Money does NOT make the world go round

Peer Steinbruck is quite right (in my humble opinion) to fear a global financial disaster of seismic proportions, the size of which the world has never seen. Laissez-faire politics may seem an easy option for governments: they get to share in the good times and yet when things get messy they can just blame the financiers and come up smelling of roses themselves.

I hold the naïve belief that all these economists with impressive degrees from prestige, elitist educational institutions must surely know what they are doing. They are scions of members of the Establishment – finance is in their genes. Current events, however, suggest two possible options. Either the money men have no idea what they are doing (and thus must face accusations of ineptitude) or they know perfectly well what they are doing and they just don’t care about the consequences. My money’s on the second option: they know full well they can’t lose. No one (at the top) loses his job or his money and certainly no one will go to jail just because a few home owners became home losers.

Herr Steinbruck has probably read his history lesson. Laissez-faire economics did not help the newly industrialised nations during the Industrial Revolution. It helped the industrialists but did little to provide comfort for their workers. Industrialists were simply left free to abuse the system with impunity, as they saw fit. For example, child workers could be freely used to swell profits for factory owners. Yes, the “invisible hand” of capitalism produced wealth but there is no reason why that hand should distribute all its hard earned benefits to all and sundry. And in any event, in a free market economy, individuals take financial decisions on a “what’s in it for me” basis, not on the basis of “what is good for society as a whole”. Yes, it is theoretically possible for all to participate in this free market economy and do well. But there will always be the dispossessed in society who need the kind of help/services that do not provide a healthy yield on one’s investment, such “loss making” enterprises as schools, health services, social housing, policing etc. You can’t farm out everything to private initiative – a private entity running e.g. a hospital will expect to make a profit, something hospitals are notoriously bad at doing.

Ireland too knew phenomenal economic success, thanks to a progressive government that actively sought to bring in foreign companies, with tax breaks and minimal beaurocracy. However, this cannot last especially when so much of the economy depends on prices in the housing market and how many new homes are going up. If everybody rented their home (as is the custom in central Europe) and invested their savings in other more stable areas, then perhaps the mess would not be so extensive.

It may be that the good days are over for the States and that they will have to acquire a taste for humble pie in place of apple pie. I leave the last word for Hamlet: “Every dog has its day”


Reward for Mismanagement
(Berliner Zeitung, 29 Sept)

The paper’s Opinion section quite logically observes that if a company does not conduct its business well, it will go bankrupt. Not so in the US. There Congress has approved further billions to support the American automobile industry. The money will help fund factories convert to producing more environmentally friendly cars. The industry will receive $25 billion at favourable rates of interest. There is nothing wrong in a government supporting the production of environmentally friendly products. However, what the government is really doing (continues Berliner Zeitung) is using the environment excuse as a guise for a billion-dollar reward for the auto company bosses’ mismanagement of years. European and Asian car manufacturers, in contrast, have long known that the trend was for low-consumption vehicles. Faced with rising fuel prices, drivers can no longer afford to fill their gas-guzzlers and don’t want to buy new ones. The net result – the big American auto companies are thrown deeper into trouble. This injection of billions is unfair competition for some European car manufacturers and a subsidy that they can only dream about. [Vive la difference, the Old World versus the New World.]


Global financial crisis putting German infrastructure at risk
Published: 29 Sep 08Online: http://www.thelocal.de/14581/20080929/

German states that have financed their infrastructure through cross border leasing with the United States are at risk of losing their transportation systems as the global financial crisis looms, daily Berliner Zeitung reported on Monday.

“The crisis can have an affect on all cross border leasing businesses,” Winfreid Fuest from the IW institute for German economy told the paper. The German cities who financed their metro systems, canals and even trade fair centres may have to pay the price for failing US banks and insurers. “Established securities are becoming worthless from one day to the next,” Fuest said, adding that it’s difficult to predict the sums of money this problem might involve because such cross border leasing contracts are rarely transparent. The practice involves a city selling its assets to a foreign entity, which then leases the business to the city - which then avoids certain tax expenses. Among other cities, Berlin has financed up to six trade fair halls. Subway and street car vehicles and equipment have also been rented from the US. Meanwhile Cologne‘s canal system, Ulm’s power plants, and Gelsenkirchen’s schools and public buildings were all financed through this system. The paper estimates that the practice involved some €40 billion in the 1990s alone.

