Sunday, January 31, 2010

Wealth of a Salesman

Hang on the line
Another caller is trying
An alternate proposal
Events are sometimes causal

The seconds are ticking
The account is open
The budget is ambitious
The market so vicious

The clientele so capricious
Demand is low
Supply is high
Failure so close

Seize the moment
Timing is everything
Bills need paying
Promotions to be fought

The cost of sales
The sale of your hopes
The customer is king
Even in a democracy

That's meritocracy
Not in your idiosyncracy
Have your parachute ready
Times are so trendy

The seconds are ticking
The window is closing
The account is on the line
Your heart is ticking

The monster of greed is licking
The sports car
The condo
Yet you are alone and the clock is ticking

A beach far away
Children play
The cost to pay
For a high flight

The career way or the highway
The tolls are high
The price worth paying?
Hold on the line!

Written: August 2005

More on a "rethink of capitalism": The purpose of a business and "profit maximisation"

In recent months due to The Crisis, many have called for a fundamental rethink of capitalism, the French (right of center) President of France, M. Nicolas Sarkozy, most recently at the Davos World Economic Forum.

This is part of my contribution to the (re)think:

The purpose of a business is to produce and/or market goods (tangible or intangible) and/or services that satisfy needs and wants of enough people (or organisations) at a price that and cost that makes the endevour worth it for the owners - shareholders. And IMO there is nothing wrong or faulty in that.

Plus, "Greed" per se and in general, although much discussed or used as an explanation for systemic socio-economic problems these days, is IMO not a factor. What is IMO/IME a factor, and a main causal one at that, is that most corporations have become so large and so impersonal - bureaucratic that they can only operate based on a single factor (mono-variable). And that factor becomes profit (or shareholder value) maximisation.

On the other hand, micro and small companies tend to remain small enough that they can operate based on a multi-variable set of goals, that includes no only profit but other factors as well that cause owner satisfaction (fame, personal ambitions and dreams, ideas, etc).

Corporations that have stocks publicly traded (ie in stock markets) have an additional source of monolithic (mono-variable) pressure ie one that focuses exclusively on profit - shareholder value maximisation: The financial market and its analyses.

What I mean by that? Most often, critiques of capitalism overlook that fact that there is no "capital" per se in large corporations at least, ie the capital-labor-knowhow triangle/model is too simplistic to describe the "system". Why? Because most operators in the financial markets are not the owners of the invested money themselves. They handle the money of clients, many clients, and, this is the key IMO, they have to compete with other operators for their business - clientele. This competition too is based on too narrow, IMO, factors: expected return (and at best, expected risk and their combo (see the "expected risk vs expected return trade-off and the max efficiency frontier). That is the best approximation of the "greed" many politicians and other "accuse", but It is not real greed, it is the competition between money managers for attracting and maintaining their clients based who will offer them the best return. It is that which, in cascade, causes the "profit maximisation" prime and single-directive on publicly quoted corporations.

So whereas in theory, other parameters could be introduced, eg social and/or environmental "responsibility", it is profit maximisation that is dominant.

That's my theory.

Friday, January 29, 2010

Obama's Catch 22?

Can the US President break the GOP's solid as a rock "defensive" game since Day 1 of his Presidency and promote bipartisanship in the House and more crucially, the Senate?

IMO, it looks highly unlikely the way things are.

An excerpt from his State of the Union (SOTU) speech:
"... Washington may think that saying anything about the other side, no matter how false, is just part of the game. But it is precisely such politics that has stopped either party from helping the American people...."

Are Americans sick of the divisive stances especially by the GOP? How can one have a convincing answer to that?

In his speech, Obama claimed that Americans (voters) have shared needs, eg a job, a future for their children, etc. Yes, but, IMO, that does not mean they agree on the more specifics of these needs. Eg one would think that most Americans would want a universal health care system. But they do not, it seems. It also seems that these days in the US there are as many different "mindsets" and "worldviews" as there are people (300 million!!!?? - OK, I am exaggerating, but to make a point).

As I claimed in an earlier post, IMO the Pres is great on generics, but appears to be lacking in what is indeed very hard these days, to "sell" a policy and to have and explain a set of inter-connecting policies (economy, jobs, healthcare, environment, trade, etc) to the people, because that is de facto very difficult for anyone to do.

It is much easier to oppose, say no, find faults in others' policies than to formulate policy in the US and the rest of the world today, IMO. Always has been, but it is even harder in this global world and due to the basket of crises and problems Obama inherited.

In such strange times we live in it is easier for people to know what they do not want than to know what they want. And although they had very high expectations from the new President, it has proved easy for them to lose confidence, especially in view of the GOP's Grand Defense in the last 12 months, a "firewall" like rejection of the President's policy proposals, in spite of his attempts to reach consensus.

Do the people want consensus between the 2 parties or do they want solutions to their problems? IMO, the latter. Catch 22, IMO.

US Q4 2009 GDP rose a lot but ....

According to the "advance" estimate released by the US Bureau of Economic Analysis:

Real gross domestic product, the output of goods and services produced by labor and property
located in the United States, increased at an annual rate of 5.7 percent in the fourth quarter of 2009, (that is, from the third quarter to the fourth quarter),

In the third quarter, real GDP increased 2.2 percent.

But note that:
The Bureau emphasized that the fourth-quarter advance estimate released today is based on

source data that are incomplete or subject to further revision by the source agency. The "second" estimate for the fourth quarter, based on more complete data, will be released on February 26, 2010.

The increase in real GDP in the fourth quarter primarily reflected positive contributions from
private inventory investment, exports, and personal consumption expenditures (PCE). Imports, which are a subtraction in the calculation of GDP, increased.

The acceleration in real GDP in the fourth quarter primarily reflected an acceleration in private inventory investment, a deceleration in imports, and an upturn in nonresidential fixed investment that were partly offset by decelerations in federal government spending and in PCE.

Motor vehicle output added 0.61 percentage point to the fourth-quarter change in real GDP after adding 1.45 percentage points to the third-quarter change.

Excluding food and energy prices, the price index for gross domestic purchases increased 1.2 percent in the fourth quarter, compared with an increase of 0.3 percent in the third.

Real exports of goods and services increased 18.1 percent in the fourth quarter, compared with
an increase of 17.8 percent in the third. Real imports of goods and services increased 10.5 percent, compared with an increase of 21.3 percent.

Real federal government consumption expenditures and gross investment increased 0.1 percent
in the fourth quarter, compared with an increase of 8.0 percent in the third. National defense decreased 3.5 percent, in contrast to an increase of 8.4 percent. Non-defense increased 8.1 percent, compared with an increase of 7.0 percent. Real state and local government consumption expenditures and gross investment decreased 0.3 percent, compared with a decrease of 0.6 percent.

2009 GDP

Real GDP decreased 2.4 percent in 2009 (that is, from the 2008 annual level to the 2009 annual level), in contrast to an increase of 0.4 percent in 2008.

full text

EU social policy to pick up pace?

Based on the Commissioner's-designate replies and hearing at the European Parliament, it seems to me that 2010+ EU Social policy "activity" will "pick up" compared to previous years.

On Thursday, I watched part of the EU's informal Social Affairs Council meet in Barcelona. Mostly the press conference.

The press conference panel included reps of ETUC, BUSINESSEUROPE and CEEP (European social partners).

There are a lot of discussion on flexicurity, it seems.

IMO the Danish (and original) model of flexicurity is the most interesting. It was developed by the Danish social partners and agreed by government.
As afar as I know, eg, the German flexicurity model allows company to change employee's job description (and thus contract) and move him/her internally.


The future of "work"

By 2050, will most work be done by freelancers?

It is the industrial revolution that turned artisans & other free lancers into employees

Back to Europe's roots?

By producing too many laws European countries and the EU have IMO undermined Europe's secularism! The solution is fewer and better laws plus a return to Europe's philosophical roots (Plato, Socrates, Aristotle, et al).

Constraints? For whom? By whom?

It is not people and small companies that set most limits to themselves, as some claim; Over regulation and legal labyrinths create most constraints IMO.
Systemically speaking how can a person or organisation make rational decisions + operate within a system of thousands of laws - constraints??

No wonder entrepreneurship moved online to escape IRLife's regulatory and legal and red tape labyrinths!! But these are catching up, steadily!

US economy and jobs: A new socio-economic model woud be nice but ....

If Obama wants 2 create jobs other than low skill - low wage then IMO he has to design and "install" new US socio-economic model. This seems most unlikely given the political - institutional dynamics in the US these days (see eg Senate "block" to healthcare reform)

On a major rethink of capitalism, moral trade, Davos, G20 and global governance, etc!

Recent intellectual policy endevours:

1) Who elected the G20 to make policy and regulatory decisions that the whole world will then "have" to adhere to?

That is one of the tweets I made in the last few days (again). A question I began to pose ever since a few months ago, under US/Obama Presidency, the G7/G8 decided to pass the torch of global leadership if not governance to G20 (after the end of the Canadian presidency).

What prompted me to tweet it again? Some of the comments by the "philosopher king", in Plato's use of the term, Nicolas Sarkozy, probably the only major political leader who cares to brainstorm in public (and upsets the balance of some other leaders who are not used to that "kind of thing"). Especially one where he says that G20 may be the sign of things to come, a global governance. But whereas I would be for a democratic global government (see below), I do not consider G20 "representative" of the world or even the UN members world or even the WTO members world.

