There are euros enough to spare yet in the German budget yet.

The drug policy commissioner in Germany has has said that when it comes to continuing welfare allowances for smokes and beers, “clearly there is room for luxury items in benefits for the long-term unemployed”.  And that anyone whom doesn’t agree with her is simply populist. For good measure, however, she does adds moderation is important.

Good news for the smokers in Germany though, the government is keen to defend their rights to smoke and refuses to increase the taxes on cigarettes.  Poor Germans are now reduced to rolling their own smokes.

“Regarding the tobacco tax we first need to create a level playing field,” she said. “Many smokers have moved to fine-cut rolling tobacco and roll their own cigarettes now, because it’s cheaper due to the lower taxes.” Instead of raising the tax on a pack of smokes, the government should instead insure that cigarette smuggling is reduced to insure that they are paid at all, she told the paper.

• Eurozone and Germany.
• Public pensions and retirement.
• Polling caste.
• Memo to outsiders: trillion dollar bailout was just window dressing.
• “The unhappiest Spaniards are those who most embrace the modernist destruction of tradition, especially when it comes to traditional family relationships.” When measuring happiness within a particular country over time.
• Will an ever-diminishing Europe slip quietly into the night?

• On stitching up dead people.
• Finally, domestic bus services in Germany. Bizarre, since Europe-wide Euroline has little problems operating.
• Michael Lewis strikes again.  This time in Greece.
• Rewiring our minds to read better.
• American kid turns into Mexican drug pin. American kid turns into Al-Shabab terrorist. Two sides of the same coin?

I used to think charging for toilets, and having up to two attendants sitting outside washroom facilities and collect coins in a little tray, ceremoniously spraying a whiff of air fresher in toilet stalls after each use, was an act relegated to developing countries with severe under-employment problems.  I was wrong.

On the European Continent, it is the rule rather than exception to have paid toilets.  Whether it’s in McDonald’s, department stores, highway rest stations, or sometime even museums, I always go forth with change in my pocket.

The newer automated paying toilet turnpike system adopted along the Germany highway is at least without attendants, generally well-lit, well-stocked and sanitary.  You also get a coupon back for the amount you inserted to get inside the washroom, which can be used in the chain of highway rest stop restaurants and shops.  So not all’s wasted.

In shopping areas and fast food outlets, I find it harder to justify installing paid bathrooms at 20 to 60 cents per use.  Why penny-pinch the customers that are buying things and keeping your business afloat?

However, the idea of keeping customer happy in Europe is still stuck at a level where YOU, and not THEM, are expected to pay for customer service.  The consumerist drive is still under check by relatively expensive goods and inconvenient shopping environments – expensive parking, spread out shopping areas, and a general indifference to the idea of comfort when shopping.

PS. Apparently Paris is also subjected to a pay-for-use public toilet system, with some places literally robbing the tourists on one whole euro per use.

Früh is a pretty famous brewery in Cologne, Germany.  On their website, they have archived all their billboard campaigns, organized by year.

At the very bottom of the list, there’s a separate category called Düsseldorf, which is a rival city.

Those ads poke fun at Düsseldorf, with taunting taglines like “Now also in small villages around Cologne”, “line up”, “for relief, now available in A3 (German highway outside Düsseldorf)”.

Full archive here.

A primer on the history of Germany’s guest workers.

Germany:

• Picked up the most unskilled and educated labour from backward parts of Turkey, on purpose, to fuel its industrial expansion
• Kept them in factory dormitories, isolated from mainstream German society
• Idea was to keep them on rotation of a few years, send them back, and get another roster in
• Industry rebelled at the high training costs of such interruptions, so same groups of workers were kept
• Built schools and educated workers’ children for eventual “repatriation” back to Turkey
• Even after an entire generation has elapsed, still refused to acknowledge the permanent nature of the migrants
• Up until 10 years ago, had no skill-based, active immigration scheme

While the Turkish migrants:

• Were from the most backwards parts of Turkey, mostly illiterate and highly religious
• For decades, in states of limbo, many had bags packed to go home, but uncertainly over Turkey’s political situation kept them
• Kids educated mostly in Turkish, although in reality had poor literacy skills in both languages
• Lack of integration and education means little employment prospects for many second and third-generation Turkish immigrants children

So is it any surprise that a homogenous and rigid society has trouble incorporating another equally homogenous and rigid community?

It’s not just Germany, but to my knowledge, the Netherlands, Sweden, Denmark, and probably most of western and northern Europe, all had some version of the guest worker scheme.  All are now lying in the thorny beds they made themselves decades ago.

This is how the likes of Geert Wilders hijacks meaningful conversations on immigration and integration.  When a chasm the size of New Zealand’s newly torn fault line exists between what politically-correct politicians and media say, and what the Joe Schmo thinks, then these populist telling-it-as-it-is ideas begin to take hold.

