My wish for you for the year 2016

When 2016 emerges, I wish that:

• You will be able to care for people who stand close to you and for the ones who don’t stand so close to you;
• You will be able to place yourself in the minds of fugitives: people who fled war, chaos, grief and despair, in exchange for a better life in our wealthy and mostly happily living Europe. Be gentle and understanding for them and do not curse and hate them for what they did last year or for what they plan to do; 
• Religion will never be a reason for you to hate people who think, act or live differently than you do;
• Politics will never be a reason for you to hate people who think, act or live differently than you do;
• Money and success will never be a reason for you to look down at people who think, act or live differently than you do;
• You will understand that closed borders and large fences around your country will not solve anything politically and are only a way of assuming the ostrich position;
• The European politicians finally understand that we’re in it together and that we will not make it on our own, by closing our borders and our hearts for our fellow Europeans and fellow humans all over the world;
• People understand that the pleasure of extreme remuneration and the distinction based upon being a millionaire is much more shortlived and futile, than having fun in your work and private life, whatever you do;
• The thick layered fog of doom and gloom will be lifted from the European Union and from its citizens;
• People understand that a crisis like the one that we are in, is a necessary cleansing process in order to reset the people and the economy. While it is a harsh and tough process, it is unfortunately indispensable for people to find out what they should really care for in life;
• People understand that for feeling better you have to take away all the negative emotions that make you feel bad: not by shopping and spending yourself out of misery, but by simply seeing the beautiful things in life, which are mostly for free;
• The Dutch and British citizens understand that their welfare state will not be ruined and that their cities will not be blown up by fugitives;
• The East-Europeans will understand that the European Union is not a Soviet Union in disguise and will stop to treat it with distrust and hostility;
• The people who spread discord and hate against other people will finally see that what they do is wrong;
• The people who do not dare to stand up against people, that spread discord and hate, will finally see that what they do is just as wrong;
• The current and future Dutch leaders realize that credit and credibility are descendants of the same Latin word ‘Credere’, which means “believing”. Winning a credibility-based debate, due to the fact that your coalition partner does not dare to drop your cabinet out of self-interest, does not mean that you are credible. The people in the country know better alas;
• The current and future European leaders understand that politicians will be respected for what they say, do and believe in and not for the way in which they arrange a nice job for themselves and their friends;
• The current and future European leaders understand that the European Union can be either a house of reinforced concrete or a house of cards. What it is lies mainly in their own hands;
• The current and future American leaders see that mindless talk, boundless aggression, worshipping of gun ownership and religious infatuation will rather weaken the American position in the world, than reinforce it;
• The current and future(!)  Russian leader will see that mindless talk, boundless agression, worshipping of power and political/societal infatuation will rather weaken the Russian position in the world, than reinforce it;
• All the Middle-Eastern, African and Asian leaders will understand that ‘Divide and Conquer’ is a game with only losers in the end;
• You will be able to see the beauty of our precious, fragile planet and all the creatures living on it;
• It will be a good year for you, my dear reader, and for your loved ones, in prosperity, health, love and happiness;
  
  Happy New Year!!!

Still no time for parties in The Netherlands of 2015

In 2015 the ongoing depression tightened its grip on the moods in The Netherlands. While it has been a very succesful year on a personal level, nationally it became in hindsight a year of unnecessary victimship, mourning,  below-the-belt nationalism and barely disguised and untargeted resentment and anger against anyone and anything, in spite of the quickly improving economic prospects in The Netherlands.

What a year 2015 has been in hindsight, from a personal point-of-view. It was my first year as freelance ICT professional, after I ran the gauntlet and chose for a life of uncertainty and personal freedom by abolishing my steady job.

This job did not only bring its pension plan and its steady perks and benefits on the positive side, but also a considerable amount of personal frustration about the shortsightedness and unwillingness of the leading management to change and reinvent the whole company, under pressure of the “zeitgeist” as well as new, gamechanging developments in the ICT industry. I dare to call this “ostrich behaviour” of the executive management of my former company.

Their total denial of both the changing environment in ICT-land and the mounting financial pressure upon ‘suppliers without special services, skills and knowledge” brought this company – in spite of its very good and capable workers – almost to its knees. Even though my former employer still exists and – thus – survived 2015, the company is yet clinging onto life by the skin of its teeth. Their personnel ( my former colleagues) definitely deserve much, much better.

But to cut a long story short: I took the step and jumped into the deep water. And in spite of the shaky start in the first half of this year, the second half has been a ball for me personally, giving me the opportunity to work hard and play hard. I entered into a wonderful assignment at a leading Dutch international bank and acquired some news skills and deep financial knowledge in the process, while helping my bank to meet the new reporting requirements of the European Central Bank.

On top of that the second half of 2015 was arguably one of the best half years that my beloved ICT industry has ever been through. 

It seemed that all larger and smaller principals – from either the government, the financial industry or the commercial services industry – had shaken off their hesitation and reluctance and finally started to hire new people, on top of the skeleton crews that had been hired during the previous years.

They did this undoubtedly spurred by the improving Dutch economy and the increasing consumer confidence, as they decided that ‘now’ was the time to invest in new and improved ICT systems, as well as in urgent maintenance on systems that had been neglected in earlier years. From the situation in early 2015, that acquiring new assignments required massive amounts of effort and energy, it changed to a situation that the new assignments proverbially dropped down from the ceiling. Hourly fees that had been under pressure for almost seven years, became suddenly open for discussion again.