So here is what I can think of in terms of models of real global governance:

G20 may be "more" representative (of the world) than G8 but leaves out 100+ WTO and UN members.

IMO a World Commission, Council and Parliament a la EU (EU style) is one solution

IMO again, an other solution would be for the world to be structured into regional blocs, EU or US style, and have bloc leaders and reps meet to decide world policies and laws. In other words, instead of G20, a global government group should consist of: reps of the EU, African U, China, India, USA, 2-3 American Unions, 2 Asian Unions, Russia ....

I know that both models I sketch above are kinda radical thinking, but hey, a) that is my task as a policy thinker and b) that, fundamental (re)thinking seems to be the "in" thing these days, not only because of Nicolas Sarkozy.

2) One other major thing that Nicolas Sarkozy said in Davos at the World Economic Forum was his view of the need for a "fundamental rethink of capitalism".

Here are my comments (most were tweeted in the last 2 days)

* A fundamental rethink of capitalism? Of which capitalism (note: of all versions floating around these days)?

* A fundamental rethink of capitalism that N. Sarkozy proposes: Is that a task for economists, politicians, sociologists, philosophers, all?

* A capitalism that includes moving away from profit as the MAIN goal of business, ie give emphasis to micro and small companies instead of corporations. Via a new socio-economic model that includes among others much less regulation and simpler laws. Why? Because, IMO, in micro and SME based economies, profit maximisation is but one many goals, unlike large corporation based ones. Because micros and small firms are motivated by owners' ambitions, pride and other non-profit related goals, not maximising shareholder value per se.

* IMO it is not just capitalism that need a fundamental rethink: Most models and theories of past centuries still "in circulation" do!
In need of fundamental rethink: capitalism, marriage, sovereignty, national interest, "work", economy, trade, legal systems, finance, etc. But most of all, in need of fundamental rethink are: our ways of life especially in the "West" (Europe, USA, etc)

3) A "moral dimension" to "free" trade Nicolas Sarkozy is "searching" for!

IMO, that moral dimension would be "free" immigration among WTO member countries.

4) Other fundamental rethinks that IMO are in order:

a) In view of discussions re sovereignty and national interest (in the UK, US, etc), is there not a need for a 2010 relevant redefinition of them?
I find most recent discussions re sovereignty and national interest a tad "selective". Are trade, sovereign wealth fund and other investments, trade agreements, WTO, COP15 etc consistent with traditional definition of sovereignty? Why are then not included in the lists of those who think the EU is "violating" sovereignty of member states (IMO the Lisbon exit clause that allows/describes how a member state to/can leave the EU is an "ultimate" guarantee of the sovereignty of the member states)? Or are concerned about "foreigners" (see other posts in this blog re oxymora that I detect in the "foreign" discussions/rationales)?

b) Corporatism, in business, public sector, and other aspects of life is another candidate IMO for a major rethink in the way Nicolas Sarkozy proposes.

PS 1. New world economy order: China has approx. USD 2.4 trillion in foreign currency reserves and half of world output comes from developing countries these days!

Thursday, January 28, 2010

Some comments on Obama's State of the Union Speech and his ability to "sell' his policies

Great speech but:

IMO Obama was right to partly blame himself for not explaining his healthcare reform to the people. But when will he do it? Can he (or anyone else, any policy)? IMO Obama is a victim of the fact that most policies, by design, are hard to explain. He's a great speaker but even he cannot sell them.

Obama should propose a national US referendum on healthcare reform and in general take his policies to the people, not Congress. But the problem, for any leader these days, again, IMO is: How can one "sell" or "explain" to the people complex and often over-complicated policies - bills such as the healthcare reform one?

PS. I agree with Obama's views on lobbying but how does he define "foreign" corporations? Plus: Are American corporations not lobbying "abroad"?

Wednesday, January 27, 2010


1) A greener - less materialist, more intellectual products oriented version of capitalism

2) A simpler but more satisfactory way of life, still consistent with the basics of Western civilisation.

Consider the pros and cons of 200 years of industrialism - what to keep and what to revise.

Tuesday, January 26, 2010

Global Warming, World Affairs, the EU, the US and leadership

Here are some thoughts, a tad radical maybe, food for thought, on the dynamics of our times:

1) EU: -30% not even as a conditional EU offer to the US, China, et al? Hm!

2) Here is a radical strategic scenario for the EU (EU2020 etc):
EU2020 Scenario: The EU adopts a -30% emissions target and stops trading with those who do not match the cut! I know, radical.

3) IMO EUropeans need to adopt a sustainable, simpler, healthier lifestyle anyway! Maybe all the way to a "Fortress Europe" (economic+environmental)? Just brainstorming!

4) How radical would this scanario be: The EU uses only solar and wind energy, no CO2 emitting energy, no nukes and EUropeans adopt simpler lifestyles (anyway). Radical, but the times we live in ....

5) Let's look at it from a wider point of view: The West: Our industrial lifestyles in the West have proved unhealthy, thus Europe, North America and others need to revise many aspects of life.

6) Why all this (the above)? Among other things, because the industrial era brought many good things but many bad ones as well, thus it is maybe time to audit the "basket" and revise models and lifestyles.

EU Leadership?

7) For the EU to assume a leadership position in world affairs, it must IMO be a thought leader, instead of a "world bureaucrat"

8) What sort of leadership has the EU shown in the 9 years of the Doha Round of WTO world trade talks and the COP15 - Climate Change talks in 2009 (leading to the results of the Copenhagen Coneference in December 2009)? With Obama now stuck in the US, there seems to be a certain leadership vacuum in world affairs and the EU could/needs to rise to the occasion and lead the world in thought and in "do as I do" throwing in a negotiation assets its 0.5 billion population - consumers - lifestyles and the economic weight of the "rich" EU in order to be a leader in world affairs. Bold?

The US:

9) In the US, the GOP (+ Fox) sem to have checkmated Obama and the Dems and thus US policy making, home and abroad, may be frozen until .... Jan 2013?

The world:

10) Meanwhile, the Director-General of the ILO (International Labor Organization) Juan Somavia calls for the same policy decisiveness that saved banks to save and create jobs

ILO says global unemployed reached 212 million in 2009

According to the ILO's (International Labor Organization) Global Employment Trends report, the total number jobless people worldwide reached 212 million in 2009, up 34 million compared to the 2007 eve of the global crisis.

IMF ups its expectation for 2010 global growth to +4%

In its new edition of its World Economic Outlook, the IMF (International Monetary Fund) WEO: expected a +4% increase in the 2010 world output expected.

This figure is up 0.75 from IMF's October 2009 World Economic Outlook expectation re 2010.

Industrial new orders in November 2009 in the EU and Eurozone

Eurostat issued on January 25 revised data (compared to January 22 release) due to receiving corrected German data on New Orders. These new figures were revised significantly upwards, and had an impact on the European aggregates. As a result, Eurostat published on January a revised News Release, which takes into account the new data from Germany:

November 2009 compared with October 2009
Industrial new orders up by 2.7% in the Eurozone, up by 2.6% in the EU

In November 2009 compared with October 2009, the Eurozone industrial new orders index rose by 2.7%. In October the index fell by 2.1%.

In the EU, new orders increased by 2.6% in November 2009, after a decrease of 1.5% in October.

Excluding ships, railway & aerospace equipment, for which changes tend to be more volatile, industrial new orders rose by 2.7% in the Eurozone and by 2.9% in the EU.

In November 2009 compared with November 2008, industrial new orders decreased by 0.5% in the Eurozone and by 1.2% in the EU.

Total industry excluding ships, railway & aerospace equipment 4 dropped by 0.8% in both zones.

These estimates are released by Eurostat, the statistical office of the European Union .

Figures and graphics available in PDF and WORD PROCESSED

Monthly changes

In November 2009 compared with October 2009, new orders for intermediate goods increased by 2.3% in the Eurozone and by 2.1% in the EU. Capital goods rose by 1.1% and 2.8% respectively. Durable consumer goods gained 0.6% in the Eurozone and 0.3% in the EU . Non-durable consumer goods grew by 0.8% and 1.6% respectively.

Among the Member States for which data are available, total manufacturing working on orders rose in fifteen and fell in eight. The highest increases were registered in Austria (+10.3%), Estonia (+7.4%) and Greece (+7.3%), and the largest decreases in Hungary (-9.6%), Ireland (-4.4%) and Bulgaria (-4.1%).

Annual changes

In November 2009 compared with November 2008, new orders for non-durable consumer goods rose by 1.6% in the Eurozone and by 4.3% in the EU . Capital goods increased by 0.8% in the Eurozone, but fell by 1.9% in the EU. Intermediate goods decreased by 2.1% and 1.8% respectively. Durable consumer goods declined by 5.3% in the Eurozone, but grew by 0.1% in the EU.

Among the Member States for which data are available, total manufacturing working on orders rose in nine, fell in fourteen and remained stable in Italy . The highest rises were registered in Slovenia (+10.6%), the Czech Republic ( +7.9%) and Finland (+6.9%), and the largest falls in Ireland (-26.5%), Lithuania (-24.8%) and Estonia (-16.3%).

UK: The seasonally adjusted Index of Services in November 2009 fell by 2.3% compared with November 2008.

The Office for National statistics of the UK released today the Index of Services November 2009.

Most recent month on a year earlier
Index of Services

The seasonally adjusted Index of Services in November 2009 fell by 2.3 per cent compared with November 2008.

