Facebook IPO - I like?

Crisis, Populism - Anarchism? A Future Scenario for the Netherlands

dr. Jan Reijnders About the Crisisyear 21, issue 4

TheEcunomist

The Beginning/EndIs Nigh

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Ontdek de wereld van Rabobank als trainee.Bijna klaar met je studie? Dan sta je voor een belangrijke beslissing: waar start je je carrière? Een goede start geeft immers

meteen een voorsprong. Zeker als je start bij Rabobank. Daar waar fatsoenlijk en succesvol zakendoen één en hetzelfde

zijn. We zijn niet alleen de meest innovatieve en ondernemende bank van en voor Nederland, maar hebben ook

een wereldwijd netwerk, met ruim 600 vestigingen en 140 kantoren in meer dan 45 landen. Bovendien is Rabobank

wederom verkozen tot de nummer 1 werkgever van Nederland. Kortom, pak die voorsprong en ontdek de wereld van

Rabobank als trainee.

Uniek loopbaanpadRabobank biedt uitdagende traineeships binnen een breed speelveld. Van lokaal tot internationaal, van commercieel

tot productgericht, van particulier tot zakelijk bankieren en van bancaire tot ICT-processen. Binnen elk traineeship krijg je

alle ruimte, voor professionele én persoonlijke ontwikkeling. We blijven continu in jou investeren. Zo word je niet opgeleid

voor een baan, maar voor een loopbaan. Dit loopbaanpad is afgestemd op jouw unieke persoonlijkheid en ambitie.

WereldniveauZit jij boordevol ideeën? Durf jij verantwoordelijkheid te nemen? En overtuigend je visie uit te dragen? We zoeken

studenten met een aansprekende persoonlijkheid, met lef en de gave om anderen te inspireren. Ambitieuze jonge

mensen die willen doorgroeien en in de toekomst op alle niveaus het verschil maken voor de Rabobank. Reikt jouw

ambitie zo ver?

Kom ontdekkenBen jij net zo ondernemend en onderscheidend als Rabobank? Ontdek of onze wereld ook jouw wereld wordt. Kom snel

kennismaken, kijk voor de recruitmentkalender en alle informatie over onze traineeships op rabobank.nl/werken.

www.rabobank.nl/werken

Word jij de Rabobank als trainee?

Rabobank. Een bank met ideeën.

Rabo_CMT Recruitment_210x297.indd 1 12-05-11 14:18

In this Issue4 Newsfeed by Willem Isbrucker

5 Snapshots: DLC Lecture Like a Boss6 From the Editor7 From the Board8 Dutch Anarchy by Thomas Huigen

10 New Beginnings and the Ordeal of Choice by Christina Schenten

11 Staying Abroad - Getting the Most out of It by Jana Rautenberg

13 Unfriended & Dead on Arrival by Miles Hilton

15 World’s Hottest Economists: Glorifying Nerds by Willem Isbrucker

16 A Gloomy Scenario by Kai Strohmeyer

18 The End is Nigh, Is It? by Jan Reijnders

20 Goodbye Reality, Hello Imagination! by Dea Tusha

23 Back to the Future by Leila Maria Scott

24 Snapshots: Study Trip to Moscow26 Working at the Dutch Ministry of Finance

by Jorrit Hendriksma

Several times a year, The Ecunomist is published in a circulation of 1,500 for the members, patrons, Ecunomen and external contacts of ECU’92.

Ronja Röttger | Willem Isbrucker | Jana Rautenberg | Thomas Huigen | Christina Schenten | Leila Maria Scott | Kai Strohmeyer | Dea Tusha | Gidde van der Ven |

Miles Hilton

Study Association ECU’92 Kriekenpitplein 18, Room 1.21

3584EC Utrecht T 030-2539680

www.ecu92.nlinfo@ecu92.nl

Printed by Drukkerij Hakker van Rooijen

News FeedPolyglots = Rational – A recent study shows that be-ing able to think through a problem in a language other than your native tongue allows people to make more rational decisions and are better able to choose favor-able risks. Good news for the English taught Bachelor program. @BoazKeysar @UniversityOfChicago

Wall Street Inequality Women stockbrokers earn over 20% less than their male counterparts, far exceed-ing inequality levels in other professions. A whole new reason to occupy. @JaniceMadden #Occupy

Hunting Dragon Kings - Dragon Kings are events akin to catastrophes and include financial market bubbles ending in crashes, forest fires, and plane crashes. A new study by @DidierSornette and @GuyOuillon re-veal data mining and statistical techniques to help pre-dict and hopefully present these types of events.

Olympics @ ICU The European Youth Olympic Festival will be held in Utrecht in July of this year. Over 3300 athletes and trainers will be housed at the ICU as well as the Uithof, effectively transforming them into an ‘Olym-pic Village’.

Netherlands Gets Ranked – A leading network of research universities has compiled a ranking system of countries based on their ability to pro-vide higher education, the Netherlands landed in 9th place (top three: USA, Sweden, Canada). #StackedUp

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DLC presents: LIKE A BOSS

From the Editor

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Dear professors, board members, and follow students,

The 2011-2012 academic year is soon coming to an end, and for our grad-uates it’s also the end of a post-secondary educational excursion. While it might be most obvious to view situations such as these as a chapter of our lives coming to a close it can simultaneously be viewed from the opposite perspective, as the beginning of another. It is this dichotomy that we have decided to embrace for the fourth and final issue of the Ecunomist.