While the ICT and commercial services industry turned out to be a definite greenshoot in 2015, the rest of the country was still in the fierce grip of the depression that this enduring economic crisis had become.

From a toxic mixture of grief, fear and resentment against other countries and also the own goverment (emerging from the continuing attention for the MH17 disaster and the international blame game to which this explosive incident led), and from the mounting tensions in the East (Ukraine vs Russia), as well as the Middle-East (Syria, Jemen and Iraq), leading to an massively elevated influx of refugees in Europe, there was the emergence of a dangerous kind of nationalism and NIMBY-ism, in combination with a mounting aggression against the powers-that-be and especially the political decisions that they made.

There were massive and ubiquitous protests against refugees and especially against the (large) refugees camps and asylum centres that were needed to shelter the people from countries, like Afghanistan, Jemen, Libya, Eritrea, Syria and Iraq.

People from the lower (middle) classes were outraged, when they learned that their hometown or village could become the new domicile for a refugee camp that would offer a temporary home for more than 500 inhabitants or when they heard that their limited stock of social rental houses would be partially handed over to refugees with a permanent residence permit.

The residents of much wealthier cities and villages, on the other hand, simply put their political friends at work to prevent refugee camps and asylum centres from entering their communities.

Throughout the whole society there emerged an increasing, poisonous distrust against the political elite in reign, while the elite itself seemed to feed this distrust, by occasionally showing itself from its most negative, unreliable and cheap, opportunistic side.

At the same time, a number of political representatives in The Hague uttered themselves with increasingly shrill voices and aggressive language against refugees and also against the more moderate politicians, enthusiastically followed by the less civilized parts of society, who were more than willing to put their money where their mouth was. This led to a number of increasingly violent and frightening protests against local and national political decisions.

As an inevitable consequence, formerly moderate politicians also started to talk in an increasingly negative manner about these refugees, displaying them as fortune seekers and 'future leeches of the Dutch welfare system' that had to be stopped at the outer borders of the European Union. These developments happened not only in The Netherlands, but all over Europe and especially in Eastern Europe, the United Kingdom and Germany. The European hospitality and compassion regarding the refugees turned into an increasingly hostile stance.

As a matter of fact, this stance became so hostile that while “Schengen” had always been the backbone of the European Union since the borders disappeared in 1992, it suddenly became ‘en vogue’ to talk about reinstating the borders between the countries of the European Union itself. And this happened with the excuse, that Greece and Italy and a few other South-East European countries had neglected their gatekeeper function in controlling the outer borders of the European Union.

The United Kingdom, which had never been part of the Schengen zone in the first place, saw their traditional distrust against Schengen as a European institution confirmed by the events in 2015. 

The British residents and especially their leading politicians saw themselves increasingly as victims of the negligence of the other European countries and in particular France (hence: Calais). Allegedly, they would be flooded by refugees who would take away their jobs and their social security benefits, thus dragging the country into a new economic crisis. 

And so, when I thought about the political and economic year 2015 in The Netherlands and beyond, I could not help thinking about the following, very powerful statement by Minyanville’s former sage Kevin Depew, about the economic depression which he already foresaw in 2008(!).

Yes, it's here. Welcome to the Depression. No, don't drop whatever it is you're doing. Don't get up. It's not going anywhere. It will wait. It's just going to sit over here in the corner and read a magazine while you do whatever it is you need to do.

A Depression doesn't run hot and fierce like some crazed meth burner. A Depression is methodical, purposeful, patient. It will build a shelter out of tree branches and newspaper, light a small, well-contained campfire and wait you out, brother. 

While you feed on the empty calories of denial and popcorn, it will quietly gather shards of broken dreams and fashion them into a terrible weapon of blunt force reality.

While re-reading those wise words, being spoken in 2008, I realize that the genuine greenshoots in 2015 do not emerge one second too early. And perhaps those greenshoots might even turn out to be false alarms regarding an economic resurrection that might never emerge, just like the first half of 2011 was also a false alarm.

Do we not see that a number of large store chains is at the brink of imploding? And is one of the leading banks in The Netherlands not dismissing thousands of workers in the next few years? Yes, they are indeed! 

And undoubtedly the resurrection of the Dutch economy might be a long-lasting operation. Not to state that the mood of many Dutch citizens is still depression-like, as I described earlier in this article.

Yet, I don’t think that the positive signals about the Dutch economy are mistaken once again. What immediately comes to mind is that the number of traffic jams has really soared in the second half of 2015, while traffic was still rather quiet in 2011, when we already thought we were through the economic crisis. 

Traffic jams are a tell-tale signal about the state of the economy, as the number of passenger cars and especially the number of trucks say something about the economic activities happening in a country. And people seem more happy to spend their money on consumer goods, lifestyle products and household appliances again, in spite of their sometimes depression-like behaviour.

This in combination with the increasing number of (still flexible) assignments and jobs and the rising hourly fees for freelancers could mean that 2016 will be the year of the definitive turn-around for the Dutch economy.

Nevertheless, it will be a long and painful process to cure the Dutch and European economies and – with all the current political and economic tensions in the world – there is still a considerable chance for a sturdy relapse, when the political sh*t starts again to hit the fan. Let us hope that it will not come this far.

Nevertheless, I wish you a very loving, prosperous and healthy 2016 for you and your loved ones. I am grateful for the fact that your read my blogposts and for your mostly positive comments that you share with me at many occasions. And to quote my life-long hero Leonard “Mr. Spock” Nimoy:

“May you live long... and prosper!"