In detail:
i) Four of the five components of the services sector decreased in the most recent month on a year earlier. The largest contribution to the decrease was business services and finance which fell by 4.4 per cent. The only component which increased was distribution.


Output from distribution increased by 2.1 per cent compared with November 2008. In detail:
i) The largest contributions to the increase were retail which rose by 3.5 per cent and motor trades which rose by 7.7 per cent
ii) Within motor trades the main increase was in
• vehicle maintenance and repair
iii) Retail contributed 1.8 percentage points and motor trades contributed 1.2 percentage points to the 2.1 per cent most recent month on a year earlier increase

Hotels and restaurants
Output from hotels and restaurants decreased by 5.8 per cent compared with November 2008. In detail:
i) The largest contributions to the decrease were canteens and catering and bars
Hotels and restaurants

Transport, storage and communication
Output from transport, storage and communication decreased by 3.2 per cent compared with
November 2008.
In detail:
i) The largest contributions to the decrease were land transport which fell by 4.5 per cent, other
transport services which fell by 5.3 per cent and post and telecommunications which fell by 1.7 percent
ii) Within land transport the largest falls were in
• freight transport by road
• other scheduled passenger land transport
iii) Within other transport services the largest decrease was in
• other land transport (which includes the operation of terminal facilities such as railway and bus
stations and the operation of car parks)
iv) Within post and telecommunications the largest decrease was in
• telecommunications
v) The largest contributions to the 3.2 per cent most recent month on a year earlier fall were 1.2
percentage points from land transport, 1.2 percentage points from other transport services and 0.7percentage points from post and telecommunications

Business services and finance
Output from business services and finance decreased by 4.4 per cent compared with November 2008.
In detail:
i) The largest contribution to the decrease was other business services which fell by 5.5 per cent
ii) Within other business services the main falls were in
• labour recruitment
• management consultancy
iii) Other business services contributed 1.8 percentage points to the 4.4 per cent most recent month on a year earlier fall

Government and other services
Output from government and other services decreased by 0.7 per cent compared with November 2008.
In detail:
i) The largest contribution to the decrease was recreation which fell by 8.9 per cent
ii) Within recreation the main falls were in
• sporting and other recreational activities
iii) Recreation contributed 1.0 percentage points to the 0.7 per cent most recent month on a year
earlier fall

This Statistical Bulletin conforms to the standard revisions policy for National Accounts. In this
Statistical Bulletin the only period open for revision is October 2009.
Table RIOS1 shows the revisions to the estimates previously published on 23 December 2009.
Revisions are mainly due to:
• Revisions to seasonal adjustment factors, which are re-estimated every month.
• Updated survey and administrative data.
• Actual data replacing forecasts.

The full release by the ONS

UK out of recession in Q4 2009 but just barely (+0.1%)

According to preliminary data released by the UK's Office for National Statistics today:

The chained volume measure of gross domestic product (GDP) increased 0.1 per cent in the fourth quarter of 2009.

The increase in output was due mainly to increases in distribution, hotels and restaurants and government and other services.

  • Output of the service industries increased 0.1 per cent.
  • Output in the production industries increased 0.1 per cent.
  • GDP decreased 3.2 per cent between 2009 Q4 and 2008 Q4 .

Contributions to growth

Distribution, hotels and restaurants was the largest contributor to the positive growth this quarter. Government and other services and total production also had significant contributions to the increase. This was partially offset by a small decrease in business
services and finance. Construction and transport, storage and communication were flat over the quarter.

Index of Production

The production industries increased 0.1 per cent compared with a decrease of 0.9 per cent in the
previous quarter. Manufacturing increased 0.4 per cent. Mining and quarrying increased 1.0 per cent and Electricity, gas and water supply decreased 3.3 per cent. The production industries decreased 6.3 per cent between 2009 Q4 and 2008 Q4 .


Construction growth was flat compared with an increase of 1.9 per cent in the previous quarter.
Construction decreased 4.9 per cent between 2009 Q4 and 2008 Q4 .

Distribution, hotels and restaurants

Distribution, hotels and restaurants increased 0.4 per cent compared with an increase of 0.7 per cent in the previous quarter. Motor trades and retail made the largest contribution to the increase. Distribution, hotels and restaurants decreased 0.5 per cent between 2009 Q4 and 2008 Q4 .

Transport, storage and communication

Transport, storage and communication growth was flat compared with an increase of 0.7 per cent in the previous quarter. The most significant positive contribution was from post and telecommunications. This was offset by a significant negative contribution from transport support. Transport, storage and communication decreased 4.1 per cent between 2009 Q4 and 2008 Q4 .

Business services and finance

Business services and finance growth was flat compared with a decrease of 0.8 per cent in the previous quarter. The most significant positive contribution was from real estate. This was offset by a significant negative contribution from banking. Business services and finance decreased 4.8 per cent between 2009 Q4 and 2008 Q4.

Government and other services

Government and other services increased 0.2 per cent, compared with a decrease of 0.2 in Q3 2009. Health made the largest contribution to the increase. Government and other services decreased 0.7 per cent between 2009 Q4 and 2008 Q4 .

The ONS release today includes this Background Note (excerpt):

Release policy

1. This release includes information available up to 20 January 2010.
Estimates of UK output, income and expenditure will be published on 26 February 2010.
A full set of quarterly national accounts will be published on 30 March 2010.
The preliminary estimate ofGDP for the first quarter of 2010 will be published on 23 April 2010.

2. Revisions to data provide one indication of the reliability of key indicators. Tables 1 and 2 show summary information on the size and direction of the revisions which have been made to data covering a five year period. A statistical test has been applied to the average revision to find out if it is statistically significantly different from zero. The result of the test is that the average revision is not statistically different from zero. The data used are consistent with that used in more detailed analysis that have been published in Economic Trends. The most recent article was published on the National Statistics website on
11 December 2006 and can be found at:

Sunday, January 24, 2010

Friends with Benefits vs F.... Buddies!

"Friends with Benefits" and "F.... Buddies" are two quite popular terms in the vocabulary of dating and relationships in recent years.

Many people use these two terms interchangeably, they consider them as meaning the same type of relationship.

IMO that is not correct.

"F.... Buddies" is when two persons spend almost all their time together making love (or having sex, whatever).

"Friends with Benefits" on the other hand, spend a large % of their time together in doing other than erotic things together, eg hanging out. That is IMO the litmus test that differentiates between these 2 modern types of relationships. In addition, IMO, "Friends with Benefits" means being friends first, lovers then!

Of course that brings us to the question:

How do thesse 2 types of relationships compare to the good old "lovers" type of "relationship". Or "an affair"?

We do live in complicated times, and dating and relationships are not exempt from this complexity. But along with complexity in this case comes diversity or pluralism, as long as both adults know what type of relationship they are "together) in! lol


This is an extra short story (fiction) that I present to you in order to raise a philosophical issue re relationships, attraction, sex, etc:

"I see you as a friend" she replied to his expression of romantic interest.

"I don't know about you" he replied, "but I do not make love to enemies or strangers".

Food for thought, fuel for discussion!

Friday, January 22, 2010

UK: December retail sales only slightly up

According to data of the UK's Office for National Statistics:

Retail sales data for December 2009

Summary: Retail Sales December 09: When compared with November 09, only +0.3 in volume but +0.9% in value; +2.1% in sales volumes and +3.6% in sales value from December 08.

I. In value terms:

Retail sales by value were stronger in December rose by 0.9% compared with November.

The seasonally adjusted value of retail sales for December 2009 was 3.6 per cent higher than in December 2008 and the three months to December 2009 was 3.0 per cent higher than the same period a year earlier.

II. In volume terms:

1) Between November and December 2009:

Total sales volume
increased by only 0.3 per cent. In other words, sales volumes did not gain a lot due to Christmas this year (but money (sales value)) spent was up 0.9 per cent).

a) Predominantly food stores sales increased by 0.3 per cent
b) Predominantly non-food stores increased by 0.1 per cent.

Within predominantly non-food stores, household goods stores increased by 0.5 per cent and other stores increased by 0.7 per cent. There were decreases for non-specialised stores at 1.0 per cent and textile, clothing and footwear stores at 0.1 per cent. Non-store retailing and repair increased by 2.8 per cent.

2) Year on year (December 2009 vs December 2008):

The volume of retail sales in December 2009 was 2.1 per cent higher than in December 2008.

a) Predominantly food stores increased by 2.8 per cent compared to the same period a year ago.
b) Predominantly non-food stores increased by 0.7 per cent.

Within predominantly non-food stores, all sectors showed growth apart from other stores which decreased by 3.0 per cent. The largest rise was textile, clothing and footwear stores which increased by 4.7 per cent, driven by clothing. Non-store retailing and repair increased by 9.4 per cent.


Sales volume in the three months October to December increased by 0.7 per cent when compared to the previous three months. Three-monthly growth increased by 0.4 per cent for predominantly food stores while predominantly non-food stores increased by 0.5 per cent. Within predominantly non-food stores, household goods stores increased by 2.5 per cent, driven by electrical stores, and non-specialised stores increased by 0.5 per cent. Other stores decreased by 0.5 per cent and textile, clothing and footwear stores decreased by 0.1 per cent. Non-store retailing and repair increased by 5.1 per cent.

Total sales volume in the three months to December was 2.7 per cent higher than the same period a year ago. Sales volume for predominantly food stores increased by 1.8 per cent. Predominantly non-food stores increased by 2.5 per cent. Within predominantly non-food stores, the largest rises were textile, clothing and footwear stores at 7.0 per cent and non-specialised stores at 5.0 per cent. The only decrease was other stores at 2.9 per cent. Non-store retailing and repair increased by 11.1 per cent.