Over the past year we have covered a wide variety of topics and issues, falling under a variety of themes. From rockstars to cycles, from the fu-ture back to the present, this year has been one to remember and we have done our utmost to reflect the best that this year has had to offer. Hopefully you’ve been able to catch a peak of yourself in the photo sections, been brought up to date by our newest addition, the News Feed, and maybe even learned a thing or two in the process.

It has truly been a pleasure and a privilege to serve as the Editor in Chief of the 21st volume of the Ecunomist. In the process I have been able to work alongside dedicated students and talented writers who have both inspired me with their abilities and informed me with their articles. It has been our combined efforts to continue to bring you every issue and we hope that it has been as enjoyable for you to read as it has been for us to make.

Lastly, I would like to take this opportunity to say a personal thank you to all of the people who have been with me through this University experience and made it what it has been. My three years within USE have been remark-able and life changing and it has been an honor.

Sincerely,

Willem Isbrucker, Editor in Chief

From the Board

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Dear Reader,

The end off the year is in plain sight, what does this mean for you? For one this might mean a the struggle for the BSA and maybe even the need to find a different studies, the other has successfully passed his/her first year and will continue with us. Others might be struggling with their thesis and trying to find a job. For the ECU’92 Board 2011-2012 it means making our last activities a big success, finding our successors, and make sure you will end this year well.

During the final month before the summer it is always hard to concen-trate. The sun is shining more and it’s getting warmer outside, which makes it more and more difficult to stay in and study. But don’t worry, there’s only one exam week left for this year! So put on your study glasses, finish your fi-nal courses of this year well - and you can enjoy a carefree summer! For now, take a break every now and then and join us at our final ECU’92 activities of this year or come by at the ECU’92 room and have a carefree drink with us!

The end off… does not have to be a bad thing, because after all, the end of the year means summer for all of us! Enjoy your summer!

Best,

Jessica WarrenSecretary / Treasurer ECU’92 Board 2011-2012

The financial crisis is a few years old. Unrest has spread throughout Holland. Unemployment benefits have been cut to half the average working wage, just enough to buy the bare essentials. There is widespread poverty as the government has had to undertake austerity measures to decrease the budget deficit, cutting back on social grants, education and public sector wages. Unemployment has increased to 10% and the economy has shrunk significantly. Holland, 1934.

When the government induced a further 10% reduction in the unemployment benefits, this lead to the start of the Jordaan Uprising. A suburb of Amsterdam, the Jordaan was home to many unemployed and low-wage workers who were hard hit by the Great Depression. It became a breeding ground for unrest. Protests took place on the streets, organised in part by extreme parties such as a subsection of the communist party and a pro-Nazi party (NSB), with the police calling for order. Instead this order was met with strong resistance, with the protestors bombarding the police with vegetables and later with stones when they realised that throwing carrots and cauliflowers wasn’t very effective. Anyone who wore a working class-cap was beaten by the police as they were assumed to be part of the protests. After 4 days of fighting (the army had by then deployed numerous

small tanks) the protests escalated to a climax with 5 protestors being shot dead and one policeman. Another 200 protestors were injured and some 100 were arrested. Protests also spread to other Dutch cities like Rotterdam and Den Haag, although on a smaller scale.

In present day Holland it is hard to imagine these scenes. Protests still occur, albeit in a very ordered and peaceful fashion. Yet present day Holland has many economic similarities with Holland after the Great Depression. Holland after the recent recession has found it difficult to grow and has had an increasing budget deficit. The government has had to employ extra austerity measures on public spending to curb this ballooning deficit. The collapse of the previous Dutch government a few weeks ago was a direct consequence of these measures. Also political distrust of the usual political parties has increased, with more people voting for left (Socialist Party) and right-wing parties (Party for Freedom) who are both euro-skeptics.

With the euro crisis worsening, a bleak economic outlook and the rise of extreme parties, unrest could increase in Holland as it has in the rest of Southern Europe. Populist parties thrive during crises, further increasing unrest by leading to the polarisation of society. One need only observe the current political crisis in Greece. Neo-nazi (The Golden Dawn Party) and radical left-wing parties are gaining a

Dutch Anarchyby Thomas Huigen

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lot of support, with the likely winner in the elections next month being a left-wing party (Syriza Party) which wants Greece out of the euro. Both the Dutch radical parties could become even more radical and populistic if Greece were to step out of the euro as this would create a wave of contagion spreading to the rest of the PIIGS (Portugal, Italy, Ireland, Greece and Spain), destabilising the euro currency and increasing skepticism of the European Project.

However, one could also take a more optimistic viewpoint. One could see the increase in unrest as an opportunity. Take Forbes’ recent interview with investment guru Jim Rogers about the Japanese tsunami: “When they [Japan] had the Tsunami I bought shares, as they collapsed. And it’s always been a good thing to do when there’s a huge natural disaster to buy into the market”. Natural disaster or a euro crisis, who cares, as long as you can make a killer profit.