Cheers, Ernst

The demise of three common store chains in The Netherlands points at the emergence of a wishbone world in the Dutch shopping culture.

The tragic demise of ‘three store chains for the ‘common, middle class man’,  V&D, MacIntosch and DA drugstores in The Netherlands and the simultaneous success of both high end, ultimately luxury, stores and the low end stores chains, like Action, Big Bazaar and Primark, points at the emergence of a wishbone world  in the Dutch shopping landscape, in which it becomes fatal to be ‘stuck in the middle’.

Clowns to the left of me, Jokers to the right,

Here I am, stuck in the middle with you.

Stealer’s wheel – Stuck in the middle

This week was a particularly gruesome day for three renowned, very large and long existing store chains in The Netherlands.

MacIntosh, the owner of several shopping formulas and chains of shoewear, home decoration and lifestyle stores – with over 400 stores in The Netherlands and 130 stores in Belgium/Luxemburg – filed for a Chapter 11 status for its head office and for its shoe- and lifestyle storechains Dolcis, Manfield, Invito, PRO Sport en Hoogenbosch on Tuesday.

At the same time, MacIntosh warned its shareholders that the possible yields of a ‘shopping formula firesale’ would hardly be sufficient to pay back the outstanding debt of MacIntosh itself. In other words, the marked-to-market value of the exchange traded MacIntosh shares would end up being close to nought. This news was enough to blow the remaining value of the stock to smithereens and fulfil this ‘prophecy’.

Such a Chapter 11 status enables MacIntosh to legally put a temporary payment stop on the incoming invoices and other amounts due for MacIntosh and its storechains, in order to acquire time to investigate and improve the financial situation and acquire new sources of funding in the meantime. Although some companies actually survive a Chapter 11 status, for most companies it is the ‘last bus stop’ before reaching the inevitable bankruptcy.

V&D, the large Dutch chain of department stores, ended an already terrible business year in style by also filing for a Chapter 11 status yesterday. By doing so the formerly grand department store chain nearly ended up in the abyss with their 60+ department stores and their hundreds and hundreds of personnel members, while letting down thousands of customers, who still own – now worthless – V&D gift vouchers.

And last, but not least, there was the central head office of DA Drugstores which also filed for Chapter 11 yesterday, due to the fact that the currently 266 independent franchisers of the formula could not pony up enough income for the headoffice to survive independently. 

All the stores of the DA drugstore chain in The Netherlands
Picture courtesy of: www.fd.nl
Click to enlarge

Although the demise of such a head office alone might not sound very alarming, it could have far-stretching consequences after all: such a head office is not only the ‘gatekeeper for the formula’, but on top of that it acts as the – vitally important – central purchase organisation, as well as the central administration and accounting office for the formula.

Without this organization, all franchise-owners of the DA formula become ‘headless organisms' and on top of that they will soon run dry of goods, as virtually all the supply lines for new store stock dry out immediately. On top of that, their central administration and accounting will not be managed anymore, meaning that all the independent stores must acquire the centralized parts of their store administration and accounting on their own computer systems. The latter is really a hell of a job and often almost impossible.

Although by itself the future of the independent DA stores is officially not at stake, this nearing bankruptcy of their head office means ‘de facto’ that a devastating blow has been administered, as these stores can hardly survive without their head office.

With the (expensive) Christmas days and New Year quickly approaching, this was terrible news for all thousands of personnel members of these three store chains, as well as for the numerous shareholders and the suppliers and other creditors, who can probably wave goodbye to a large share of their investments.

And as the following infographic created by HetFinancieele Dagblad shows, these three store chains are not just the next ones in a long, long line of store chains going bankrupt during the last few years; no, in this line V&D is undoubtedly the largest store chain to perish in sales numbers as well as personnel members.

Infographic of large store chains going
bankrupt since 2011
Picture courtesy of: www.fd.nl
Click to enlarge

So even though 2016 should be the year of the definitive return to economic prosperity for the Dutch economy as a whole, the year could not have started worse for the people involved in this three companies.

Among the so-called ‘fatal flaws’ of these companies, the most obvious one could be that neither of them was able to adopt a good online(i.e. internet) strategy with accompanying online portals, to attract the many young and middle-aged customers who prefer to do most of their non-food shopping online. So that they could beat the Zalando’s, Bol.com’s, Wehkamp’s and other “successful” internet retailers (i.e. successful as in high sales figures, as being profitable is often another ball game for such online stores).

However, that is only half of the story in my humble opinion. As the following chart with calculated sales figures (based on indexed 2013 sales numbers for both online and B&M stores) from the Dutch Central Bureau of Statistics shows, the sales of the combined internet stores is still only around 10% of the total brick & mortar store sales, in spite of its fast growth. 

So it is not fair to state that increasing internet sales alone is solely responsible for demolishing the ‘old-fashioned’ B&M stores.

Calculated Sales development of B&M stores
vs Online stores in The Netherlands
Data courtesy of: www.cbs.nl
Chart by: Ernst's Economy for You
Click to enlarge

While I have spent an article or two about both the dangerous circumstances for and fatal flaws of such massive store chains like the aforementioned ones, there is another very interesting side to the current, enduring chaos in the Dutch retail landscape.

This side is what we could call the wishbone world in which the Dutch shopping landscape has ended.

