On the InterRail Way of Travel

The InterRail Pass was introduced in 1972 to celebrate the 50th anniversary of the International Railway Union (Union Internationale des Chemins de Fer). Youth under 21 years old were offered to travel for one month in 21 member countries at a very low cost, less than 30 British pounds or about 50 U.S. dollars.

  Watch a 2012 documentary celebrating the 40th anniversary of the InterRail Pass. 

 

About 5,000 young people bought the InterRail Pass in 1972, and it was so popular that it was repeated in 1973, when about 85,000 young travelers bought the card. Over the years, the InterRail Pass had expanded its reach to more and more countries, while the travel offers has become more varied and even includes First Class travel. Outside Europe the card is known as the Eurail Pass.

For most young people traveling with the InterRail Card/Pass in 1973 was very, very different from how you travel today. Most kids traveled without credit cards, cellphones, Internet, Web, Facebook, WiFi, guidebooks and with very little money. If you couldn't find a campground or a bed in a youth hostel, you had to sleep on a night train, on a beach, with a friend, on a railway station or wherever you found a place to rest your head. It was not always safe, but kids who had come of age in 1968 didn't worry much about safety. They were naive and willing to take risks. And most of them made it home alright.

Alone in our own bubble (Loreen)

Congrats to Loreen to the Eurovision schlager win. She sings and dances well, and she is surely sexier than Russia's dancing babushkas.

But the lyrics?

We are here, we’re all alone in our own Universe,
We are free, where everything’s allowed and love comes first,
Forever and ever together, we sail into infinity,
We’re higher and higher and higher, we’re reaching for divinity.

A close reading would make you think that it is a comment on the current European crisis, but that's not fair. It's all about the title, and "Euphoria" will echo up there in Schlager heaven together with "Waterloo" (1974), "Diggi-Loo Diggi-Ley" (1984), "Fångad av en stormvind" (1991), and "Take Me to Your Heaven"(1999).

The Verdict On the Tea Party Solution Is In

Markets plunge on economic turmoil; fears of another recession

“If this economy were a bicycle, it would be about to topple over,” said Jared Bernstein, a senior fellow at the Center for Budget and Policy Priorities and formerly the top economic advisor to Vice President Biden. “We need to put pressure on those pedals, but the political system is pushing us in the other direction. The economy is crying out for help and the political system is deaf to those cries.”

(Washington Post, August 4)

Stocks Down Over 4% in Global Sell-Off

Mohamed El-Erian, chief executive of the bond giant Pimco, said investors were selling risky assets like stocks “globally prompted by concerns about the weakening economic outlook, spreading contagion in Europe and insufficient policy responses.”

(New York Times, August 4)

Tea Party’s War on America

Economic growth could have gone a long way toward shrinking the deficit, while helping put people to work. The spending cuts will shrink growth and raise the likelihood of pushing the country back into recession.

Inflicting more pain on their countrymen doesn’t much bother the Tea Party Republicans, as they’ve repeatedly proved. What is astonishing is that both the president and House speaker are claiming that the deal will help the economy. Do they really expect us to buy that? We’ve all heard what happened in 1937 when Franklin Roosevelt, believing the Depression was over, tried to rein in federal spending. Cutting spending spiraled the country right back into the Great Depression, where it stayed until the arrival of the stimulus package known as World War II. That’s the path we’re now on. Our enemies could not have designed a better plan to weaken the American economy than this debt-ceiling deal.

(Joe Nocera, New York Times)

The Lesser Depression

Right now we’re looking at not one but two looming crises, either of which could produce a global disaster. In the United States, right-wing fanatics in Congress may block a necessary rise in the debt ceiling, potentially wreaking havoc in world financial markets. Meanwhile, if the plan just agreed to by European heads of state fails to calm markets, we could see falling dominoes all across southern Europe — which would also wreak havoc in world financial markets. We can only hope that the politicians huddled in Washington and Brussels succeed in averting these threats. But here’s the thing: Even if we manage to avoid immediate catastrophe, the deals being struck on both sides of the Atlantic are almost guaranteed to make the broader economic slump worse. (...)

For those who know their 1930s history, this is all too familiar. If either of the current debt negotiations fails, we could be about to replay 1931, the global banking collapse that made the Great Depression great. But, if the negotiations succeed, we will be set to replay the great mistake of 1937: the premature turn to fiscal contraction that derailed economic recovery and ensured that the Depression would last until World War II finally provided the boost the economy needed.

Did I mention that the European Central Bank — although not, thankfully, the Federal Reserve — seems determined to make things even worse by raising interest rates?

(Paul Krugman, New York Times, July 21)

The President Surrenders

The worst thing you can do in these circumstances is slash government spending, since that will depress the economy even further. Pay no attention to those who invoke the confidence fairy, claiming that tough action on the budget will reassure businesses and consumers, leading them to spend more. It doesn’t work that way, a fact confirmed by many studies of the historical record.

Indeed, slashing spending while the economy is depressed won’t even help the budget situation much, and might well make it worse. On one side, interest rates on federal borrowing are currently very low, so spending cuts now will do little to reduce future interest costs. On the other side, making the economy weaker now will also hurt its long-run prospects, which will in turn reduce future revenue. So those demanding spending cuts now are like medieval doctors who treated the sick by bleeding them, and thereby made them even sicker.