The Occupy Wall Street protests were also seen in a positive light by Goldman Sachs’ Chairman Lloyd Blankfein: “Dear Investor: Up until now, Goldman Sachs has been silent on the subject of the protest movement known as Occupy Wall Street. That does not mean, however, that it has not been very much on our minds. As thousands have gathered in Lower Manhattan, passionately expressing their deep discontent with the status quo, we have taken note of these protests. And we have asked ourselves this question: How can we make money off them?” The conclusion is to invest

in the Rage Fund which “will seek out opportunities to invest in products that are poised to benefit from the spreading protests, from police batons and barricades to stun guns and forehead bandages. Furthermore, as clashes between police and protesters turn ever more violent, we are making significant bets on companies that manufacture replacements for broken windows and overturned cars, as well as the raw materials necessary for the construction and incineration of effigies.” To be perfectly honest, the letter is actually a satirical piece done by an American comedian, Andy Borowitz. For some reason this may not seem obvious at first sight.

However, this piece has more than an inkling of truth about it, and there are some valuable lessons to be learned. The Jordaan Uprising could always inspire new protests if things go horribly wrong in Europe and consequently in Holland, so keep your eyes on the Rage Fund or similar virtuous funds. If you don’t feel like joining protests, just invest in crisis stock, like companies manufacturing police batons. Or even better, invest in these crisis stock and afterwards instigate the protests. As soon as the protests reach a critical level whereby they fuel themselves, you can retire young, as the protestors will ensure a steady income stream for you as your stocks increase in value. This will give a whole new meaning to conflict of interest, but who cares about that when physical conflict spreads through the streets. Perhaps the Dutch army should ready its tanks? ■

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Any phase of your life is going to end at some point. The end of childhood, the end of school, the end of your stud-ies, the end of your work life – but these endings are new beginnings at the same time. The beginning of independence, the beginning of your student life or your first job experience, the beginning of earning your own money (big time), the beginning of a life without obliga-tions.

While new beginnings are always new opportunities, they also force you to make choices about what you want to do with your life. Despite all the ex-citement about moving on, experienc-ing something new and unknown, the enormous choice of opportunities that people, and particularly students face

nowadays can also be paralyzing. Do you want to continue your studies, be-coming a Master or even a PhD? Should you stay in the same direction of stud-ies, should you redirect, or should you specialize? Do you even feel like study-ing for another few years? Finally mak-ing your own living certainly has a nice sound to it. But then – where to work? Where can I apply, where do I want to apply? Or now that you are thinking about it, might a gap year travelling the world also be an option worth consid-ering?

Having the choice certainly is a luxu-ry by far not everybody can afford, and it should be appreciated greatly if it is given. Yet, having the choice can also be a burden. There are tons of books about how to find out what you want,

strategies telling you how to make decisions and figur-ing out what kind of career you want to pursue. While these books can surely be guidelines and have probably also helped some people, what it comes to down to in the end is very simple. No matter how much

New Beginnings and the Ordeal of Choice

by Christina Schenten

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you plan or which ambitious career paths you decided to take, in the end it is probably going to turn out differently. That of course does not mean that you should not make any plans and just wait for life to happen to you without doing anything. It means that instead of look-ing up some career ladder and thinking, yes, I want to climb up there, although that implies ten years of doing a job you do not like at all, you should pursue do-ing the things you enjoy. Without taking the metaphor personally, mind that a

rhino will never be a unicorn, no mat-ter how hard it runs. The things you enjoy doing are the things you are good at. Don’t waste your time running on a treadmill that in the end will lead you nowhere. Follow your ambitions and find out what you are good at without racking your brains about whether you made the right choice or not. Any choice is better than no choice at all, and in any case: An end is always a new beginning. ■

Staying abroad - Getting the most out of it

New beginnings - There are numer-ous ways of seeing, celebrating or ap-proaching a new beginning. In my eyes a new start is closely related to packing up part of your things and leaving either for a limited time only or indefinitely to a foreign country. I am not talking about going on a vacation, but really staying in a country for a longer period. (It has to be noted that by this it is not meant to go on a vacation, but rather to stay for a longer period of time.) Living in a unique culture or travelling through an unknown country is a great way of see-ing your own life from a different per-spective. This is surely not the only rea-son why every student should consider going abroad. Being surrounded by dif-ferent customs, languages and nation-alities improves ones ability to develop his character, increases the sensitivity

and respect for world wide cultures and events and you simply learn a lot about yourself. But it has been established enough that a stay abroad is something positive one can mostly benefit from.

If you consider spending time abroad, either during your studies or before or after that there are endless possibilities in doing so, but also a few things to keep in mind. At this point it is important to know that I base this knowledge alone on my own experience which I was able to collect during my various times I spend abroad.

First of all it is essential to figure out what you want yourself. Do you want to learn a language, get to know the cul-ture, do an internship, meet new people or maybe see as much as possible from certain landscapes or tourist attrac-

by Jana Rautenberg

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tions. In asking yourself questions like: ‘What do I want to see/learn/accom-plish/experience?’ Or ‘What is impor-tant to me?’ (Possible answers could be: Weather, language, food, water, sports, museums, architecture) you can get closer to know what you want and where to go to.

Once you have figured out what is most important to you, the next step should be to figure out a time which fits in your schedule. After the end of school or your Bachelor is a great opportunity, since then there is nothing in you plate. But of course it is also possible to in-clude a semester abroad (Economic students: contact Andrea Naylor from the student exchange office) or an in-ternational internship (Contact: Frank van der Salm) in your study.

After you found out what you want to do, where to go to and when, it might be useful to keep some of the following things in mind:

- Do not worry too much: Of course you should try to arrange some things beforehand (like housing if possible, flights, bus/train connections, exchange money, getting shots if necessary and so on), but if you forgot something it is usually still possible to organize it.

