Germany is likely the only country in the world where Ricardian equivalence — the theory that the government cannot stimulate private consumption by cutting taxes because rational actors know that taxes will eventually have to rise again and therefore put aside savings — actually holds true.
As for reasons behind Germany’s obsession with savings? Other than the demographic pressures and a cultural of frugality?
History plays a role:
Whereas the Anglo-Saxon world is characterized by what one could call pragmatic optimism, Germans instinctively think about the long term, and they aren’t disposed toward cheerfulness. Whereas America’s recent history teaches hope, Germans see in their history the need to be cautious: In the last 100 years, Germans have experienced two currency reforms and the rise and demise of three regimes.
A distinctly German view on economic activity and the role of trade:
It’s an economic model that traces back to the beginning of the postwar period, when booming exports were the backbone of the Wirtschaftswunder, or economic miracle — the period of strong growth in the 1950s that transformed the destroyed country into a major world economic power. When Germans saw Volkswagens on roads all over the world, it wasn’t only a source of income, but proof that the country was once again an accepted member of the international community. Add Germany’s traditional obsession with engineering and its distaste for the service sector, and it may become clearer why the country is prone to mercantilism.
How government sees its place in macro-economic policy-making:
Germany simply does not have a tradition of macroeconomic policy, at least not in the American sense of managing aggregate demand. Contemporary German economics has its roots in Ordnungspolitik, a unique school of thought that emerged in the 1940s and for which there is no English translation. Ordnungspolitik accepts that government intervention is necessary for the economy to function properly, but the role it assigns to the state is fundamentally different than in the Anglo-Saxon tradition. Whereas most American macroeconomists believe in discretionary intervention in the way of countercyclical monetary and fiscal policy, German economists encourage the government to only alter the framework within which economic agents interact. Read more...
I’m taking a short break away from the Lowlands, which gives me a good chance to reflect on the driving habits of my current compatriots.
There’s no doubt that the crowdedness of the country contributes to the overall feeling of aggression on the road. Behaviours such as tailgating, switching lanes with no signaling, not keeping to the right, relatively frequent use of the middle finger, all adds up to a pretty harrowing experience.
Taking into account the prevalance of biking as a serious mode of tranportaion in the country, perhaps this should not e a surprise.
Compared to the 2 cars per family (if not more) of more spacious lands, most Dutch families, when possible with work, make do with one car. That means a large portion of drivers on the road use cars only very occasionally.
I think of it this way: all those times much of North America spends on the road, driving to and from work, to the grocery store, going to movies, picking up kids from school; the average Dutch spends that time honing his ability to tackle various obstacles placed in front of his bike.
It would seem to me that as trivial as driving might be as a task, there is something to be said about practice. In my two years here, I have witnessed some truly mind-boggling driving behaviors that I can only attribute to time substituted on the bikes. In all fairness though, I’m also only on the road on the weekends too, so the sample is probably slanted towards the more amateurish set of weekend drivers. Alas, irony strikes as cloggie land mandates very expensive driving schools (around three thousand euros). And perhaps recognizing a rather unfortunate deficiency in manners, there are now discussion on driving exam touch-up when people renew their driving licences.
How do people invoke national football support as a boundary-drawing exercise?
In Scotland support for the national football team is regarded as a legitimate expression of national identity for both Scottish and English folk. The representation of a collective English national identity and ‘their’ stereotypes of the Scottish legitimate the assertion of a shared Scottish national identity, the maximization of differences between the national groups, and the justification for anti-English sentiment.
Moreover, this psychological attachment to Scotland and the Scottish is distinguished from the state of ‘being’ British. In England, respondents can also cast English and Scottish national identity in terms of national football, but treat these as problematic. Whilst the Scots are attributed with performing national identity and (justifiable) antagonisms towards the English through football, it is not acceptable for the English to do so.
Displays of collective English national identity are treated as irrational, a threat to individualism, and reflecting negative associations with hooliganism, xenophobia, and the values of the far Right. The inclusion of far Right hooligans into the sample, who do regard football as a legitimate expression of English nationalism, offers an insight into what the majority of the England-born sample resist.
Let’s tally up all the ways Europe is reversing gains made by decades of painful integration efforts:
- Germany’s North Rhine-Westphalia election clearly put German interests in front of European ones, and its vehement resentment towards Greek bail-out signals the country wants to come out of its WWII political backroom and function as a normal country.