(Paul Krugman, New York Times, July 31)

Wasn't the Debt-Ceiling Deal Supposed to Avert a 512-Point Dow Collapse?

If Obama does not reject the failed fantasies of the past and start promoting a jobs agenda that is based on federal government investment in infrastructure, education and the stabilizing of state and local governments so that they can continue to deliver needed services, the Tea Partisans will continue to control the discourse.

Obama must take the lead—with an absolute rejection of the extreme right's extremely wrong agenda—if he hopes to rally the popular support that is needed to define the debate and, ultimately, to start winning the fights that will determine the future of the US economy.

Obama has to climb into the bully pulpit and take charge. If he does not, the circumstance will just get worse.

Compromises do not build confidence.

Cuts do not inspire.

Tax breaks for the rich do not does not jumpstart a stalled economy.

Austerity does not create jobs.

And if Barack Obama continues to surrender to the peddlers of the austerity fantasy, if he continues to refuse to use the full strength of the federal government to advance a job-creation agenda, he will have a lot more to worry about than whether John Boehner will still go golfing with him.

(John Nichols, The Nation, August 4)

The Republican’s Double-Dip, and What Must Be Done

It was never a debt crisis. The debt crisis was manufactured. It’s been a jobs, wages, and growth crisis all along. And that reality has finally caught up with us.

Now that we’re slouching toward a double-dip recession, the only hope is voters will tell their members of Congress – who are now on recess back home – to stop obsessing about future budget deficits and get to work on the real crisis of unemployment, falling wages, and no growth.

We need a bold jobs bill to restart the economy. Eliminate payroll taxes on the first $20,000 of income for two years. Recreate the WPA and the Civilian Conservation Corps. The federal government should lend money to cash-strapped states and local governments. Give employers tax credits for net new jobs. Amend the bankruptcy laws to allow distressed homeowners to declare bankruptcy on their primary residence. Extend unemployment insurance. Provide partial unemployment benefits to people who have lost part-time jobs. Start an infrastructure bank.

And more.

The jobs bill should be number one on the nation’s agenda. It should have been all along.

(Robert Reich on his blog. August 4) 

Will the New Global Middle Class Adopt American-Style Bourgeois Values?

David Brooks discusses the new global middle class in an interesting column prompted by a new version of Hans Rosling's viral TED video about income growth and life expectancy. Brooks is usually good when he sticks to his forte, which is sociology, but his attempt to sell the U.S. model as the future for the new middle-class is to stretch it too far, way too far.

To be middle class is to have money to spend on non-necessities. But it also involves a shift in values. Middle-class parents have fewer kids but spend more time and money cultivating each one. They often adopt the bourgeois values — emphasizing industry, prudence, ambition, neatness, order, moderation and continual self-improvement. They teach their children to lead different lives from their own, and as Karl Marx was among the first to observe, unleash a relentless spirit of improvement and openness that alters every ancient institution.

(...)
Americans could well become the champions of the gospel of middle-class dignity. The U.S. could become the crossroads nation for those who aspire to join the middle and upper-middle class, attracting students, immigrants and entrepreneurs. (David Brooks: Ben Franklin’s Nation)

This is a narrow American perspective, "bourgeois values — emphasizing industry, prudence, ambition, neatness, order, moderation and continual self-improvement." It excludes other values that have grown all over the world as more and more people are entering the middle class, values such as social welfare systems, universal health insurance, long paid vacations, paid maternity leave, abolishment of death penalty, and so on. I don't know if Ben Franklin would have objected to parental leave, but that doesn't really matter. For all their glory, the Founding Father's had their limits (as well as their slaves). The new global middle class will of course get "Americanized" as they become relatively wealthy, but that doesn't mean that they will give up their traditional culture or preferences for social security and a more humane society. U.S. observers often think they see themselves whenever somebody abroad opens a can of soda, but that is not always the case!

Hans Sandberg

Here is Hans Rosling's presentation:

Living Standards in the U.S. and Europe are Much Closer than They Appear to Be

If you compare the incomes in Europe and the U.S., it looks like people in Europe are much worse off than people in the U.S., but this could be an illusion according to a a research paper for the National Bureau of Economic Research (NBER) in the U.S. written by Charles I. Jones and Peter J. Klenow. The authors state that:

"...living standards in Western Europe are much closer to those in the United States than it would appear from GDP per capita. Longer lives with more leisure time and more equal consumption in Western Europe largely offset their lower average consumption vis a vis the United States."

Paul Krugman Debunks Myths About Greece and the U.S. Economy

If you listen to the CNN/CNBC/MSNBC pundits, America is cursed and damned, like a fiscally irresponsible Odysseus drifting in a sea of debt, while Zeus is itching to strike and Poseidon can't wait to whip up a terrible storm.

Paul Krugman gives the keynote at Woodrow Wilson
School on May 13. Photo: Hans Sandberg.