What I’m getting from this Newsweek take on the Sarrazin non-sense sweeping Germany, is that one, Germany refuses to acknowledge its long-term negligence and mistakes made on immigration and integration policies.  As a result, Germany’s post-war repentance took on a wildly ignorant and politically correct tone which confused racial equality and tolerance with recognizing disadvantaged and left-behind communities for what they are, disadvantaged and increasingly left behind.

And two, politicians and media cannot effectively deal with this underclass of mostly immigrant citizens, and refuses to acknowledge what is in plain sight – that is, their low economic and social status.  I understand the nuances required in separating the underlying social problems from their attached communities, but that’s what politicians are paid to do.

So far, it looks to me as though they are only capable of doing one of two things.  One, blaming poor development in the Turkish/Arab communities in Germany (and Turkish/Moroccan communities in the Netherlands) on Islam.  Or two, pointing the finger on politicians on the other side of the table and calling them Hitler, and thereby exempting themselves from meaningful discussions on the wider social problems and policy mistakes made in the past, possibility by their own parties.

Many people have said that this is all but a distraction from the real economic and demographic challenges that Europe faces.  No doubt, Europe could very well harvest this “crisis” into an opportunity and benefit from the younger demographic profiles of their immigrant communities.

But I would say that when you have 10-20% percent of your population in a politically provoked, socially isolated, and economically unfulfilled state, those countries are out of balance.  In Brussels, Moroccan youths are (from reliable friends that live there) wreaking havoc in Arabic neighbourhoods – everything from petty theft and property vandalism to rioting against the police.

On the other hand, Belgium is also a country where most white-collar work places have no (not a little, but none whatsoever) people of colour, despite a good 15-20% of their compatriots being non-white.  It says something about the society when most native Belgians have never encountered a non-European co-worker, instead only interacting with the immigrant underclass through their jobs as office cleaners, grocers, and other lowly menial jobs.

But back to Sarrazin, is it then any surprise that most Germans support him and his views?

Who’s for it, and who’s against it.

Spain, Poland, Austria, and Belgium are backing the concept, France, UK, Germany and the Netherlands are against.

It seems that the more up-and-coming, politically and economically unstable ones are looking to the the EU for more centralized (and with luck, fair) power partitioning. Poland is still waiting on the doorsteps of the inner circle Europe, so you take good will where you can get it?  Austria’s still awaiting the verdict on its eastern European investments, Spain struggling with higher unemployment and general economic ruin, Belgium barely able to keep the country together.

Bigger states like France and Germany want to retain more sovereignty, and it would look both politically untenable and silly to hand over more power when both believe they control the institution anyway.  In the UK and Netherlands, the shift to the right has a distinct and not at all unsurprising anti-EU slant to it.

Germany’s massive workforce bail-out.

EU regulations limiting doctors’ working hours “failing spectacularly”.

Working on a startup doesn’t suck, it’s just really, really hard.  Especially if you are the one taking on most of the risks.

China sees Africa the same way the West sees China: A land of a billion customers.

The Wintel monopoly is dissolving.

Intuit wants to fight the free Californian tax filing offerings.

Our palate becoming spicier with shifting demographics.

Language and how it influences the way our respective cultures view the world.

Bringing your own camper with your own food when traveling is a well-renowned Dutch sport.  Apparently Germans dabble in it as well, much to Norwegians’ chagrin.

A piece on the changing state of the British middle-class.  The word “class” comes up a lot, both explicitly and implicitly.

How our state of mind and our awareness of social norms and perceptions have on morality.

One scenario on US-China relations in 2020. This one is not optimistic.

How Kaiser Wilhelm II tried to harness the power of Caliphate to further German imperial interests, and failed.

Is the development of America’s materialistic culture in the 20th century merely the result of its democratized luxury?

A brief history on the decline of cosmopolitanism.

Everyone’s got something to say about Zynga. Here’s the latest.

Why media outlets need to consider making money through commerce versus the tired choice between advertising and pay-wall.

How to change norms and public behaviours.

Over-hyping Gustav Mahler.

A modern Lhasa that is hardly the calm and still Shangri-La that many have in mind.

Cognitive trade-offs with concentration-enhancement drugs.

There’s no future without adequate savings for the under-40s.  The Gen X and Gen Y retirement will look pretty different.

I will let the title of this article speak for itself: “Are big breasted women more intelligent?”

There might be a causal link between happiness and the level of connectedness we have on the social web.

If you can’t fight them, join them. Germany starts down the road in educating its own home-grown imams.

Women played a larger role (on the German side) during the Holocaust than previously expected.

What Americans considers bad economic times, Germans may see relative prosperity.  History helps explain behaviour and outlook, and the German version supports long-run fiscal caution.