- The Dutch electorate had a clear preference for more right-winged talk this time around. Two of the three top parties ran on platforms that 1) railed against the EU bureaucracy, 2) railed against (real or imagined) Islamic threats in the country.
- Belgians took it one step further than anyone else. Previously the golden child that saw itself the trailblazer in multiculturalism, the original mini-EU is now tearing itself apart at the seam. The Flemish party which ran on a separatist platform won the election. Although rumours have it that De Wever might very well let the Francophone Socialists run the country for a while, just so they can be the ones that nail the Belgian coffin shut for good. In the meantime, this kind of stuff is happening.
- Ring-winged and nationalist parties have always existed on the fringe, but the economic crisis, along with flagrant abuses/misuses of power in Brussels are now ruffling more mainstream feathers than usual. It’s not just France and Switzerland that have the occasional flair-ups, eastern European countries like Hungary have also entered a period of nationalistic radicalism.
Nationalism can stand alone in a sea of otherwise indifference. But when closely clustered countries start to one-up each other, we get into trouble. A decade ago, Europe could’ve pointed to Turkey’s nationalistic turn and snickered. Nowadays, the pot can’t call the kettle black without sounding like a hypocrite. After all, in 2010, what could be more European? Read more...
The best part of blogging is when the world echoes back, and someone challenges me on my ideas. The latest question came from a dear reader, Amit, on the post I did a while ago on women’s labour participation in the OECD, particularly that of Japan and the Netherlands.
I’ve edited our email exchange slightly for easier web consumption.
Amit says:
1) The use of “abysmal” suggests that there is a pre-posited ideal state. Why so? It remains unclear as to whether the US and Scandinavian experiences with bringing vast numbers of women into the workforce fulltime are “correct” in an absolute sense.
Elizabeth Warren points out in her analysis of the US middle class, that women in the US workforce are there not just because they “want” to be, but often because they “need” to be, to afford housing and consumption at levels conditioned by media/pop-culture. She shows how the debt burden has risen per family, consistently, to the point where a prole+/bourgeoisie family has no alternative but to post 2 incomes to afford its suburban house (to which schooling is tied).
The US does not frown upon “assisted childcare” to allow women to work fulltime, but it also does not provide such care (though Scandinavian states do). For a mom to work fulltime in the US, the family takes on an additional expense burden (that eats away further into that debt servicing cash flow) of nannies and playschools, and the angst of knowing that this type of care is unregulated, and is held to a standard only on a caveat emptor basis.
Why is the US model good? Most American women (of a bourgeoisie status anxious grad schooled variety) I know, feel severe pressure to work and retain the “victories” of feminism, despite the strain it brings to their nesting and breeding instincts.
2) The Atlantic this week features the “millennial response” to the hook up culture, see it if you have time, and juxtapose with the Japanese sub-20 aspiration Read more...
1. On the difference between empiricists and philosophers, and the size of blunders they commit.
Most of the world seems to think that the Americans are the ones who do the crazy things, but it is really the Europeans who commit the colossal blunders. Americans are empiricists – they will try anything, but if it doesn’t work they stop doing it. Europeans are thinkers, philosophers. They theorize and analyze brilliantly creating castles in their minds, turning them over and over to perfect them. The tradition starts with Plato, then Machiavelli, and goes through Karl Marx, Nietzsche, and Pareto, to the creators of the euro. Every philosophy can be discredited. It is only when a concept works in the real world over time and is adjusted to fit changing circumstances – like Communism in China – that one can be sure of success. All empiricists know that the euro can not work as constructed, but the Euroleaders will destroy their economies, harming the Swiss as well, until they are forced from power.
2. On the problematic side of free education, of which the lack of standards naturally emerge as a side effect, as manifested in the Swedish educational experiment.
Yet the Swedish authorities’ own research has concluded that over the last fifteen years since the free schools were introduced, the number of low performing pupils has increased in Sweden, while the high performing pupils have neither increased in numbers nor have they become more successful.
The free school system, implemented without imposing clear standards, has seen schools opening with sub-standard facilities, often without libraries, and with a far greater number of unqualified teachers.
What’s more, the introduction of free schools has led to increased segregation where pupils from the same social background increasingly concentrate in certain attractive free schools.
This matters because segregation and poorer facilities serve no-one but the Conservatives seem to specifically think that these “freedoms” are positive aspects of the policy. This is a serious mistake. Read more...
