A Moral Question During This COVID-19 Crisis

Boooking.com

During this COVID-19 crisis more than a few moral questions are finally out in the open. Here’s one that sparked many a heated debate here in the Netherlands.

Before we go into the question, a quick background.

To help keep companies afloat during this economic crisis, which according to many publications, is only just beginning, the Dutch government has instituted the so-called temporary emergency measure NOW (a Dutch acronym for Temporary Emergency Measure Bridging for Employment). The principle of NOW is brutally simple: entrepreneurs can be reimbursed up to 90% of their wage costs if they expect to lose at least 20% turnover over 3 months due to the corona crisis. ‘Pay first, ask questions later’ is their motto during this crisis. A rather radical departure from the usual red-tape.
So far, some 92,000 entrepreneurs have file a request for NOW, according to various newspapers. 92,000 companies, big and small have requested this emergency support from the government (/the Dutch taxpayer). And there is, in principle, absolutely nothing wrong with that.

When things get murky…

I deliberately said in principle… Because among those 92,000 entrepreneurs is Booking.com ceo Glenn Fogel, who saw 85% of bookings of his world’s leading travel site just wiped out. According to a leading newspaper: ‘In over ten years, Booking.com has expanded from 1,000 to 18,000 employees, 5,500 of whom work in the Netherlands. The exact terms of the state aid to Booking.com are not known. The average income at Booking Holdings is almost 47 thousand euros per year. If the Netherlands pays up to 90 percent of the wages of the 5,500 Booking.com employees in our country via the NOW scheme for three months, the damage could amount to tens of millions of euros.’ In this context it might be noteworthy that the average income in the Netherlands is €36,500 per year. So the average booking.com employee is a rather well paid one.

In (the unlikely) case you’ve never heard of Booking.com, here’s an overview. The company is in debt. Booking Holdings, the US-based holding company, has against the US$6.3 billion in cash (!) a debt of US$7.6 billion. The company made €3,5 billion (US$3,500,000,000) profit last year, which it spent largely on a stock buy-back scheme. There are many that accuse the company of buying back shares to prop up the value of its shares, which would only benefit existing shareholders and employees whose bonuses are for a large extent a certain number of shares.

Averting lay-offs

As stated, the Corona pandemic caused bookings at the company to drop by 85%. Disastrous by anyone’s standards. Depending on how long this crisis will last before things go ‘back’ to a (new) normal, and how that new normal will look for Booking.com, measures will have to be taken.
Fogel has already made a first atoning sacrifice by handing in a whopping 20% his salary. At the same time, the Works Council noted, Fogel’s salary is only a fraction of his fee: in 2018, his fixed wages were $ 750,000, but thanks to bonuses and shares, he was able to add a total of $ 20.5 million to his bank account that year. So this atonement was ‘lead round scrap iron’ as we say here.

Stop the (now much less) expensive share buy back scheme, which cost Booking US$14 billion in the last two years, is another demand from the Works Council in order to minimize the number of forced lay-offs among their 5,500 strong workforce.

The latest measure is applying for the NOW-scheme…

A moral question…

The question basically is to what extent this is the classic trick of business in an economic crisis: privatize profits, socialize losses. Let the (Dutch) taxpayer pay to prevent lay-offs.

In the previous crisis, banks did this incredibly well. Billions of profits disappeared into the pockets of employees and shareholders, the losses came to taxpayers worldwide.

The other way

Now, let me the first to paraphrase the ceo of Shake Shack who stated on CNN that ‘in this pandemic no company is unsinkable’ and that every company has the obligation to care for their people. Exactly why Shake Shack initially requested the emergency loan. The above linked article opens with:

Shake Shack (SHAK) is returning a $10 million loan it received from the US government under an emergency program that was touted as a way to help small businesses pay workers and keep their operations running during the coronavirus crisis.The burger chain was awarded the loan as part of the Paycheck Protection Program (PPP). The $349 billion stimulus package, overseen by the Small Business Administration (SBA), ran out of funding last week. Over the last few days, there has been a growing backlash over the distribution of the funds. Several media outlets have revealed how large chunks of the package were taken up by chain restaurants, hoteliers and publicly traded corporations, rather than small, local businesses

Shake Shack CEO Randy Garutti and chairman Danny Meyer revealed their decision to give back the funding in an open letter Monday, saying that the NYSE-listed company no longer needs the money because they are “fortunate to now have access to capital that others do not.” The company said in a filing Friday that it expects to be able to raise up to $75 million from investors by selling shares.’

Now, there’s a novel way, selling shares to get the cash-infusion the company needs to pay its employees.