The nineteenth-century German politician Otto von Bismarck was hardly anyone’s idea of a nanny, but he constructed the world’s first nanny state for the sole purpose of making German citizens so codependent on the German Reich that they would never think of rebelling against it. By offering Germans a prototype of the modern welfare state, Bismarck’s goal was not improving the common man’s lot—it was his way of inducing the common man, when faced with personal difficulties, to expect the state to look after him, instead of relying on himself to deal with his own problems.

Ironically, Bismarck launched the first welfare state because he feared the influence of Karl Marx on the German working class. Marx opposed the welfare state precisely because he recognized that it would create a population codependent on the ruling elite in charge of the German Reich. It would tend to make them more docile and helpless, less self-reliant and rebellious. Today’s European socialists, along with America’s welfare statists, are not the descendants of Marx; they are the great-grandchildren of Bismarck.

A rather cynical take on the social psychology behind the construction of a welfare state nowadays.

But as paranoid as some Libertarians may sound, there exist throngs of well-meaning politicians and policy-makers with intentions to improve the general well-being of citizens, but inevitably cultivate a culture of dependence and co-dependence.  The spirit of independence might be the de facto norm in many lands, but the zeal to defend it is hardly universal.

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.

And as for Germans’ infamous fear of inflation?

By staking such a hard line, [Germany’s central bankers] managed to claim more influence for themselves in the West German political order. Germany’s contemporary fear of inflation is the product of an invented history — one that the mythmakers themselves came to believe.

businessweek.com- Many Greeks view the state with a combination of a sense of entitlement, mistrust, and dislike similar to that of teenagers vis-à-vis their parents. …

US Federal Reserve- “It is not the wolf at the door but the termites in the walls that require attention. The sooner the house’s structure is strengthened, the better.” …

FT- It is time to recognise that Greece is not just suffering from a liquidity crisis; it is facing an insolvency crisis too. …

blogs.ft.com- The eurozone’s most vulnerable economies are getting little benefit from the euro’s fall because they are too inflexible and uncompetitive. …

standpointmag.co.uk- The least bad option would be for the German bloc to leave EMU. Germany’s banks might still have to be recapitalised, but it would be less costly than trying to “rescue” Greece. …

The Economist- Rich countries with their greying populations should be saving whereas younger, fast-growing developing countries should be borrowing heavily. But in fact it is the other way round. …

NY Times- Austrian banks slowly recover from a sharp economic downturn and tries to pay down a pile of private-sector debt. …

marketwatch.com- We’re still living in a fantasyland. Most people have no idea what’s really going on in the economy. …

WSJ- Hayek understood that the opposite of top-down collectivism was not selfishness and egotism. A free modern society is all about cooperation. …

Newsweek- We may be reaching the limits of economics. The disconnect between theory and reality seems ominous. …

newyorker.com- Financial illiteracy isn’t new, but the consequences have become more severe, because people now have to take so much responsibility for their financial lives. …

cjr.org- Rolling Stone made a virtue of the fact that it is not wedded to the news cycle in order to produce journalism that helped drive it. …

seedmagazine.com- No animal spends more of its allotted time on earth fussing over sex than homo sapiens. …

Business
BP’s hypocrisy problem
nymag.com- Hayward knew that what he was enduring was a ritualized necessity.
On guns, butter and broken windows, now with more oil…
economistsdoitwithmodels.com- Economists are right in touting the supposed economic benefits of the oil spill.
Retail chains are embracing their online stores
latimes.com- Traditional merchants such as Macy’s are adapting to online shoppers.
What valley companies should Kknow about Tencent
techcrunch.com- Tencent is the largest, most profitable Internet company in China. OK. It’s also the 3rd largest Internet company in the world, after Google and Amazon. Whoa.

Finance & Economics
Why European countries are like American banks?
thedailybeast.com- Greece is like Bear Stearns, Germany is JP Morgan, and guess which country plays the role of Goldman Sachs?
Canada’s economy is suddenly the envy of the world
Boston.com- And is very smug about it all.
Normal adjustment mechanisms
brontecapital.blogspot.com- When metals prices/demand falls the Australian dollar falls. Greece is not so lucky.
Dealing with Dutch disease
VoxEU.org- The recent boom in primary commodity prices has once more stimulated interest in the issue of “Dutch Disease”.

The rest
Unwed daughters in Greece catch ‘time bomb’ in pension overhaul
noir.bloomberg.com- Greek spinsters are not marrying for fear of losing their meager pension. Screwed up incentives? You betcha.
China’s real estate boom spells trouble for boyfriends
latimes.com- No house, no car, no girlfriend.  Welcome to the reality of an ever-so-materialistic China.
Soccer done right
forbes.com- Changing soccer scoring would better the underlying competitive realities than the current rules.