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My recent economics studies
My own way of understanding money
The recent Euro-crisis has made me spend some time in studies, to try to understand what it’s all about. Starting with the present situation, I felt very uncomfortable with the prospects of Germany taking on liabilities for other countries, although I personally have nothing to lose and very little to fear. So I’ve listened to some learned professors on youtube, on how this Euro-crisis has come about.
As I read and listened, my jaws dropped, and dropped, and dropped some more. Join me in a recap of what I found.
How money works
I was aware of the fact that all assets are pushed out as loans in order to get served with interest. That’s how ‘money works’. And I also knew that wealth had been on the increase in Germany, and I thought that’s how we got into the situation of increasing debts, by all that wealth being pushed out as loans.
However, I learned one mind-boggling fact: banks loan out money that they don’t have. It’s a trick of book keeping. In finances, a debt claim is just as good as the money itself. Like if I want to buy something and tell the grocers’ that I haven’t got the money, but here’s an invoice I sent to my customer a month ago and that guy’s supposed to pay and don’t you see, it’s as good as the money itself. Because when my customer pays, the money will turn up. Eventually.
So now watch this: the bank creates an entry that they loaned you money, and to back up this loan with something, they don’t take money that they have from someone who deposited their savings. No, they enter a claim against the repayment of your loan and treat it just as though it was as good as money they have. Like I did at the grocer’s. So two minuses make a plus, if you just keep your accounts in separate books.
The nasty thing about all of this is, that once you’ve repaid your loan, their claim against you is settled, that means they are left with … nothing. Zero, Zilch, Naught. No more interest coming in. So they aren’t the slightest bit interested in you paying back your loans. For as long as you owe, they’ve got those debt claims, which hold value, as long as you owe and they’ve got your interest.
On an international level, when countries grant loans, they can create that money from their reserve banks. Which wouldn’t make sense in the Euro zone. Because every member state who needs money has a reserve bank and can issue Euros themselves. Of course, money creation is supposed to be closely monitored and heavily restricted, but these restrictions haven’t been enforced very well. Everybody turned a blind eye hoping the problem would go away. With some member countries increasing their Euro amounts, to repay their debts, the Euro inflates. When an item (the Euro) is well supplied, its value drops. Then some countries step in and buy the extra Euros. No, that’s stupid, you can’t buy money. That’s how schizophrenic you get when money is both goods and means of exchange. They basically absorb it and put it down a black hole where it disappears. It’s just an entry in the computer, remember. So once there are less Euros around, their value increases again, as long as that government doesn’t get the idea to take out those Euros from the black hole. But you bet they act as though they had real value in their safes. Although they can’t spend it. That’s Fiat Money. You believe it’s there until you try to spend it.
So I came away from the idea that debts are evil and immoral. Although I still wouldn’t want to have any. My aversion to debts is the reason for why I’m poor. Ha ha, because all my life I didn’t to spend money I didn’t have. Wealth is the other way around. You get rich by spending money you don’t have. Because you can’t get that kind of money unless you had an idea of how to deal with a loan, that is some assets to back up a loan. Assets can be invented, so to say, but I’m not financially creative enough. It’s my choice, not my good character. Instead of wealth, however, I’ve got the creative gift of doing without. Which might come in handy.
The Euro-Crisis as I see it
So if the Greeks took on all those loans, who pushed out all those loans? Apparently, it was us, the Germans who were at fault. We exported plenty and imported little. Which helped us to have a teeny-tiny inflation rate and abroad, our goods sold well. Apparently we overproduced, oversaved, we were overly eager to strive for success. There is just something wrong with this picture: living here in Germany, it didn’t feel like it. In fact, during the last ten years, life here inside this fancy economy has taken a downturn, to the point that people have been quite scared in their outlook of the future. Small-scale businesses closed by the droves and lining former bosses up at the employment agencies.
