Radio Free Finland tonight: David Cord of ScandinavianFinance.com
Tonight at 21.00 (GMT +2) on Radio Free Finland I’ll be joined by David Cord, Managing Director of the Investment Services division of Fundior AB, and author of the blog, ScandinavianFinance.com. He’ll be on to discuss Scandinavian finance, the Finnish economy, and a whole lot more. Be sure to tune-in tonight for the live interview!
David J. Cord worked for over eight years as a financial advisor in one of the largest asset managers in America. In America his clientele consisted of high net worth and mass affluent individuals and families. In 2005 he married a Finn and moved to Helsinki, Finland. He is now the Managing Director of the Investment Services division of Fundior AB (publ). Fundior is a financial and insurance services group based in Sweden with a presence throughout the European Economic Area. In his spare time David enjoys being with his wife Niina and dog Orion. He is a huge history buff and has long studied various aspects of the Roman Empire and ancient Scandinavia.
UPDATE: Fantastic show! We discussed the Finnish economy, taxation, retirement, saving strategies, housing costs, U.S. economic trends, and much more. Here’s the podcast…
Download the show in MP3 format at 64kbps (20.5 MB - 43:05)
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Comment by Phil — Mon, Jan 29th, 2007 @ 7:34 pm
ickles
Comment by Hank W. — Mon, Jan 29th, 2007 @ 7:39 pm
You kept that quiet David, I would have listened in live and maybe called in with some akward questions!
I guess I’ll have to download it!
Tony
Comment by Tony — Mon, Jan 29th, 2007 @ 10:30 pm
Be sure to ask him about the Welfare states impact on holding an economy back from real progress.
Remember, its TAXES that kill the economy. Its wasting those taxes to prop up the underclass that really kills an economy.
Comment by winter — Tue, Jan 30th, 2007 @ 12:00 am
That was a lot of fun, Phil. I really enjoyed it, except when you made fun of the Indianapolis Colts.
Thanks for the opportunity!
Comment by Väinämöinen — Tue, Jan 30th, 2007 @ 12:19 pm
Great interview Phil! David seems like a real pro with sound advice. Hope he posts here on your blog occasionally. I’ll make a point to visit his….
One thing that strikes me, is one of his comments. To paraphrase: “Finland needs to find immigrants to fill jobs.” Of course, it’s a common refrain. To keep the welfare state alive, we need to import warm bodies from everywhere.
To a certain degree, we brought this condition onto ourselves. Even until the late 80’s, while much of Europe was turning toward an investment-based model, a large portion of the Finnish population was still contemplating whether Communism is a viable ideology. Due to this, there is very little private ownership of anything here in Finland—at least, not by Finns themselves.
And, during that time, we developed some hefty pension obligations that we have to fulfill today and in the future. That’s the price of our past flirtation with Communism.
Unfortunately, its vestiges still haunt us today, as evidenced by those who sill think it’s a good idea to tax the hell out of anything that doesn’t move. Great strategy :-/
Although I don’t mind small numbers of immigrants, I don’t think immigration should be seen as a solution to our alleged labor shortage. They might fulfill a need today when the economy is good, but they’ll be collecting unemployment benefits when things cool down in the future.
Look what happened after the 2000 tech bubble in the United States burst. Before then, lawmakers talked about “severe shortages and impending economic catastrophe.” Suddenly, after 2000, there were no more tech jobs in the States. Tech market in Europe was fine though, in fact there was a slight shortage. Perfect.
Immigration is a band-aid solution to the real problems, which David so aptly pointed-out. In particular, we have high structural unemployment due to over-taxation. Small companies, which could reduce this unemployment, don’t have much of a chance here in Finland. Very low return-on-investment due to high taxes, so they go elsewhere. I’ve been saying it all along. It’s obvious.
Thanks for reinforcing my point David!
Comment by Kristian (in Espoo) — Wed, Jan 31st, 2007 @ 2:32 pm
Great interview Phil! David seems like a real pro with sound advice.
Thanks! Yeah, David is a real pro, he sounds just like one of those analysts featured on BBC. Amazing how all those replies just flew out of his mouth so quick and on-point. And we had spent a whole 10 minutes before the show prepping, he had little idea what kind of questions I was going to throw at him.
Comment by Phil — Wed, Jan 31st, 2007 @ 4:07 pm
Great interview!