If you on the other instead listen to Paul Krugman, which I did yesterday at seminar held by the Center for International Security Studies at the Woodrow Wilson School, you would worry about the long-term debt the U.S. is accumulating (mostly thank's to the Bush-Cheney tax-cuts for the rich and senseless invasion of Iraq), but you would never even consider joining the Tea-party.

"We are not Greece," Krugman said, pointing out that the greek economy is about the size of the State of Michigan, and it tanked without pulling the U.S. economy down with it. Another thing to remember is that the U.S. export is only 3 percent of GNP. The root of the Greek crisis has, according to Krugman, a lot to to with the Euro, which he feels was pushed through way to early by the European elites, shackling the possibilities of a country like Greece to adjust by devaluing their currency. He seemed very pessimistic about the possibility to solve the Greek financial crisis, and expects it to blow up later on, as the austerity policy could lead to deflation and economic implosion. His most common answer during the Q&A-session was to shake his head. It's bad news for Greece, but it's not going to pull the U.S. or the world into a malstroem...

Here is a video clip from the keynote:


Here is Krugman's May 14-column for the New York Times:
We’re Not Greece.

Hans Sandberg

Greek Drama Let the Animal Spirits Loose On Wall Street

It didn't take long for the week to turn sour with the smoking loaded car on Times Square, BP's worsening oil spill in the Mexican Gulf, and the growing nervousness about Greece, a country on the brink of default. But on Thursday things went really rough as the Dow plunged 997 points while our cable networks showed street scenes from Greece that made you think of May 1968 in Paris or Bangkok in April 2010.

The guys on Wall Street may have thought or hoped that the worst was over now that the Tea Party was starting to fizzle and the grilling of CEO's at the BBQ in Washington was starting to wind down, but then the climate changed and a sudden icy chill blew in over Wall Street. The crisis in Greece went from bad to worse, and now it looked like the country could collapse and drag the other "PIGS" (Portugal, Italy, Greece and Spain) with it, maybe even pulling down Great Britain, which is also struggling with huge debt issues and were likely to emerge politically weaker after Thursday's election. Who can blame the Masters of Universe for feeling a little paranoid? The rational expectations turned into irrational fear and panic faster than you can flip channel on your TV.

"Even apart from the instability due to speculation, there is the instability due to the characteristic of human nature that a large proportion of our positive activities depend on spontaneous optimism rather than mathematical expectations, whether moral or hedonistic or economic. Most, probably, of our decisions to do something positive, the full consequences of which will be drawn out over many days to come, can only be taken as the result of animal spirits - a spontaneous urge to action rather than inaction, and not as the outcome of a weighted average of quantitative benefits multiplied by quantitative probabilities."(John M Keynes, The General Theory of Employment, Interest and Money, London 1936.)

The trouble with Wall Street and the pundits is that they are not all that smart when it comes to the real economy. The models don't tell them what to expect, and they don't know how to interpret the battles in the streets. They got scared and they sold. Add to that computer programs that send the consumer giant Proctor and Gamble down drastically, and everybody was talking about how America's recovery would be hit if the European market goes down and the dollar strengthens against the Euro. There goes the recovery....

"There was a lot of panic selling that came in and the market fell apart,” Peter Cardillo, the chief market economist of Avalon Partners, told the New York Times.

The rational for the obscenely huge bonuses Wall Street pays its executives is that they are supposed to be superstars, who carries enormous responsibility, and are really, really smart.

But on a day like this, they proved themselves to be driven by fear, greed and ignorance, like the rest of us, except that they somehow had managed to rake in millions and millions in bonuses, while we others counted our losses. For all its beauty, capitalism is a self-destructive system, which is why we need the government to rein it in, to set the rules and make sure that they are followed. This is were the stupids in the Tea Party got it all wrong. If you don't want to get screwed over again and again by the rich and powerful, you need government, and not just a little of it. Keynes knew that, FDR knew it and we should all know it by now. Government is not socialism, not even big government. It's actually the only way to save the capitalist system from blowing itself up.

Hans Sandberg

A Picture Speaks: A Lonely Bush In Europe

Sometimes a picture speaks more than words, but you don't need a thousand words to describe this photo by Kevin Lamarque/Reuters, here published in the New York Times:

President George W. Bush at the NATO Summit in Europe.  Take a closer look here!

Europe Is Waiting To Exhale

Around the world, there are hopes the next president will adopt a different style from what critics have called Bush's cowboy diplomacy and go-it-alone foreign policy, AP writes in a report about Bush "farewell tour" and his visit to the NATO Summit.

"There seems to be a great deal of enthusiasm, particularly for (Barack) Obama but also Hillary (Rodham Clinton) on the other side of the Atlantic, that there's going to be some revitalization of the trans-Atlantic partnership and we start with a clean slate and a new chapter and all the rest," said Julianne Smith, Europe program director for the Washington-based Center for Strategic and International Studies.

"I think a lot of these European countries have found a way to get past the dark shadows of 2003 and '04 when we had divides over Iraq and all the rest," she said. "And many of them are looking forward now to the next president in Washington and are already thinking about what the 2009 (NATO) summit will bring."

(from an AP article published in New York Newsday on March 29, 2008)