Professor Hans-Werner Sinn gave a different meaning to excess exports, or rather, the lacking imports: the German people didn’t spend enough. Either they didn’t have the cash, or they reacted to the fearful atmosphere by stacking up their cash in their bank accounts as savings, adding to the amount of money that had to be pushed out as loans. I think on top of the troubles and reductions in everything Germans saved to the tune of 1800 Euro a head in 2009. I mean, it drives the tears to my eyes, thinking of the reduced work and cuts in pay the population took for years, most of them without complaint, just hanging on. Yes, of course, they were grateful just to have a job. Lining up at the unemployment office is social suicide. And now Germans are collectively to blame that we incurred an export plus? And as everyone can guess, the liabilites we’re supposed to take on in return will end up on the working people/taxpayer again, not the elite who drove those exports.
Why we didn’t spend all these years
So I started to wonder why actually the climate in Germany was so depressing, when we were doing just fine, globally? Because some ten years ago, we were served Chancellor Schröder’s Agenda 2010. We were told that the social welfare and labour costs had to be reduced in order to be globally competitive or the industries would move to cheaper countries. From about 2003 onward, the country was in shock at the fundamental changes in welfare and the harsh control the administration took of laid-off workers and shut-down entrepreneurs. In order to receive any benefits at all, a person has now got to be prepared to disclose all of their private details bordering on a declaration of bankrupcy. Common kindness, generosity and hospitality are ruled out, once you’re on welfare, as they would be indicators of undeclared income. Any detail withheld is considered criminal fraud. People have to be available by phone and by post for job offers at odd days and short notice.
German law is very systematic. There is no leeway for administration to interpret or adjust it. If individuals in the administration sympathise with the population, they ultimately risk their job. There are quotas in place, or competition between departments to produce desired results. Although the people have a right to information, in practise, the administration do not volunteer that information unless they’re asked the appropriate question. An 18-y-o male turned loose without guidance is bound to end up with a police record by the time he’s 23, for being unable to adequately handle the mindless paperwork and stipulatations the administration turn out.
When the Agenda 2010 took full swing, Germans were so depressed that by end-2005 Chancellor Merkel launched the ‘Du bist Deutschland‘ campaign. Nationalist feeling had long been an embarrassment to the population and under the circumstances, the intentions of the countless ads placed in papers and on prime time TV were obviously cheap. A few months later German morale was boosted with a Das Wunder von Bern – broadcast and director Sönke Wortmann announced that he would turn the 2006 Football championship into a similar movie Deutschland ein Sommermärchen, in essence, raising hopes that the Bern miracle would repeat: football as therapy. Germans responded with the most enthusiastic football hype in history. The German flag was everywhere. In fact, the industries had not anticipated the demand and the country ran out of football merchandise weeks before the event.
What was behind the Agenda?
I went back to find out more about the Agenda 2010 and was startled to find out that in 1998, shortly after taking office Chancellor Schröder had been presented with a paper by Bertelsmann‘s Reinhard Mohn. Schröder implemented the Agenda pretty much unchanged. Mohn was a libertarian and believed in minimising government administration and maximising economy freedom. At the same time Germany saw a major overhaul of privatisation of public services. When Angela Merkel took office she thanked Schröder for his courage to see the Agenda through. It cost him his post.
Bertelsmann runs a host of TV Channels, publications and (savour this) a personnel leasing agency that is aimed at providing government administration staff. No wonder Merkel had a media campaign rigged up in no time and had no qualms to rip through her administration. They can be replaced at any time.
Incidently, Liz Mohn, the 5th and final wife of Reinhard is bosom friends with Merkel. So is Friede Springer, of Bild’s Axel Springer, who was one of the most powerful media tycoons. Along with Merkel, they form Germany’s triumvirate, no doubt the driving force behind Germany’s recent copyright issues. Both wives got to be where they are by starting out as nannies in the respective households and holding out for years as lovers, with children. In fact, in high-society at first and later in high-politics it became acceptable, if not the norm to replace the first wives by younger, more pliable, PR-worthy ones. It might be easier to count the men who stuck with their wives. Of which Helmut Kohl was one. Which might explain why he never sought the company of the rich and influential elite. And why the Agenda had to wait until Schröder was in power.
Why the Euro?
Going back even further, apparently Kohl got us into the Euro, a concession he had to make to France’s Mitterand in order to re-unify the two countries. Up until 1990 the Federal Republic of Germany had not officially regained sovereignty after WW2. It was still occupied by the allies, Britain, US and France. France’s fear of a strong Germany goes back to 1871, when the German Empire was founded under Emperor Wilhelm I, after he waged a war on France. Before that, Germany was not a national state. Incidently the ideas of a social welfare state and the deutschmark currency date back to that time as well. And apparently it was their destiny to fade out together 120 years later.
So you basically have an ill-advised Euro-currency, brought on by old external fears that Germany might be too strong and the internal concerns of the German economic elite that the re-unified country might be too weak to return the optimal profit on their assets. For some we work too hard, for some we save too hard, and now we’ll have to pay even harder.
Sich selbst in Szene setzen – Presenting yourself
| Vor einiger Zeit traf ich einen Mann, der ‘in Frage kam’. Beim ersten Kaffee wollten wir uns etwas näher kennenlernen, und zu meinem Entsetzen stellte ich fest, dass ich kaum bereit bin mich im Privatleben darzustellen. Ganz einfach deshalb, weil ich auch nicht dazu bereit bin, eine solche Darstellung auf längere Zeit mit dem passenden Hintergrund zu verdichten. Im Berufsleben ist meine Darstellung zeitlich so wohltuend scharf begrenzt.Er hatte Erfahrung mit seiner eigenen Inszenierung, brachte aus eigenem Impuls all die Informationen ein, die Frauen interessieren: Familienverhältnisse, Fitness, berufliche Aussichten, Hobbys, religiöse Ansichten, seine Lebensgeschichte.Was mir da alles durch den Kopf ging: ich müsste meine Essgewohnheiten umstellen, mir eine Art Lifestyle zulegen, einen modischen Geschmack, Vorlieben und Abneigungen zu allem Möglichen und Unmöglichen, und diese dann auch durchsetzen (nichts ist lähmender als ein ‘Ist mir egal’), ich müsste diesem Mann Gelegenheiten schaffen mir zu gefallen. (damit er seine eigenen Ungereimtheiten wieder gutmachen kann). Kurzum, ich müsste Geld (und schlimmer: Gedanken) an Fragen verwenden, die meine Lebensqualität um keinen Deut verbessern. Und obendrein dürfte er von meiner muffeligen Einstellung nichts bemerken.
Was dabei für mich rausspringen könnte, Sex und vielleicht auf lange Sicht finanzielles Teilen, (ungelogen, so denken Frauen) würde mir unter den Umständen wenig Freude machen. Also ließ ich die Inszenierung sein und fand mich noch am selben Nachmittag mit einem freundlichen Winken an der Straßenbahn abgestellt. Jeder inszeniert sich, hat schon lange und unermüdlich an einem glaubwürdigen Abbild seiner selbst gebastelt. Das ist Teil der üblichen Sitten und des allgemeinen Anstandes. Hier ist der öffentliche Raum so wohltuend: nicht was man ist, sondern dass man etwas darstellt, sichert einem Menschen einen Anteil. Am besten sieht man das an Senioren, die sich für den Sonntagsspaziergang sorgsam in Schale geworfen haben, und somit genau soviel gelten, wie ein poppiger Mountainbikefahrer in der Blüte seiner Jahre. Die Wissenschaft geht inzwischen soweit, dass es gar kein Ich gibt. Wir wählen nach Bedarf – in den jeweiligen Situationen – aus unserem Repertoire verschiedene Persönlichkeiten aus, Konstrukte, die wir dann möglichst glaubhaft präsentieren. Man trete nur mal während einer Party auf die Terrasse, um die frische Nachtluft zu genießen. Drinnen und draußen ist man jeweils ein anderer Mensch. Es it eine Leistung unseres Gehirns, dass wir das Ich als kontinuierlich erleben. Ist es denn angebracht überhaupt von Authentizität zu sprechen? Geht es denn nicht eher um ein hohes Maß an Glaubwürdigkeit? Nun kommt es gar nicht darauf an, ob man das Ich für gegeben nimmt oder nicht. Die inneren Abläufe nehmen ihren Lauf. Somit ist die eigene Internetpräsenz lediglich eine weitere Persönlichkeit in der Palette. Vielleicht stört uns daran nur, dass der konstruierende Mechanismus zu offensichtlich ist, über den wir uns sonst gerne hinwegtäuschen: die Inszenierung. Warum geht dann der Deutsche so zögerlich auf die Sozialen Medien zu, ist er doch bereit sich in anderen Lebenslagen bewusst oder unbewusst zu inszenieren? Das nervt:
Und unterschwellig fühlt jeder, was Harold Jarche hier so präzise ausdrückt: Wer zum ersten Mal an die Sozialen Medien herantritt, ist wie ein Erwachsener beim Sprachenlernen. Man kann nicht mit den gleichen ausgefeilten Gedankenmodellen und -bildern der Erstsprache arbeiten. Zudem wird der eigene Gedankengang von der Ausdrucksweise und der Kultur der neuen Sprache geformt, wenn man ein höheres Niveau erreicht hat. Dies ist der eigentliche Veränderungsprozess, der von den Sozialen Geschäftsmedien ausgeht; der Mensch denkt anders. Die Sozialen Medien erfordern zunächst eine Bereitschaft zum Umdenken und erbringen dann ein neues Denken. Wir wissen inzwischen, dass es buchstäblich an die Substanz geht; das Gehirn wird neu verdrahtet. Und bevor man sich’s versieht, hat man mit dem bisherigen sozialen Umfeld nichts mehr gemeinsam und hat sich in eine Welt gestürzt, die als soziales Netz noch nicht ausgefeilt ist. Aber es ist nur eine Frage der Zeit. Hierzu Derek Sivers kurze Darstellung: |
