German Of The Day: Späti

That means the late-night stores of Berlin. And we should have smelled this rat coming long ago.

Späti

How could these popular local convenience stores be allowed to continue running without being inconvenienced by the Berlin city government? They were allowed to open when they saw fit, depending entirely on supply and demand. You know, like in capitalism? Spätis are one of the few things that actually work in this town, by the way. Obviously, somebody had to step in here. Spätis are crying out for government regulation – for our own good.

Since a May ruling by the Administrative Court of Berlin, city authorities have fastidiously targeted family-run convenience stores such as Abels’ if they’re open on Sundays. The crackdown is part of a broader debate that’s erupting over the future of these stores — known as Spätis — that have over the decades emerged as cultural symbols of Berlin.

“Spätis are to Berlin like cafés are to Paris. It’s where all forms of life come together.”

Berlin Is The Place

The place where you don’t want thriving companies offering gainful employment and increasing property value in your neighborhood.

Gentrification

I get it. It’s about gentrification again. But the problem here isn’t the evil capitalist rich swooping in to speculate and force the poor out of their neighborhoods. The problem is a classic case of “I’m from the government and I’m here to help.” The German government in general and the Berlin government in particular have been “helping” German renters for decades in ways that have discouraged Germans from owning property of their own (the vast majority of Berliners pay rent). Then when reality finally strikes (supply and demand = rising rents) the same politicians can’t help these renters anymore and leave them high and dry with rents they can no longer afford to pay. Ain’t nothing new.

Kreuzberg has long been one of the most affordable areas of Berlin, making it a haven for students, immigrants, artists and activists, a hub of culture, night life and left-wing politics. But in a pattern repeated in similar neighborhoods in many of the world’s wealthiest cities, affluent people have moved in, too, in recent years, bringing with them the social tensions of gentrification.

“They push out the people who were here before.”

German Of The Day: Fiasko

That means fiasco. You know, like the state-ordained Energiewende?

Wind

Berlin likes to think of itself as a green-energy example to the rest of the world. It sure is.

It makes you wonder if there’s any form of energy-price signal that governments won’t ignore. Germany’s 16-year-old Energiewende, or energy transformation, already has wrecked the country’s energy market in its quest to wean the economy off fossil fuels and nuclear power. Traditional power plants, including those that burn cleaner gas, have been closing left and right while soaring electricity prices push industries overseas and bankrupt households. Job losses run to the tens of thousands.

But now Berlin is going to fix all of this – again.

Derzeit gehe der Ausbau zu schnell und werde zu erheblichen Mehrkosten bei der Umlage zur Ökostrom-Förderung führen.

Same Old Problems Caused By Same Old Solutions

Rent control still rocks. Just ask the people looking for a place to live in Hamburg, for instance.

Rents

The German government’s Mietpriesbremse (rent control plan)  – it’s “sozial,” as in “for free”  –  has alarmed landlords who are now raising rents even higher than they already had been, “vorsorglich” (preventitively).  Imagine that. Bad landlords.

It’s always the same old thing. There is a shortage of apartments. This increases the rents. New apartments are needed. That is why the government steps in “to help” by imposing price controls called rent controls. That is, the government ensures that the shortage will remain by making new housing construction unprofitable for those who would otherwise build the new housing (I know, profit is a dirty-ugly-yucky word but we haven’t found a better one yet). The shortage is sustained and increased by rent control, the supposed solution.

But don’t worry. Elections will come around soon enough and the same politicians who fixed that first problem will have new proposals for fixing the one that followed, all inexplicably like. And they will get reelected – by the very same people they screwed in the first place. Now that’s what I call sozial.

“Durch die Ankündigungen ohne konsequente Umsetzung hat die große Koalition die Kosten immer wieder angeheizt.”

More Benevolent Über-Government Intervention In Action

It goes like this: An EU regulation forces Osram and the rest of the industry to shift from traditional light bulbs to light-emitting diodes. They are smaller, more energy-efficient, have longer lifespans than traditional bulbs (except that they don’t really), are very much more expensive and must therefore be forced down the consumer’s throat and, well, everybody here hates the damned things and wants their old light bulbs back.

Light

The benevolent part? Now 8,000 Osram workers lose their jobs because of this.

„Durch die EU-Verordnung ist das traditionelle Glühbirnen-Massengeschäft von Osram weggebrochen. Dort war Osram führend.“

Black Workers Are Everywhere These Days

No, not Afro-American workers. You know, Schwarzarbeiter (illegal workers).

Black

And they’re everywhere all over Europe these days, although Germany is the champion here again too, as usual.

Eight million Germans are working on the black market as we speak, so-to-speak, generating about 13 percent of the country’s economic output. And loving it, I hope for them, because many of them just don’t seem to have any choice in the matter. Nobody will hire them otherwise:

Punitive tax regimes, increased labor market regulation and a growing lack of trust in governments are causing many Europeans to abandon formal employment and enter into the murky, illicit world of shadow economies worth billions of dollars.

Unternehmen und Arbeitnehmer setzen auf Schwarzarbeit, dadurch entstehen zwei Drittel des Schadens. Für das weitere Drittel ist verantwortlich, dass viele zu geringe Einkommen und Erträge ausweisen.

BEA-EADS-RIP

Massive political resistance or pure economic theory? Or both?

“From an economic perspective, this should of course be avoided. Pure economic theory would say that the state should stay out of it and leave the market alone.”

“The massive political resistance was ultimately too great to overcome.”

Circumcision Decision Revision

Not that there was ever much doubt about it. That it would come to a big backpedaling Aktion, I mean.

The German government says Jewish and Muslim communities should be able to continue the practice of circumcision, after a regional court ruled it amounted to bodily harm.

That’s what can happen when you have that pressing need to fix things that aren’t broken.

“Circumcision carried out in a responsible manner must be possible without punishment.”

State Subsidies In Action

This would be funny if wasn’t so funny. Where do we want to go broke today? Q-Cells is now the fourth major bankruptcy in the German solar industry sector of late and although they are sure to have made a lot of dumb mistakes themselves, they certainly couldn’t have gone bankrupt “this well” without the German government’s relentless and merciless help.

It’s all about drugs, subsidy drugs. And once these subsidy drugs had been administered – in this case promoting wonderful and environmentally friendly solar technology for the good of all German-kind (in a country where sunshine is still a news item) – most of these companies failed to wean themselves from their reliance upon them and made some bad business decisions as a result (decisions they wouldn’t have made if they had been clean).

In the meantime, Asian competitors in the real world learned to produce the solar technology cheaper (as usual) and, just to add a little insult to injury here, it turns out that the German government helped the Chinese solar industry with financial aid , too. Only they did this better than they did in Germany.

Then Berlin finally got tired of shelling out all this money back home and started reducing the dosage faster than the addicts could adapt to and, well,  the rest is history, or Geschichte, if you prefer.

So what’s the moral of the story? Remember those nine most terrifying words in the English language: “We’re from the government and we’re here to help.”

Somehow the German government must have lost sight of the fact that its policy in fact encourages the demise of Germany’s own solar industry. The development bank of the government-owned KfW group of banks supports China’s green industry with low-interest loans. Ironically, the German Investment and Development Company (DEG), also a subsidiary of KfW, is one of the financial backers of Chinese industry giant Yingli Solar.