The Barnard Observer

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Home  Vault  Misc  Contact                               c2003-10 Thomas Barnard

Germany 

From V. Buj, Person. & Individ. Diff., Vol. 2, pp. 168 to 169, 1981
Subjects >16 yrs. old tested on the Cattell Culture Fair Test 3 (16 SD), standardized in the USA (IQ=100).
 

    You will notice that missing above are the Asian nations, and my reading suggests that they would be right up there.  The Japanese are brilliant, Seoul has more Ph.D.'s per capita than any other city in the world, and American Chinese are the highest IQ scorers in the country at the moment.  So, this must be a European table I've grabbed off the internet.

    In a more recent European study, it was the Netherlands and Germany again, tied at an average IQ of 107. 

Germany Had a Great Quarter

    And so, bringing me to a sober and brainy post-war Germany.  Population 82 million and not growing.  So, you know that the 2.2% growth in the second quarter had nothing to do with a baby boom, and everything to do with exports.  German unemployment has decreased to the near pre-recession level of 7.7 percent, from 9.1 percent in January, an 18 year low.  It is thought the DAX may be headed to 7,000 by year end from its current setting of 5,900.

    Germany recently supported Greece in the crisis.  Many Germans grumble about this as did the couple from Dusseldorf who sat next me at Lido's as I sipped my coffee and read my Business Week (BBW July 19-July 25, 2010).  They grumbled for sure, but I don't think they'll do much about it because if Germany separates and the Deutsche Mark goes skyward, it will surely impact their exports, which are 41% per cent of the economy, and driving force behind the growth.  And perhaps an unspoken benefit of supporting the Euro is that Germans begin to feel less guilty about their WWII crimes.

    Germany has been restructuring for the past 12 years, and has grown 13% more competitive than its neighbors in that time period.  Siemens, for example, has taken $29 billion in restructuring costs since 2001, and is now enjoying an operating margin greater than GE's unit in Europe, Alstom.

Costs of Unemployment

    In America, when corporations see downturns ahead, they just fire and layoff thousands and write them off.  In Germany, the government paid corporations to keep workers on.  In addition, the government lowered unemployment benefits, but made hiring and firing was made easier, and management and labor worked together to keep a lid on costs.  The government encouraged shorter work weeks and furloughs to keep people in the work force.  It seems sensible, humane, and more effective than our program.  Also, for those concerned about government spending, they spent less.  It's about being smart with your use of scarce resources, which is what economics is all about. (NYT, August 13, 2010).

German National Healthcare

    Germany has the oldest national healthcare system dating back to Otto Von Bismarck's administation and legislation of 1883 and 1884.  Since World War II, a new legislative program covers approximately 92% of the population under a 'Statutory Health Insurance' plan, which provides a standardized level of coverage through any one of approximately 1100 public or private sickness funds. Standard insurance is funded by a combination of employee contributions, employer contributions and government subsidies on a scale determined by income level. Higher income workers sometimes choose to pay a tax and opt out of the standard plan, in favor of 'private' insurance. The latter's premiums are not linked to income level but instead to health status. Healthcare costs inspite of rising drug prices are still only 10.7% of GDP versus, 16% in the U.S.  (Wikipedia: Universal health care, August 31, 2010)  What's so complicated?  Once again, why not just copy it?

Solar Power

    German is well motivated to get into solar power.  It has no access to vast oil and gas deposits, it is dependent on a touchy Russia for natural gas.  It has pursued solar power with substantial subsidies, and even though it does not get the great sunlight of Arizona and Nevada it is doing well with solar power.

    On the business side, the Germany now has the largest manufacturer of solar panels, Q-Cells, which now outsells Sharp, formerly the largest.  It has by far the largest market for photovoltaic systems, which convert sunlight into electricity, with roughly half of the world’s total installations.  And it is the third-largest producer of solar cells and modules, after China and Japan.  (NYT, May 16, 2008)

    If Congress could be convinced to do a second stimulus, I would be for a very large wind turbine and solar program.  I would want it to be large enough, and with enough research to make it self-sufficient, and biased towards American manufacturing.  We need workers/consumers with money to spend.  On the other hand, no money for state governments.  They have to do their own hard work about figuring out their finances.