Sometime ago, I met a man who might have been ‘Mr. Right’. We wanted to get to know each other a bit over a cup of coffee, and to my dismay I discovered that I am hardly prepared to present myself in a private way. Simply because I haven’t what it takes to support such a presentation with the appropriate background. On the job, luckily presenting myself is reduced to a distinct time frame.He was experienced in presenting himself. On his own accord he mentioned all the points a woman would be interested in: his family, health, professional plans, hobbies, religious views, his life story.And oh, the things that went through my head: I would have to change my eating habits, acquire some sort of lifestyle, fashion taste, likes and dislikes concerning a bunch of inconsequential things. Not only that, I would have to assert them (‘I don’t care’ just won’t do); I would have to make ways for him to please me (in order to make up for his own idiosyncracies).
In short, I would have to spend money (and worse: thought) on matters which don’t contribute to the quality of my life. On top of it all, he shouldn’t ever notice my grumpy attitudes. Whatever were in it for me – sex and perhaps longterm financial sharing (honestly, that’s the way women think) wouldn’t be worth the trouble. So I refrained from staging my own self and in no time I found myself left at the next bus stop with a cheery good-bye. Everyone is staging their own presence and has spent considerable time tinkering to build a credible representation. It’s part of decency and convention. This is where the public space comes in so handy: you share in it, not by who you are, but by what you present to be. It’s easily seen when senior citizens dress up carefully for their sunday walk and command as much significance as does a sturdy youth on a mountain bike. Science has reached a point saying that there is no ‘I’. According to the need and the respective situations we choose from a range of personalities that are within our repertoire. These are constructs which we make an effort to bring across realistically. For example during a party night you may step on the terrace to enjoy some fresh air. The person you were inside and the one you’re outside are substantially different. The fact that we continually experience ourselves as one being is due to a smooth performance of our brains. Can we really be authentic? Or aren’t we rather operating with a high level of credibility? It doen’t matter at all whether one takes the ‘I’ for real or not. Inner processes take their course and one’s presence on the net is just another personality one among many. Perhaps the constructing mechanism shows far too plainly and crudely, whereas in everyday life we love to deceive ourselves about the fact that we’re performing. So how come Germans are so slow to embrace Social Media, when they have no problems whatsoever presenting themselves in other situations? Here’s the problem:
Everyone uncannily feels what Harold Jarche expressed here: Those who come to social media for the first time are like adults learning a new language. They cannot start with the same advanced mental models and metaphors they may have in a primary language. Furthermore, once they get to an advanced level in this new language, its idioms, metaphors and culture may have changed how they think in that language. This is the real change process enabled by social business; people will start thinking differently. Initially Social Media calls for mental flexibility only to eventually change our minds. By now we know that our substance is affected directly; the brain is rewired. And before you know it, your social ties are inadequate, if not obsolete and you’ve plunged into a world that hasn’t got the scope of a functional social net yet. However, it’s just a matter of time. Watch Derek Siver’s short explanation: |
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Lists, How-To’s, Surveys — Whaddya know?