* * *

I sincerely hope Germany is not trying to emulate Britain in looking to private enterprise to help fulfil its civic responsibilities. It it does, then it can only come a cropper! Britain favours a system whereby public bodies enter into long-term contracts with private firms to design, build and operate assets such as hospitals or schools (a grand system going by the name of Public Financial Initiative). Usually the private firms lack the expertise, management skills and resources to do a good job.


Hamlet’s take on political events has particular resonance both in Bavaria and Austria. Whereas we cannot say that there is something rotten in the state, people do want change when they see the old regime is tired/arrogant/ineffectual, whatever. Don’t forget as well that a whole new batch of young voters (16 and 17 year olds) voted for the first time in Austria, Europe’s youngest electorate. Fresh blood with new perspectives.

Watch out for the tram

The city is renovating its fleet of trams. The vehicles are made by Bombardier (with headquarters in Berlin) and each one costs €3 million. If all goes according to plan, the city hopes to buy another 206 trams by the end of next year. That is, a total of €618 MILLION!!! I’m not sure where the money’s coming from or if they can afford it but now the graffiti artists will be able to reach their destination in comfort. Nor will they have to fumble around for loose change – the new trams will be fitted with ticket machines that accept bank notes and cash cards. Big screens inside will display the next five stops, rather like inside the S-Bahn.

Power to the workers

All the federal Euros in Europe, however, are no match for the might of the formidable German unions. Doctors and hospital workers brought the city centre to a standstill, by marching on the Brandenburg Gate. Traffic was diverted, traffic jams brought about frayed nerve endings and public transport was disrupted. Commuters had a hard time getting home. What was their gripe? Not enough money, of course (not just higher salaries but more spending on health services together with reform of the health system). As is the norm in cases like these, the ones in a position to change things are not the ones affected by industrial action.

Let justice be done

Berliner Zeitung has an interesting feature in its Berlin pages. A front page column (“Diese Woche im Gericht”) lists interesting cases appearing in the Criminal Court. An outline of the charges is given together with Court number, time and address. No names are mentioned but for anyone keeping an eye on local events, it must be obvious who is being referred to. If you have nothing better to do on a wet and cold Thursday morning, you can sit in the public gallery in the warm and watch someone’s dirty laundry being aired in public. Anyone hoping their brush with the law can be hushed up in the neighbourhood has another thing coming. They will not only have to pay the price for their criminal activity in the law courts but also have to face public censure from the community at large. It is this second aspect that is perhaps a more effective deterrent against crime than a fine or custodial sentence.

Germany's most successful city

Munich ranked Germany’s most-successful city

Published: 5 Sep 08 17:27 CETOnline: http://www.thelocal.de/14135/20080905/

For the fifth year in a row, Munich is Germany’s most economically successful city, according to a new study published in weekly business magazine Wirtschafts Woche on Friday.

The study, conducted in tandem with the Initiative for New Social Market Economy (INSM) reviewed conditions in the country’s 50 largest cities for the last five years, ranking them in terms of economic success, dynamism, and overall economic success. Munich’s wealth, job market and economic structure earned a first place ranking for overall success, followed by Münster, Frankfurt, Karlsuhe, and Düsseldorf.

Meanwhile Saxony’s capital city of Dresden was the country’s most dynamic. Other formerly communist East German cities are “on the fast track,” including Chemnitz, which jumped 23 rankings to 10th place last year, and Rostock, up to 23rd place from almost last place. These cities on the study’s dynamism rankings can thank attractive worker costs and high investment quotas for their new success, the study said.

Capital city Berlin tanked for the second year in a row, earning last place overall. The job market in the city is worse than any other large city.

Cities in the German state of North Rhine-Westphalia also ranked at the bottom of all aspects of the study, with Wuppertal in last place for dynamism. Meanwhile Herne’s status deteriorated the most of any city in the study, falling 22 ranking to 34th. The gap between the struggling cities and the leaders is shrinking, though, INSM head Max Höfer said on Friday.

The study, conducted anually since 2004, included criteria such as average incomes, gross domestic product and pro-business atmosphere.

[It must be something in that Alpine air that makes the difference – I am at a loss to find any other explanation].

Pay your taxes

It is peculiar that in a social democratic nation, the state is obliged by the constitution to collect taxes from its citizens’ salaries and hand the money over to the church; all this in a nation where state and church are admirably separate and not joined at the hip and where there is no established church. As much as 70% of church revenue comes from the Church Tax (€8.5 billion in 2002 – Wikipedia). Of course, you are not in any way forced to pay this tax – you can opt out. But bear in mind that if you are a member of a church community (e.g. by being baptised into that church) and later decide you want to opt out and not pay church tax, that church can refuse to marry you or bury you when you are dead!