The wishbone world of the Dutch shopping landscape
Infographic created by: Ernst's Economy
Pictures courtesy of: www.veendammer.nl, www.jongordon.com
Click to enlarge

At the highest end of the wishbone, there is the enduring and considerable success of the Italian and French designer stores, the brand stores, the luxurious jewellers and bodywear stores and other extremely expensive lifestyle shops for goods of impeccable quality and sky-high prices: jewellers and luxury good stores like Cartier, Schaap & Citroen, Luis Vuitton and Tiffany or high-end fashion shops like Chanel, Gucci, Ermenegildo Zegna or Rive Gauche and their likes.

These are all stores meant both for people for whom a  budget is never concern at all and for people who want to show off to their friends with the wrappings and the shopping bags of these brands, which are almost as desirable as the goods that these brands sell themselves.

At the low end of the wishbone, there are store chains like Primark, Big Bazaar, Voordeelwinkel and Action, which sell fashion and low end lifestyle/consumer goods and household appliances against the lowest prices, for people who can’t or won’t afford to buy something more expensive.

Also these chains are very successful in fulfilling their own mission of being the drainage canals for mass produced low end fashion and consumer goods (i.e. “container goods”) from the low-wage countries (i.e. countries like China, Vietnam and Bangladesh), as well as for the remaining stocks and surplusses of bankrupted store chains and shops.

The shops that are ‘stuck in the middle’ of the Dutch shopping landscape are either surviving by price-stunting their brains out – like for instance the famous “Kruidvat” drugstores, which litterally move from one price-action to another, hoping to earn back their losses from the other same store purchases that people do when they are in the Kruidvat stores – or they lead an increasingly lingering existance, fighting against higher bills and lower sales figures. These are formerly very successful store chains like Blokker and Hema, who now also seem to be on a dangerous path towards their future demise.

Many municipalities, exploitation companies for shopping space and interest groups for the retail industry look at these developments concerning V&D, Hema, Blokker, DA and MacIntosh with feelings of shockedness, disbelief and pain.

However, these developments all seem an inevitable result of the enormous, unhealthy increase in shopping space of the last decades, as well as the “Blokkerization” – the increasing monotony and dullness of Dutch shopping centres as a consequence of always the same store chains occupying most of the available shopping space – of the Dutch retail industry.

Even though the economic crisis seems to have finally come to an end, I think that the shakeout in the Dutch retail industry must and will continue, in order for it to become healthy again. This is a painful, but yet inevitable process!

We trust, because we care for each other!

Trust of civilians in companies and in eachother is not the consequence of ‘a disciplining free market’, as Mathijs Bouman states in last week’s column in Het Financieele Dagblad. 

To the contrary: trust is founded upon a strong belief in the intrinsical goodness of people and is itself an indispensable catalyst for successful cooperation and ‘entrepreneurship’.

"I told him you got the right ta-ta,

But the wrong ho-ho..."

Dean Andrews (John Candy) – ‘JFK’

Mathijs Bouman, whom I mentioned earlier in some of my articles, is a macro-economist, as well as a columnist for Het Financieele Dagblad (FD) and a co-host of televized business programs.

Especially his written columns for the FD are often very good and interesting reads, although I quite often disagree with his conclusions and mental leaps.

Last week Mathijs again had written a very interesting article, about the need for confidence and mutual trust in a country, in order to bring it on a higher economic level. One of the most interesting quotes of this article was the following one:

I was hungry, so I decided to buy a ‘raisin roll’ (i.e. in Dutch ‘krentenbol', a sweet bread roll filled with raisins - EL). I did not know the bakery, where I bought it. No idea where he acquired his flour and raisins, or how clean his bakery shop was. Still, I took my raisin roll and sunk my teeth in it, without looking. Three bites and my roll was gone.

Again the miracle happened: there was no thumbtack in my roll.  Every time when I buy a raisin roll at a bakery store which I didn’t know before, there is no thumbtack in it. You might think: “Come on... Of course, there is no thumbtack in it. Which bakery would do that?! He would not sell a single item anymore, as no customer would trust him again”.

That is exactly my point. I trust the baker to not drop something sharp in his dough, as I know that it will cost him his bakery store. I trust him, because he is disciplined by the free market. Efficient capitalism is therefore a matter of trust; when I had to investigate whether the baker and his suppliers could be trusted, it would cost me half a day.

Trust is an important factor for production. Without trust we can only negotiate and deal with the few people that we know well and not with the anonymous mass. Without trust markets don’t work efficiently and we lose much time and money with assessments and regulation. That is pure spillage and a waste of effort and time. 

I wholeheartedly agree with the tenor of this article, as mutual trust between people and general consumer confidence are the building blocks of society and strong catalysts for a healthy and growing economy.

However, Mathijs is dead-wrong when he states that this trust is built up and maintained due to the fact that small entrepreneurs ‘are disciplined by the Free Market’. To use one of my favourite JFK movie-quotes: Mathijs Bouman has the right ta-ta, but definitely the wrong ho-ho!

That sheer fact is not hard to explain by itself: Mathijs has traditionally been a representative of the liberal-conservative school, which advocates the ‘discipline of the market place’ as the perfect medicine for almost any human flaw. Exactly this discipline seems to be founded on Theory X about humans, in my humble opinion. 

This theory is described in Wikipedia like this:

Theory X considers that on the whole, workers dislike their work, and have little inherent motivation to perform well. Therefore, if organizational goals are to be met, 'Theory X' managers must rely heavily on detailed rules and instructions, on close monitoring, and on the threat of punishment to gain employee compliance.