Comment by Nina — Wed, Jan 31st, 2007 @ 8:54 pm
Kristian:
You just keep repeating your economic myths without offering any proof whatsoever.
Some comments.
“To a certain degree, we brought this condition onto ourselves. Even until the late 80’s, while much of Europe was turning toward an investment-based model, a large portion of the Finnish population was still contemplating whether Communism is a viable ideology. Due to this, there is very little private ownership of anything here in Finlandâ€â€at least, not by Finns themselves.”
OK. Where are your stats to prove this? It might be that ownership is lower, but this is not due to the explanations you offer, but simply due to the fact that private financial capital hasn’t had the time to develop in Finland in the same time-frame as in e.g. Sweden, due to historic reasons. But in any case I would welcome some FACTS, not just your CLAIMS concerning this matter.
“And, during that time, we developed some hefty pension obligations that we have to fulfill today and in the future. That’s the price of our past flirtation with Communism.”
Where are your FACTS? The finnish public economy is in perfectly good shape according to the OECD. We are one of the few OECD countries where the public economy is “net debtless”. Norway (not even gross-debted), Sweden and S-Korea being the others.
“In particular, we have high structural unemployment due to over-taxation.”
Where are your FACTS to prove that the high structural unemployment is related to TAXATION?
“Small companies, which could reduce this unemployment, don’t have much of a chance here in Finland. Very low return-on-investment due to high taxes, so they go elsewhere.”
BS. The reason e.g. Nokia is the success-story it is, is due to the fact that engineers have been available cheaply (much more cheaply than e.g. in the U.S., Gerat Britain or Germany). This has nothing to do with taxation. Nokia pays engineers salaries. The engneers pay taxes. If the engineers demand gross-salaries that are lower than the gross-salaries demanded by engineers in germany, it is cheaper for Nokia to hire them in Finland.
The fact that Ollila has whined about taxation is - IMHO - merely politics. Nokia can hire any “experts” they like, regardless of taxation. If the “expert” they want says he/she wants a net-salary amounting to X euros, Nokia has the means to pay the corresponding gross-salary. These “experts” are few, and the taxation in Finland mst certainly isn’t a hindrance for Nokia. They can put away a few euros of the free TEKES millions they receive from Finnish tax-payers to cover, if needed ;-). But Ollila - IMHO - has made a fool of himself whining about taxation. Nokia is not paying the taxes of engineers. The engineers are. But Nokia USES lots of the infra the tax-paying engineers (and others) have financed. And Nokia pays very little for this.
“I’ve been saying it all along. It’s obvious.”
Yes. You’ve been SAYING this all along. But you have given no evidence proving that what you claim is obvious is true. You’ve just relied on your own belief that it is OBVIOUS. Which it isn’t.
Comment by Thomas — Thu, Feb 1st, 2007 @ 11:58 pm
Thomas
Nokia is a small business? Interesting. I was under the impression that they are a large multinational corporation.
and
“Nokia is not paying the taxes of engineers.” When was Nokia relieved of paying employment taxes?
Comment by Anonymous — Fri, Feb 2nd, 2007 @ 6:11 am
#10: “Nokia is a small business? Interesting. I was under the impression that they are a large multinational corporation.”
Spot-on #10. Large companies like Nokia succeed pretty well here, due to reasonably competitive capital gains taxes and, according to many, paying low-salaries. Unfortunately, small businesses and startups don’t benefit because they rely more on low personal income taxes, not capital gains.
Thomas: “It might be that ownership is lower [...]due to the fact that private financial capital hasn’t had the time to develop in Finland in the same time-frame as in e.g. Sweden, due to historic reasons.”
Fine, but I don’t feel like waiting another 60-years to see if we can catch-up to Sweden. I’ll be dead by then. It’s especially not worthwhile considering that the average Swede is rather poor—in terms of purchasing power, etc.—compared to other Europeans.
Comment by Kristian (in Espoo) — Fri, Feb 2nd, 2007 @ 3:04 pm
#10:
“Nokia is a small business?”
Did I say that? But Nokia was a starting enterprise in the mobile phone business (which didn’t even exist a relatively short time ago - so there weren’t any big companies to start with), and wouldn’t have been the success it was, if it would have had to pay the level of salaries as engineers in Germany, the U.S. or the U.K. (to give some examples) recieved while that market developed/receive these days.
