Dutch Economy Falling Behind Germany

The Netherlands (Wikimedia)

The Economist is reporting on economic developments in the Netherlands - one of a select group of Eurozone countries still with a AAA rating (the others are Germany, Austria, Finland and France, the latter with a split rating) -. The Netherlands, often regarded as Germany's little brother, is slipping behind its big brother with a shrinking economy. Germany's economy is still growing.  According The Economist the Dutch weakness is caused by a slowdown in consumer spending due to anxiety about dropping house prices. Till the financial crisis started in 2008, the Dutch housing market has been supported by a favorable mortgage tax treatment, resulting in the Euro-zone's highest household-debt levels (at 249% of income according to 2010 Eurostat data.) Now that the economy is facing a slowdown, the housing market has been under pressure. The IMF, which had been visiting the Dutch parliament,  agrees that the Dutch housing market needs to be structurally reformed. The IMF, surprisingly, also finds that further austerity measures, considered by the Dutch government, are not only unnecessary, but also counterproductive. Is this the beginning of a fundamental change in IMF's austerity views?

Background of the Great Euro Crash

(European Politicians, Robin Hood Tax/Flickr)

With Cyprus now the latest crisis in the Euro saga, I went looking for a clear and historical overview on how Europe got into this financial, economic, and political trouble. I found it in a well-documented TV program by the BBC's Robert Preston, The Great Euro Crash, aired last year but still very informative and relevant. It shows clearly that the cultural and economic differences among the various member states were far too great to have them join a single currency, and that this was a political decision often ignoring the economic realities.

"..Talking to historians, economists and politicians, (this film) takes a long view of the euro - from Churchill's vision of a Uniteda States of Europe to the bail-outs of Greece, Portugal and Ireland. Meeting a property developer in Ireland, a taxi driver in Rome and a German manufacturing worker, the film exposes the high cost being paid by European workers today for the dream of monetary union - and how close Europe came to a complete banking meltdown..."  

Now a year later, after many experts and pundits believed late 2012 that the worst was over, it seems that with the political uncertainties in Italy, ongoing problems in Greece and Spain, and now with the troubled rescue of Cyprus, the risk for the Euro and its financial system still is fully alive. To get a historic understanding how this all happened starting after World War II, view this documentary:

The Netherlands at the World Baseball Classic

Dutch Baseball Team Celebrating World Cup in 2011

After the Dutch baseball team won the Baseball World Cup in 2011, they are among the last four teams competing in the World Baseball Classic finals. Now that the Baseball World Cup is discontinued in favor of the World Baseball Classic, the latter is the main international baseball tournament. The other three finalists are Japan, the Dominican Republic and Puerto Rico, the latter two responsible for eliminating the U.S. team competing with MLB players such as R.A. Dickey, David Wright,  Jimmy Rollins and Joe Torre as manager.  The New York Times highlights the Dutch as "the surprise entry to the final four of this tournament." in this interesting article, Kingdom of the Netherlands, the Epitome of the Classic .....................Just coming in, the Dutch lost in the semi-finals against the Dominican Republic (1-4), which will be competing later today against Puerto Rico for the World Championship.

Why Label Genetically Engineered Food, the New York Times Wonders?

Sweet corn/Fairfax County

The New York Times is often vilified by the right as being liberal and biased, while many liberals find it an amazing newspaper offering their daily "news" diet. I for one don't share this overly emotional hatred or admiration for this newspaper. Frankly, I find The New York Times often quite a conservative and closet-establishment publication. Case in point is its today's editioral, Why Label Genetically Engineered Food? In it, it refers to the earlier announcement by Whole Foods Markets to start labeling GMO products in its stores (see my earlier post). It says:

"....Any private company has the right to require its suppliers to meet labeling standards it chooses to set, and consumers have a right to know what’s in the food they are buying. But there is no reliable evidence that genetically modified foods now on the market pose any risk to consumers."

It then refers to the Food and Drug Administration's view that there is no basis for concern, and adds:

Cellphones as a Modern Irritant

Bfishadow/Flickr

This week I've counted three experiences in cafes and restaurants,  where fellow guests, usually sitting by themselves speaking on their cell phones, caused an irritating experience by speaking loud and acting as if they are in their own home or office seemingly with no regard for other guests in this public space. I've been making this my personal crusade by either asking managers of the venues to stop their patrons from using cellphones - somewhat successful - or asking the patrons themselves to lower their voice - less successful, as they usually consider speaking on their cellphone their god-given right - . I always thought that the annoyance was caused by people on their cellphone speaking louder than normal, but now a new study in the journal Plos One while confirming that cellphone conversations are irritating and distracting, explains this is not because people speak louder, but because our brains pick up on a public conversation to someone who is not present. The New York Times reports this as follows:

War in Europe?