Belgium’s government dissolved, and the almost 200 years experiment of constructing two (maybe 3 if you count the German minority to) major linguistic groups – based on mutual resentment and suspicions, amongst other national interests of its neighbours, is on the brink of collapse.
This is hardly shocking. The Belgians have gone without a government before, and the linguistic divide between the Flemish and the Walloons are well known. I wrote about encroachment of Catholicism in Netherlands and the potential of a unified Flemish and Dutch state a while back. And as far as Belgium background pieces go, it doesn’t get better than this.
What I do find interesting is the parallel between what is going on in Belgium and what is potentially in store for the EU in the foreseeable future. Consider this piece from the Telegraph three years ago. Obviously written from a rather euro-skeptic point of view, but worth looking at nevertheless.
Belgium functions – or malfunctions – on the same basis as the EU. There is no Belgian language, no Belgian culture, precious little Belgian history.
As the winner of June’s election, Yves Leterme, has put it, Belgium resides in the king, the football team and some beers. To paraphrase René Magritte (one of the few unquestionably famous Belgians): “Ceci n’est pas une nation”.
Unable to appeal to a shared identity, the fledgeling Belgian government had to buy people’s loyalty though massive public works schemes. Every state institution was dragged into the racket: the trade unions, the nationalised enterprises, the social security networks.
Belgium, in short, became a microcosm of what the EU is becoming: a mechanism for the arbitrary reallocation of money.
Is the same happening within the EU experiment? Substitute northern Flanders for the northern constituents of the EU, and Walloons in the south for the southern and eastern constituents of the EU, do you get a comparable situation in the EU?
Belgium is failing because there are no real Belgians, just as there are no real Europeans. Rather, there are discrete peoples, with their own languages, television stations and political parties. Read more...
Europe may have in recent years refrained from violence to settle ethnic quibbles, but in the southern and eastern corners of the continent, attempts on having the last word on history is far from abandoned.
Check out the Macedonian and Greek quarrel here, and the tedious bickerings between various other pairings here.
Backed when I lived in Toronto, there were areas in the city where you would see veiled women. I feel the same way about veils as I do, well, Mormons in full Mormons dresses, or Jews in full Orthodox gear. The light bulb that goes off is: these are some pretty religious people, and they are probably fairly segregated from the community at large.
And most likely, these not people I would end up fraternizing with, nor am I someone they would want to hang out with anyway. But if they can navigate and do well within their own communities, what business is it of mine, or anyone else’s, to tell them how to live? The idea of “female repression” barely registers.
So could this whole big deal about banning the hijab in France be the result of a specific French interpretation of the veil?
According to a fact-finding project conducted last year that surveyed general public’s attitudes towards Muslims in the UK, France, and Germany:
The general European populations surveyed are more likely to associate the hijab with religiosity than fanaticism, oppression, or being against women. … [T]he general French population is more than three times as likely to associate fanaticism with the hijab than the French Muslim population.
As for the reason most frequently cited by French politicians in support of the ban?
Regarding the link between “repression of women” and the hijab, the views of the two communities differ by an even greater margin: 52 per cent of the general French population associate the hijab with repression, compared to 12 per cent of French Muslims.
If France thinks the deep-rooted social and structural problems behind integration can be solved by removing veils from the streets, then they’ve got another thing coming.
But then again, Sarkozy also supported the Swiss ban on minarets, so there you go.
Escaping the mediocrity, sometimes unfathomable bureaucracy, and a general lack of opportunities in their home countries, many European economists have stayed in the US after pursuing a degree.
This is not exactly shocking news. But it reminds me of my own. So allow me to indulge for a minute.
While in university, some of my friends went on exchange, and many to Europe. While getting B-ish grades in our own universities, many came back with A+ from schools in Europe while maintaining a party schedule the rest of us could only dream of.
Not too long ago, I myself spent some time at a European university for a master’s degree. Now watching my boyfriend also pursuing a master’s degree from the same reputable university, I can say from first-hand experience: There-Are-No-Standards.
First off, many universities in Europe have no entrance cut-offs. That means, with the right preceding degree – which was also given to students that studied with no real entrance requirements, you are stuck in a classroom with the lowest dominator. Having a “tolerant” education system also means assignments can be handed in late, exams can be taken and re-taken, an atmosphere of genuine lacklustre-ness prevails.
