The End of a beginning

Nicholas Roerich

Lift not the painted veil which those who live

Call Life: though unreal shapes be pictured there,

And it but mimic all we would believe

With colours idly spread,-behind, lurk Fear

And Hope, twin Destinies; who ever weave

Their shadows, o’er the chasm, sightless and drear.

I knew one who had lifted it-he sought,

For his lost heart was tender, things to love,

But found them not, alas! nor was there aught

The world contains, the which he could approve.

Through the unheeding many he did move,

A splendour among shadows, a bright blot

Upon this gloomy scene, a Spirit that strove

For truth, and like the Preacher found it not.

Percy Bysshe Shelley

This marks the end of posts here on Blogger. Why, you may ask. Upon which you might cast an eye on this page.

From now on it's back to here.

Reading Lounge

1. The integrated superblocks that dominate Jakarta

2. “external shrinkage”

3. Limewire

4. TV, or not TV: The story of our bike box

5. The man who fell from the sky

6. Blockchain is dead

7. Don’t go to grad school. Get a turtleneck instead

8. "You start off with a grey. And then you add a little concrete colour, so every paving stone is slightly different”

German Constitutional Court looking for scientist to learn if constitutionally guaranteed subsistence level of Hartz 4 could be reduced by 60%

Are you a scientist? If yes, we, the German Constitutional Court @BVerfG would like to hear from you.#HartzIV

— Clarky Cat Boz Boz (@ErebusSagace) November 12, 2019

"So far, the effectiveness of this reduction in performance has not been adequately researched either with regard to the immediate goal of attaining participation or with regard to special or general preventive effects". (recital 193)

— Clarky Cat Boz Boz (@ErebusSagace) November 12, 2019

You may as well drop by our fancy digs in Karlsruhe and, please, do not feel ashamed or misplaced when you see us in our solemn attire. As Beau Brummell said: “Fashions come and go; bad taste is timeless.” pic.twitter.com/GVA0j1QClh

— Clarky Cat Boz Boz (@ErebusSagace) November 12, 2019

Reading Lounge

1. The seething sexual inferno of Japanese couples

2. "There is no 'P' in hamster."

3. and here the Twitter thread

4. Limited edition beer cans which read 'Epstein didn't kill himself' on the bottom

5. Beau Brummell spent five hours a day getting ready and polished his shoes with champagne

6. The Peanut Butter and Mayonnaise Panic of 1969

7. The secret of China's economic success uncovered by EU Commissioner Oettinger: »The Chinese take shorter and colder showers"

8. Sick of Led Zeppelin? A classical orchestra in Germany aims to "make climate change audible" with a reworking of Antonio Vivaldi's famous violin concertos "The Four Seasons" using algorithms based on climate data

9. The Micromobility Mirage

German economics students gently rocking the boat

One may ask what took them so long? Anyhoo, here they are:

Open Letter: Rethinking the Role of Banks in Economics Education

Dear Economics Professors and Teaching Staff,

Banks and their role in the creation of money are integral to our modern, financialised economies. Yet, the teaching economics students receive doesn’t give them the full picture. As those with the power to influence the next generation of economists, it is essential that you review the teaching of the role of banks in economics courses and bring it in line with up-to-date research. Our economics graduates need to understand how banks function in the real-world, in order to avoid past crises and to create better economies in future. 

What is currently taught?

Economics textbooks across the world, some of them first published in the 1960s, continue to teach students a model of the monetary system in which commercial banks act as intermediaries, that only move existing money around the system, like lubricant in a machine. Many economics courses rely on the models in these textbooks, without recognising the empirical evidence that undermines them. This gives an unbalanced view of the way the monetary system functions and of the role of banks in the economy.

How is money created?

As research from the Bank of England, Bundesbank and numerous academics has shown, banks are not intermediaries channelling pre-existing funds from savers to borrowers. Commercial banks create the vast majority of money in circulation. Unlike other financial institutions, they create money when they extend loans to borrowers. In the process of extending a loan, banks do not move pre-existing funds from any other account but newly ‘invent’ the money by crediting the borrower’s account. Therefore, banks’ lending is constrained by borrowers’ demand, profitability considerations and financial regulations, not by pre-existing funds (i.e people’s savings) nor by central bank reserves. This reality is in line with the credit creation or endogenous money theory, which is absent from most current economics textbooks and teaching.

Commercial banks also determine where money is directed in the economy. Around 80% of new money created in countries like the US and UK currently goes towards existing property and financial markets, rather than the ‘real’ or productive economy, leading to soaring house and land prices, and housing crises. In the Global South, 33 major global banks poured $1.9 trillion into fossil fuels since the 2015 Paris Climate Agreement, directly influencing the trajectory of economies that will be hit first and hardest by climate change. The power of banks to create money therefore has enormous implications for the shape and stability of our economy. Yet, in an overwhelming number of cases, economics textbooks and courses do not teach this to the economists of tomorrow.