Theory X is a very calvinist and even cynical view upon the world and on human behaviour, stating that people can’t be trusted without having a carrot in one hand and a big stick in the other. Theory X takes the imperfection and presumed laziness and disinterest of humans as starting point, instead of looking at it as outliers. 

In this particular example of the bakery store, the stick is carried by the 'disciplining and almighty Free Market'. In other words, when this imaginary bakery is so stupid to spill a box of thumbtacks above their dough mixing machine (’as if...’), the so-called ‘free market’ will punish it by expelling this bakery from the market place.

Even though I warmly endorse the remaining content of this article and agree with Bouman’s call for trust, this ridiculous example shows that there is little intrinsical trust in Mathijs’ statement itself.

Personally, I will also eat such a raisin roll without the slightest hesitation. First, because the odds of finding a thumbtack in one’s raisin roll is extremely small, even perhaps when a clumsy baker spilt a whole box in his raisin dough.

And in the second place, based upon the knowledge that independent bakers generally love their profession and like to ‘spoil’ their customers with healthy and tasty quality-food, every day made with love and passion. Just like most SME (small and medium enterprise) owners genuinely love their job and want to produce the best quality for themselves and their customers, while working long, hard hours to achieve this.

While there are of course exceptions, most workers – irrespective of them being blue colllar or white collar – love their jobs and what they do too and give their very best on a daily basis. That this very best differs from person to person is a fact of life, but nevertheless most workers do.

However, a lot of workers and SME entrepreneurs get fed up by the distrust of their managers and bosses at one hand or their local and central government at the other hand.

Managers and government representatives are not seldomly people, who have a general distrust for their personnel or their citizens and domestic companies. Therefore they try to get hold of all tangible and intangible results, facts and circumstances through their dreaded ‘key performance indicators’, ‘control frameworks’, permit procedures, enquiries and ‘general assessments’.

Of course I’m not naive and therefore I am aware of the fact that there are indeed some ‘rotten apples’ in the basket: both among corporate and government workers and among independent entrepreneurs. 

Yet, most people deserve being looked at with Theory Y in one’s head: these are people of enthusiasm and good will, who are willing to work hard and smart and who want to fight for a ‘good cause’ and for the reputation of their company. 

Offering the best quality and fair prices within their business or profession is always at their retinas. There is no way in which the Free Market is a catalyst for such people to achieve more, just like the traditional ‘carrot and stick’ approach won’t bring them to better quality or higher output eventually. They already give their very best, even though not every day or achievement can be rewarded with an A+.

There is only one thing that most people like to have in their work or their company: trust and faith of their bosses and their respective governments and the freedom to do their job in the way that they learned to do it, founded upon education and/or experience. 

This is the reason that many managers are not a catalyst for growth and improvement within their companies, but rather form ‘a grain of sand in the machine’ for most workers, with their KPI’s, their perpetual desire for change and improvement and their dashboards and controls.

Of course governments need to maintain inspections and assessments, in order to stop people and companies from cutting corners and endangering their customers out of sheer greed or fear for the competition. Yet, governments need to do so with Theory Y in their heads: founded upon trust, instead of having distrust as a starting point.

But there is more: Bouman’s article was illustrated with an interesting chart containing WorldBank data upon trust and faith within countries. 

This chart even somewhat undermined his own vision about the effects of ‘discipline, administered by the Free Market’ upon trust and faith within a country.

People with trust in the majority of their countrymen
Based upon a WorldBank survey.
Chart courtesy of: www.fd.nl
Click to enlarge

When people are asked about the countries with the highest amount of free market-adepts within their government and with the most liberated markets in the world, there is a considerable chance that the United States, Australia and Canada are mentioned among those.

Yet, these countries are far removed from the winners, when mutual trust and general confidence of their citizens are regarded. Not even to speak about ‘liberized’ and fast-growing capitalist markets in countries like Brazil, Russia, India or Mexico.

No, the winners with respect to mutual trust and general confidence are ‘social-democrat-ish’ countries with relatively big and caring governments, like Norway, Sweden and... The Netherlands.

So neither the ‘Freedom of Trade’ nor the ‘Discipline administered by the Free Market’ seems to provide the indispensable mutual trust among the population in a country.

It is the fact that the people care for each other – financially and non-financially – under the umbrella of a caring, but definitely not intrusive government, that seems to be the catalyst for mutual trust and general faith in a country. That must be a surprise for Mathijs Bouman, who seems to be in favour of a smaller government, just like so many other liberal-conservative people in The Netherlands and abroad.

Having said this, there is one – perhaps somewhat surprising – outlier on this aforementioned chart: China. In spite of the ubiquitousness and almightiness of the Chinese government, as well as its infamous corruption, the Chinese seemingly trust eachother.

Perhaps this is just the consequence of having lived with an enormous population in a formerly rural country for thousands of years: a country in which there were always many, many mouths to feed, even during times of bad weather and bad crops. 

Trust and cooperation are the only means for surviving in such a situation and so the Chinese trusted and still trust eachother. Even 75 years of communism alledgely could not change that at all!

Please redeem us Europeans from footage of crying relatives and friends, in case of deadly gun-related violence! Stop the Second Civil War in The United States!!!

When a national disaster happens in a certain country, government leaders from all over the world call the head of state of that country to personally condole him/her and wish his/her fellow countrymen all the best with going through the painful mourning process.