(European Politicians, Robin Hood Tax/Flickr)

The Luxembourg Prime Minister, and until last January Euro Group Chief, Jean Claude Juncker (also known as Mr. Euro during his eight year tenure as Euro Group Chief and informal head of the Euro monetary Union) has unnecessarily stirred the pot of European politics in a recent interview about the situation in Europe in the German magazine Der Spiegel, "The Demons Haven't Been Banished"

Upon Der Spiegel's statement, "You're exaggerating. No one today seriously doubts peace and friendship in Europe.", he responded as follows:

"That's true. But anyone who believes that the eternal issue of war and peace in Europe has been permanently laid to rest could be making a monumental error. The demons haven't been banished; they are merely sleeping, as the wars in Bosnia and Kosovo have shown us. I am chilled by the realization of how similar circumstances in Europe in 2013 are to those of 100 years ago"

Once this statement reached the outside world, many media reacted, for example:

Investment Strategist Jeremy Grantham on Debt, Paper World vs. Real World

TaxCredit/Flickr

Jeremy Grantham, Co-founder and Chief Investment Strategist of Grantham Mayo Van Otterloo (GMO) an asset management firm, and known for his predictions and views of  market bubbles was this week interviewed on the Charlie Rose show. Grantham covers a whole range of subjects related to the economy and financial markets. One of the things he mentioned, which I found remarkable, was that debt is not the main problem facing the U.S. and the world economies. Debt is part of the paper world, he says. More important is the real world, which is, in his view about the quality of people, their education and training and the innovation of products and equipment.

Other areas he touches upon are the dangers of the Keystone pipeline for the environment; the importance of renewable energies in order to move away from the current carbon driven society; that the housing market collapse and the price increase of commodities are the main reasons for the current economic crisis, more so than the debt crisis; how the shortage of fertilizer and specifically the finiteness of phosphorus could cause a food disaster within the next 50 years;  and how current monetary policies are transferring wealth from the poor (i.e. savers and pensioners) to the rich (i.e. hedgefund managers and banks.) For the complete interview click here.
 

Whole Foods Announces GMO Labeling

Sweet corn/Fairfax County

While the democratic process in the U.S. is slow in deciding on mandatory GMO labeling, being hampered by several corporate interests, it's now another corporation which shows the way to a safer future for consumers. Whole Foods supermarket, as America's first national grocery store, has decided that by 2018 products in its U.S. and Canada stores must be labeled if they contain genetically modified organisms.

As Walter Tobb, co-CEO of Whole Foods, stated in The Huffington Post:

“We are putting a stake in the ground on GMO labeling to support the consumer’s right to know. The prevalence of GMOs in the U.S. paired with nonexistent mandatory labeling makes it very difficult for retailers to source non-GMO options and for consumers to choose non-GMO products. Accordingly, we are stepping up our support of certified organic agriculture, where GMOs are not allowed, and we are working together with our supplier partners to grow our non-GMO supply chain to ensure we can continue to provide these choices in the future.”

This news follows on the heels of a recent HuffPost/YouGov poll indicating that 82 percent of Americans think GMO foods should be labeled. Common sense still would dictate that the labeling of GMO should happen as soon as possible. Although Wholefoods' initiative is welcome, waiting five years seems a long time when dealing with consumers' choice and health.  

Detroit, a Microcosm of America?

Ian Ransley Design/Flickr

 “Detroit is a microcosm of what’s going on in America, except America can still print money and borrow,” said Mr. Boyle, a veteran financial consultant after reviewing the financials of the city of Detroit. Is Mr. Boyle right and what does this mean for the future of American cities? Read full article in the New York Times about how Detroit seems to be stumbling towards bankruptcy.  For a visual experience see the ruins of Detroit.

Wealth Inequality in America

Serge Melki/Wikimedia Commons

We know that wealth inequality has been increasing in the U.S. - and in many other countries - : stories about CEOs making hundreds of times more than their average employees; bonuses of millions of dollars awarded to executives who leave, stay, sign up, perform well, perform ok, or perform lousy while average pay is under pressure; individual hedge fund managers making billions a year, while countries are on the verge of bankruptcy for lesser amounts. I discussed this subject in a previous post, Money, Power & the American Dream. Books have been written, studies performed about the negative consequences of too great of an inequality, but political discussion or social outrage has been quite limited in the U.S., with the exception of the Occupy Wall Street movement. Till now, perhaps, with the following video which has been going viral. It gives a simple but clear overview of wealth inequality in the U.S., showing that the gap between the haves and have-nots is much worse than many of us think:

Are There Any Europeans Left?

(European Politicians, Robin Hood Tax/Flickr)

While being this week in Europe, I couldn't help reading the most international newspaper of Europe, The International Herald Tribune. Soon it will be renamed the International New York Times, which is too bad but a sign of the times - no pun intended - and reflects the reality of being solely owned by The New York Times. The International Herald Tribune used to be a joint-venture between the Times and The Washington Post, but the Post stepped out in 2003, so now The New York Times wants to extend its global branding: see for a personal memory Adieu Herald Tribune by Hendrik Hertzberg of the New Yorker. Anyway, coming back to where I began: I was reading a thought-provoking article by French writer and journalist Olivier Guez, titled: Are there any Europeans left?

It starts out by saying that Europe is in a crisis "not just of Europe’s currency, but of its soul." and he continues: