Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Economist’

The spotlight shifts from Germany to France

Posted by hkarner - 29. September 2017

Date: 28-09-2017
Source: The Economist

A dynamic Emmanuel Macron and a diminished Angela Merkel point to a new order in Europe

WHO leads Europe? At the start of this year, the answer was obvious. Angela Merkel was trundling unstoppably towards a fourth election win, while Britain was out, Italy down and stagnating France gripped by the fear that Marine Le Pen might become the Gallic Donald Trump.

This week, it all looks very different. Mrs Merkel won her election on September 24th, but with such a reduced tally of votes and seats that she is a diminished figure. Germany faces months of tricky three-way coalition talks. Some 6m voters backed a xenophobic right-wing party, many of them in protest at Mrs Merkel’s refugee policies. Having had no seats, Alternative for Germany, a disruptive and polarising force, is now the Bundestag’s third largest party. Den Rest des Beitrags lesen »


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Pessimism and optimism on Germany after its election

Posted by hkarner - 26. September 2017

Date: 25-09-2017
Source: The Economist

Its tumultuous vote might just do the country more good than harm

WONDERING what to make of the German election? Really, it is simple. You just need to decide if you are a pessimist or an optimist.

Germany for pessimists

The far-right Alternative for Germany, a party with real neo-Nazis in, is on track for 93 seats. It might even come first in the state of Saxony, where its lead candidate is a man who rails against „mixed peoples“ and Germany’s „cult of guilt“ about the Holocaust. In the Bundestag the party will enjoy resources and prominence: hundreds of staff members, allocated speaking time under the glass dome of the Reichstag building and seats on prime-time political talk shows from where it can spread its messages and thus advance further. It is only a matter of time until it joins a coalition at state level. The shouty „Elephant Round“ (a post-election TV discussion between the party leaders, pictured above) was the overture to a new period of political discord in a once-harmonious country.

Meanwhile the two main parties that have underpinned Germany’s reputation for centrist sensibleness—the Christian Democrats (CDU/CSU) and Social Democrats (SPD)—are on their lowest combined vote share since the war. The SPD having ruled out a new „grand coalition“ with her, a weakened Angela Merkel must now form a highly wobbly and possibly dysfunctional „Jamaica“ coalition with the right-liberal FDP and the environmentalist Greens, who have spent much of the past few weeks at each other’s throats.

The Christian Social Union, the CDU’s Bavarian sister party, seems to have ended its pre-election ceasefire and is now grumpier than ever, having lost about a quarter of its support ahead of a crucial state election in Bavaria next year. It is demanding that Mrs Merkel secure her right flank. Meanwhile with the somewhat Eurosceptic FDP in the finance ministry, optimistic talk of a new Franco-German axis can go out the window.

Germany is launched into a period of new political instability and just at the point when other problems are starting to grow. The mighty car industry is in crisis. The baby boomer bulge is about to retire. The infrastructure is deteriorating. Demands on Germany to do more for international security are growing. The work of integrating the over 1m people who arrived since Mrs Merkel conspicuously kept the country’s doors open two years ago is still young. Dark clouds are gathering over the country.

Germany for optimists

Germany has generously taken in over 1m people in two years. There was bound to be a reaction, not least given the way Mrs Merkel handled the decision: taking it at the last minute, without much consultation and without „rolling the pitch“ of public opinion first. Meanwhile she made basic, corrigible mistakes during her election campaign. This was intellectually lazy, offering platitudes (for a Germany in which we live well and gladly) rather than engaging in difficult debates. She underestimated voters’ discernment and paid a fair price, nonetheless doing just fractionally worse than in her first two successful bids for the chancellory, in 2005 and 2009.

In any case, the AfD’s performance—high at 13% but short of private pre-election predictions of 15% or more—was part of a broader story: the rise of smaller parties tapping into voter restlessness after 12 years of Mrs Merkel, during eight of which she has helmed flabby grand-coalitions with the SPD. In many respects this fragmentation is a fair response to a tired and platitudinous political establishment summed up by the dismal TV debate between Mrs Merkel and Martin Schulz, her SPD rival—which compared unfavourably with a more substantive debate at the small parties’ encounter two days later.

The result could even reinvigorate German democracy. The SPD is returning to opposition, where Mr Schulz’s natural pugilism will come into its own and, together with the modernising energies of figures like Manuela Schwesig, could enable the party to go into the post-Merkel election in 2021 revived and newly competitive. In the meantime it may well outshine the chaotic and infighting-ridden AfD, which will be forced by the rigours of the legislature to alienate parts of its sprawling and disjointed electoral coalition („the relationship between the AfD and its voters is weak“, notes Cas Mudde, an authority on populism). New powers and resources might give the AfD’s high command more things to fight about. And there is such a thing as bad publicity.