This was exactly what happened in the aftermath of the MH17 disaster in The Netherlands  and – a few weeks ago – after the Paris’ terrorist attacks, which claimed the lives of about 130 people.

There are, however, a few countries for which the global government leaders don’t even bother to call anymore, when incidents with more than five or ten casualties occur.

Just for the simple reason that bloody incidents and mass shootings are an everyday reality in these countries. Calling after every bloody incident would simply mean that the global government leaders would need to have a 24x7 hotline with such countries, as Syria, Afghanistan, Iraq, Mexico, Honduras and... the United States.

While countries like the first five (i.e. Syria, Afghanistan, Iraq, Mexico, Honduras) have a extremely violent recent history of (civil) wars or drugs- and gang-related violence, the United States is a. “the policeman of the world” and b. one of the most successful, democratic and wealthy countries of the last 500 years.

Yet, there is a Second Civil War going on in the United States. A bloody war which claims thousands and thousands of victims annually each and every year: for instance in 2013 a total of 33,169 deaths related to firearms (excluding firearm deaths due to legal intervention).

The Second Civil War is a civil war between:

• Criminals and innocent citizens and/or law enforcement officers, who cross their path at the wrong time and place;
• Gang members and innocent children/teenagers, who just happen to live in the wrong ‘hood;
• Desperate or intrinsically violent husbands (wives) and their scared wives (husbands) and children;
• Serial killers and psychopats and their victims;
• Frustrated citizens and their adversaries of the moment;
• Motorgangs and other motorgangs;
• Adolescents ‘gone of the right path’ and their co-students, teachers and professors, who coincidentally go to the same school or university;
• 5 year old infants and 3 year old toddlers;
• 3 year old toddlers and 5 year old infants;
• Boys who play ‘cowboys and indians’ with real firearms, which were accidentally present and in loaded condition under the pillows of their parents’ bed;
• Semi-military and excessively armed law enforcement officers and everybody who stands in their way at the wrong moment;
• And sometimes even police agents and unarmed representatives of minorities.

And everytime when such a bloody incident with more than one casualty occurs, right-wing politicians are mumbling their steady, favorite mantras:”guns don’t kill people” or “this would not have happened when their victims would also have carried firearms”. Unless of course the shooter was a cop...

As if an average American university is the "OK Corral" and the average student is Wyatt Earp or Doc Holiday, who wants to shoot himself a position in the national history books... 

When the latter mantra would indeed be true, it would mean that there should be much more casualties during mass shootings in Europe.

Except... for the simple fact that there are much less “fruitcakes” carrying firearms in Europe, which consequently makes mass shootings in Europe an extremely rare phenomenon.

We have had Anders Breivik in Norway, as well as a certain number of other mass shootings on universities in Germany and Finland, plus – of course – our share of gang and drug-related violence, which is actually a global problem for which Europe is not immune at all.

Yet, in no European country the domestic situation with firearm-related violence is anywhere near the American situation. Really!

Infographic of US mass shootings during 2015
Picture courtesy of NRC
Click to enlarge

Of course, the United States’ citizens are fully entitled to practice their rights, administered to them on behalf of the Second Amendment. Be my guest!

Yet, they should understand that almost all Europeans look at all the US (mass) shootings in ‘shock and awe’, flabbergasted as they are out of sheer disbelief; both about the outrageous day-to-day violence on display and the total civic and political ignorance for it, with on top of that the publicly displayed allegiance to the Second Amendment that often accompanies such events.

Unless... the perpetrators of the gun-related violence are radicalized Muslims of course; like last week in San Bernardino. Then all the GOP-members and some Democrats – who firmly assumed the ostrich position during all the other (mass) shootings and firearm-related incidents – jump into action and set enhanced visa regulations for all visitors from ‘suspicious’ countries, while some others even try to prohibit all Muslims to enter the US.

The reason for this seemingly erratic behaviour is that there are clearly two categories of gun-related violence in the United States: 

• Violence coming from domestic, ‘all-American’ sources, which supposedly is accepted by the average American citizen and should on top of it act as a ‘trigger’ for buying and carrying even more firearms than the average American already does (and with in average one handgun or rifle per American citizen, this is obviously quite a lot already);
• Violence coming from foreign or non-Christian, religious sources, which is called ‘terror’ and – as a consequence - scares everybody sh*tless and therefore calls for stringent counter-measures from both political sides of the spectrum.

But hey, this is actually quite normal, isn’t it?!

Of course, I am just a silly European who writes a crappy piece of article on a subject that Americans themselves know best. So please don’t take my word for it.

Yet, I don’t want to see those approximately 33,000 casualties again in 2016, 2017 and 2018 and in many other years in a row. 

I don’t want to be a witness anymore in that Second Civil War in the United States that never seems to come to an end. I do care for all those people being murdered and I don’t want to see several hundreds of thousands of American lives being ended prematurely during the next twenty-odd years.

So, if you don’t want to waive your Second Amendment rights to carry firearms, please redeem us Europeans then from American footage of desperate and angry people and crying children in Detroit or crying students at schools and universities all over the United States, after their friends and/or relatives have been shot to death.

And redeem us from footage of universities which are better protected against gun-related violence than European prisons are.

Redeem us from the stories of toddlers and infants accidently shooting their brothers, sisters and parents.

Redeem us from trigger-happy police officers, who shoot black people ‘out of self-defence’ with at least 16 bullets, ‘because they did something very suspicious’...