Any engineering company small or gigantic, has this same advantage. The difficulty is finding the market. New products - that will have a global market - are not that easy to invent. Look at how desperately mobile phone developers and mobile network providers try to invent some new uses of the mobile phone technology. The only thing that has really had a global impact is SMS, which was developed more or less as a “joke”, and probably to help mobile network administration in the first place. The success of them was a real surprise (and still is - at least to me, I simply hate those SMS-messages). Everything else has more or less failed.
“When was Nokia relieved of paying employment taxes?”
???? Employment taxes, what are these? Companies pay a number of “tax-like” employer fees on top of the gross salaries of their employees, but the employee pay their taxes themselves, although administratively “pre-taxation” is HANDLED by the employer. Or are you saying that if you receive a tax-refund once the annual tax level is checked, you hand it over to your employer?
Comment by Thomas — Fri, Feb 2nd, 2007 @ 10:18 pm
Kristian (from Espoo) said:
“Small companies, which could reduce this unemployment, don’t have much of a chance here in Finland. Very low return-on-investment due to high taxes, so they go elsewhere.â€Â
Then Thomas replies:
“BS. The reason e.g. Nokia is the success-story it is, is due to the fact that engineers have been available cheaply…”
Thomas doesn’t understand the argument, so he invents his own.
Comment by Anonymous — Fri, Feb 2nd, 2007 @ 10:32 pm
Kristian:
“Spot-on #10. Large companies like Nokia succeed pretty well here, due to reasonably competitive capital gains taxes and, according to many, paying low-salaries. Unfortunately, small businesses and startups don’t benefit because they rely more on low personal income taxes, not capital gains.”
So Nokia has been a large multi-national mobile phone and mobile network developer since the beginning of time?
And what are these “capital gains taxes” you talk about? Nokia - the corporation - is succesful due to the fact that it pays “reasonably competitive capital gains taxes”? AFAIK, individuals pay “capital gains taxes” on capital income. And “capital gains taxes” are realtively low in Finland, AFAIK. But how does this affect Nokias performance? There is something called “corporate taxes” that corporations pay from their profit. But if that is what you meant you should say so. And again, AFAIK, these taxes are also low in Finland. Not to mention the fact that corporations also get their factories built by tax-payer money (e.g. Perlos), only to leave the country once they’ve ripped off the tax-payers all the benefits they can. The Tax-payers - naturally - don’t receive any dividend on their factory investments.
And in what sense do the “personal income taxes” affect any companies. The answer: they don’t. At least not DIRECTLY. Personal income taxes are, well you said it, PERSONAL. They are not the companies responsibility. The only thing that DIRECTLY affects companies, is the gross-salary level they have to pay in order to attract employees.
“Fine, but I don’t feel like waiting another 60-years to see if we can catch-up to Sweden. I’ll be dead by then.”
You could start by demanding that Perlos or Nokia, start providing the tax-payers with shares in return for the investments they make into these companies. That would build up FINNISH ownership. Nokia receives the largest fraction of TEKES money in this country. Tax-payer money. Do the tax-payers get any return on their investment. No. Instead Nokia blackmails the tax-payers, by threatening to leave Finland. An other example is Perlos, receiving tax-payer money for building their now defunct factories in P-Karjala. Did the tax-payers receive shares. Hell no. It’s so clear that the tax-payers should invest into these companies, but then once things get rough, you can just blame the markets.
Comment by Thomas — Fri, Feb 2nd, 2007 @ 10:38 pm
#13:
“Thomas doesn’t understand the argument, so he invents his own.”
The mr./ms. Anonymous might perhaps explain this ARGUMENT, so that even stupid Thomas understands it.
Fact is, Nokia made rubber-boots in the 70s. They made NO mobile phones. They were NOT multi-national. They basically started a new industry from scratch. I’m pretty sure they didn’t put 10000 engineers to work on that at that time. Nokia was even close to bankrupcy back in those days.
When one talks about SMALL companies, it is a fairly vague term. OK, there are some categorisations, that base themselves on the number of employees. But I’m pretty sure that any CEO of a small company would love to see his/her company grow to become a multi-national corporation. Companies are “organisms”, that develop over time.
