if a better alternative comes along. So why did I use flickr in the first place. 3 simple reasons:

1. Share photos with my friends and family
2. Backup my photos on the internet so that I can still access them if my house is robbed
3. Access these photos with ease in any part of the world that has internet access

So what has changed since then?

1. Over time I found it easier to share photos with friends and family over social networking sites such as Facebook and Twitter.
2. With cloud computing, there are full blown services that provide back and storage of your entire hard drive, making flickr an invaluable proposition with just its photos and videos.
3. I may not be an expert on this topic but I see accessing photos (or data) from cloud drives is much faster and easier for repetitive use. So for e.g. if I access a set of photos once from dropbox, it downloads on my device making it easier to reuse it while flickr would go back to the server every time I access a file.

Now elucidating a bit more on #2, if a customer rents a storage space, he is a legal owner of the goods stored in that space and should have the freedom to take it out anytime.  But flickr seems to think otherwise and has a one-way policy where once you get in you cannot get out. It is amazing business model but completely illegal is my view. So it kills my objective of using flickr as a backup if I cannot download back my files if for some unfortunate reasons I’m burgled of my hard drives and computers. 

I’m sure there are thousands of customers globally feeling cheated the same way I do, especially the loyal customers who have stuck to flickr over the myriad number of free services.

I’m not even talking about some of the other complaints that customers may have related to picture sizes, file types, mobile access etc which may be point of consideration for moving away from flickr, but I’m talking about the basic premise of a storage and photo-sharing site. So it is time to bid adieu to flickr forever with my farewell words “It was nice meeting you and I just wish you hadn’t ripped me off and we ended this relationship on a better note”

Disclaimer: The opinions expressed are my own.

Piquant Penang

Two guys are walking up and down, their eyes fixated on people to make sure that no one is engaged in prohibited activity. I bend my head, trying to hide behind a seat, making sure that no one is looking and sneak out a packet from my bag. Just then, hungry eyes prowl on me from two seats away, sending a message “I want a cut or I’m calling in”. Ignoring him, I take my chances and put the chips in my mouth indulging in piquant pleasure. 

This is not a story from the war front, but from AirAsia flight where passengers should buy food (and even water) on board or face starvation.

I was headed to Penang, the food mecca of Asia and I was not ready to succumb to airline food.

The destination - Penang

Penang, an island occupied by many different forces including the British, Germans and Japanese historically. A city was once a staging post for the opium trades between India and China. A city where East India Company auctioned off licenses to gambling dens, brothels and opium traders (which accounted for approximately 60% of colonial Penang’s crime). A city that was bombed during wars, rocked with riots and bloodsheds between civilians. An island that continues to charm and attract people from all around the world with its colonial street names, heritage buildings and most importantly its fascinating food influenced by various ethnic groups that migrated to this little island over the many years, since it was founded in 16^th century.

The food (Muthu’s banana leaf rice)

I’m a big fan of Anthony Bourdain’s “No reservations” because he manages to explore some of the best food in every city. I wish I had more time to explore the unexplored, but given the time constraint I normally just create a list of cuisines/restaurants, following the traces of other popular food enthusiasts.

Based on Anthony Bourdain’s recent trip to Penang, I had already put Muthu’s on top of my list, which serves traditional banana leaf rice. A small, shabby looking hidden den without any sign board is very easy to be overlooked. Even if you did manage to take a sneak peak, you would quickly write it off, thinking of it as a place that serves food to the less privileged. This little place without any décor or ambience has a high turnover where customers don’t sit sipping drinks and gossiping. The rule is simple: sit, eat and get out.

Don’t let your eyes deceive your taste buds with the trashy ambience, and just relish the food, which really explains why the Portuguese and British traveled all the way to the east in search of spices. The spices seemed to be in perfect harmony, reflecting the skills of the chef who can use the same set of spices to create so many different flavors.

Unlimited rice, assortment of curries, pickles, curried meat/fish etc would cost you less than two dollars. Obviously there is a reason that there is no sign board.

Some more food (New Lane Hawkers food)

We decided to explore the popular New Lane hawkers’ street. The lane was buzzing with numerous small stalls. Looking at all those stalls, I felt like a little boy left alone into the candy store.

The long queue at the Char Koay Teow stall was not going to dampen my spirit. After a 30 minutes wait, I had my prized treasure in my hand. The prawns, eggs, chilly, clams and flat noodles cooked perfectly in a wok, over burning hot charcoal, exquisite blend of texture and taste. This one dish was worth the trip to Penang. We also tried few other dishes but nothing could beat Char Koay Teow.

And then finally some more food (Halal food at Restoran Sultania)

It was already Sunday and it was time to go back. Time was slipping away but our quest for good food continued. Like a little kid, the more we got, the more we wanted. We had already tried Malay and Indian food, and Halal food was next on the list.