Meanwhile the Jamaica coalition Mrs Merkel must now build could constructively shake up Germany’s sleepy consensus: the Greens pushing drastic and welcome progress towards electric cars and renewable energy and the FDP driving advances on long-neglected subjects like red-tape reduction and digitalisation. Many of the differences between the Greens and FDP were exaggerated for the election (the leading figures of the two parties, Cem Özdemir and Christian Lindner, address each other with „du“, or the informal pronoun; they get on, in other words). And anyway, a bit of conflict in the next government may do the country more good than harm, blowing away the cobwebs.


The truth, of course, lies somewhere between pessimism and optimism. But to which is it closer? That will take some digestion. But my instinct is that the „Germany for optimists“ is the more accurate. The election result is unsettling on several fronts, deeply so where the AfD is concerned. But much of Germany’s pre-election tranquility was illusory anyway. The anger had been building for years; the AfD’s success has just brought it to the surface, where perhaps it can even be understood and addressed. Questions that were going unanswered, tensions that were going unconfronted, now brook no oversight. Den Rest des Beitrags lesen »

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The teaching of economics gets an overdue overhaul

Posted by hkarner - 23. September 2017

Date: 21-09-2017
Source: The Economist: Free exchange

Students are forced to grapple with the real world from the very beginning of their courses

ECONOMISTS can be a haughty bunch. But a decade of trauma has had a chastening effect. They are rethinking old ideas, asking new questions and occasionally welcoming heretics back into the fold. Change, however, has been slow to reach the university economics curriculum. Many institutions still pump students through introductory courses untainted by recent economic history or the market shortcomings it illuminates. A few plucky reformers are working to correct that: a grand and overdue idea. Overhauling the way economics is taught ought to produce students more able to understand the modern world. Even better, it should improve economics itself. Den Rest des Beitrags lesen »

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Bitcoin is fiat money, too

Posted by hkarner - 23. September 2017

Date: 22-09-2017
Source: The Economist: Free exchange

What Charles Kindleberger has to say about cryptocurrencies

FINANCIERS with PhDs like to remind each other to “read your Kindleberger“. The rare academic who could speak fluently to bureaucrats and normal people, Charles Kindleberger designed the Marshall Plan and wrote vast economic histories worthy of Tolstoy. “Read your Kindleberger” is just a coded way of saying “don’t forget this has all happened before”. So to anyone invested in, mining or building applications for distributed ledger money such as bitcoin or ethereum: read your Kindleberger.

Start with A Financial History of Western Europe, in which Kindleberger documents how many times merchants in different centuries figured out clever ways of doing the exact same thing. They made transactions easier, and in the process created new deposits and bills that increased the supply of money. In most cases, the Bürgermeister or the king left these innovations in place, but decided to control the supply of money and credit themselves. It is good for the king to be in charge of his own creditors. But also, it has always been tempting for private finance to create too much money. There is no evidence that money born on a distributed ledger will be clean of this sin. Den Rest des Beitrags lesen »

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Climate change: There is still no room for complacency in matters climatic

Posted by hkarner - 22. September 2017

Date: 21-09-2017
Source: The Economist

New estimates of permissible carbon dioxide emissions notwithstanding

IN JUNE Christiana Figueres, the UN’s former climate chief who helped broker the Paris agreement in 2015, warned that the world has “three years to safeguard our climate”. It was a hyperbolic claim, even then. New research makes it seem even more of one today. An analysis published in Nature Geoscience on September 18th, by Richard Millar of Oxford University and his colleagues, suggests that climate researchers have been underestimating the carbon “budget” compatible with the ambitions expressed in Paris. It may be possible for the world to emit significantly more carbon dioxide in the next few decades than was previously thought, and still keep global warming “well below” a 2°C rise above pre-industrial levels, which is what the agreement requires. Den Rest des Beitrags lesen »

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Posted by hkarner - 17. September 2017

Date: 16-09-2017
Subject: German Auto Giants Face an Existential Challenge

The Arrival of Tesla

BMW, Daimler and Volkswagen have been struggling to adapt to the advent of the electric car, held back by conservatism and internal challenges. Now, Tesla is making inroads in Germany — and the country’s automakers face an uncertain future.

At the start of this year, Karl-Thomas Neumann was planning a minor revolution. His plan was to transform German carmaker Opel, known for basic models like the Astra and the Corsa, into a purely electric brand. Electric cars were to be designed at Opel’s R&D center in Rüsselsheim, near Frankfurt, destined for the world market.