Adding to the lack of uninspired classroom interactions, the hierarchical structure on the other end of the podium is also unfathomable. Unlike the tenured and untenured tracks in the North American system, complete with resident RAs that mark assignments and hold the occasional seminars, the entire supporting arm of this higher education branch is missing!
Contrasting my lonely graduate student life with those that pursued their graduate careers in Canada – with their own office space, more-or-less guaranteed research assistant positions, access to professors and conferences, and a structured graduate-student social life, my deal was truly crap.
So I buy the story when it says: Read more...
NPR did a couple of podcasts, touting the “awesomest” economy in the world, Denmark, here, and here.
I thought it was going to be another piece of hoopla on the wonders of Danish happiness derived from their unthinkably high taxes. But luckily, Danes interviewed in the program didn’t go into PR mode, so some real questions and real concerns were addressed.
I do not think the low unemployment number (at 1.8% versus 5.8% in the US, on average) in Demark is indicative of its economic success by any means. Whether they like to admit it or not, an open EU has effectively made Denmark’s neighbours, close and afar, competitors of its most vital resource: labour. Courtesy of the country’s free education system.
Danish taxes also contrast sharply with those in nearby London, often jokingly referred to among Danes as a Danish town, because so many of them live there. Lower taxes on high earners have been a centerpiece of the policy mix that has fed the rise of London as a global financial center since the 1980s.
But today young Danes can easily choose not to pay for the system’s upkeep, once they have siphoned off what they need. For starters, as citizens of the European Union they are entitled to work in any of the 27 EU countries.
In a country of just 5.5 million people and averse to immigration, there is no loss too small.
The Confederation of Danish Industries estimated in August that the Danish labor force had shrunk by about 19,000 people through the end of 2005, because Danes and others had moved elsewhere. Other studies suggest that about 1,000 people leave the country each year, a figure that masks an outflow of qualified Danes and an inflow of less skilled foreign workers who help, at least partially, to offset the losses.
And once the effect of its brain drain is felt, slower growth will follow, and the existing welfare system will have to change. Read more...
Image via Wikipedia
I have written about the sorry state of demographics in the developed world, where low births can’t keep up with rapidly declining populations to maintain the costly welfare systems.
Germany, along with Japan and Italy, were singled out.
From my humble point of view, Germany fails on two fronts: 1) poor public policies in both government and corporate sectors do not support a post-partum life that involves both children and career; 2) its patriarchal social structure effectively forces women to choose work over children in most instances.
So I was pretty happy to see the Germans taking a huge leap to tackle above-mentioned problem number one, which in time, will hopefully break down problem number two.
Starting with afternoon programs in school.
Unlike schools in North America where children can stay all day, in Germany, most schools close at noon.
Now, in the face of economic necessity, it is crumbling: one of the lowest birthrates in the world, the specter of labor shortages and slipping education standards have prompted a rethink. Since 2003, nearly a fifth of Germany’s 40,000 schools have phased in afternoon programs, and more plan to follow suit.
“This is a taboo we just can’t afford anymore; the country needs women to be able to both work and have children,” said Ursula von der Leyen, the German labor minister.
The spread of all-day schooling in Germany, a trend she considers “irreversible,” is a sign of the times, Ms. von der Leyen said in an interview. “The 21st century belongs to women.”
And surprisingly, but then again perhaps not so surprisingly, child-care infrastructure is way stronger in the former East Germany than it is in the west.
In the East, a Communist leadership losing male labor to the West set up free day care centers and all-day schools. Women drove cranes and studied physics. Western wives, by contrast, until 1977 officially needed husbands’ permission to work. By then, their Eastern peers had a year of paid maternity leave and shorter work hours if they nursed. Read more...
Image via Wikipedia
There are roughly three alcohol belts in Europe.
The vodka belt includes much of the former Soviet states, including parts of Eastern Europe, the Baltic states, and a number of Nordic states.
The beer belt counts the much of western Europe, including the beer-loving Benelux, UK, Germany and a number of central-European states.
And going down south is the wine belt, where states bordering on the Mediterranean such as France, Italy, Spain, and Greece prefer to sip their drinks with food.
According to the Economist world figures, the following countries topped the yearly alcohol consumption table in 2008. I suspect Germany and Czech’s high positions is attributed to their heavy beer-drinking habits, which are always consumed in higher quantities than wines and spirits.
1. Germany
2. Czech Republic
3. Finland
4. Denmark
5. Russia
6. Austria
7. Venezuela
8. Poland
9. Slovakia
10. Netherlands
But available statistics for binge drinking looks quite different than those of regular drinking.