What are the consequences of this teaching?

These models, taught without balance or regard for existing evidence on the financial sector, lead economics graduates – who often gain influential positions in society – to draw flawed conclusions. One example is the misconception that in order to increase investment in the economy we need to encourage people to save money first. Other misconceptions that arise are that money is a scarce resource and that public investment always ‘crowds out’ the private sector.

Furthermore, a main driver of the 2008 global financial crisis was the build-up of debt and credit by the private sector, as banks lent unprecedented amounts to property and financial markets. The crash was unanticipated by the majority of academic economists. This was in no small way influenced by blind spots regarding the power of banks to create money and influence the wider economy.

The same theories that led to these blind spots are still being uncritically presented to economics students 11 years on. When real-world evidence demonstrates that banks function a certain way, why is this not taught to students? Any decisions these students take in their future careers – from financial regulation, to approaching issues like asset price bubbles or unproductive lending – will be influenced by their education at university.

Full letter here.

There is also an extended version. Conspicuously, German rock star economists Fratzscher and Fuest (cough) are not among the signees.

Manchmal muss dem SG München einfach mitgeteilt werden, dass es persona non grata ist

FAX

Sozialgericht München
Richelstr. 11
80634 München

Vertretungsvollmacht

Hiermit erteile ich

xxx

meinem Vater xxx (Adresse im Kopf des Faxes)

die Vollmacht, mich in unseren Angelegenheiten vor den Sozialgerichten zu vertreten. Mein Vater ist berechtigt, verbindliche Erklärungen abzugeben, Anträge zu stellen und Rechtsmittel einzureichen und zurückzuziehen.

Ich stelle weiters fest, dass ich keinen Kontakt in jedweder Form von den Sozialgerichten betreffend den andauernden Streitigkeiten mehr wünsche und verweise insbesondere auf die eindeutigen Aussagen in der Email der Antidiskriminierungsstelle des Bundes vom 11. Okt. 2019 nach Beschwerde durch meinen Vater. Diese wurde dem SG München und dem Bayer. LSG am 15. Okt. 2019 zur Kenntnisnahme weitergeleitet.

München, 29. Okt. 2019

It may be three decades since the Berlin wall came down but too many others have recently proliferated

"No wall that excludes people and limits freedom is so high or so wide that it can not be broken," Merkel said in the Chapel of Reconciliation on the former death strip on Bernauer Strasse.


David Gow differs: It may be three decades since the Berlin wall came down but too many others have recently proliferated.

In Social Europe he writes

Europe: tear down those walls!

‘Die Mauer in den Köpfen’ (the wall in the heads) is a phrase I first heard as a German correspondent in the 1990s, not that long after the October 1990 celebrations of reunification at the Reichstag in Berlin, on which I reported. The famous dictum of the former long-time Social Democrat leader Willy Brandt at the Schöneberg town hall a year earlier—‘es wächst zusammen was zusammen gehört’ (what belongs together grows together)—had swiftly turned to dust.

Then, as now, economic disparity had something to do with it, even though on average €100 billion a year has been transferred from west to east over the last three decades. Three million east Germans lost their jobs within barely a year. The overwhelming number of senior posts were taken over by Besserwessis. And today, as the Hans Böckler Foundation’s WSI institute recently reported, east German wages are 16.9 per cent lower than for western counterparts with the same qualifications.

Indeed, in the run-up to the decidedly low-key, typically soul-searching 30th-anniversary celebrations in Germany, there were many reflections on the emotional, cultural, sociological and psycho-political walls remaining between east and west. The chancellor, Angela Merkel, who grew up in the old German Democratic Republic, told Der Spiegel: ‘Different experiences of life in east and west are a fact. We should talk more about it and make a greater effort to understand each other.’ She blamed an initial lack of curiosity and interest on the part of west German politicians.

And, I might add, the west German media. When I returned from a week-long visit to Saxony in 1991, investigating neo-Nazi attacks on migrants and asylum-seekers, colleagues in the Bundespressekonferenz (official lobby for political correspondents) asked incredulously: ‘Why on earth go there? They’re a different, difficult lot …’ Outside the Zwinger museum complex in Dresden 15 years later, a group of tourists from Düsseldorf admitted to me that it was the first time they had set foot in the east—and insisted they still had little in common with their compatriots.

Now, I imagine, they would be shaking their heads in disbelief at the fact that, together, the Left Party (Die Linke, part-successors to the old east German Communists) and the far-right populist Alternative für Deutschland commanded over 53 per cent of the vote in the recent state election in Thuringia or that the AfD came a strong second in Brandenburg and Saxony. It scores 13 per cent in current national polls; it won 23.4 per cent in Thuringia, 27.5 per cent in Saxony and 23.5 per cent in Brandenburg.

Read the full article at Social Europe.