If you talk about “small companies” in the sense of companies that will never grow, never develope, only work in some niche market forever, then OK. But even for such companies, income-taxes (or employer fees) are not the relevant issue. The only relevant issue is the TOTAL cost of employing a person. That’s why I do not want to listen to these arguments that base themselves on totally irrelevant issues, like income-taxes.
If income-taxes are high, but the population feels they get enough in return in terms of services, they might accept employment at lower gross-salaries. The income-tax level is then, totally irrelevant from both the employers and the employees point of view. If we look at Finland, and say the bussiness providing nurses to hospitals or like, they are probably able to hire people much cheaper than in e.g. the U.S. simply due to the fact that the salaries in the public sector are so low. Why would a health care sector private business “go elsewhere” due to the “high income tax rate” in Finland? Most of the so called service sector jobs, that many say are the main provider of jobs in the future due to increased automation, don’t even need any capital investments. If there is a market for a company in this kind of an environment, why would it have to go elsewhere, since it doesn’t have to tie up any investment capital in the first place?
I simply don’t understand Kristians ramblings at all. Maybe I’m stupid, but you or Kristian have not really contributed ANYTHING to enlighten me (or anyone else) regarding the theme under discussion.
Comment by Thomas — Fri, Feb 2nd, 2007 @ 11:04 pm
“I simply don’t understand Kristians ramblings at all.”
Thomas,
you wrote 3 long and irrelevant posts about Nokia. Been drinking overpriced liquor from Alko again?
Comment by Kristian (in Espoo) — Sat, Feb 3rd, 2007 @ 10:15 am
By the way, David Cord mentioned the high alcohol taxes in Finland. He could have mentioned the overpricing due to Alko monopoly too.
All things that damage the Finnish economy.
Comment by Kristian (in Espoo) — Sat, Feb 3rd, 2007 @ 10:42 am
Man libertaerians are “dumb”. Looks like some individuals need to go back to business school (Still I reckon that Thomas does a better job than them as unfortunately the educational facilities have also been struck by this brain disorder.)
Comment by Blah — Sat, Feb 3rd, 2007 @ 11:03 am
“Man libertaerians are ‘dumb’. ”
I can’t say for sure, but I don’t think David J. Cord is a Libertarian.
Also, I wouldn’t call him dumb. According to Phil, he’s “Managing Director of the Investment Services division of Fundior AB.”
Comment by Kristian (in Espoo) — Sat, Feb 3rd, 2007 @ 12:11 pm
Kristian:
“Thomas,
you wrote 3 long and irrelevant posts about Nokia. Been drinking overpriced liquor from Alko again?”
I can’t remember my last visit to Alko. and that’s not because I was drunlk the last time I visited ;-).
But in what sense were my post irrelevant? I think that I - contrary to you and most other “liber-ecomomicians” - addressed the themes of the postings in great detail. I think Nokias mobile phone successs is RELEVANT if you talk about business in Finland. Reason: they more or less CREATED a global market. That is (and should be) the aim for ALL small starting technology businesses. Those that aim only for the domestic markets, couldn’t move their business elsewhere, which was one of the corner-stones in YOUR argument.
“Also, I wouldn’t call him dumb. According to Phil, he’s “Managing Director of the Investment Services division of Fundior AB.—
You have to grow up. If you haven’t seen/met any DUMD managing directors, your traveling/employment history shows signs of being too monotonic. I can tell you that I’ve seen managing directors that are more stupid than all their employees, including the out-sourced cleaning woman.
Comment by Thomas — Sat, Feb 3rd, 2007 @ 4:41 pm
“I think Nokias mobile phone successs is RELEVANT…”
Nokia was an established (partly state-owned) enterprise when it started the telecom business in the 1960’s, therefore it’s not relevant to David J. Cord’s argument.
However, David’s advice to lower taxes makes perfect sense, because it would enable many startup businesses to stay in Finland—rather than move to places like Estonia, like they do now.
“I’ve seen managing directors that are more stupid than [...] the out-sourced cleaning woman.”
Sounds like you have a low opinion of cleaning women.
Comment by Kristian (in Espoo) — Sat, Feb 3rd, 2007 @ 7:34 pm
re-post with better formatting…
“I think Nokias mobile phone successs is RELEVANT…”
Nokia was an established (partly state-owned) enterprise when it started the telecom business in the 1960’s, therefore it’s not relevant to David J. Cord’s argument.