The moral of this tale – when you go to obtain your income tax number, make sure you do not declare membership of any official church, otherwise you will find your monthly pay packet somewhat lighter by a further 9%. You are free, of course, to contribute as much (or as little) as your conscience dictates to the religious community of your choice, thus cutting out the government middleman. The government itself has no qualms about taking its cut from the churches – it charges them an administration fee for the church tax it collects on their behalf. With falling (if not at absolute rock bottom) attendances, the theologians are in no position to complain about the commission they are charged.


Luther

Talking of religion, Wittenberg is cashing in on the Luther business – 2008 marks the 500th anniversary of his arrival at the University of Wittenberg as professor of theology. Festivities are due to continue for a long time (just in case you miss out this year), until 2017 (in 1517 Luther nailed his Ninety-Five Theses to the door of Wittenberg’s Castle Church). There will be talks, exhibitions, shows, readings, lectures etc. etc. etc. The hoteliers will be rubbing their hands in glee.

“Wealth has in it neither material, formal, efficient, nor final cause, not
anything else that is good; therefore our Lord God commonly gives riches to
those from whom he withholds spiritual good.” -- Martin Luther

Today’s Wall Street bankers might do well to reflect long and hard on Luther’s pronouncement on the matter of wealth. If there is a direct connection between the size of one’s personal bank accounts and the degree of spiritual depravity, then I’m glad I’m skint.

Mrs Merkel (perhaps in a noble attempt to avoid infection from the miasma emanating from the other side of the Atlantic) has stated that Germany will definitely not need any financial assistance to ride out the current financial fiasco. We are managing quite alright on our own, thank you very much.


Becoming German

Der Spiegel’s issue of 15 September carried an article about what it takes to become a German citizen and what it’s like for a teacher to teach immigrants on an integration course at a Volkshochschule. The students were from all continents east and west. They discuss explosive issues such as legislative-executive-judiciary, constituencies, suffrage: all noble subjects and perhaps worth knowing about (if you aspire to a political career) but is this knowledge really what it takes to be a “good citizen” (of any country)? And what is the definition of a “good citizen”? Students have one hour to answer correctly 17 questions out of 33. A retentive memory helps here. The article wonders just how prepared for integration the candidate might be if he can state when Warsaw fell. It is doubted if many ‘real’ Germans would be able to pass the test if they had to write it.

Perhaps the point here is not that an immigrant has learned the language and is able to rattle off a list of dates and spout political theory; more to the point I think is that she is prepared to apply herself [the gender is specific – all the students in the class happened to be women] to a task and work to produce results.

What does it take to be German (or for that matter, English or Spanish or Italian)? The point is that there is no definitive answer. We can revert to stereotypes and say a true Englishman is someone who drinks tea and wears a bowler hat or a true German drinks beer and eats lots of sausage, but these are mere constructions imposed on a people which are reinforced by mass culture (advertising, press, TV, music, popular culture and so on). A purist who is introverted (and perhaps a little narrow minded) will cling to these constructions and claim that his country is under threat from an invasion. He will fail to realise that the true-born ___ (you can add your own nationality, it doesn’t matter which) does not exist.

The question of nationhood and national identity is a minefield and there are more questions than there are answers. Further, when there have been decades of immigration and assimilation, the boundaries between “them” and “us” become blurred even further and the issue of identity is no longer straightforward.

The writer wonders where the connection is between understanding the electoral system and being German. There is no connection, only the candidates’ drive and determination.

German citizenship test goes into effect

Published: 1 Sep 08 16:51 CETOnline: http://www.thelocal.de/14041/

Germany put a hotly-debated citizenship test into effect on Monday in a push towards better integrating immigrants into German society.