- Do not freak out: If you something happened which you did not anticipate (lost you passport/money/keys, no place to stay) then try to stay calm. Ev-erything usually works out: I myself had to stay in a Hostel for two weeks when I

started my study, because I did not have a room yet. But I met great people dur-ing that stay!

- Go with your gut/ Be spontaneous: If you feel like doing something, then do it! This might be the only chance you get! I am talking here about doing a spontaneous weekend trip with ex-change students or going partying in-stead of studying. Of course you should still consider consequence like being broke at the end of your trip or failing an exam, but often if you put a bit more effort in later everything should be fine.

- Be open towards everything new or unfamiliar: Try to respect local cus-toms, habits, cultures or food. Do not make fun of it only because you have never seen it like this before. Try to appreciate instead the diverseness the world has to offer.

- Put in effort: Do not give up easily. If you have a hard time motivating your-self to study for example for the lan-guage course you desperately wanted to do, try to focus why you choose this for yourself. You are putting in time and money so try to get the best out of it.

Hopefully this encourages you to con-sidering a stay abroad, but I can only say: Do it! You will have a great time and it does not depend that much on where you go or even what you do, but rather on your attitude towards it. It will not always be sunshine, ice-cream and fun, but if you stay positive, active and hard-working you will get a lot out of it. ■

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by Miles Hilton

Unfriended & Dead On ArrivalThe technology stock exchange Nas-daq had a very busy day that morning when Mark Zuckerberg was outside at the Facebook headquarter in Menlo Park, California. The young man con-fidently grinned into the cameras and wore his ‘trademark’ grey hoody. Face-book wrote history by making the world’s largest internet company IPO. The anticipated hype translated into an immediate jump in the price of 10.5% from $38 to $42 USD. Somethings though, have still stayed the same. Zuck-erberg and his team partied hard; nerd style. The so-called “hackathon”, a caf-feine and loud music fuelled, late night/early-morning party which is meant to provide a creativity fostering ambience for writing state of the art software.

The next morning Zuckerberg was surrounded by hundreds of cheering co-workers in Menlo-Park, quite dis-tant from the New York located Nas-daq. Indeed Zuckerberg has no reason to celebrate anymore- every one dollar decrease in stock price will reduce his fortune by 500 million dollars. At least he made sure that his voting rights still give him majority of votes and power of company.

The IPO was planned take place at 11 am NY time but ended up being delayed by an incredibly agonizing 30 minutes. The company’s price fell in response to this, but gradually recovered after

the execution. NASDAQ had outcom-peted the New York Stock Exchange’s offer for the IPO. Slightly untypical, the stocks were sold to private investors, eventhough it is more typical for an IPO to almost exclusively deal with institu-tional investors. Facebook is now a true multinational, the starting offered price already valued the company at €80 bil-lion. In total they could collect $18.4 bil-lion, from which only about $7 billion will be plowed back into the company.

Zuckerberg did not insist on being stood next to the opening bells of the exchange, which is quite unusual. Face-book is however not a usual company. The IPO of this social-network company is the pointe of a success story. Within one year, the network registered one million users and within the next year it is said to become a billion.

Facebook is still a bet on the future. The companies’ numbers are looking rather red than green. Last year the turnover was at $ 3.7 billion and the profit $2 billion. The expectations are that this number will not be going up very soon. News announcements like General Motors decision to not have adds on Facebook, because it fears that consumers are not approached effec-tively enough, is troubling news. The trend of smartphones on which adds are not visualized, and the introduction of add blockers, have effected the pros-pect tremendously.

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The investors are now taking legal

action against the mismanagement of the IPO. Several institutions are now checking the process, including the SEC. Amongst the underwriters, Morgan Stanley is to be blame since they pre-pared the IPO as lead underwriters of a consortium of banks. Their main task and responsibility was to make sure to sell as many stocks as possible at an ap-propriate price.

The major US bank is now confronted with three accusations: The first argues that Facebook-buyers were treated dif-ferently. Shortly before the IPO, Mor-gan Stanley had made new, less posi-tive, estimations about future revenue. The specialists only dispersed this information amongst some very few selected, top clients, investors and not to the broad public. Finance-experts were quite stunned by what happened on Wall Street. Not only did Morgan Stanley as lead-underwriter change its prognosis, other investment banks such as Goldman Sachs and JP Morgan Chase had all of a sudden, in the midst of the IPO process, announced such negative prognosis. It is highly uncommon to change the prognosis in the midst of the offering. Is this due to the sheer volume of transactions, the unpredictability of the business model, or the fact that Facebook is rather late to go public?

Their second accusation claims that the price for the stock was set too high. It is then questionable why the price was set at 38$ when during the first discussions a price-range of 25$ to 35$ was targeted. Experts were assured that the stock price would hit 34-38$.

Thirdly, the CFO of Facebook insisted on offering 25% more stocks than origi-nally planned. Which is quite odd, in light of the Banks’ change in prognosis. Other sources point out that the banks suggested the expansion of stocks with the approval of the original owners of Facebook. Either way, according to statistics, Facebook managed to make weakest US IPO in the last five years.

Another problem which could have had an impact on the decline of the price, is the fact that large banks as lead underwriters of an IPO, such as Morgan Stanley, do not only buy the shares to keep up the price, but also lend them out to short-sellers who are betting on the price to fall. Possibly, the next prob-lem that Facebook may face is a fight against anti-trust as it is gaining mo-nopoly power. The cases of Google and Microsoft are a warning sign of a strict supervision of US competition authori-ties. ■

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World’s Hottest EconomistsGlorifying Nerds

by Willem Isbrucker

Fitting with our dichotomous theme, my final installment of the World’s Hottest Economists will take a look at two classics with opposing views. Each of these men has influenced billions around the world, shaping our economies, our policies, and our lives.

Adam SmithNot just the namesake of our new departmental building, Adam Smith is perhaps the most eminent figure of the Scottish Enlightenment, a social philosopher, and viewed as the father of modern economics. Smith’s magnum opus, An Inquiry into the Nature and Causes of the Wealth of Nations published in 1776, has grown into one of the most influential works ever published and stands alongside classics like Darwin’s Origin of Species and The System of the World by Newton. Famed for the Invisible Hand, he saw capitalism as the systemized self-interest that leads to so-cietal welfare.

“It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own neces-sities but of their advantages.”

Karl MarxKarl Heinrich Marx was to Adam Smith as oil is to water. The German philosopher, economist, and sociologist was equally influential and perhaps even more notori-ous than the father of modern economics himself. He penned several texts during his lifetime, but will forever be known for is now infamous Communist Manifest to from 1848. Marx’s theories on society, politics and the economy, known now as Marxism, hold that societies progress through class struggles. He criticized in the utmost of ways the ubiquity of capitalism, which he dubbed the ‘dictatorship of the bourgeoisie’ and purported instead a ‘dictatorship of the proletariat’, or a workers state if you will. He foresaw that capitalism, much like dictatorships, would inevita-bly create internal tensions that would lead to its own annihilation, being replaced by socialism and subsequently by its logical conclusion, communism.

“Political economy came into being as a natural result of the expansion of trade, and with its appearance elementary, unscientific huckstering was replaced by a de-veloped system of licensed fraud, an entire science of enrichment.” ■

15

Why on earth are we on earth? For some people, the answer lies in reli-gion, for others, we are just a whim of the universe. Not only are there many different religious convictions, but also numerous philosophies. For most people, it isn’t only a question of faith versus atheism, though –a number of people doesn’t even concern itself with it and remains agnostic. It goes much deeper than that. The question above is rather one to help orient oneself in life.

From the moment we arrive on the planet, and blinking, step into the sun, there is more to see than can ever be seen, more to do than can ever be done. – Tim Rice

The essential question which at some point really goes round and round in our heads is what to do with our lives. It’s the question of purpose. People like choices, but choices are hard. The quote very well captures two extremes: see in the sense of personal adventure, own experiences, opposed by do in the sense of societal involvement. You can be-come an ethical egoist; only focusing on your own pleasure as much as ethical principles allow. On the other extreme, you can attempt to impact society, try to change it for the better. Personally, I’d like to contribute something to society. So far, I have used my right to vote, I’m a political consumer (as far as my fi-nances allow), worked in several more or less important jobs, and I inspire you

with my articles –winking smiley. Yet, I think that I can do better than that. I still need to figure it out, but maybe I want to work for an NGO, the government, be active for a political party or contribute through research one day. Currently, I prepare: I study, which doesn’t add any-thing to society at all. Only in the future, it will hopefully pay out and make peo-ple benefit from my expertise.

This is what I thought, but let me tell you how I changed my mind about what societal contribution also means. I was thinking through this typical ‘what if…’ scenario: What if you happened to know that the end of your life was nigh? Suddenly, there appears to be even more to see than can ever be seen, even more do than can ever be done. Prob-ably, you would set your priorities com-pletely new. On the one hand, there will be all the things you would still like to experience. On the other hand, there may still be this ambition to give some-thing to society, give your life a sense. Fortunately, I never had to experience a comparable situation, so that I can only speculate. The aim to contribute something may vanish when lifetime becomes limited.

What, if not? What can a person like us do in such a situation to be able to de-part the world with a quiet conscience towards oneself? I can only speak for myself. In my view, it is completely le-gitimate if the first priority becomes to fulfill your own dreams. The scenario

A Gloomy Scenarioby Kai Strohmeyer

16

described is not self-inflicted. Person-ally, I would quit university. I would spend time with friends and family, want to travel and see the world. Enjoy my life. Of course, it all comes down to preferences, and these are different for everyone. Some might want to write a book, others spend the rest of their life in a particular place and enjoy cigars and brandy. Still, whatever you do, I re-alized, it is still pretty simple to change the world for the better, and be it just a bit. You can try to be a true friend and behave helpfully. Try to be a role model, to inspire people with your views. Even if this only applies to your surroundings, you still leave a positive impact. Think-ing about this, I realized that what I previously mentioned as contributions I have already made is of the kind that crosses our minds in light of what our

future plans are. What plays an equally important role, though, and can easily be forgotten, are the little things in life you can do: For instance be a source of advice. Cheer up your friends. Make good for your mistakes. Make people think about their mistakes. Be a source of inspiration or of controversy, igniting fruitful discourse. Nowadays, it is easier than ever to reach people. Think of all the music videos on YouTube. Be it that the singers touch you or become an ob-ject of your amusement; in both cases, a positive contribution has been made. So if you end up as a researcher one day, making substantial findings for society, one can well argue about your net con-tributions to the world if at the same time you are the callous guy who steals little children’s ice cream. ■

17

by dr. Jan Reijnders

Crisis is the buzzword that dominates the headlines at the time. The expression crisis has very dramatic connotations. It is as if society (or at least the European part of it) is at the brink of destruction.