However, David’s advice to lower overall taxes makes perfect sense, because it would enable many startup businesses to stay in Finland—rather than move to places like Estonia, like they do now.
“I’ve seen managing directors that are more stupid than [...] the out-sourced cleaning woman.”
Sounds like you have a low opinion of cleaning women.
Comment by Kristian (in Espoo) — Sat, Feb 3rd, 2007 @ 7:35 pm
Kristian:
“Nokia was an established (partly state-owned) enterprise when it started the telecom business in the 1960’s, therefore it’s not relevant to David J. Cord’s argument.”
To be honest I don’t know what companies might be relevant in the case against your arguments. One reason being the fact, that you don’t provide ANY facts to support your OPINIONS.
IMHO, Nokia represents a SMALL company (a company that might leave the country unless its orders are not followed by the government, which was the category of companues you adressed), at the point it started its mobile phone business. At that point it wasn’t global, it was virtually bankrupt. What else do you need?
“Sounds like you have a low opinion of cleaning women.”
No. Can’t you read, or is this just a reading comprehension problem.
1) I haven’t said anything about cleaning womEn.
2) You were the one making points about intelligence based on peoples position in organisations. You said :”Also, I wouldn’t call him dumb. According to Phil, he’s “Managing Director of the Investment Services division of Fundior AB.—. So being the managing director of FUNDIOR (whatever that is) makes the guy non-dumb?
Comment by Thomas — Sun, Feb 4th, 2007 @ 12:12 am
“You have to grow up. If you haven’t seen/met any DUMD managing directors, your traveling/employment history shows signs of being too monotonic. I can tell you that I’ve seen managing directors that are more stupid than all their employees, including the out-sourced cleaning woman.”
I’d hate to be your boss. You know everything, but your not getting anywhere because you are getting screwed by everybody that’s “dumber” than you. Your perception of the world, and the actual reality of the world are on two different trains heading the opposite direction.
Comment by maksalaatikko — Sun, Feb 4th, 2007 @ 3:07 am
Kristian:
Been drinking overpriced liquor from Alko again?
I just broke my month-long alcohol fast with a G+T made from Bombay Sapphire. Turns out the stuff costs pretty much exactly the same in Alko as it does in the UK. So I don’t really know where your ideal tax heaven is located. Somalia, perhaps?
I believe that Thomas’ point was merely that Nokia’s success story would have never happened if it wasn’t for Finland’s evil system. I must concur.
I work for a small company, and boy is our boss not struggling to make ends meet. One factor in this is definitely the ridiculously low salaries we’re supposed to live on. Now, the system (including them evil taxes) may have something to do with that state of affairs.
Comment by Freeridin' Franklin — Sun, Feb 4th, 2007 @ 4:01 am
#24
Well it’s a well known fact that assholes, psychopaths, brown-noses and narcists rise to the top in politics and economics even though they don’t know shit about nothing (it’s just their charming personality and the stupidity of their bosses that carries them to the top)
Comment by Anonymous — Sun, Feb 4th, 2007 @ 11:50 am
Eventually, I think we’ll find the right balance between private and public system, but in the end it really depends on our ability to pay for it. However, I don’t really see any reason why service should be determined by income or wealth. Everyone should have good quality care available to them. It only costs a few-thousand/capita/year anyway.
Advancements in quality and service are paramount. Government-funded endeavors can succeed, but perhaps only in narrow realms. Even the Soviets had some impressive accomplishments—it just didn’t have a broad range of them like the US. We need to change our narrow picture here in Europe to move forward.
We need people who are willing to speculate financially to fund research, etc. with hope of being rewarded. It takes private capital. In the end, everyone benefits from it. Our high-tax European economies (especially Finland) with correspondingly low GDP’s isn’t the way to encourage a broad range of advancement.
Comment by Kristian (in Espoo) — Sun, Feb 4th, 2007 @ 2:46 pm
#26 Sorry, posted in wrong thread. But I guess it’s equally relevant here nonetheless.
Comment by Kristian (in Espoo) — Sun, Feb 4th, 2007 @ 2:48 pm
Thomas, this is for you:
http://www.livejournal.com/userpic/42241626/8034491
Comment by I Don't Endorce Blog Drama — Mon, Feb 5th, 2007 @ 4:01 pm