We decided that if we cannot stay back for dinner, why not take dinner with us to Hong Kong. We got packed two portions of chicken biryani packed from the halal Restoran Sultania. When we reached home, we make some lentil curry, popped open a bottle of wine and continued to relish Penang delicacies.

At least you have a job

The newspapers are filled with headlines “Bank of America to lay off 30000 people”, “HSBC to cut 25000 people”. The bigger the number, the more the gossip on the streets, especially over the evening drinks at LKF; a street full of bankers, ex-bankers and future ex-bankers, drinking and bitching about recent financial crisis. If someone with a job even got a chance to bitch then the unanimous response is “At least you still have a job and get your monthly pay check”

Pondering over this statement makes me throw up because it forces me to be content with mediocrity than chasing growth and success.

The recent financial crisis has forced banks to lay off thousands of people in order to improve their balance sheets and regain shareholders confidence. In many cases, tax-payers money was injected into these banks against a demand to reduce risk taking activities and make their balance sheets sound. This has in fact worked contra to the tax-payer's interest by making companies inefficient and forcing them to operate below excellence levels, thereby putting more pressure on the economy and governments, and creating more unemployment directly and indirectly.

This false illusion is not only making companies, including its leaders and managers, more risk averse but also pushing them to act towards self-preservation rather than growth. This is certainly not the objective of individuals, teams and the companies as a whole. Many of the individuals in banks come out from elite business schools where they are taught that crisis provides opportunity; that their girth is measured by the goals they set and efforts they make to chase those goals, and not by preserving a job.

The desire, reason and way of self-preservation is sometimes obvious but in most cases hidden under many layers of company bureaucracy. Surprisingly in most cases the drive for self-preservation comes from self-realization that they are actually not competent and have been riding on the back of smarter people in the organization. Yes realizing that they are part of 80 and not 20 in the 80:20 rule of most companies. In some cases, employees have got richer by the desire of certain organizations to become bigger without any strategy, pushing them to hire mediocre people with fat packages to drive growth but eventually falling on their faces. 

The most derogating of all is the lifetime employment concept, which promotes the idea of job security rather than performance. For a believer of free capitalism, the concept of guaranteeing life-time job, irrespective of his contribution to the company is as fatuous as it can get. In companies where employees are not rewarded and promoted solely on their performance provides opportunity to incompetents at the cost of another deserving candidates. It is like Sports committee telling Ussain Bolt that he cannot compete in Olympics because they promised a particular individual life time participation in sprinting.

Some of the employees have been successful in preserving their “precious jobs” due to company policy of hiring freeze which is forcing managers to keep under-performers. Anyone who believes in talent management knows that the only way to deal with under-performance is to replace them. 

When employees work towards self-preservation, it increases “workplace politics” which is like playing hunger games where the only way to survive is to kill others.

What we need to hear more from individuals and companies is that “Lets adapt and win”. That statement signals commitment, confidence, drive and ambition. How often have we heard that human capital is the biggest asset of a company and how often have we seen companies and managers brushing that thought aside as one of the “good to have management principles in our mission statement”?

We get excited and cheer winners in all facets of life. We celebrate when new world records are set. Why is that? It is because individuals and teams are supposed to excel at everything they do. It is because we are supposed to raise the bar. It is because the objective of working is to reach new heights of success. It is because our action defines the work place, the society and the world.

When companies perform sub-optimally it has a cost not only for its employees, owners, shareholders but for the economy as a whole.

For individuals who are trying to stay content with just a job, let me quote Ayn rand 

“In the name of the best within you, do not sacrifice this world to those who are its worst. In the name of the values that keep you alive, do not let your vision of man be distorted by the ugly, the cowardly, the mindless in those who have never achieved his title. Do not lose your knowledge that man's proper estate is an upright posture, an intransigent mind and a step that travels unlimited roads. Do not let your fire go out, spark by irreplaceable spark, in the hopeless swamps of the approximate, the not-quite, the not-yet, the not-at-all. Do not let the hero in your soul perish, in lonely frustration for the life you deserved, but have never been able to reach. Check your road and the nature of your battle. The world you desired can be won, it exists, it is real, it is possible, it’s yours”

The Balkan Journey - Chapter 2: Croatia

Trains are my favorite part of the journey. It gives you a real sense of travel as you breeze pass the small houses, farms, railway stations; waving adiós to people, but really sending them a telepathic signal  “yes, I am going to explore new places while you continue with your usual boring life here”. So I took a lazy train, albeit it was tagged as express, from Budapest to Split to explore the beautiful landscape of both the countries. It was an unique experience, least to say, from the point I boarded the train.

At around midnight we saw some gypsies on the train, only to realize they were border control officers, on board to check our passports.