Although the word is widely used, it is not very well defined. Some use it in the sense of an epoch. The ‘age of cri-sis’ is then seen as a phase that fosters the upcoming catastrophe. In econom-ics this interpretation belongs to the domain of the so-called crisis theorists who made their mark in the begin-ning of the 19th century. They stressed the presence of cumulative processes that could possibly throw society back into the Stone Age. They assume that there is no means of stopping the cu-mulative process, which consists of the leapfrogging of production, em-ployment and demand. In this view the economy will keep snowballing down and finally tumble into the abyss.

Others rather regard the crisis as a definite point in time. It marks the watershed between good and bad times. Most economists adhere to this interpretation. In their view the cri-

sis is nothing but an upper turning point, the pinnacle of an expansionary phase. Beyond this point a downturn sets in. When the slowdown is mild, they call it recession. When it inten-sifies and covers a prolonged period of time they designate it depression.

So told, it appears as if the cumula-tive downturn is progressive in the sense that its falling speed increases over time. Looking back at history, how-ever, we observe that capitalism went through a number of crises without breaking down altogether. So obviously there is a ‘mechanism’ that protects the system against breakdown. Moreover, in the course of time, this mechanism even prepares the stage for a new up-swing. Business cycle theorists who in-vestigated the mechanics of this process discovered that downswing and recov-ery could be explained on the basis of a process of interaction between the mul-tiplier and the accelerator (the famous Hansen-Samuelson process). The mul-tiplier part explains why the downswing is degressive. Given this, the accelerator part explains why recovery ultimately takes place. On this view the crisis is just a fleeting moment in a sequence of

The End is Nigh, is it?Having become honorary member of ECU’92, dr. Jan Reijnders honored our request to write an article in the Ecunomist. We are very glad that he contributed to this issue. dr. Jan Reijnders is associate professor at the Utrecht Univer-sity School of Economics and specialized in Macroeconomics and Business Cycle Theories.

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ups and downs called ‘business cycles’.

On top of the mechanism that ex-pounds the sequence of upswing, crisis, downswing and recovery, the under-standing of it’s working resulted in a number of policy prescriptions for mea-sures to stabilise business cycles. In the euphoria of the Post War Keynesian rev-olution, economists devised a system for countercyclical measures designed to mitigate the overheating of the up-swing (and consequently the intensity of the ensuing crisis) and to stimulate economic activity and so alleviate the intensity of the downswing. Experience taught us that the general idea was in-teresting but that its practical applica-tion left much to be desired. Especially the timing of the measures was critical. When they arrive too late, measures designed to slow down the upswing will intensify the downswing and vice versa. Due to such timing problems, ex-plicit countercyclical policies went out of use. The core of stabilisation policy was now left to so-called automatic sta-bilizers; mechanisms that routinely give properly timed positive or nega-tive impulses depending on the stage of the business cycle. The best known of these are a progressive tax system and a system of unemployment benefits. On the upswing taxes increase faster than incomes, which takes the heat off and moderates the upswing. On the downswing taxes decrease faster than income, which counteracts recessive powers. Something similar applies to unemployment benefits. On the down-swing, when unemployment increases, the increasing employment benefits mitigate the decrease in income and

hence counteract depressive forces.

From the point of view of economic policy, the existence of automatic stabi-lizers implies that one can survive the vagaries of the business cycle if one stays cool, keeps a clear mind and has confi-dence in the validity of economic theory of past experience. Unfortunately, how-ever, especially during downswings, the fact that the automatic stabilizers cost money (shrinking tax receipts and in-creasing unemployment benefits affect government budgets) may twist the minds of neo-liberal politicians. They confuse the principles of simple book-keeping with sound economics. They think that they can save the economy by balancing the books only (see for in-stance the proposals for tax increases and the tampering with unemployment benefits in the so-called Kunduz-agree-ment of Dutch Parliament). In doing so, however, they impede the opera-tion of automatic stabilizers. Accord-ingly, they take the risk of deepening the recession and tilting the economy into depression. If you imagine the so-cial instability that results from such course of action, you may rightly think, “The End is Nigh”. Leaving the economy in the hands of single-minded book-keepers truly is a recipe for disaster. ■

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As Albert Einstein once said: “Logic will get you from A to B. Imagination will take you everywhere…” And boy, did he know what he was talking about! But Einstein was after all…well, you know, Einstein, and most of us would consider it far-fetched and preten-tious to even think that our imagina-tions might reach those levels of bril-liance. And yet, we seem to have an everlasting crave and hunger to make our imaginations run wild, overcome barriers and go beyond the ordinary. Sometimes we might need some help though, and luckily, we have found a way. We turn to books, films, graphic novels, games etc and we find in them what reality fails to give us. But what exactly makes fiction so fascinating?