“Those who want citizenship should know some things about Germany,” the German government said in a statement. “With this test they can show the important knowledge about Germany’s laws, social organization and way of life.”The exam will cost applicants €25 ($38) a go, and foreigners will be given all the questions to study beforehand. Candidates must correctly answer at least 17 of 33 questions on German culture and history to pass. Those exempted include people who have gone through the German school system, those younger than 16 and older people with learning disabilities, according to the Interior Ministry. Successful applicants also have to have adequate German, no criminal record and have been living in Germany for at least eight years. Candidates can retake the test as many times as they like.Critics of the exam have said the test is too difficult, with irrelevant questions that even Germans may not be able to answer, much less the country’s 7 million permanent residents without citizenship.The test is “somewhat sloppily made,” and “flawed,” head of the parliamentary Committee on Interior Affairs, Sebastian Edathy said on Monday on broadcaster Deutschlandradio Kultur.Leaders from the country’s Turkish community have been particularly critical of the test. At 2.3 million, Turks make up the largest group of immigrants in Germany, and have long pushed for the right to keep both Turkish and German passports. Around 340,000 people over 18 will soon face the tough decision of choosing between German or Turkish citizenship.In 2000, Germany reformed its citizenship laws which had previously only recognized the principle of nationality by blood. The reform now allows foreigners who have lived in Germany for eight years to apply for naturalization. But the original plan to allow their children born in Germany to automatically become German failed in the face of fierce opposition by conservative parties. As a compromise, it was decided that naturalized children would have to decide at the age of 18 whether they wanted to keep their German passport or their foreign one.Some point out that being forced to choose between nationalities could mean a conflict of identity and loyalties.

[p.s. We also don’t want anyone claiming unemployment benefit – you must be able to support yourself and your family to acquire nationality.]

And, finally ….

At last – someone who possesses an ounce of common sense. Politicians in Saarland have objected that the amount of VAT on pet food means that it is cheaper to feed a dog than it is to feed a baby. They want VAT on baby products to be reduced in their state. Either we are serious about helping families with children or we aren’t.


Today’s post, I see, has a lot to say. I had thought about keeping some items back to save them for another day but then they would be stale news. And who knows what fresh stories will materialise in the meantime. Never mind – enjoy the bumper harvest today for the future may have lean times in store.

The city has given up all presumptions of enjoying balmy, southern weather, with pretensions to the status of a chic, gentrified metropolis and has reverted to type, that is to say damp, dark and COLD. It’s not so easy to be bohemian when you are wrapped up in a duffle coat, clutching your paper cup of caffé latte trying to warm your hands as you wait for the tram. This is a city for practical people who wear sensible warm shoes and wrap themselves in scarves. It is already pitch black outside when I get up. It won’t be long before the clocks go back, but the hours of darkness during the day will still be considerable.

How quickly the wooden benches and little tables have been cleared off the pavements and spirited away out of sight. The bio-ice cream parlour that last week was overflowing with kids and school bags is now deserted – only one little park bench remains outside the shop window, cemented to the pavement. The assortment of benches, stools and odd chairs (no two pieces were the same) had gone and the few die-hards who just have to have an environmentally-friendly ice cream are now forced to eat it on the way home. If nothing else, the consumer has no fear of his confection melting before he gets to the end of it.

The only patrons that don’t seem to be adversely affected by the inclement weather are the beer drinkers, specifically those that like to imbibe their beverage while puffing away on a cigarette. New legislation means that they cannot smoke even inside a pub, unless the premises are large enough to provide a separate room just for smokers. Since most pubs and bars are tiny, one-room affairs, this means that the clientele have to sit outside on the pavement. It appears that the combination of nicotine and alcohol in substantial quantities renders the individual immune to bad weather: it fails to have any perceivable effect on him. Postscript: the constitutional court has recently ruled that banning smokers from small pubs is bad for business and drives customers away. It is unfair competition on the part of the bigger establishments. Smokers can now return to the comfort of their favourite corners, safe in the knowledge that should the Ordnungsamt official perform a surprise raid, the proprietor won’t be fined for breaking the law.

Any visitor using the public transport system here had better make sure he is in possession of a valid ticket. Inspectors conduct lightning checks on a regular basis. On many occasions I have had to produce my ticket twice or three times in one day! You can never spot them when they get on: they look like regular workers, punks, apprentices. They are mostly men, always working in pairs (they start at opposite ends and work their way to the middle) but there is a couple that pass themselves off as husband-and-wife. I am constantly surprised by the blasé attitude of people that get caught without a ticket. It’s as if they think the risk of getting caught is worth taking or perhaps the fine is a lot less than the cost of a monthly travel pass. In any event, when they hear the familiar “Tickets, please”, they immediately have their ID cards ready instead, for the details to be recorded. They seem to know the procedure well.