Deep Social Intelligence

    I am trying to develop a concept that explains the necessary changes in a sophisticated economy and culture that need to be made to have a successful economy and happy populace.  I am not necessarily speaking of compromise, though surely that would be useful.  Or of altruism, a nice but unreliable concept for anyone who's read his Balzac, or greed which usually runs amuck, witness the recent home mortgage disaster.  Straight socialism and capitalism need to be retired as guiding ideas.  What we need, in short, is a method of working incentives so that they serve individuals and the common good.  I think it's a bit of a trick, and maybe it would serve us to find the best model and copy it.  After all, around the world, countries have used our constitution as a model for their own governments.  And General Motors would surely have been much better off if it had copied their Japanese and German competitors.  It is not necessary to start from scratch. 

    I have never understood, for example, why employers want to beat down their workers pay, when workers re-labeled as consumers are your biggest market?  And why employers would want to send jobs overseas for peanuts, when, when everyone ends up doing this you have a market that is paid peanuts, and peanuts is all they will have to spend on your products.  It works in the short run.  In the long run, which we are into now in the States, it means consumers have less money to spend because you've shipped your consumer dollars overseas.  It seems for sure we will have an extended depression.

    My label for this idea is Deep Social Intelligence, and I think the Germans are a good model for both employment and healthcare, two of the main concerns of any society.  Ultimately, I think we need to add that this deep intelligence needs to address behaviors that will permit the continuation of the species, which is not a given, I'm afraid.  I'm not necessarily speaking about the climate, I'm thinking more of survival, and the clear-cutting of forests, and the concomitant decimation of species.  E.O. Wilson has speculated that we are losing 27,000 species per year.  Yet we behave as though we do not necessarily need those species or forests, but maybe we do.  Investors, think diversity.  Think balanced portfolio.

A Plug for Human Survival

    So, I would urge the immediate cessation of clear-cutting in Indonesia and Brazil.  These are important planetary resources.  And maybe fish populations need to be protected as well.  The oceans have turned into huge deserts.  We are part of a great ecosystem, a vast complex system, which we have not nearly the knowledge to deal with.  Nevertheless, we have exploited it like it is endless, and have not been conservative in our treatment of it, which may come back to bite us in the ass.  As Clint would say, a man's got to know his limitations.  We should call a hands-off to doing anything with these rainforests.  Well, it's just a plug.  Far be it from me to stop anyone's fun in plundering, pell-mell, what's left in a mad dash toward planetary suicide.

Investments

    The rush into governments smells odoriferous to me.  Why are people chasing yields which are dropping to nothing?  Well, it's uncertainty, of course.  I hate to be the optimist, especially when PE ratios are so high, but I recently read somewhere that there is $8 trillion in cash sloshing around, and as I have said repeatedly, every intelligent person I know has a substantial cash component to their portfolio.  It is not the recipe of a great market drop.  We certainly could get another correction.  It is the end of summer, the doldrums could drift into a decline.

    Investors are going to finally get tired of getting nothing for the money.  And an exit in governments would mean better times for the stock market.

    Hey, this is best I can do for free.  Join my partners.  See below.

August 31, 2010

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I'm still elephant hunting.  I'm only interested in game changers and truly unusual opportunities.  My father has told me many times that what made the difference in his stock market investments were the elephants, the stocks that went up multiple times.  Much harder to pick those now than 15 years ago when all you had to do was mention the internet.  And you better believe it, I'm saving my best ideas for my partners. 

Stock Recommendation Partnerships.  Presently, I have two such recommendations.  These are stocks I just can't get enough of for my own account.  You own the stock in your account, but a percentage of the winnings go to Thomas Barnard for his recommendations. 

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