If you look back in time, the elements of the fantastic have always been there in literary works. In the times of Greek tragedies, the fates of people were in the hands of the Gods. These superior creatures with superhuman powers bore much resemblance to the ordinary people in terms of character traits, but their supremacy was well established. Over the course of history we then find this mixture of the real with the extraordinary illustrated in all sorts of forms. What always seems to attract people is setting surrealistic characters in very realistic environments and fol-

lowing them in their attempts to cope with that. Most of the time that means watching how they “try to hide their powers because the world simply would not understand.” I guess this is how it works with us humans: we sympathize and bond with the outcasts in these sto-ries, although in principle we are part of the same community that does not accept them. So maybe this emotional connection plays a significant role by allowing us to identify with the charac-ters and make their problems our own. But this is the case with all kinds of fic-tion, even the ones set in perfectly real-istic backgrounds. There must be some other ingredient that makes the super-natural that much more interesting.

Just think of some of the most famous fantasy book series these last decades (I would say last years, but I guess all the “Lord of the Rings” fans would go mad if I did not mention it): “The game of thrones”, “The hunger games” and all the heroes’ tales so wonderfully il-lustrated in the Marvel comic books. I apologize to everyone who considers my mentioning Harry Potter “politically wrong”, as it pertains to the realm of children’s books, but I know that many others grew up with the series as part of their lives. Also, it is my personal fa-vourite. It is not hard to see what these books have in common: they offer a whole new world! Imaginary scener-

Goodbye reality, hello imagination! A Non-Fictional Story of Fiction

by Dea Tusha

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ies described to the very last detail, creations of new concepts, new objects and different beings. Tolkien went as far as to create whole new languages! To everything you can think of having in the human “ordinary” world, you find an extraordinary, never boring equiva-lent in the imaginary dimension. Usu-ally fantasy books soon become series, because the amount of information you can add to the stories is never-ending. And then they become films and give you the chance to almost touch those images in your mind. It may be a world of refuge whenever reality becomes dull or frustrating; a place for inspira-tion, when the surrounding world fails to deliver; a shot of adrenaline at all times. After all, I guess it is only hu-man to want to feel superhuman for a while… and fiction makes that happen!

But let’s not get ourselves too enthu-siastic and forget about our rational,

economic minds. There is something very rational and quite profitable in economic terms in this whole story: this is quite simply a money-making industry. With all the publicity they receive and the “loyal customers” they make, it is an endless range of profit-able opportunities. Seven books and eight movies bearing the Harry Potter “brand name” made J. K. Rowling the world’s richest author, and the twelfth richest woman in the UK in 2008, ac-cording to Sunday Times Rich List. And let’s not even get started with all the merchandise making use of these im-ages! But no matter how much it costs us, we will probably keep spending on these books and movies. After all, it is the only way we know to end the day in our usual world and start a new one in some incredible dimension…■

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Sara Montonen (21) from Finland. Speaking Finnish, English, and French.

Sara is so much more than a Finish girl, having lived all over Asia most of her life it’s no surprise that interna-tional relations has been her passion. After having come to study in Utrecht because of a Dutch friend, Sara quickly discovered the joys of living in small, “cozy and cute” student city, although you may get sick of it after three years, especially the housing shortage! She told me that the “Dutch are a little bit more close-minded than they advertise and it’s kind of difficult to make Dutch friends.” Some things she especially liked about USE: the big lectures and small tutorials. Some things she thinks could be improved: “The economics fac-ulty is very separated from other facul-ties.” She points out that the organiza-tion of the university improves as you advance in your studies, though she believes that the university should do more to help international students get internships and suggests that interna-tionals try for internships in their home country. But something this honors stu-dent minoring in law has taken away from her stay is a greater understanding of Dutch people, not to mention some

amazing friendships. What does the fu-ture hold? Sara’s not sure if she’s going to stay here or go back to Finland, but she’d like to do a Masters in economics. Her long-term goal is to work for a mul-tinational firm in something dealing with strategy and organization. Onnea!

Daniel Portabella (21) from Guate-mala. Speaking Spanish, French, and English.

Daniel was impressed by the inde-pendence and freedom of movement, the good standard of living and equal-ity in the Netherlands. At the begin-ning, he was frustrated as he thought he would belong to Dutch culture, but found that he didn’t identify. Now, he actually understands the culture; the Dutch are very straightforward and blunt, very funny and shocking at the same time. “Utrecht has a nice center,” he says and was first impressed by the canals and lush vegetation. His advice to new students: try to learn Dutch; it’s extremely difficult to get an internship or job if you don’t. Advice for second and third years: try to get an intern-ship with a company and to write your thesis with them, KPMG might be an

When I arrived in Utrecht two years ago, I wondered if I hadn’t made a giant mis-take. Fast forward two years, after having crashed my bicycle several times, failed a couple of courses, and miraculously adjusted to the suicidal weather, I’m happy to say that it was the right choice for me. But even now I’m wondering, how is this going to turn out? Luckily for you and I, most people are in the same situation and in the name of making myself feel better, I went out and got some answers.

Back to the FutureUSE Students about their memories and Future plans by Leila Maria Scott

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option, but most importantly, do it on something you like! Do a minor, try to do well in those courses as it is easy to get high scores and boost up your grade average. Go on exchange, interact with older students and get info from them on books, housing, and courses. As a former member of the Conference Com-mittee and Freshmen Committee, Dan-iel strongly suggests joining commit-tees within ECU’92, to make friends and to build up your CV. If you want to do a business masters, try to do the GMAT in the summer of your second year. The accessibility of teachers is something which Daniel appreciates about USE, but also feels that the university should put a lot of effort into creating a standard grading procedure and course consis-tency. He thinks Dutch language courses should be provided in the curriculum, not for a grade but just as an option for international students. His plans? He’s been accepted to University of Amster-dam, but would like to go to Erasmus in Rotterdam and study international economics. His dream is to work for a multinational firm and be relocated to another country, go into projects in de-veloping countries; he’s looking for a nice challenge. “It was a good time be-ing here” and he hopes to keep in touch with his classmates. Buena suerte!