The pitiable chestnut trees of the city have already lost the last of their brown and withered leaves but it has nothing to do with the onset of autumn. The culprit is a moth from Skopje that has found its way to western Europe, laid its eggs on the leaves of chestnut trees and decimated the population. Tree doctors are desperately seeking a cure – some say perhaps injections will do the trick. One thing is for sure, the street vendors will be short of chestnuts to roast at Christmas – we’ll see where they will get their raw material from.

The Chancellor Angela Merkel recently visited a vocational training school in a district renowned for its Muslim immigrants. Here young Muslim women were learning their way around a sewing machine and picking up skills for work as seamstresses (no more need to import cheap clothes from China!) This was just one stage in Mrs Merkel’s nationwide-tour of German schools so that she has a better understanding of the state of the country’s education system. This is conveys the importance of education to the wealth and wellbeing both of the individual citizen and the nation. Everyone (whatever his abilities) can contribute and no one will be left behind to be a burden on society/welfare benefits/indulgent parents. For those that want to learn here, all the doors are open. You can choose anything from degrees and foreign languages to cooking on a budget and philosophy. I think there are some lessons to be learnt here for some of Mrs Merkel’s other European counterparts.

Roll up, roll up!

Roll up, roll up! The circus is in town. A circus has suddenly appeared on a piece of waste ground near our home. They must have come silently in the night, pitched the big top and corralled their caravans in a cosy circle, facing inwards, complete with white wooden fencing and a set of plastic tables and chairs in the centre, ready for al fresco morning coffee.

By lunchtime the next day, an impromptu paddock had appeared in full view of the main road and two not very healthy looking and not very white horses were scraping around for tufts of green grass. Why were the horses not housed within the enclave together with the rest of menagerie (one camel and some miniature ponies)? The answer soon became abundantly clear. The horses were the doing the job of sales promotion, advertising; they were bait. The plot of land is conveniently situated near a school and children returning home with parents would inevitably stop to gawp. Predictably, the next step was for children to plead with parents to take them to see a performance. How could they refuse? This tactic is somewhat on a par with the practice of displaying sweets at the checkout just at the right level for little fingers. But I digress. The children gaping at the horses brings to mind Louisa and Tom Gradgrind doing exactly the same thing in Hard Times, the only difference being that they had to do it surreptitiously and not holding father’s hands. The little Gradgrinds were brought up to endure a life bereft of Fancy, a life dedicated only to Fact, with tragic consequences for both of them. Sissy Jupe, however, proves more resilient to attempts to have all the Fancy choked out of her by Gradgrind’s schooling. She survives intact to the novel’s end and is the only one who the novel foresees as having children of her own in the future. Her father was after all a horse rider in the circus, much to Gradgrind’s disgust. Too much Fancy is just as damaging as too much Fact. What is called for is a degree of moderation – a visit to a circus would not harm anyone, so long as it is coupled with a modicum of Fact.

First Steps

These rhapsodic entries aim to reflect an abiding interest in literature and writing plus observations on life in Berlin from the perspective of a non-German resident. Two disparate domains but both have touched upon my life and shaped it in significant ways. It is not inconceivable that other miscellaneous items will creep into the agenda but such is life; you make a plan and then change it (but at least you have a plan).

Regarding my literary interests, it is not my intention to initiate some kind of bluestocking group. But I have been struck by what women authors have had to say, as well as the conditions in which they executed their art. Those of you familiar with the life of Jane Austen will immediately recognise the allusion in my title to this blog. Today’s writers need not fear discovery of their true identity or hide behind a different gender. Not for them the tribulations that the Brontës, George Eliot or even Woolf faced in trying to bring their work out into the public sphere. How different things could have been for them if they had access to a computer: even locked up in their drawing rooms no one could stop them. (Incidentally, why did J.K. Rowlings and P.D. James decide it was better to use initials instead of their full names?)

Regarding the second (incongruous) thread, I have been living in Berlin for nigh on a year now. With no knowledge of the place, nor friends or contacts here, I have struggled to get along and establish myself, discovering pitfalls as I go along. A pitiful command of the German language only enabled progress at a snail’s pace. Some of my experiences may prove useful for those who follow in my footsteps. For an outsider, the city is redolent with images of its past history, imbued with an atmosphere of an era long gone. People who come to the city, either as tourists or with the intention of staying longer, do so because of the ‘idea’ of Berlin they carry in their heads, as opposed to Berlin per se, as a real, tangible city. This was certainly true in my case. The reality of living in this city bears no connection with the images that are popular outside – whether this disparity is good or bad, I cannot say. I merely record my experiences and leave it for you to decide.