And redeem us from the fairytale that ‘guns don’t kill people’.

We Europeans simply can’t stand it and we can’t understand it anymore...

“New Kid in town”: the Su-24 incident shows that Turkish president Erdoğan's rise to power might have dangerous implications for the world.

There's talk on the street; it sounds so familiar

Great expectations, everybody's watching you

The Eagles – New Kid in Town

If Time Magazine would have had a contest for the most influential politician of the last two weeks, it would be a neck-on-neck race between the French president François Hollande and the Turkish president Recep Tayyip Erdoğan.

Although both politicians effortlessly drew the international spotlights during the last fortnight, the reasons for their “claim-to-fame” couldn’t have been more different.

François Hollande cashed his ‘president’s credit’ in the aftermath of the terrible attacks in Paris by making a ‘Tour de Monde’, bringing him in close contact with the global leaders including the Russian president Vladimir Putin. 

With his panache and finetuned French diplomatic skills, Hollande sought participants for his attack coalition against IS in Syria, after declaring them war. And although the results of Hollande’s tour are not crystal clear yet, the odds are quite considerable that the attacks upon IS-bases in Syria will be extended in the coming period.

However, the real man of the last two weeks was undoubtedly Turkish president Recep Erdoğan.

With one well-aimed missile of an F16 fighter plane, Erdoğan’s Turkish airforce downed a Russian Sukhoi Su-24 bomber aircraft during its attack stint over North-Syria, after it passed the Turkish border for a very brief, yet fatal period. Although both pilots could escape using their ejector seats, one pilot was fatally shot in mid-air by Turkmenish insurgents, who had been under attack by the same airplane.

Thus Erdoğan gave Russia a powerful signal that there is ‘a new kid in town’, when it comes to both global politics and regional use of power. That the signal had been very well understood became clear from the governmental and public outrage in Russia, as well as from the shedload of economic measures and boycott actions against Turkey and Turkish companies and citizens, that were declared overnight by Vladimir Putin and his henchman Foreign Minister Sergey Lavrov.

Although the reason for the Turkish attack against the Russian bomber plane is not yet clear, voices speak softly that there is more behind it than a simple, fatal cross-border incident with a jet plane. Insiders speak that Erdoğan wanted to teach Russia a lesson for:

• attacking their Turkmenian brothers in Northern Syria, who many Turks consider to be closely related to their people, instead of only attacking IS;
• their enduring protection of the Turkish archenemy, Syrian president-under-fire  Bashar al-Assad, thus letting him stay in power during the now almost five year lasting civil war in Syria.

And according to the Australian newssite ABC (and various other international media) Vladimir Putin himself stated that Turkey had attacked the Russian plane in order to protect the alleged Syrian and Iraq oilstreams to Turkey, managed by IS. This is a possibility that may not be so implausible as it seems at first glance.

Stil, I have a hunch that these are not the only reasons for this quite brutal and probably unnecessary attack against the Russian plane, which probably did intrude Turkey for a very short period, but crashed (and had been shot (?)) when it was already back in Syria.

In my humble opinion, the state of mind and the enormous ego of president Erdoğan might also play a role. As a matter of fact, both Vladimir Putin and Recep Erdoğan are quite similar persons.

Both share an undeniable intelligence with a considerable amount of ruthlessness, as well as disdain for their opposition, for the free press in their countries and – as a matter of fact – for their population as a whole.

Where Vladimir Putin has been president and shadow-president (i.e. Prime Minister) for more than 16 years in a row already, the reign of Erdoğan lasted from 2003 (when he became PM) until now and it will probably last much longer.

Erdoğan’s latest ‘tour de force’ was his second election victory in 2015, in which he reclaimed the absolute majority in Turkey after he lost it in earlier elections during this same year. During these elections the Turkish AK Party government did not scare away from sending personalized letters to Turks living all over Europe and other forms of soft and hard intimidation of his opponents and grassroots.

Both Putin and Erdoğan turn more and more into solar kings, who see their country’s wealth and income as their personal achievement and thus their personal property. Their slogan is seemingly: “Ask not what I can do for my country, but ask what my country can do for me”.

Putin put this slogan to life by earning shedloads of money through all kinds of state participations in oil, gas and other commodity-driven companies and by ‘simply being the top dog in Russia’.

Erdoğan has done so by building a new presidential palace for himself with a ‘petty’ 1150 rooms, costing the Turkish citizens billions of dollars and by other ways to enrich himself and the clan around him.

Their self-complacency, insensitivity for self-criticism and ruthlessness becomes blatantly clear from the way that they deal with the ‘darkish’ past of their respective countries and in the manner that they treat(ed) their adversaries. 

What Putin did with his Chechnian adversaries in Russia or with the people in Georgia, is exactly what Erdoğan does with the Kurds in Turkey and – as a matter of fact – Iraq: when deemed necessary enforcing (bloody) confrontations and/or bombing the living daylights out of them.

Further, Turkey  is more and more changing from a country with basically free press into a country in which press representatives are turning into fair game for government officials: some are arrested, while others are probably murdered (see also this link).

Yet both Putin and Erdoğan are strong, outspoken men, who are appreciated by the majorities of their countries for their tough politics and rocksolid goals.

Both have grand visions of their country becoming famous and mighty again. 