A few years ago I came across an article How to write compelling headlines. Five simple suggestions.
The article itself was – naturally – a compelling example. How-To’s and Five Steps To’s are most appealing to readers. After wasting a lot of time rummaging through such posts on blogs, social media and news, I’ve taken a little time to think.
Lists come across like cooking recipes, giving the impression that if you only follow through, you’ll achieve something close to the desired result, usually depicted in glossy, mouth-watering images. That’s what a good recipe has got to do for you. And since the process is familiar – even if only moderately successful – we quickly rely on the mental effort that others have expended on our behalf. The really nasty implication here is: if you don’t achieve the desired result, something must be wrong with you.
How to get something done is an even more subtle approach, implying success with the implicit idea that certain procedures can be automated. Yet, how-to’s are faulty and incomplete expressions. The full content would read: How you can get something done. Come to think of it – - rather presumptuous. To think that someone else would tell me what I can do…
No, that isn’t the true content of that faulty statement. It really should read: How I got things done. But such a phrase would invariably make the reader come to a logical conclusion: This is true for you, in your situation, under the circumstances you were in at the time. But I’m a different person in a different setting. A conclusion the writer would want to avoid by all cost, because it won’t get him large readership. People recommend and share what seems to be relevant for them.
Now people don’t write lists and how-to’s without some expertise. Lately, with the vast potential the Internet offers, more and more surveys and polls are taken. Naturally those must be valid for a majority, that’s how they are laid out to be. Exactly… have you ever taken part in a survey and the questions seem to give you rather narrow options of expressing our opinion? In a survey, queries streamline people’s opinions as to facilitate the evaluation of the whole darn thing. Data is the raw material for statistics, but the real work of art is the sense-making of it all, in the process of which reality inevitably gets warped.
Let’s say, lists, how-to’s and surveys are the best we can do in the way of making statements that are possibly valid for many folks. But let’s not cover up the fact that we’re talking about approximations that are far from fool-proof.
Google drawbacks – Google Nachteile
| The drawbacks of Google Google is working to create the most comprehensive user platform ever. Some folks have raised concerns about how they do this. Basically, when you sign in to Google, your movements on the internet get tracked and then used by algorithms to present you choices that are based on your previous preferences. Two major issues are connected with this:
A very fine explanation can be seen in this TED video: Beware online “filter bubbles” Of course, there is no denying that these issues exist, and they seem to touch on a person’s innermost ethics. That is if a person values privacy and free will above opportunities to connect and interact. Note that while I’m talking about facts, these issues really are about emotions that run very deep in the Western idea of human values. What I personally don’t like about the privacy and free-will stance is that it completely ignores facts about human nature itself. The last decade or so of brain studies have brought up some embarrassing details. |
Die Nachteile von Google Google hat die Absicht, die umfassendste Nutzerplattform aller Zeiten zu schaffen. Manche Leute haben Bedenken über die Vorgehensweise. Ganz elementar: wenn man sich bei Google anmeldet werden alle Bewegungen im Internet mitverfolgt und dann von Algorithmen verwendet um dem Nutzer eine Auswahl von Inhalten zu unterbreiten, die auf die vorgegebenen Vorlieben aufbauen. Da gibt es zwei Hauptbedenken:
Ein sehr schöne Erklärung kann man in diesem TED Video sehen: Beware online “filter bubbles” (mit deutschen Untertiteln) Natürlich kann man nicht leugnen, dass es diese Probleme gibt und auch nicht, dass sie an die persönliche Ethik rühren mögen, wenn denn jemand Privatsphäre und Willensfreiheit höher wertet als die Gelegenheit sich mit anderen zu verbinden und auszutauschen. Man bemerke, dass die Problematik nicht in den Tatsachen liegt, sonden in den Gefühlen, die sie in westlichen Vertretern der Menschenwerte auslösen. Ich persönlich habe ein Problem mit dieser Wertigkeit, da sie gewisse Tatsachen der menschlichen Natur völlig ignoriert. Die Gehirnstudien der letzten zehn Jahre haben da einige eher ungelegene Einzelheiten aufgezeigt. |