As the head of Opel at the time, Neuman was convinced that the end of the internal combustion engine was closer than many believed. He now hoped he could bring the necessary technology to Germany. Den Rest des Beitrags lesen »

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Great strides have been made against disease and poverty

Posted by hkarner - 17. September 2017

Date: 16-09-2017
Source: The Economist

A report from the Gates Foundation spells out the biggest risks to future progress

IF YOU look beyond the rich West, most of which has been in a funk ever since the financial crisis of 2007-08, the world has had an amazing run. Fully 6m fewer children under the age of five died in 2016 than in 1990. Never before have so many people been free of grinding poverty and ill health. Never have women been so unlikely to die as a result of giving birth, or to lose a baby to illness.

But the possibility that after this long winning streak humanity could be about to trip and fall is preoccupying Bill and Melinda Gates, a pair of self-described “impatient optimists” who run a foundation dedicated to solving the world’s problems. A report from the foundation published on September 13th suggests that progress on several fronts may be starting to falter. Den Rest des Beitrags lesen »

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Tony Blair has a plan to exit from Brexit

Posted by hkarner - 16. September 2017

Date: 15-09-2017
Source: The Economist

But even the former prime minister’s talent for fudging may not be enough

BRITAIN’S eventual exit deal with the European Union will not only have to be signed off by the bloc’s 27 increasingly irritated member states. It must also satisfy a home audience split between those with sky-high expectations of Brexit and those who oppose it in any form. There is a growing sense that the government—which announced this week that the next round of talks in Brussels would be delayed by seven days, until after the prime minister has made a big speech on Europe in Florence—lacks the political skill to forge such a delicate compromise.

On September 9th Tony Blair, whose knack for fiddles and fudges helped to sell peace to Northern Ireland and capitalism to the Labour Party, piped up with a plan. In a report published by one of his several foundations, Mr Blair proposed a deal that he said would occupy “the space between Brexit At Any Cost and simple reversal of the referendum”. He suggested that the EU might weaken its rules on the free movement of people—the biggest driver of the Leave vote—in order to persuade Brexit-backing Britons to switch to the Remain camp, or at least to accept free movement and thus keep Britain eligible for membership of the single market. Den Rest des Beitrags lesen »

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Why Donald Trump should reappoint Janet Yellen

Posted by hkarner - 16. September 2017

Date: 15-09-2017
Source: The Economist

Gaps at the Fed are becoming a real concern

ONE of the many fears about President Donald Trump was that he would pack the Federal Reserve with loyalists. That concern has been replaced by another: the central bank’s top echelons are unpacked with anyone. On September 6th Stanley Fischer, a seasoned policymaker and crisis-fighter, announced that for personal reasons he was retiring early as vice-chairman. That means a fourth vacancy has opened up on the Fed’s board; as a consequence, four of the 12 seats on the Fed’s interest-rate-setting committee are also up for grabs. That number could rise to five in February, when Janet Yellen’s term as Fed chair is due to end.

Mr Trump has been slow to make senior appointments of any kind. But an underpowered Fed is a particular concern. Its policies help determine everything from the health of the American economy to the price of credit in emerging markets. The best way for the president to start dealing with the backlog is to reappoint Ms Yellen head of the Fed. That might clash with his instincts. Mr Trump values loyalty above competence. Ms Yellen, first appointed by Barack Obama, is a Democrat who has pushed back against proposals from the Treasury that would weaken financial regulation. But a second term for her would provide clarity about the Fed’s future direction and independence, and make the other posts easier to fill. Den Rest des Beitrags lesen »

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Digital technology can make financial struggles easier to manage

Posted by hkarner - 11. September 2017

Date: 08-09-2017
Source: The Economist

In rich countries its potential has scarcely been tapped

BETWEEN 2011 and 2014, according to the World Bank, the number of people in the world with a bank account, either directly or through a mobile-money provider, grew by no fewer than 700m. The global ranks of “unbanked” adults thinned from 2.5bn, 49% of the total, to 2bn, just 38%. Data being collected this year are likely to show further progress, with more people who used to rely on cash and informal, often expensive, means of saving, borrowing and paying for goods and services now connected to formal financial systems.

This rapid advance is far from complete: 2bn is still a big number. Plenty of transactions that could take place more safely and efficiently by electronic means are still conducted in cash. Nonetheless, progress has been remarkable. It is largely the product of a technological revolution—the harnessing of digital technology, in particular mobile phones, to provide financial services in developing countries. The most celebrated example is M-PESA, a mobile-money service used by 27m Kenyans. Although only 2% of people worldwide had amobile-money account in 2014, in sub-Saharan Africa 12% did, half of whom were not customers of conventional financial institutions. Den Rest des Beitrags lesen »

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