I handed over my passport and he asked me annoyingly,”I need a photo id of yours”

I replied hesitantly “I just gave you my passport and that is my photo id”. 

He looked at me irritated and commanded in a clear, loud voice “I need some other id so that I can make sure this passport is real”.

I searched my wallet and handed over my Japanese driving license (which is all in Japanese but had my good old picture). The officer matched the picture of the passport to the license, stamped my passport happily and moved on.

Lesson learned “If you can’t convince someone, then confuse them” and that is exactly what the officer did to himself.

Early morning we caught the first glimpse of Split, and it looked absolutely picturesque, but as soon as I got off the train station, the feeling of  “most beautiful city in the world” or “Mediterranean summer”, as the locals call it, vanished quickly. It seemed more like a busy port, full of tourists and back packers who were waiting for small boats to luxury yachts and mega-ships to carry them to “far far away islands”. First impression can be deceptive though. As you roam around this historic city, centered on the beautiful Diocletian palace, you quickly get mesmerized by its beautiful architecture, squares and churches.

By the day, you can explore the small shops in and around the palace, walk on the waterfront, enjoy kremšnite (creamy cakes) at its numerous bakeries and cafe or simply sunbathe on its small but characteristic beaches. By the night, you can have drinks at the small bars lined up on the steps inside the old town or groove your move at the many clubs on Bacvice beach where partying strictly starts after midnight.

One of my stranger-waiting-to-be-friends from Split told me that food in Split is simple and boring yet flavorful and scrumptious. The food is influenced by many different cultures and regions such as Slavic, Hungarian, Turkish, Greek and Italian, naturally making a very interesting cuisine. Some of my favorite spots

Konoba Nikola – A small restaurant just outside the city serving simply the best grilled fish and sea food in the whole of Split. Mostly popular among locals, you will not know this place unless someone spills out the secret.

Konoba Marjan – Near the waterfront towards Marjan hill, this small restaurant serves delicious fish and is rated highly on all travel websites.

Zrno Soil – A relatively new name in the small list of upscale restaurants, with a breath-taking view and equally amazing food.

Pizzeria Galija – One of the oldest pizzeria. Good food but poor service. Don’t bother to order anything other than pizza.

I am sure there are many other experiences in Split and I wish I could try them all, but as a traveler I had to move on to explore a new unkown.

My trip to Croatia was more like a teaser as it was short-lived and did not take me to any popular destinations such as Dubrovnik and Hvar, but it still showed me Split - a jewel in the crown of Croatia. 

The Balkan journey - Chapter 1: Belgrade

As a 35 year old teenager when I decided to visit Serbia, all my friends grinned that I picked up that destination due to its popular nightlife. Having been there I’ve to admit that the night life is sensational and popular for good reasons. Apart from the undeniable reasons, I did not expect much out of the Balkan nation that is known for all the wrong reasons, including its history of fighting countless wars. For me it was a thrill of exploring a new country especially with a Serbian friend who happened to be in Belgradeand generously offered me to show her city.

Just after landing in Belgrade I was very disappointed to see, what can be called a modern infrastructure. I come from India and given the hype on emerging countries like India and China, it was disappointing for me to see that a country like Serbia can have such good infrastructure, especially a nation that was bombed just two decades ago. I am not sure which part was disappointing, that Belgrade had such good roads or unadopted Indian roads that are like a slap on your face as soon as you land in the city.

Driving from the airport through the new Belgrade to the old Belgrade is like cruising through a time machine at instant speed. All the history that you have read about the Balkan nation starts flashing in front of your eyes as old historic buildings, graffiti on walls, orthodox churches, bombed buildings, empty hotels, hot Serbian gals and we-do-nothing youngsters sitting in numerous cafes all over the city.

The city is like none other in the Balkan region or even the whole of Europe. At the confluence of two large rivers the city has a character like none other. The city is like the wine that is complex yet elegant, powerful yet up front, bold yet easy-drinking, age-worthy yet matured. It lingers on you for a long time.

It is one of the few cities in the world that has been bombed so many times and yet it has recovered every time and recovered gracefully. You can witness debris of a destructed building in the heart of the city like a wounded soldier who just returned for a war along side a fancy café where young Serbs passionately indulge in their national hobby of watching beautiful Serb gals.

The city, which through out the history has been at the crossroads between the west and orient, is located at the confluence of Sava and Danube rivers that adds a different charm to the city. One can witness the different era and style of Belgrade at every bank of these rivers, from the typical European style architecture in centre historic town of Zemun to the modern buildings in the new Belgrade. The most recognizable and distinct feature of Belgrade is the floating cafes, river clubs or barges that are spread along the banks of the rivers.

