Vin Diesel. Mike Tyson. A horse-sized duck. There are many people I’d take in a fight, but European regulators aren’t one of them. Uber’s clearly feeling brave.

The lowdown

• 🇯🇵 Toshiba is delisting from the Tokyo Stock Exchange following a $14 billion take-private deal.

• 🎬 Hollywood writers and producers reportedly near a deal to end their strike.

• 🪫 Automakers slam the UK’s move to delay its ban on the sale of new petrol and diesel cars to 2035.

💸 Balance Sheet: Founder Letter

Inside zero-based government: Should countries be run like companies?

By Harriet Green, Founder HSG & Balance Sheet.

The four horsemen of the All In Podcast are currently cycling through presidential candidates – interviewing each one in the run-up to next year’s presidential elections. Week before last, they had Republican Chris Christie on – a litigator, and former governor of New Jersey.

Amongst Ukraine and Fentanyl, it didn’t take long for Christie to borrow an idea from the accounting world: zero-based budgeting – for government.

I have a banker friend who thinks national governments should emulate public companies, with share price and market cap the new litmus for democracy. It’s a neat idea, but who would the shareholders be? Everyone, or government workers? (In the UK, that’s nearly everyone now anyway.) There’s no buying mechanism or real market, either, because you have to pay tax. And would you ever buy shares in a company whose debt repayments were traveling towards the sun?

Zero-based budgeting (ZBB) is less zany, though still disruptive. PE firms use it a lot, it’s pretty standard in tech companies, was (predictably) created by a man who made calculators, and we’ve covered it before. Rather than kick off the year with a budget based on historic spend, you start at zero. From there, each piece of expenditure needs to be justified; your income less expenses should equal zero.

In theory, ZBB forces prioritization: potholes over a rebranding project, more efficient medical supplies purchasing (here’s a European company doing great things on this), re-evaluating subsidies and programs.

You can imagine an unfortunate trajectory where the process of justification itself becomes hyper bureaucratic and nepotistic. One answer is to pair ZBB with smaller units of government – ie at a state / local level – because you’ve got less to wrap your hands around to start with.

(Some useful stats here on state and local spending in the US.)

What is interesting to me is the idea of documenting budgeting decisions in near real-time, and using that as a democratic mechanism – voters can thumbs up and down decisions, shifting the substance of votings / elections from who's in power to what they're doing with it. Clearly this could get messy, but over time it could provide actual data on performance and efficacy. And, beyond that, a mechanism for a constant democracy, where votes carry weight beyond an election cycle.

Why is considering this sort of thing important? Because governments keep spending and borrowing more and more money. Unless Modern Monetary Theory holds (and, full disclosure, I think it’s nonsense: an accounting gimmick that pretends taxpayers’ wealth is directly proportional to government deficit, and that printing money doesn’t dilute the unit), there’s only one logical end point: taxpayers putting in more than they earn – which is obviously impossible.

Here’s Morgan Stanley worrying about MMT.

In the UK, many people feel like politicians and parties are increasingly all the same – just crap. If we’re off to Mars while reversing aging this century, it’d be a shame if we were scuppered by systems. It’s time our political processes matched the future we’re building

Featured story

Uber warns EU regulation could force it out of European cities

EU lawmakers love a bit of regulation. In the delicate balancing act that is company vs individual, Brussels has a long history of siding with the latter.

Now the EU has turned its attention to the gig economy, proposing a law to give ride-hailing app drivers full working rights. Uber has come out all guns blazing, warning the change would force it to cease operations in hundreds of European cities and raise prices by as much as 40% ($).

At the moment, most of Europe’s gig economy workers are presumed to be self-employed, which means they don’t have rights like paternity leave and a minimum wage. But some countries have improved their conditions. In the UK, drivers are considered “workers”, a status short of being a full employee that gives them benefits like holiday pay and sick leave. In Germany, Uber employs drivers through fleet management companies to operate under local rules.

We’ll see how rattled EU lawmakers are by Uber’s warning when they discuss the final text of the new law this week.

The content we're consuming today

• WSJ: America’s biggest landlords can’t find houses to buy either ($)

• Bloomberg: Ex-Goldman bankers make a fortune with controversial bet on coal ($)

• Yahoo Finance: Why Howard Schultz's departure could 'open the door' for Starbucks’s expansion in China

Off-balance sheet items

• AI-generated images are one step closer to going mainstream. OpenAI has released the third version of DALL-E, which converts text to images, and you can now use ChatGPT to create prompts.

The bottom line