It’s impossible to come to Berlin and not be filled with an enormous sense of history. Everywhere there are echoes and reminders of fascism, not least because the Germans have, admirably, come to terms with their own past and made their repentance extremely public and thorough. Public museums, all free, document assiduously the rise of Hitler, the terror of the 1930s followed by the total war of 1939-1944, culminating in Berlin’s Götterdämmerung in 1945.
United Germany is now the powerhouse of Europe, the one true European leader. Yet despite the wealth and the prowess, when talking to Germans you get a pervading sense of crisis here.
The refugee crisis is placing great strain on German politics because the notion that Germany will receive every migrant who wants to travel from the Middle East is beginning to scare the average German. Taxi drivers here, mainly from Turkey, claim that right now it’s not a problem, but it may well become one if the numbers continue to rise.
This is happening at a time when the German stock market has fallen by 30pc from its peak because of worries about the global economy and global demand. Germany is the world’s best exporter and therefore it has most to lose from a global slump. Add to this the Volkswagen debacle that has undermined the ‘Made in Germany’ brand for quality and honesty.
Meanwhile, Germany’s relationship with Europe is coming under strain – and it is a strain that will have significant implications for Ireland in the years ahead.
The first issue is the euro. As Europe’s growth rate falters, the ECB will again cut interest rates to further, negative territory.
Europe is now gripped with deflation and the ECB has to respond. Germany insisted that the rest of the Eurozone couldn’t raise government spending to get out of the recession, so interest rates have to be cut aggressively. This will send the euro lower, which should benefit German exporters – but the hard-money fanatics of the old Bundesbank will find it very hard to bear. At the moment the debasement of the euro is not a big deal to the Germans, but if it continues, there are plenty of people here who will be uneasy.
The other fear the Germans have is that the euro crisis will reignite, not in Greece but in faltering Italy. Germany could handle Greece, but Italy is a different story.
Furthermore, Germany is now at loggerheads with its former allies in Poland and the other central Europeans who don’t want migrants, but it looks like the Germans want everyone to take their share.
Indicative of the neuroses in Berlin are reports in the local papers that Angela Merkel is suggesting that Nato get involved in the refugee crisis in the Aegean.
All the while the EU is taking aim at Ireland and our tax rates, particularly the test case over Apple. The German government wants Apple to pay its taxes simply because Germany, with its massive capital base, has most to lose if the likes of Apple can divert cash through Ireland and avoid taxes. What happens if some massive German companies ‘do an Apple’ in Ireland? Germany will lose tax revenues. It’s not hard to see what side the Germans are on.
Talking of taking sides brings me to our election.
The issue of our relationship with Europe and what choices we have to make in the next Dáil are quite stark – but Europe will hardly be mentioned in the debates.
For years, the EU has been a simple deal for us. It was more or less win-win. We took their money and outsourced critical thinking to Brussels, pretended there were no conflicts of interest and just played the game of being good Europeans without ever really asking what that meant. We sent MEPs to ‘the continent’ and then forgot about them and adopted a European currency without even a debate.
However, with Germany now looking at our tax base through its collection agent, the EU Commission, and the Brits possibly on their way out, the Irish in Europe becomes a more complex issue. What is it for us now, this EU? If the Brits leave, we could find ourselves having to obey Italian, German or Spanish-imposed trade barriers on our nearest neighbour.
The solutions are not easy.
We can’t follow the Brits out the door immediately – because to do so would mean that the past 100 years, all the 1916 stuff, was actually a cruel joke. By leaving with the Brits we would be admitting that we are, and always were, essentially a satellite of London. However, to career off in a continental orbit, pretending that we are not an Atlantic people with deep cultural, familial and economic links to the Anglo/American world, would be financial suicide.
There are two Irelands: commercial Ireland and bureaucratic Ireland. For many years, their interests were aligned. The commercial angle revolved around Ireland having trade links with the EU but with Anglo/American tax policies for capital; the bureaucratic angle involved being pro-European. They complemented each other. Bureaucratic Ireland wanted to curry favour amongst Europeans at the top table, while never really standing up for the citizens of the country. So when, for example, the citizens voted against EU treaties, we were admonished by bureaucratic Ireland to vote again.
This is not the stuff that democracies are made of.