| These studies have shown that indeed before any information ever comes to our attention it is already pre-processed by neural paths in the brain which in turn are again created by our previous preferences. Decisions can be traced as neural activities in the brain up to ten seconds before we consciously think about them. This is sort of embarrassing news, because it raises a whole slew of questions about how we’ve handled the human condition so far.I dare say two things though: in my opinion, Google is so successful because it imitates our brain circuitry. I dare say that they are not the only ones, but they seem to be the only ones willing to disclose the inner workings of how they do what, which is by far the best deal of what we can get at the moment: one great learning process about our own existence. |
Diese Studien zeigen auf, dass die Informationen, die bis in unser Bewusstsein vordringen tatsächlich im Voraus manipuliert wurden und zwar durch Neuronenwege im Gehirn, die auf unseren vorhergehenden Vorlieben basieren. Entscheidungen können bis zu zehn Sekunden als Gehirntätigkeit aufgezeichnet werden, bevor wir bewusst an sie denken. Das bringt uns in Verlegenheit, denn da werden eine ganze Reihe von Fragen aufgeworfen, wie wir denn bisher das menschliche Sein Hand hatten.Zwei Dinge wage ich zu sagen: meiner Meinung nach hat Google Erfolg, weil ihre Vorgehensweisen den Kreisläufen in unserem Gehirn entspricht. Auch meine ich, dass sie nicht die einzigen sind, aber immerhin die einzigen, die anscheinend willends sind, die Einzelheiten zu veröffentlichen, wie sie was machen. Das ist in etwa das Beste, was wir im Moment angeboten bekommen: ein einziger großer Lernprozess mit unserer eigenen Existenz als Thema. |
Life after Death
Ideas, thoughts, character, memories are the conclusions of our minds.
Usually, what we hold true and adopt into our personality are ideas that were passed on to us by these mechanisms.
But the more we uphold our individual personality, the more we’re bound to walk into a trap. It is when we abandon the concept of individuality, of which life after death is merely an extension, that we are free to shape our lives whichever way we want.
It’s like a fun game. All games are designed to absorb us to the full. And still most games are better played when we don’t forget that they’re just games.
Our ideas, thoughts, character and memories live on in as much as we pass them on to our children or peers, just as we have acquired them from our parents and peers.
The fact that we perceive these ideas, thoughts, character and memories in that particular combination to be us, is an achievement of our memory towards a certain purpose.
Whatever we think about life, it’s a model. We need models, because we’re sense-making creatures, not because there is a meaning to life.
So I’m free to adopt a model that I feel works best.As an exercise, walk into an old-folks home and watch people’s memories fade away. Their personality fades. And yet you can’t say that the person is gone. Just the same as a baby, that hasn’t developed a personality yet, you can’t say that he/she is not a person. In my opinion we need a life model that includes these and other fringe-type of situations (mental illness, coma, paranormal, etc)
The latest research simply shows that need for a better model. The more we know about the brain, the more we have to adapt our models. And I’m not convinced that the model of individuality serves towards our happiness. It does serve towards our survival, that is sure. That’s why, when you touch on it, people instantly relate such a move to death and yearn for a life beyond.
One question…
As long as I can think back, there was only one subject I ever pursued – with persistent commitment. Yes, there were other pathways, but they were picking-daisies kinds, never holding my attention for long. Nothing could quench that quest not even family and children. While I had a fabulous go at it, I was running a comprehensive experiment to supply me with data about my one and only question: what is life?
There is a dilemma though: how can you objectively look at life, while you’re alive? Yet what other chance have I? Or rather has my mind?
To life itself my being alive or dead is a negligible factor; it’s my mind that is making the difference and wants to understand life.
Obviously, the experiment isn’t over until I take my last breath, but I can always give an update as to the progress…
So the latest update is:
Ta Taaaa:
There is no life except in the body. All reality is in the body. And when you consider that the body functions without the mind most of the time, then the notion that life is in the world must be a construct.
It seems to me that the mind notoriously disrespects the body and there for creates reasons of its own. Perhaps it’s merely oblivious, but the mind has the gift of focusing on what’s important.
When the body is healthy the mind isn’t aware of it, turning outward to the world.
Maintaining awareness of the body is living, and living well.
