Politics, Weather, Photography, and the Dog
Thursday 3 March 2011

The Economist ran a good story last week analyzing the pros and cons of federalism:

Why is the tie between federalism and democracy so awkward? In most federations the units have formally equal status, regardless of population, so voters in small units fare better. Thus the 544,270 residents of Wyoming have two senators—the same as the 37m people of California. In Australia the 507,600 people of Tasmania have the same weight in the upper house as the 7m who live in New South Wales. In rich, consensus-based democracies, such anomalies are often accepted. They may be seen as an inevitable legacy of the past; when political units have freely come together, as the 13 original American colonies did, they keep their status as building blocks of the union. But the perverse electoral system of the European Parliament (to which the 1.2m voters of Northern Ireland elect three members, whereas 500,000 Greek-Cypriot voters send six) cannot claim the veneer of age. After a scolding over its democratic deficiencies from Germany’s constitutional court, the Euro-legislature has commissioned a study of federal systems, and the associated electoral quirks, all over the world.

They also ran a bit on IKEA's inconsistencies worth reading:

Critics grumble that its set-up minimises tax and disclosure, handsomely rewards the Kamprad family and makes IKEA immune to a takeover. The parent for IKEA Group, which controls 284 stores in 26 countries, is Ingka Holding, a private Dutch-registered company. Ingka Holding, in turn, belongs entirely to Stichting Ingka Foundation, a Dutch-registered, tax-exempt, non-profit-making entity, which was given Mr Kamprad’s IKEA shares in 1982. A five-person executive committee, chaired by Mr Kamprad, runs the foundation.

The IKEA trademark and concept is owned by Inter IKEA Systems, another private Dutch company. Its parent company is Inter IKEA Holding, registered in Luxembourg. For years the owners of Inter IKEA Holding remained hidden from view and IKEA refused to identify them.

In January a Swedish documentary revealed that Interogo, a Liechtenstein foundation controlled by the Kamprad family, owns Inter IKEA Holding, which earns its money from the franchise agreements Inter IKEA Systems has with each IKEA store. These are lucrative: IKEA says that all franchisees pay 3% of sales as a royalty. The IKEA Group is the biggest franchisee; other franchisees run the remaining 35 stores, mainly in the Middle East and Asia. One store in the Netherlands is run directly by Inter IKEA Systems.

These kinds of stories make me happy to spend $3 a week on the newspaper. I just wish it would arrive Fridays or Saturdays, so I can read them on time. It's no fun to get home from a business trip on Thursday to find last week's Economist in the mailbox.

Thursday 3 March 2011 16:41:40 CST (UTC-06:00)  |  | Kitchen Sink | Politics#
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