In Europe, Denmark outpaces most of its neighbours in excessive drunkenness. Off the continent, UK is a big binger. And unsurprisingly, Russia’s infamous drinking problem also lands it on the list.
Russian’s vodka obsession is tightly linked to its culture, its relative poverty, and its frigid cold.
To understand the grip vodka has on Russian culture, one need only to look at its name: vodka is a diminutive form of the word voda — Russian for water. The average Russian drinks 4.75 gal. (18 L) of pure alcohol a year, mostly in the form of vodka. Distilled from grains or potatoes, it has no real taste. It is not sipped; it is not savored. In fact, there’s no real reason to drink it except to get drunk. With an alcohol content of between 40% and 55% (80-110 proof), vodka is consumed as a shot, usually in the afternoon or evening, followed by a salty snack: fish, pickles, jellied meat or sauerkraut. After the food comes another shot. Then more food. Shot, food, shot, food — and so on until the Russian winter seems a little less cold. Read more...
The vampire-genre used borrowed heavily from Slavic folklores and rules, or at least tried to claim some kind of European bloodline. Remember the mythical creatures named Vlad out of Transylvania, vampires of Byron, Bram Stoker, Bronte, and later Anne Rice, and even the ones out of Blade?
Not so much anymore.
In recent years, with shows like Buffy, Twilight, True Blood, the vampire theme has morphed from a sub-genre of horror, to an entire class itself. In recent years, its depth has risen from merely terrorizing humans and dueling with other creatures of the night, to expounding on hot-bed issues like abstinence, racial and social issues, ideas or morality and mortality.
Vampire baseball, can you dig it? If the old SCTV gang had thought that one up, they’d have knocked off early for the day to celebrate. But sometimes ninnies express truths that smart alecks couldn’t think up at gunpoint. Thanks not least to its eerie echo of Camelot’s touch-football games, the image of Lugosi’s star-spangled descendants shagging flies in ball caps had the one popcult virtue that can’t be faked: accidental profundity.
And vampire characters have progressed from two-dimensional blood-sucking monsters, to those with American suave, exposing bigotry and hypocrisy, and championing unjust causes.
True Blood‘s anti-Bush glee makes subtext as archaic as laser discs. Before Anne Rice ruined everything for her fans by going Christer on them, she won a vast gay following by creating sympathetic vampires whose non-mainstream tastes made them mournful but special. Now Alan Ball has junked the mournfulness—about time, too—while reworking the parallel to send up homophobia.
Better yet, he’s discovered that turning vampires into an interest group is a great way to crack wise about all the other smack-downs that keep God’s favorite country so lively. Smug subcultures versus heartland straight arrows, ostracism versus tolerance, assimilation versus exclusivity—yep, the whole bazaar. Subtle he isn’t, but you can’t say it’s not a joke we’re all in on.
Is there anything the French does not try to plan? Its oppressive education system aside, and in a clear showing that French politicians need some real crisis to lose sleep over, here’s what’s on the French agenda this week.
The French elite is united in their desire to ban the burka, citing its divine mandate and unique French imperative to free those women from the “prison” those items of clothing create. What’s more ironic than throwing legal tricks around to render a previously harmless act illegal? That less than 0.06% of French’s Muslim population dons the cursed thing!
Women wearing the head-to-toe covering, which leaves just a narrow opening for the eyes, are a rare sight in France. The French domestic intelligence agency said late last year it has even counted them, and found precisely 367 niqab-wearers in a country with a Muslim population estimated at close to six million.
Next, the connoisseur and patron of under-aged sex tourism, French Cultural Minister Frederic Mitterrand, wants to tax Google (perhaps because taxing the Internet is just a tad too, ambitious) for “the development of legal outlets for buying books, movies and especially music on the Internet”. Because the French Internet is particularly averse to file-sharing that’s destroying the great institution known as French innovation.
Comment?
I have a better idea[:] how about we tax the French Telecom companies for allowing access to the data, then we can tax the PC manufacturers that sell products in France for providing the equipment to users to pirate music. After that we can tax the French electric company for providing power to run those piracy machines.
Finally we can tax the French Government being complete idiots.
Moving right along, the French government is back-pedaling from its 2005 name ruling. It would see obvious now that having your last name hyphenated with two hyphens look ghastly. But I’m sure it made perfect sense to a French bureaucrat at the time! Read more...
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