Naturally Belgrade is a sharp contrast from the rest of Serbia where massive urbanization has made Belgrade home for more than 1.5 million Serbs, accounting for more than 20% of the total population of Serbia. This has led to increased unemployment which currently hovers at around 23%, putting more pressure on the already fragile economy. The Serbs need to go back to the fields and plow the rich agricultural land. Very few countries in the world have such vast farm land like Serbia and the Serbs naturally ought to use that to build their nation and economy.

I am no expert on the Serbian economy but as an outsider I found the city exceptionally beautiful and worth exploring, so definitely put it on your Bucket List and you will surely witness something truly majestic.

People in Serbia naturally like to eat and it is very obvious from the variety of food they cook, which has elements of former Yugoslavian cuisine as well as the Ottoman Empire, while Austrian and Austro-Hungarian rule richly influence the Serbian desserts. Serbs love their meat and dishes such as Cevapcici (ground meat sticks) validate their love for good food. Another popular dish is pies and Burek tops the rank. Its flaky, greasy pastry filled with cheese or meat but I promise that you will not stop eating it once you try. I found the food a bit too salty but that would not keep me from enjoying the delicious Serb cuisines.

Overall Serbia is a hidden gem in Europe and will definitely become a hot tourist destination as people know more about it. 

Death of capitalism and return to slavery

The brainchild of US Senators Chuck Schumer and Bob Casey announced a new law known as the Ex-PATRIOT Act, which will no doubt be the dumbest law ever created.

‘Ex-PATRIOT’ stands for “Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy”. Kudos to the senate for such a dumb acronym, and even dumber law!! The law proposes three key provisions:

1) Individuals who are deemed, in the sole discretion of the US government, to have renounced US citizenship in order to avoid US taxes, will be permanently barred from re-entering the United States.

2) Such individuals will also be required to pay a 30% capital gains tax to the United States government on ALL future investment gains derived from the US. Currently, non-citizens who do not reside in the US pay no US capital gains tax.

3) These proposals are RETROACTIVE, and, if passed, would apply to anyone who renounced his/her citizenship within the last 10-years.

First, a bit of history lesson. In 1990’s, many wealthy Americans renounced citizenship, renounced American citizenship. President Clinton was furious, and in 1996, he pushed Congress to pass a series of financial penalties for people who renounce citizenship. At the time, a ‘renunciant’ had to continue filing US tax returns for 10-years after renouncing. Effectively, though, this penalty was a tax on worldwide income, not an exit tax on assets.

Fast forward to the 2000s, the Bush regime passed a series of changes to expatriation rules, dropping the income tax filing requirements in lieu of charging a one-time exit tax on assets (why wait every year when you can kill the goose that lays the golden egg). 

In the years since the exit tax on assets was established, the number of Americans renouncing US citizenship has risen steadily and asset bubble has burst, so assets are worth much less than just a few years ago. As such, the government isn’t collecting as much revenue from the exit tax.

Fast forward once again to current decade. Americans renouncing the US citizenship continue to go up.  Eduardo Saverin is the latest example. The Facebook co-founder’s recent renunciation of US citizenship has become a rallying cry for politicians to go back in time and steal money from former citizens retroactively and establish a larger base for future tax revenues.

This is a truly despicable thing to do considering that these former citizens followed the appropriate rules at the time, paid the tax, and moved on with their lives. Now Uncle Sam wants to go back in time to unilaterally change the deal, and expect everyone to abide even though they’re not even citizens anymore. The arrogance is overwhelming.

Obviously the idea behind the law is to discourage Americans to renounce their citizenship.

It is surprising that of all countries America - a country that was once regarded as the freest, most economically enviable in the world, would treat its productive citizens with such hostility.

If America wants to keep people at home, it should try to create an environment similar to Norway and Sweden where people enjoy one of the highest standards of living and are indeed happy to shell out higher taxes for such benefits. 

Warren Buffet once said that to be born in America is nothing short of winning an ovarian lottery but looks like that winning comes with a life long obligation to finance the corrupt misdealing of the political class; and if you chose to abandon the obligation you will be barred from ever entering your homeland again.

In another continent, Europe, we see another insane work in progress. Monsier Hollande is proposing 75% tax on income exceeding 1million euros as part of his plan to fund France’s budget deficit. I guess it is inspired by the Japanese culture where salary man gives away all of his income to his spouse, who would manage the household and give a fixed amount every month back to the husband as pocket money. Naturally such policies are popular among masses but would that really help a nation to overcome its fiscal deficit problems? Would it really get the creative minds build the best companies in that country? Will it really motivate anyone to build something extraordinaire? Or may it will just force people to think ways of evading taxes.

It’s truly extraordinary that the Land of the Free has deteriorated to the point that the government must now resort to threats, coercion, and intimidation in order to keep its most productive citizens inside.

Like the producers in Ayn Rand’s novel Atlas shrugged, many productive members of the society have grown weary of being constantly bashed to pay for political handouts and unending wars of aggression.