Booking.com might well take a look at this and think again what they will do with the $4 billion in loans they claim to have secured. Now is the time for some ‘caring capitalism’ instead of the ‘savage capitalism’ where shareholder value has been King.

Abandoned • Cee’s Black & White Photo Challenge

Abandoned bicycle

Abandoned • Cee’s Black & White Photo Challenge is my entry for this week’s episode of this challenge. A.k.a. Bicycles, Tricycles, Motorcycles, Unicycles. But I’d like to put this into a somewhat different context. That the recession is well past us is something we all know. Consumption is on the rise…still. Especially the consumption of durable consumption goods (see the table at the end of this post for instance). Here’s the thing though: I’ve often wondered whether this is a good sign. Since most ‘markets’, especially those for durable consumer goods, are saturated.

What can this mean?

Which means basically that for every purchase of something new, something old gets discarded. And it shows. Bicycles, motorcycles, HiFi’s, even cars are abandoned unceremoniously in the streets. Around the problem of illegally dumped bicycles in the Netherlands I’ve already written a short post. To show that abandoned old and tired consumer durables is however a real and global problem see for instance the below photos.

Abandoned stuff

Abandoned Honda • CB&W
Abandoned motorcycle, Cadaquès, Catalunia, Spain. Photographed February 6, 2020.
Abandoned vintage radio • CB&W
Abandoned Philips vintage radio. Photographed in The Hague, January 9, 2020.
Abandoned toilet • CB&W
Abandoned toilet, Cadaquès, Catalunia, Spain. Photographed February 4, 2020.
Discarded bicycle • CB&W
Discarded bicycle. Photographed in The Hague, January 7, 2020

I’ve got tons more of these pictures taken in the streets of Amsterdam, The Hague, Cairo. I’ll be posting these off and on.

What do I hope to accomplish with this post?

So…what do I hope to accomplish with this post to a select, presumably higher than averagely educated audience such as you? Well for starters, T H I N K if you really need that new piece of stuff before you acquire it. And I’m sure that you do, because don’t we all love new toys? So when you do buy that new shiny toy you/we so desperately need, T H I N K what you will do with your old one. Make sure it’s being recycled? Give it a new life by giving it away to a second hand shop? Whatever, as long as you do not abandon it without giving it any thought. We’re drowning in enough shit as it is…

Here’s the promised table:

Source: CBS (Central Bureau of Statistics). This table reflects just the consumption in the Netherlands.

Monday Window – Oct. 7, 2019

Monday Window lead pic

My first entry in this Monday Window trail is not a happy memory, but it is one etched in my mind.

Monday Window - to another world
Window… to another world

This photo I took of the funeral procession of one of my oldest friends – Menno Boerema.

Menno was one of Europe’s leading film editors. He died at the age of 61 this summer.

Our friendship dates back 45 years; to my first day in boarding school. Menno had been there from the age of 11 or 12. I will never forget all the happy moments we shared. In the end, this is how I want to remember him by. But nor will I forget the moments where we would find solace in each other’s frustration, anger and resentment of the situation we found ourselves in.
Our last day in that place we hated was coincidentally the same. It was the day after the high school party that was the official end of the school year. Menno had graduated and went on to the Film Academy in Amsterdam. I had one more year of high school ahead of me, but was expelled from this particular boarding school. I remember his famous ‘last’ words that day: ‘The things we do for love…’

It feels strange – in a good way – to share these memories. Maybe this #MondayWindow post is the start of a bigger one.

While this post started off a little sinister, it started a chain reaction of much happier memories of this Rider on the Storm.

The stories hands tell • Becky’s Lines & Squares Challenge #6

becky's lines & squares challenges - the stories hands tell

Unfortunately, my hands are becoming pretty useless these days… Just typing these two sentences and correcting the mistakes takes me well over a minute or so.
My feet on the other hand are quite a different story after my DBS (deep brain stimulation). They don’t seem exactly tireless, but at least take me to new stories…
And that without the use of a cane!

Becky's Lines & Squares Challenges-These-boots-are-made-for-walking
These boots are made for walking…

Up until March last year getting around was a pain. Totally dependent on my cane.

The author in Jan 2018, going to light a candle in preparation for his DBS
Me in Jan 2018, going to light a candle in
preparation of the DBS
Photo courtesy of Heleen Arends Photography.
Finally a foreign beach again...
Finally a foreign beach again…

If you’re tired of this soap, no sweat. Take a look Raquel Welch, Brigitte Bardot and other 60s and 70s celebrities and their cars in this post.