ONS Notes :
1. The December 2009 period covered 5 weeks from 29 November 2009 to 2 January 2010.
2. Retail sales volume is the total takings adjusted for inflation and the value of retail sales is the total actual takings.
3. All volume statistics referred to above are seasonally adjusted and chainlinked.
4. Sales refer to average weekly sales.

The effects of US immigration policy on its world competitiveness and lessons for the EU

This is my working theory, from a systemics point of view:

1) How has a much more restrictive immigration policy by the US in recent decades affected its competitiveness + exports in recent decades?

2) What lessons are there for the EU?

Those who frequently read my policy analysis tweets and/or my blog posts know that I like to do compare and contrast exercises between the US and the EU, especially from a systems analysis - systemics point of view, in other words, compare and contrast the US and the EU as socio-economic-political-policy-general models. Not that I think that the US should or can "copy" the US (1) (or vice-versa), but I do think that this type of exercise can yield useful insights re potential EU and US "re-modeling".

In my recent 4050 words submission - contribution to the European Commission's public consultation on an EU 2020 Strategy I argued, inter alia:

IMO, part of the competitiveness of the United States, until a few decades ago, was it near open door immigration policy (this has changed in recent decades). For many decades the US was the natural destination for anyone in the world who felt suffocating in the confines of his/her native country. The EU should IMO adopt a much more open door immigration policy towards third country nationals who wish to make the EU the arena of realisation of their ideas and dreams, thus partaking in the “EU Dream”.

I also pointed that the role of the US as an academic and research "powerhouse" pst WWII seems to have done nothing to avert loss of its industrial base to Japan and others and now China.

My thesis/theory is that a major cause for the loss of competitiveness of the US in the world is that its immigration policy in recent decades has largely deprived it of the "wild spirits" (a la Schumpeter, “Mark I”) that it used to attract.

Why is that?

1) whereas providing a home for political - asylum seekers was of course a noble and fully justified policy
2) whereas PhDs and other highly educated specialists did not cease to be given residence status in the US (and to contribute to the US needs for high level expertise)
3) whereas the "US Green Card" lottery may seem a tad strange but does play some role in enriching the make up of the US population

The above 3 could not and did not IMO contribute per se to attracting the "natural" wild spirits, the venturers of all kinds and entrepreneurs, that used to find fertile ground in the US in previous decades and centuries.

Of course some of the persons who qualified under (1), (2) and (3) above may have incidentally fitted that profile too, but eg one does not need a PhD (or even an MBA) or other "objectively verifiable" skills or knowledge or past achievement in order to turn out to be a venturer or a value adding entrepreneur.

Thus, according to my theory, whereas the near open door policy of Ellis Island and later years did allow the wild spirits to relocate in the US and produce their added value as part of the US GDP, including exports, the later immigration policy of recent decades highly restricted that access. And that the "deficit" in such wild spirits "capital" in recent decades has contributed most significantly in its competitive demise.

For Europe, a place where "wild spirits" (men and women) used to flee from right from the early migrations West, because of its suffocating national situations, especially social and related, in the 17th-20th centuries, it has no tradition of attracting wild spirits, as the US had. On the contrary. In addition, in the last decades, via the EEC and then the EU, and now a common immigration policy, the EU offers at present, even fewer avenues than the current US immigration policy does for attracting "wild spirits" (as I described them) from outside the EU.

Should thus the EU formulate a much more open immigration policy as a mean as attracting among the immigrants from outside the, wild spirit capital that can help it innovate, venture and enterprise more, not only intra-EU (inter-MS) but in the world economy and markets of all kinds?

Of course, this alone may or may not do. Where are the hubs or clusters of world class new thinking and venturing in the EU? Does the EU have any? Examples? But that is a topic for a separate post (or posts).

(1) I have actually argued in many tweets and blog posts that the EU could not become a US style "United States of Europe"even if it wanted to (which it seems not to want to anyway).

Thursday, January 21, 2010

Good news for UK exports!

According to the CBI, the Confederation of British Industry (member of BUSINESSEUROPE), manufacturing production rose for the first time in two years, as overseas demand for UK made goods increased and stock reductions eased.

According to the CBI's latest quarterly Industrial Trends Survey (note: The January 2010 CBI Industrial Trends Survey was conducted between 10th December 2010 and 6th January 2010; 461 manufacturing firms replied) there was a stronger-than-expected rise in output in the three months to January.

But the CBI warned that the outlook for the sector remains uncertain, with domestic demand still weak, and some firms still struggling to access finance.

Of the 461 manufacturers surveyed, 31% said output rose during the three-month period, while 20% said it fell. The resulting balance of +11% is the strongest figure since January 2007 (+19%).

Export orders rose for the first time since January 2008, boosted by the relative weakness of Sterling and improving global demand. 30% of firms said exports grew during the quarter, while 24% reported a fall, giving a balance of +6%. Exports are expected to grow more strongly in the next quarter (+13%), and firms are the most optimistic about export prospects for the coming year (+19%), since July 1995 (+21%).

Firms are continuing to de-stock, but at a slower rate, which also helped lift output. A balance of -11% indicated that stocks of finished goods fell in the quarter, compared to a balance of -29% in the October survey.

Domestic demand, however, was weaker than expected with 18% of manufacturers reporting a rise, and 26% a fall, giving a rounded balance of -9%. That compared with a balance of -16% in October. Total new orders were broadly unchanged (+1%).

Ian McCafferty, the CBI’s Chief Economic Adviser, said:

“After nearly two full years of falling output, manufacturers are seeing a return to modest growth, thanks in part to improved overseas demand and much slower stock reductions.

“It is encouraging that the weaker pound is now providing firms with some respite as global demand improves. Exports are rising for the first time in two years, as UK-made goods are looking more attractive in overseas markets. Manufacturers are also feeling upbeat about export prospects for the year ahead.

“However, the manufacturing sector is not out of the woods. With domestic demand still weak, and credit remaining constrained for some companies, firms expect growth to be more modest in the next quarter. This underlines our view that the UK’s economic recovery will be slow and protracted.”

According to the same survey, the availability of finance remains a concern, and is cited by 13% of firms as a factor likely to limit output, and by 12% as likely to limit export orders.

Despite that, sentiment about the overall business situation is continuing to improve, with a net 12% more optimistic than three months ago.

The rate of job losses across the sector is slowing. A balance of -13% indicated a drop in staff numbers during the quarter, an improvement on October’s balance of -34%.

Investment intentions for the year ahead are stabilising. Firms are planning on spending more on training and retraining (+11%) and on innovation (+15%). Investment in buildings will be cut back further (-18%) and little change is expected in spending on plant and machinery (+1%).

Domestic prices are expected to rise for the first time in six quarters (a balance of +8%). 66% of firms report that they are working below capacity, compared to 76% in October.

Wednesday, January 20, 2010

Policy related oxymora!

Policy: To what extent are a) regulation and b) deregulation capable of fixing faulty world systemics and dynamics?

In today's constantly changing world, do reactive + un-systemic national public policies, regulations and laws
a) improve or
b) worsen things?

Ponder on those modern oxymora!

a) foreign inward investment
b) foreign products (imports)
c) foreign workers and people (humans) in general:

1) Why are a, b, and c each treated differently by part of the political world and public opinion? Specifically, why are political parties who are against foreigners and emphasize national sovereignty focus either (or both) on foreign humans as well as transnational or supranational laws? Why are they not "bothered" equally or more by "loss of sovereignty" and privileges of the "national citizens" from foreign ownership of businesses (via direct and indirect investment, some of it by funds controlled or supervised by foreign governments) and the loss of sovereignty due to tastes for foreign goods that displace "made in" (at home country) ones and loss of sovereignty due to foreign debt?

2) Assuming that one considers a, b and c equally "damaging" to sovereignty or national interest, why is factor (c) considered so? And is this treatment of fellow human beings consistent with a) humanism b) the human allegiance principles of many religions?

Yes we do live in complex and volatile world systemics and many people, including politicians get "dizzy" inside this chaos. But it it not time for humanism as well as logic to kick in?

Realise this!

A trip down short term memory lane:

Before the effects of US subprime spread like a tsunami to the US and world full economy, in 2008, staple world foods + oil prices went bizerk pushing input prices way up. Then came the tsunami of subprime led effects. Analyse this!

And philosophise on this: Do modern economic and other systemics call for a back to basics philosophy not only in the economic dimension of people's lifestyles but ways of life in general, at least in the US and other economically mature economies/countries? To make them more sustainable as well as to make human life on this planet more sustainable (see climate change - global warming)?

Can such changes in lifestyles be legislated? I do not think so. IMO they have to make via opinion and fashion - way of life leadership! Who are those leaders? Ponder on this.

Tuesday, January 19, 2010

The materialism Trap

Do not fall into the trap of trying 2 impress (wo)men who are impressed by material possessions by accumulating fancy material possessions

Happiness: For an intellectual and physically fulfilling life

These are some elements of my life philosophy:

Greed is mis-channeled zest - passion for life!

Material possessions are not a cornerstone of our (western) way of life

The only genuine possessions are those you carry and keep in your mind and your heart!

Leave material possessions behind, carry only what you need, (re)discover the intellectual and physical pleasures in life! Kingdom of the mind, empire of the senses.

Sunday, January 17, 2010

How philosophised; are you?

In my native Greece, there is an expression that says:

"How philosophised are you?"

It basically means: Do you have your own philosophy in life, do you know why you do the things you do or are you a ship w/o captain lost in the "ocean" of life's complexities, issues and problems.

My philosophical "mission" is to help people develop their own personal philosophy in life, primarily via food for their thinking.

US Trade Statistics for August 2009 and Jan-Aug 2009

With the release of August 2009 U.S. International Trade in Goods and Services report by the Department of Commerce’s U.S. Census Bureau and the Bureau of Economic Analysis:

  • U.S. exports of goods and services increased by 0.2% in August 2009 to $128.2 billion since July 2009,
  • while imports declined 0.6% to $158.9 billion over the same period.

Thus in August 2009, the monthly U.S. goods and services trade deficit decreased by 3.6% to $30.7 billion when compared to July 2009.

Although the decline in year-to-date figures from 2008 to 2009 has been significant, the monthly figures show signs of stabilization.
On a monthly basis, August represents the fourth consecutive month that goods and services exports have increased, with monthly exports rising from $120.6 billion in April 2009 to $128.2 billion in August 2009.

Export Markets:

The largest export markets for U.S. goods year-to-date through August 2009 were:
Canada ($130.3 billion),
Mexico ($80.9 billion),
China ($41.2 billion),
Japan ($32.9 billion), and
the United Kingdom ($30.2 billion).

Export sectors

In August, U.S. good exports continued to improve, with exports increasing:
  • of pharmaceutical preparations (up $458 million from July 2009),
  • steel-making materials (up $356 million),
  • and passenger cars (up $285 million).


Through the first eight months of 2009 (January – August), U.S. goods and services exports totaled $996.2 billion, a 20.3% decline from the $1,250.5 billion exported through the same period of 2008.

U.S. goods and service imports fell faster than exports, with imports declining 29.1% through the first eight months of 2009 (when compared to the year earlier period).

The Oil effect on imports and exports:

The decline in trade in nominal terms is partly due to the drastic decline in crude oil prices.

Since the peak reached in July 2008 of $124.6, the price of crude oil has declined 48.0% to a value of $64.8 in August 2009.

Imports: The total value of U.S. imports of petroleum have fallen to $152.5 billion year-to-date through August 2009, compared to $330.4 billion from the year earlier period.

Exports: U.S. exports of petroleum have fallen to $30.0 billion year-to-date through August 2009, down 39.4% from the same period of last year.

Trade with developing countries:

Although trade with most of its major trading partners has fallen, U.S. goods exports continue to grow to developing areas.

The effect of Free Trade Agreements:

Free Trade Agreements have also helped the U.S. to maintain a foothold for U.S. manufactured goods exports:
The U.S. manufactured goods trade balance with the US' FTA partners has improved from a surplus of $12.7 billion through the first eight months of 2008, to a surplus of $19.3 billion through the first eight months of 2009.

NAFTA: The most dramatic improvement in the manufactured goods trade balance has been with NAFTA partner Canada, where the U.S. manufactured goods trade balance has increased to a $19.4 billion surplus!

Saturday, January 16, 2010

Seasons Of Years

A poem, a business allegory:

"Seasons Of Years"

Winners they were, of endless quarters
Believers they were, to the cause
Seekers they were, of the absolute advantage
Players they were, of the perennial game

Alone she was, waiting for her Prince
On the phone she was, searching for clues
Prone she was, to conspiracy theories
Away from her throne she was, a princess without her prince

Speechless he was, observing the outcome
Penniless he felt, after the game
Effortless he thought, was his way home
Pointless he knew, was to try to regain his throne

Years passed
Springs, Summers, Autumns and Winters

The princess was waiting
The prince was hurting
The people were confused
The enemies were amused

Fairy tales can come true
But only in fairy tales

Written: 2005

What is Love?

What is Love?

Some claim that "Love" is a word that is often used by men to get sex and women to get a commitment, LTR (long term relationship), marriage.

IMO, Love means a platonic feeling a human is supposed to have towards ALL other humans, according to both Jesus Christ and John Lennon as well as many others.

Eros or "being in Love" (as opposed to Love) is the fickle but wonderful emotion between two humans that turns mere sex into a mystical experience called "making love".

Friday, January 15, 2010

Euro interest rate by ECB stable

On January 14, the European Central Bank kept its central interest rate at 1% for yet another month.

U.S. retail and food services sales for December 2009 down compared to November !

The U.S. Census Bureau announced on January 14:

Advance estimates of U.S. retail and food services sales for December 2009 - adjusted for seasonal variation and holiday and trading-day differences, but not for price changes - were $353.0 billion.

That represents
1) a decrease of 0.3% (±0.5%)* from November 2009
2) a 5.4% (±0.5%) increase from December 2008.

* The 90 percent confidence interval includes zero. The Census Bureau does not have sufficient statistical evidence to conclude that the actual change is different than zero.

Total sales for 2009:
Total sales for the 12 months of 2009 were down 6.2 percent (±0.2%) from 2008.

Total sales for the October through December 2009 period were up 1.9 percent (±0.3%) from the same period a year ago.

The October to November 2009 percent change was revised from +1.3 percent (±0.5%) to +1.8 percent (±0.2%).

Retail Trade Sales
Retail trade sales were down 0.2 percent (±0.5%)* from November 2009, but 5.9 percent (±0.5%) above last year.

Gasoline stations sales were up 33.6 percent (±1.5%) from December 2008 and nonstore retailers sales were up 10.3 percent (±1.7%) from last year.

Note: The advance estimates are based on a subsample of the Census Bureau's full retail and food services sample. A stratified random sampling method is used to select approximately 5,000 retail and food services firms whose sales are then weighted and benchmarked to represent the complete universe of over three million retail and food services firms. Responding firms account for approximately 65% of the MARTS dollar volume estimate. For an explanation of the measures of sampling variability included in this report, please see the Reliability of Estimates section on the last page of this publication.

The Advance Monthly Retail Sales for Retail and Food Services for January is scheduled to be released February 11, 2010 at 8:30 a.m. EST.

US Trade balance in November 2009

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced on January 12:

US International Trade in Goods and Services:

Goods and Services

Total November exports of $138.2 billion and imports of $174.6 billion resulted in a goods and services deficit of $36.4 billion, up from $33.2 billion in October, revised.

November exports were $1.2 billion more than October exports of $137.0 billion.
November imports were $4.4 billion more than October imports of $170.2 billion.

In November, the goods deficit increased $3.2 billion from October to $48.4 billion, and the services surplus was virtually unchanged at $12.0 billion.

Exports of goods increased $1.2 billion to $94.6 billion, and imports of goods increased $4.4 billion to $143.0 billion.

Exports of services increased $0.1 billion to $43.6 billion, and imports of services increased $0.1 billion to $31.6 billion.

In November, the goods and services deficit decreased $6.8 billion from November 2008.
Exports were down $3.3 billion, or 2.3 percent, and imports were down $10.1 billion, or
5.5 percent.

Goods (Census basis)

The October to November increase in exports of goods reflected increases in foods, feeds, and beverages ($1.3 billion); automotive vehicles, parts, and engines ($0.7 billion); and capital goods ($0.4 billion). Decreases occurred in consumer goods ($0.7 billion), industrial supplies and materials ($0.5 billion), and other goods ($0.4 billion).

The October to November increase in imports of goods reflected increases in industrial supplies and materials ($2.1 billion), consumer goods ($1.4 billion), and capital goods ($1.2 billion). Decreases occurred in foods, feeds, and beverages ($0.2 billion) and automotive vehicles, parts, and engines ($0.1 billion). Other goods were virtually unchanged.

The November 2008 to November 2009 decrease in exports of goods reflected decreases
in capital goods ($2.3 billion); automotive vehicles, parts, and engines ($0.6 billion); industrial supplies and materials ($0.5 billion); other goods ($0.5 billion); and consumer goods ($0.2 billion). An increase occurred in foods, feeds, and beverages ($1.1 billion).

The November 2008 to November 2009 decrease in imports of goods reflected decreases in industrial supplies and materials ($5.7 billion); capital goods ($2.2 billion); other goods ($0.7 billion); and foods, feeds, and beverages ($0.6 billion). Increases occurred in consumer goods ($0.6 billion) and automotive vehicles, parts, and engines ($0.1 billion).


Services exports increased $0.1 billion from October to November. The increase was more than accounted for by an increase in other transportation (which includes freight and port services). A decrease in travel was partly offsetting. Changes in the other categories of services exports were small.

Services imports increased $0.1 billion from October to November. The increase was more than accounted for by an increase in other transportation. A decrease in travel was partly offsetting. Changes in the other categories of services imports were small.

Services exports decreased $0.4 billion from November 2008 to November 2009. The largest decreases were in travel ($0.5 billion), royalties and license fees ($0.4 billion), and passenger fares ($0.3 billion). Increases in other private services ($0.5 billion), which includes items such as business, professional, and technical services; insurance services; and financial services, and transfers under U.S. military sales contracts ($0.5 billion) were partly offsetting.

Services imports decreased $1.3 billion from November 2008 to November 2009. Decreases in other transportation ($0.8 billion), passenger fares ($0.7 billion), and travel ($0.5 billion) were partly offset by an increase in other private services ($0.4 billion).

Goods and Services Moving Average

For the three months ending in November, exports of goods and services averaged $136.2 billion, while imports of goods and services averaged $171.3 billion, resulting in an average trade deficit of $35.1 billion. For the three months ending in October, the average trade deficit was $33.1 billion, reflecting average exports of $133.4 billion and average imports of $166.4 billion.

Selected Not Seasonally Adjusted Goods Details

The November figures show surpluses, in billions of dollars, with Hong Kong $1.4 ($1.6 for October), Australia $1.0 ($1.3), Singapore $0.7 ($0.9), and Egypt $0.2 ($0.4). Deficits were recorded, in billions of dollars, with China $20.2 ($22.7), European Union $6.4 ($4.9), OPEC $6.1 ($5.8), Japan $5.4 ($4.4), Mexico $5.1 ($4.6), Nigeria $2.1 ($1.4), Venezuela $1.6 ($1.7), Canada $1.4 ($2.1), Taiwan $0.9 ($0.7), and Korea $0.7 ($0.5).

Advanced technology products exports were $21.0 billion in November and imports were $29.3 billion, resulting in a deficit of $8.3 billion. November exports were $2.7 billion less than the $23.7 billion in October, while November imports were virtually unchanged.


For October, goods exports were revised down $0.1 billion and goods imports were revised up $0.3 billion. Goods carry-over in November was $0.1 billion (0.1 percent) for exports and $0.9 billion (0.7 percent) for imports. For October, revised export carry-over was virtually zero. For October, revised import carry-over was $0.1 billion (0.1 percent), revised down from $0.6 billion (0.4 percent).

Services exports for October were revised up $0.2 billion to $43.5 billion, reflecting upward revisions in most categories. Services imports for October were revised up $0.1 billion to $31.6 billion, reflecting upward revisions in most categories.

US inflation (CPI) in 2009

According to the Bureau of Labor Statistics of the US Department of Labor, Jan 15:

2009 in Review

For the 12 month period ending December 2009, the CPI-U rose 2.7 percent, compared to 0.1 percent for 2008. The larger increase was primarily due to the energy index, which rose 18.2 percent during 2009 after falling 21.3 percent in 2008. The energy upturn was caused
by the gasoline index, which rose 53.5 percent in 2009 after declining 43.1 percent in 2008. The household energy index, in contrast, declined 4.9 percent during 2009 with the index for natural
gas falling 18.1 percent and the electricity index declining 0.5 percent. The food index, which rose 5.9 percent in 2008, fell 0.5 percent for the 12 months ending December 2009, the first December-to-December decline since 1961. The index for food away from home rose 1.9 percent while the food at home index fell 2.4 percent. Within food at home, all six major grocery food groups posted declines in 2009 after rising in 2008. The dairy and related products group
declined the most, falling 7.6 percent, its largest annual decline since 1938.

The index for all items less food and energy rose 1.8 percent during 2009, the same increase as in 2008. This identical increase was the result of offsetting factors. Pushing the index higher were vehicle prices, which rose in 2009 after declining in 2008. The indexes for new vehicles rose 4.9 percent in 2009 and the index for used cars and trucks increased 9.2 percent. Additionally, the apparel index turned up in 2009, rising 1.9 percent after declining in each of the
previous two years. The medical care index rose more rapidly in 2009, increasing 3.4 percent after a 2.6 percent increase the previous year, and the tobacco index increased 30.1 percent in 2009 after rising 6.3 percent in 2008. Largely offsetting these accelerations was the shelter index, which posted its smallest annual increase since its inception in 1953. It increased only 0.3 percent after increasing 1.9 percent in 2008, with the indexes for both rent and owners' equivalent rent increasing 0.7 percent. Also, the indexes for recreation and for household furnishings and operations both declined in 2009 after rising in 2008.

US CPI for December 2009

According to the Bureau of Labor Statistics of the US Department of Labor (January 15):

On a seasonally adjusted basis, the December 2009 Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1%.

Over the last 12 months (Jan-Dec 2009), the index increased 2.7% before seasonal adjustment.

The seasonally adjusted increase in the all items index was broad based, with the indexes for food, energy, and all items less food and energy all posting modest increases. Within the latter group, a sharp rise in the index for used cars and trucks was the largest contributor to the 0.1 percent increase, while the indexes for airline fares, apparel, and lodging away from home rose as well. In contrast, the indexes for rent and owners' equivalent rent were unchanged and the index for new vehicles declined.

Grocery store food indexes showed broad-based increases, leading to the food index rising 0.2 percent, its largest one-month advance in over a year. The energy index also rose 0.2 percent; this was its smallest increase in five months. The indexes for fuel oil and gasoline rose, but the electricity index was unchanged and the natural gas index declined.

Consumer Price Index Data for December 2009


The food index rose 0.2 percent in December after rising 0.1 percent in each of the previous two months. The food at home index increased 0.3 percent, its largest increase since October 2008. Among the major grocery store food groups, the index for meats, poultry, fish, and eggs was unchanged while the other five groups all posted increases. The index for cereals and bakery products rose 0.6 percent, while the dairy and related products index increased 0.5 percent after declining 0.7 percent in November. The indexes for fruits and vegetables and for other food at home both rose 0.3 percent while the index for nonalcoholic beverages increased 0.2 percent. The index for food away from home increased in December, rising 0.1 percent after increasing 0.2 percent in November.


The energy index, which increased 4.1 percent in November, rose 0.2 percent in December. The index for energy commodities increased 0.5 percent, with the gasoline index rising 0.2 percent after increasing 6.4 percent in November. (Before seasonal adjustment, gasoline prices
declined 1.5 percent in December.) The index for household energy was unchanged in December. The fuel oil index rose 1.1 percent after a 9.0 percent increase in the previous month, but the index for natural gas fell 0.7 percent. The index for electricity, which increased 1.4
percent in November, was unchanged in December.

All items less food and energy

The index for all items less food and energy rose 0.1 percent in December after being unchanged in November. The index for used cars and trucks rose 2.5 percent in December, accounting for almost half of the increase in the all items less food and energy index. The
index for airline fares also continued to rise, increasing 2.4 percent in December after advancing 3.8 percent in November. Also increasing were the apparel index, which rose 0.4 percent, and the medical care index, which rose 0.1 percent. The shelter index, which declined 0.2 percent in November, was unchanged in December. The indexes for rent and owners' equivalent rent were both unchanged after declining in November, while the index for lodging away from
home rose 0.5 percent in December. The index for new vehicles declined in December, falling 0.3 percent after increasing in each of the previous three months. The recreation index also declined in December, falling 0.4 percent as televisions, sporting goods and toys were among many recreation components that posted declines.

Not seasonally adjusted CPI measures

The Consumer Price Index for All Urban Consumers (CPI-U) increased 2.7 percent over the last 12 months to an index level of 215.949 (1982-84=100). For the month, the index decreased 0.2 percent prior to seasonal adjustment.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 3.4 percent over the last 12 months to an index level of 211.703 (1982-84=100). For the month, the index decreased 0.1 percent prior to seasonal adjustment.

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 2.8 percent over the last 12 months. For the month, the index declined 0.2 percent on a not seasonally adjusted basis. The indexes for the post-2007 period are subject to

The Consumer Price Index for January 2010 is scheduled to be released on Friday, February 19, 2010, at 8:30 a.m. (EST).

EU and Eurozone industrial production up in November 2009

These estimates are released by Eurostat, the statistical office of the European Union.

In November 2009 compared with October 2009, seasonally adjusted industrial production1 grew by 1.0% in the Eurozone and by 0.9% in the EU.
In October production fell by 0.3% and 0.7% respectively.

In November 2009 compared with November 2008, industrial production declined by 7.1% in the Eurozone and by 6.4% in the EU.

the full press release by Eurostat

EU Trade results for January-October 2009

According to Eurostat, the statistical office of the European Union:

EU Trade results for January-October 2009


The EU deficit decreased for energy (-191.8 bn euro in January-October 2009 compared with -323.5 bn in January-October 2008) and for raw materials (-15.5 bn compared with -36.1 bn).

The surplus fell for machinery and vehicles (+88.6 bn compared with +130.1 bn), but rose for chemicals (+66.9 bn compared with +63.6 bn).

Trade Partners:

EU trade flows with all of its major partners fell, except for exports to China which remained stable.

The largest decreases were recorded
a) for exports to Russia (-40% in January-October 2009 compared with January-October 2008), Turkey (-25%), Brazil (-23%), South Korea (-21%) and the USA (-20%), and
b) for imports from Russia (-40%), Norway (-30%), Brazil (-29%), Japan (-28%) and Turkey (-25%).

The smallest decreases were observed for trade with Switzerland , for both exports (-12%) and imports (-9%).

The EU trade surplus fell with the USA (+35.9 bn euro in January-October 2009 compared with +55.9 bn in January-October 2008) and Switzerland (+11.0 bn compared with +15.0 bn).

The EU27 trade deficit decreased with China (-111.3 bn compared with -138.8 bn), Russia (-39.5 bn compared with -65.2 bn), Norway (-26.4 bn compared with -43.8 bn ) and Japan (-16.7 bn compared with -28.6 bn ).

Member States:

Concerning the total trade of Member States, the largest surplus was observed in Germany (+105.2 bn euro in January-October 2009), followed by Ireland (+32.6 bn), the Netherlands (+32.1 bn) and Belgium (+11.4 bn).

The United Kingdom (-77.9 bn) registered the largest deficit, followed by France (-42.5 bn), Spain (-40.7 bn), Greece (-23.7 bn) and Portugal (-15.2 bn).


EU and Eurozone trade balance stats for November 2009 (first estimate)

EU and Eurozone trade stats released today by Eurostat, the statistical office of the European Union (first estimate for November 2009):


The first estimate for the Eurozone trade balance with the rest of the world in November 2009 gave a 4.8 bn euro surplus, compared with -7.0 bn in November 2008.

The October 2009 balance was +6.6 bn, compared with -1.2 bn in October 2008. In November 2009 compared with October 2009, seasonally adjusted exports fell by 0.4%, while imports rose by 0.3%.


The first estimate for the November 2009 extra-EU trade balance was a 5.8 bn euro deficit, compared with -24.4 bn in November 2008. In October 2009 2 the balance was -4.8 bn, compared with -18.3 bn in October 2008. In November 2009 compared with October 2009, seasonally adjusted exports rose by 1.9% and imports by 1.5%.


My comments in the public consultation on the future of "EU 2020" Strategy

My comments to Commission working document COM(2009) 647 final (Brussels, 24.11.2009):

(submitted today)

I. General Comments

In my opinion (henceforth: IMO) the working document contains many valid points but nevertheless a wider approach would be merited rather than focusing to such a large degree on Knowledge and the introduction of a “5th freedom”. IMO the 2020 Strategy should contain a much wider socio-economic or even wider, a systemic model, for the EU, internally and in the world in the 2020 horizon. My comments relate to elements of such a model.

1) Knowledge and research in their widest sense:
Whereas research by academic and other organisations is indeed a valid asset for the EU, research and its products are only one of the elements of that lead to innovation that leads to growth and employment. IMO Knowledge must encompass all sorts of sources of new thinking and is not always correlated to academic or other traditional sources of new ideas and thinking or new knowledge. Hence, IMO, the need for a pluralistic view with respect to EU 2020 on “research, knowledge, applications”. Eg pluralism is an ”innovation” in terms of people's mindset or worldview (as opposed to uniformity) in Europe.

2) Not focus, a model:
The working paper states: “The Commission considers that EU 2020 should focus on key policy areas where collaboration between EU and Member States can deliver the best results, and on improved delivery through better use of the instruments at hand.”
I beg to differ. A strategy cannot focus on key areas, a strategy by definition must encompass a total – systemic view of all aspects and dimensions and hence, policy areas. A strategy must present a model. Thus IMO it is imperative (see II. Analysis) that while maintaining a pluralistic and subsidiarity respecting view, the EU (institutions and member states) needs to discuss and develop a new model that includes not only socio-economic modeling parameters but a full systemic model of the EU.

3) Services at the core:
It is IMO crucial that it is realised that not only in the EU but also the US and other OECD countries, manufacturing is a minority contributor to both GDP and jobs, and that Services contribute some 75-80% of GDP and jobs. That we live in Services era.

4) Intellectual Products and “industries”:
In addition, the role of intangible goods/products aka “intellectual products” (music, film, TV and other content, literature, etc) is emerging as a driver for growth and jobs, especially if one considers the scenario of an emerging less materialistic Society that may, partly, be the result of the Climate Change challenge that humankind faces as well as evolution in personal tastes, lifestyles and “philosophy”.

5) From Knowledge to Growth and Jobs?
Not to under-estimate the view that knowledge is valuable per se, for a citizen, human, consumer, but under what conditions does it lead to a job or a venture that results in growth and jobs?

6) Market Access is crucial
a) Global market access:
Is the key competitive asset nowadays in the world knowledge or market access? And do WTO rules adequately address market access problems? Can they? What good is knowledge or production of a good, service or intangible good when the company, especially in the cases of micro and SMEs, does not have real access to the market where such product or service is needed and/or wanted by the consumers? And whereas the Internet does help access and delivery, it is not panacea.

b) Intra-EU – inter-state Market Access:
Of course the EU needs to have its own academic and research capacity, taking advantage of EU economies of scale via an effective “single market” for knowledge producers (and knowledge workers). But while this 5th freedom is being deliberated, how about the 3rd (Services) and the 4th (jobs, work)? With so many languages “at work” in the EU's national job markets, how many types of workers or professions can treat the EU as “their” single market for employment? How many micro and SME companies?

7) A real and “working” single market of the EU, especially for micros and SMEs
Of course, the linguistic issue is not the only factor that prevents the existence of a real EU single market in many jobs and professions and economic activities. The reactions to the traveling plumbers in the 2005 EU referendum in France etc and the various reactions to the adoption of the “Services” directive (the deadline for its transposition expired 31.12.2009) show that the EU single market is not yet a reality. But it must become one, for many crucial reasons.

II. Analysis

1) The role of Services and Micros and SMEs
We (in the EU and other parts of the world) live in transitional world from an industrial to a meta (post) industrial era. Already, in many states of the EU and the EU as a whole, manufacturing is but a small contributor to GDP and jobs. Services, ranging from financial and telecoms to bars, hotels, restaurants, barbers – hair salons, as well as plumbers constitute 75-80% of GDP and jobs.

The production of manufactured goods, which was already migrating to Japan and other Asian countries, after 2001, with the entry of China to the WTO, has accelerated greatly both in the EU and the US as well as other “mature” OECD countries/economies.Yet many policy analysts and makers, media, and other people, including the public opinion, continue to visualise (cognitively associate) manufacturing and plants as well as large corporations when they think of the word “business”, instead of Services and Micro and SME companies. This must change. EU policies need to be conceived and designed with a Services and Micros and SMEs EU economy in mind. That new mindset must be part of the EU 2020 Strategy.

In addition

2) SWOT:
The EU does not exist in a vacuum, it is part of a planet. What goes on on it is affected and affects the EU. I propose to take a look at two basic scenarios regarding this global environment and the implications for an EU 2020 Strategy.

Scenario 1 “Global De-stabilisation - A self-reliant EU”

Globalisation has not managed to gain the support of the majority of the “people” in many if not all parts of the world, including the EU. The inability to reach an agreement in the Doha round of WTO talks since 2001 is indicative of the “globalisation-skeptic” public opinion pressures on politicians and policy makers in the US, the EU and other members of the WTO.

What is more, the staple foods supply and prices crisis in 2008 brought a realisation of the risks of global trade reliance of countries for the provision of basic (staple) foods.

Similar realisations came about due to the oil price crisis in 2008, on top of the challenges of the Climate Change issue. As a leader in addressing the Earth and humankind risks from global warming, in this scenario, the EU may have to take a radical approach in its relations with the rest of the world in order to “convince” them to commit to sufficient cuts in Greenhouse Gases (ghg), after the failure in Copenhagen in December 2009. This may include departure from the WTO and multilateral trade agreements and almost total reliance on bilateral and maybe Regional Trade agreements (which have been popping up in recent years anyway, as a hedging tool to the problems in multilateral trade systemics). The entry into force on 1.1.2010 of the China – ASEAN 6 RTA is, too, indicative of the complexities of trade and business systemics and dynamics.

An EU 2020 Strategy thus IMO has to incorporate the ability of the EU to rise up to the challenges of such a “self reliant EU” scenario.

Scenario 2 “Global dynamics and a Global EU”
This scenario assumes that in spite of some of the concerns listed under scenario 1, world systemics and dynamics in the next 10 years will be such that will not require a self-reliant EU (in staple foods, energy, basic need manufactured goods etc) . That world trade will remain more of less active at the 2010 levels or that even a Doha round WTO agreement will be reached in the coming 12-24 months. That progress will take place in COP15 climate change commitments. And that countries and the EU can thus depend on the world markets for procuring many of the goods that they need (energy, staple foods, manufactured goods that address basic needs, etc) instead of producing them inside the EU.

Whereas it is common sense that the remaining in the EU manufacturing activity must switch into “green”, it is not clear whether EU green industries can become a means of re-activating manufacturing capacity in the EU ie compete with green industries from developing economies including China and their products, both at “home” (the EU single market) and globally.

In such a scenario as No. 2 (which is more or less the assumed scenario in the Commission's working paper, except maybe for the role of green tech industry), the key question becomes:

What can the EU produce and market competitively both internally (in its market) and globally? Knowledge? Or is EU produced knowledge the “wooden walls” that will save and move the EU economy forward? Being an academic and research powerhouse, in recent decades, did that prevent the US from losing most of its manufacturing base? Are there factors that differ in the EU's case and for the next 10 years? IMO, a 2020 strategy must address this issue.

3) The digital economy. Not a panacea for growth and jobs, not even close:
The bursting of the mainly US dotcom bubble in the last 1990s did already demonstrate the limits of the digital economy. Did it teach lessons?

Who has made money so far in the digital economy? I am not familiar with any concrete studies but my educated guess is that these are the “providers” as well as 2-3 specific types of content as well as some of the online content that is provided by traditional – offline – mainstream print and some electronic (TV based) media (newspapers, magazines, etc).

And various studies have shown that online commerce usually requires offline marketing or reputation building as well, and is focused on certain low risk products (eg books). So whereas the internet has become and will remain and probably expand as a source of free information, it is questionable whether it can significantly help EU based micros and SMEs market their products in other member states and globally. One should also study the diversity of fiscal regimes (sales taxes, VAT, etc) among EU and non-EU countries and their effect on the ease of micros and SMEs to do intra-EU and global business (sales).

4) From How to Why:
It is my opinion that in the last century, the key question – decision factor was “how” (knowhow). The 20th century led to astonishing developments in technology and its applications. But IMO, 10 years (10%) into this new century, my view that the key question is “Why?” (instead of “How?”) seems to have been validated.

5) Adding up and knowledge:
And it is in this era and state of dynamics that has brought to the surface the problems resulting from deficits in elementary education in many developed economies/countries. The realisation of the deficit in logic, maths and other very basic and very crucial skills that are needed as a necessary foundation for further education (including higher education) that can lead to wise/smart decisions and hence growth and jobs. In other words, IMO, the “polyvalence” (French term ) required for citizens and “workers” of this Services, globalisation, fast paced, volatile, era, is put in peril not by the absence of higher education but due to deficits in those basic skills. In other words, in many developed countries one can meet people who are well informed and/or have received a higher education but do not possess the fundamentals (logic, wisdom) etc to turn information and knowledge in results. A recent study in one of the EU member states showed that many consumers do not know enough maths to compare prices when shopping (1)! That skills gap sounds more menacing and more crucial than knowledge per se.

III. Basis for an EU2020 Strategy:

1) Genuine Single EU Market – Freedoms No. 3, 4 and 5!
The EU institutions and the member states (MS) must take all necessary measures to alleviate practical and technical barriers to a genuine EU Single Market not only for capital and goods but for tradeable Services and jobs as well, including one for academic and research jobs.

In the latter, the existence of a genuine Single Market – space for researchers and new ideas will have multiplier effects in the cumulative knowledge capital of the EU.

In addition, this 5th freedom must be inclusive all of types of new ideas and knowledge creation, both typical and atypical.

The EU institutions and the member states must take actions to preserve all official languages of the MS while at the same time promoting the use of a single language, already spoken as mother or foreign language by 50+ per cent of the EU population (2) in the workplaces around the EU as a means of enabling a real single market for as many job types as possible.

2) An EU minimum wage!!!???
Maybe an EU minimum wage, decided either by the European Social partners (via negotiations, see European Social Dialogue, or the EU institutions (a Treaty amendment may be needed for that or not) is a necessary offset for true mobility of Services, free lancers and workers. After all, many EU MS have one (others only have sectoral ones), and even the US has a minimum wage (federal, plus each state can have its own, equal or higher than the federal one). An EU minimum wage could be part of a EU2020 Strategy and make social acceptance of “traveling servicemen”

3) A knowledgeable, a smart or a wise EU?
Which of the three assets is most crucial and more realistic for the EU in the next ten years? IMO it is wisdom. That requires action by the EU and MS in the elementary education area. As well as realisation of the value of experience. In recent years, the older workers have lost their job market appeal in favor of a trend that values ability to deal under pressure and think on one's feet over experience and wisdom. With evident negative results, around the world, especially in the US and the EU (see also point 9 below).

4) Entrepreneurship and the diverse sources of innovation:
IMO the EU needs an entrepreneurial “culture” as badly as the US needs real healthcare reform. As a general rule, EUropeans are not “into” risking or venturing. That is more part of the traditional “American Dream” model. They tend to prefer security (risk adverse) in economic matters. How many Europeans express their creativity via development and marketing of a new product or service that will try to satisfy the need and/want of a certain target market?

A few years ago, I was involved in an online discussion with a few other European. When I made the argument that in this Services era, one does not mean much financial capital to start a company (as opposed to a manufacturing company) and that one could use friends and relatives as investors – stockowners, one of the other participants remarked: What!! Exploit my friends and relatives and risk their money?
The above comment shows, IMO, the lack of Unternehmergeist. So much for Schumpeter's “wild spirits”! One can only compare this with the line from the American film “Tucker”: “It is the idea that counts Ed, and the dream”. That is, IMHO, “entrepreneurial culture” (or spirit). And ideas can come but need not come from academic research or other forms of “typical” Research, but merely from the good old mind of the creative, thinking out of the box, entrepreneur. And in an era when most companies are in Services, the money needed to put that idea and dream to a test, “build it” and see it they “come”, is relatively little.

Back to Europe, let us not forget the well known French song, sang among others by Alain Delon, in which the singer says that he wanted to become a poet, an artist, and instead, alas, he became a businessman!!!

What should be challenged, IMO, is Schumpeter's “Mark II” theory, that the actors that drive innovation and the economy are big companies which have the resources and capital to invest in research and development. It is my personal experience as well as impression from reading papers and press reports that in the last few years, big corporations have focused more on procedures that mostly require execution and little creativity at the local (national) markets level, thus shifting the profile of the manager to much younger and less experienced persons able to withstand pressure rather than the older model of the experienced manager, thus creating employability problems for many 55+ or even 50+ managers first in the US and then in Europe and elsewhere. In addition, cost minimisation pressures due to competition from low wage cost countries has further pushed many US and European multinationals to rely more and more on uniformity and procedure rather than experience and knowledge. In a “survival of the cheapest” world.

On the other hand, as many studies have shown, small companies founded by “wild spirits” suffocate under a labyrinth of regulations and red tape, further exacerbated if the company decides to have activities in more than one national markets, even within the EU Single Market. Unless it is realised, at least in the EU (over 42,000 new state laws were passed in the US in 2009!), that over-regulation little affects big companies that have the expertise to deal with it while suffocating small companies, the EU's micros and SMEs cannot become the agent of EU growth and employment that they can be. Let me add to that that studies have shown that small companies often have the most trouble not in adhering to new regulations but in a) understanding them and b) reporting (proving) their adherence to the authorities! That the cal for better regulation in the EU, is so urgent, IMO, that in spite of many initiatives to yield results in better regulation initiatives at EU and member states level, real tangible better regulation results must to made a priority, if micro and SME companies are to contribute even a portion of their potential to growth and jobs in the EU.

5) Which type of “Flexicurity”
Which type of “Flexicurity” will be employed most in the EU? IMO , that is an important part of a EU2020 Strategy. The Scandic countries take pride in claiming that the work “smart” and the Danish flexicurity model that makes it easy for companies to fire (based on the theory that then they are less reluctant to hire) in return for a higher-than-average-tax socio-economic Danish model,

6) Niche EU and niche global Micros and SMEs!
Part of the EU2020 Strategy should IMO also be the realisation that both the EU Single Market and globalisation must “work” for the “small guy” ie the micros and SMEs. That one of the main benefits of the 1992 project as well as WTO “free-er” trade was for niche EUropean and world markets to emerge and a) become the field of focus for EU or globally active Micros and SMEs b) have their niche needs or wants satisfied by products and services whose production/delivery would not make sense within the confines of national markets.

7) Deeper Union in a must – A “TeamEU” mentality
Another part of the EU2020 Strategy should be the raising of awareness that individual member states cannot compete in the global trade, economic, business etc “game” and that TeamEU (a deeper EU, equipped with a single laws to make it easier for citizens and micros and SMEs to “live” and “be active” in the EU (rather than the member state) and a federal tax system to replace the use of bilateral double taxation avoidance agreements between member states based on a … OECD model!) is in the best national interest of the MS and that the EU represents a Union of sovereignties that does not undermine them, at least in their modern, 2010, definition).

8) EU taking advantage of global “talent”
IMO, part of the competitiveness of the United States, until a few decades ago, was it near open door immigration policy (this has changed in recent decades). For many decades the US was the natural destination for anyone in the world who felt suffocating in the confines of his/her native country. The EU should IMO adopt a much more open door immigration policy towards third country nationals who wish to make the EU the arena of realisation of their ideas and dreams, thus partaking in the “EU Dream”.

9) The educated, knowledgeable and wise EUropean:
In the last few years, as a thinker and an analyst of dynamics, I have identified an emerging need and to some extent want for “wisdom”, mainly in Europe and North America. As well as “philosophy”, ie the pursuit of wisdom.
In parallel, more and more people are recognising the value of knowledge for the sae of knowledge, defying the expertise trend that emerged in recent decades and still exists, as far as professional education is concerned. In other words, in the US and in Europe, more and more people wish to “better themselves” via better self awareness and awareness of the world they live in.
At the same time, IMO, a Services economy does need workers who fit the old “well rounded education” type rather than the “expert”.
To that effect there is an emerging retail market for tools and services that offer better information (including news and analysis), more education (the success of international “thematic” TV channels with a high educational dimension to their content comes to mind as an example), as well as more awareness and food for thought.
Addressing the need and wants of such a market, with the EU, as well as in North America and elsewhere, should IMO be part of the “Knowledge industries” dimension of an EU2020 Strategy.


10) The “EU Dream”
The EU can and must pick up the slack created by the changes in immigration policy of the US in recent decades. It can also create many more reasons for anyone who wants to be in the “world league” in his/her “field of dreams”, be it business, sport, arts, etc, to do so in EU clusters rather than American or other ones. Points 1-8 above would contribute to that.

IV. Epilogue

We all live in a volatile world. Risk-free is not the way of Nature. The world needs a Wise “participant”, a participant that will help the world make wise choices and decisions (see eg Global Warming) as opposed to allegedly “smart” ones. TeamEU has the skills and experience to be the wise contributor in the world in 2010-2020. But it needs a strategy to do so. That should be the EU2020 Strategy. An EU that is deeper, “single”, much more self-aware (of its strengths and weaknesses), aware of the world (enlightened) and a thought – ideas leader to the world. But above all, the sage member of the world community.


1) The Guardian, Tuesday 20 February 2007
2) According to the "Special Eurobarometer 243" of the European Commission with the title "Europeans and their Languages" Feb. 2006

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