Where Putin can’t sleep at night due to endless pondering upon his ‘Great Russia’ vision, Erdoğan dreams of the revival of an ‘Ottoman-ish’ empire, in which Turkey is the greatest regional power with an influence stretching from Eastern Africa in the West to Afghanistan and Pakistan in the East.

The latter is probably the reason that Turkey (i.e. Erdoğan) really hated the Russian intervention in Syria, in favour of their ‘old friend’ Bashar al-Assad: an intervention that could eventually diminish the Turkish influence and damage Turkish interests in the region, as well as their (perhaps) above average relation with the leaders and representatives of IS. This might after all be the reason that Turkey took its chance, when the Russian plane crossed its borders.

Nevertheless, whether this all was indeed the motive for Erdoğan to shoot down the Russian plane or not, does not matter much in the end.

What matters, however, is that it has been a reckless and extremely dangerous move of Turkey, which could have dramatically increased the international tensions in the world (and it still could do so in the near future). 

To make things worse: both the ego’s of presidents Recep Erdoğan and Vladimir Putin prevent them from simply saying ‘sorry’ and admitting that they have acted ‘wrongly’ in this matter.

No, instead they turn into an international ‘cockfight’ in which they try to punish each other with inconsiderate economic measures (‘an eye for an eye’), loud sabre rattling and political charivari. This would not be a very big problem, when Turkey would not be one of the most prominent NATO members with arguably the most strategic position in the Middle-East, as heeder of the entrance to the Black Sea (through the Bosporus seagate – see map).

Map of Turkey, emphasizing its strategic
position in the Middle East
Picture courtesy of Google Earth
Click to enlarge

Even though the NATO is probably absolutely not willing to risk an ‘all out’ war with Russia, on behalf of Turkey, the odds for this are increasing when the tensions between Russia and Turkey keep on mounting. In one of the most unstable regions in the world, this is almost equal to committing suicide.

Perhaps one of the biggest problems is that both the NATO and the European Union cannot force Turkey to ‘shut up’ and sweet-talk itself into a regained mutual understanding with Russia.

The NATO desperately needs Turkey as an operating base for the Middle East and as entrance for its seafleet to the Black Sea. Arguing with Erdoğan could lead to undesired reactions of the Turkish president.

The European Union, on the other hand, desperately needs Turkey to solve its refugee problem going awry. This was the reason that European Commissioner Frans Timmermans went to Ankara with a fistful of (empty) promises about a future EU membership, visa-free entering into the EU for Turkish citizens and €3 billion in cash to help Turkey solve the refugee-crisis. “Don’t mention the plane, Frans... Don’t mention the plane!”

The savvy FD journalist Marcel de Boer argued that the uncertain forecast for the Turkish economy could be an extra uncertain factor for the political future of Turkey.

Tweet by Marcel de Boer, journalist of www.fd.nl
Picture courtesy of Tweetdeck.com
Click to enlarge

Marcel:  I am especially curious what will happen when the Turkish economy will collapse (which is inevitable, as the country hoarded too much debt).

My reaction was “that Erdoğan would probably become even more dominant and authoritarian than he already is, in order to distract attention from the failing Turkish economy”.

To collect some data, illustrating the assumptions of Marcel about the Turkish economy, I collected some statistics from the Worldbank about Turkey.

The first thing that struck me was the growing influence of Tourism in Turkey: from roughly 1.2% of Gross National Income (GNI) in 1995 until 5.6% in 2013. This makes the country extremely vulnerable for Russian touristical boycotts, as more than 4 million Russians visited the Turkish mega-hotels and touristical hotspots each year.

Although the Turkish GNI and the GNI per capita showed a healthy development during the last twenty years (first chart) and the non-performing loan portfolio is currently back at a decent level of 2.8% (second chart), it is especially the development of publicly guaranteed bond loans in Turkey that shows reason for cautiousness. According to the World Bank there are currently over $3.5 billion in publicly guaranteed bond loans, which seems like a considerable amount in comparison with the past.

Chart of the development of the Turkish GNI (per capita)
Chart by Ernst's Economy for you
Data courtesy of Worldbank
Click to enlarge

Turkish development of bonds, commercial loans
and non-performing loansChart by Ernst's Economy for you
Data courtesy of Worldbank
Click to enlarge

It is hard to tell from this data whether the Turkish economy will indeed collapse soon, as honestly most data – except for the soaring bond loans – look quite normal.

One thing is clear, however. The Russian boycott will hit the Turkish tourist industry below the belt, as well as the Turkish building industry, which acquired enormous building contracts in Moscow, St-Petersburg and other Russian cities. Also the vast trade flow between the two countries will probably collapse to the bare minimum, which is a ‘lose-lose’ situation for both countries and especially for Russia, of which the population already suffers from the enduring trade boycott between Russia and the EU, after the MH17 incident.

So it would be healthy for both countries to get this incident out of the way a.s.a.p.

Yet, president Putin is not the man to easily forgive the Turks for what they did. A first attempt of president Erdoğan to privately speak with Putin at the Paris’ climate summit was bluntly refused by the Russian president. And as I said before: the ego’s of both presidents will stand in the way of mutual excuses.

Yet, it is important that both leaders keep their cool, in order to prevent this incident from growing to epic and dangerous political proportions.

And perhaps president Erdoğan should get his act together regarding IS.

One cannot be both president of arguably one of the most strategically important NATO members and a silent endorser and trade partner(?) of one of the most dangerous terrorist groups in the Middle East.

One person can simply have just too many conflicting interests to remain a credible leader!