Marius Dragulin (21) from Ro-mania. Speaking Romanian, Eng-lish, Italian, French and Dutch.

After having lived in Italy for two years, Marius remembers coming to the Netherlands and says, “Everyone was tall and blonde, at least on the day I arrived. There were bikes everywhere and everyone seemed to know English.

People were very friendly and helpful to me.” Three years later he feels at home, and likes the geographical location of Utrecht, in addition to the coziness and lovely architecture. The hardest thing to adjust to was the weather, he tells me, but it makes you appreciate the good weather a lot more. Moving around by bike was relatively easy to adjust to, although a bit scary at first. Marius likes the mix of Dutch and internation-als, “It’s the perfect amount, you are constrained to embrace the Dutch cul-ture.” While volunteering with AISEC, he made a lot of contact with Dutch stu-dents. Marius was also in the Utrecht University Career Day committee and suggests that the university should try harder to get international students in-ternships. He appreciates the academic skills which the program has endowed him with, especially giving presenta-tions and working in a group and be-lieves that he has improved tremen-dously. Some of his fondest memories have been ECU’92 activities, but wishes they had organized more parties. But without a doubt, the friendships he has forged will be his greatest experience from university and he plans on keep-ing in touch with the people he has met. Starting this fall he will volunteer for a year in France, working for the European Commission in the Youth in Action program. Afterwards, a masters program in Paris and politics in the Eu-ropean Union; his final goal is to return to Romania and attempt to improve the situation there. He stresses that new students should learn Dutch, try to make Dutch friends and generally, integrate! You won’t regret it! Noroc!■

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Study Trip to Moscow

First to clarify something what is a Rijkstrainee exactly?

The Rijkstrainee program is set up by the Dutch Government. You will have different functions and also work at a different department inside the Dutch government or abroad, for example the European Union. During these years you don’t only work, you are being coached and trained to develop your-self. This gives trainees a broad basis of skills and knowledge which they can use in their career.

What is your study background? I did my Bachelor in Business Admin-

istration at the University of Tilburg. During the last years of the Bachelor I choose to follow more courses in the direction of finance. The Master that suited my interest the most was the Fi-nancial Management Master in Tilburg.

Students always question whether

the theories they learn from the text-books are relevant for their career later on, how did you experience this?

The courses really added something for me including the courses on the macro-economic level as well as the business economics courses.

How did you explore your career op-tions during your years of study?

In my bachelor I visited some career events to explore my options. One use-ful tip I got during such a day was that for a job later on in life I was given the advice that I needed more experience. So during my Masters I worked for a Corporate Finance firm.

And what did you do after you gradu-ated?

I had the unfortunate timing of be-ing done around August 2009 when the crisis was still ongoing. But I got a job

by Jorrit Hendriksma

Working at the Dutch Ministry of FinanceRonald Lauwerijssen, Rijkstrainee

In every issue of ‘Working at’ we focus on a personal story of a starter, the transition from student to the working live and their experi-ences with their first job. This time we talked to Ronald Lauwerijssen, who is 26 years old and a Rijkstrainee at the Dutch Ministry of Finance.

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at an international firm specialized in the frozen food sector. Here I worked at the financial department and I was responsible for the total budget, includ-ing the calculation of the cost price of certain products. Exploring this whole financial side was definitely an experi-ence where I learned a lot, but from the start it was clear that this function was only temporarily

So how did you end up at the Minis-try of Finance?

I got an email regarding the Rijk-strainee program. The combination of personal development and doing something for the society attracted me heavily. You are coached during your traineeship, get classes on certain skills and have a lot of contact with the other trainees. That is why I applied for the traineeship and luckily I got the job.

You worked at a corporate finance firm, an international firm and now for the Government is this a deliber-ate choice?

I do have to admit I like both settings, but I preferred a job that means some-thing for society in a broader sense.

How far are you in your traineeship now?

I have been working here for 1.5 years now. I started at the ‘Directie Bed-rijfsvoering’ which supports policy de-partments. I calculated the cost price of

certain products of the ‘Directie Bedri-jfsvoering’. Moreover, I was involved in the planning and control cycle. After a year I got a different function in London at the European Bank of Reconstruc-tion and Development (EBRD). Here I advised to my Director whether to vote for, abstain or vote against certain fi-nance projects. The goal was to stimu-late the market economy in certain countries and taking into account vari-ous aspects, such as the environment, integrity, financial/economical and social aspects. This broader view, the political context and the international aspect really stimulated me. Now I am back at the Department of Finance in the Netherlands.

Where do you see yourself in 10 years?

I don’t have a clear picture of what I want to do in 10 years. I want to do something financial/economical but I do not know what and where exactly. What I do know is that I want to de-velop my talent and mean something for society. That is why this traineeship is a good opportunity for me to do that. In that sense I can recommend to any-one who thinks personal development is important and who wants to mean something for society to work for the Dutch Government. ■

More information about the rijkstrainneeship can be found at www.rijk-strainee.nl. For more information on vacancies and internships at the Gov-ernment visit www.werkenvoornederland.nl.

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