But now, for the first time in years, a conflict exists between commercial Ireland and bureaucratic Ireland.
Commercial Ireland, the Ireland of business, might have to, very quickly, exercise some critical thinking and restraint over bureaucratic Ireland.
Commercial Ireland lives in the real economy, the one that buys and sells, makes profit, employs people, pays wages and is largely held in some way responsible for what it does.
Bureaucratic Ireland inhabits the never-never land of the Dublin-Brussels corridor, which is entirely populated by civil servants and technocrats who have no reason to worry about commercial Ireland because their wages don’t depend on commerce. There is no relationship between competence and reward in bureaucratic Ireland. Consider the Central Bankers, Department of Finance heads and regulators whose incompetence helped destroy this economy. Who lost their job? Did anyone lose pensions? No, they were largely rewarded for their failures. At least the politicians were voted out, but the top civil servants remain unscathed.
Now we should be making hard decisions. Outsourcing critical thinking to the EU is no longer an option.
In the years ahead, we need a new plan, which deals with a different world – and if these two sides of the Irish ruling elite have to clash, so be it. The battleground may well be Apple and test cases like it.
With that in mind, as the election looms and we gear up to celebrate our own revolutionary dead in Ireland, here in Rosa Luxemburg Platz in Berlin the words of that German 20th-century revolutionary reverberate: “Freedom is always and exclusively freedom for the one who thinks differently.”
And there was me thinking it was Steve Jobs who urged us to “think different”?
Whether the advice comes from a communist revolutionary or a commercial revolutionary, the message is the same. A time comes for hard thinking. For Ireland, that time is now.
So, for discussion:
– Leave the Euro
– Ireland issues its own ‘hard philosophy’ currency
– 2 taxes only, totalling a 25% effective tax rate:
– 1 ‘central’ flat tax rate of 20% split between basic income (15%) and Government costs (5%)
– 1 ‘county’ tax of 5%
– Guaranteed income based on tax collected for all citizens
– Remove HSE, & all other welfare types
– Make health insurance mandatory
– Roads, Schools, and Hospital infrastructure costs [not labour and services], subsidised based the county tax rate
Thoughts?
Probably the best article ever written by David for Indo (my hitherto favourite was the one about the Spanish Empires’s gold). Obviously, there are two schools of thought whether we are in danger of deflation or hyperinflation (or mine – first deflation, then hyperinflation), but I am not going to break my lance for it – dude, that was awesome. “What happens if some massive German companies ‘do an Apple’ in Ireland? Germany will lose tax revenues.” Here is what argument to use against German hypocrisy. According to 50 Shades of Tax Dodging report, Germany is the second biggest tax… Read more »
http://www.wsj.com/articles/SB122531242161281449
I lived in Berlin in 1984,when the wall was up and checkpoint charlie was the route to East Berlin.The city was in black and white to the East and in Technicolour to the West.The Germans I worked with were less than positive towards the Turkish ‘Gastarbeitern’ that worked throughout the city,driving taxis,running (fab) kebab stalls,cleaning,driving buses…doing the jobs that the germans were reluctant to take on. I was consistently bemused by the constant references to Kreusburg,the suburb in West Berlin which had become something of a Turkish ‘enclave’ (read ghetto)in the city. Thirty years on I can’t help but wonder… Read more »
Interesting article David,
I agree that the Brits leaving the EU would present major questions for the Irish as to which sphere we really belong in. I would be very interested in getting your views on what you see as the implications of a Brexit both for Ireland, the UK and the EU.
It’s always amusing to see the Irish who struggled so hard to get out of the British yoke, then meekly accept a German one.
The Scots are having the same debate and will no doubt head down the same path.
Why is being shafted by the Germans so much better than the English? Do they use more lube?
Subscribe.
“United Germany is now the powerhouse of Europe …………………………..but the hard-money fanatics of the old Bundesbank” The two above are CORRELATED. “all the 1916 stuff, was actually a cruel joke” Never were truer words spoken. This is a picture of an elephant David; http://animals.nationalgeographic.com/animals/photos/elephants/#/african-elephant-standing_9033_600x450.jpg Here is another picture of a German elephant not spoken about in an article on Germany; http://www.theguardian.com/business/2016/feb/10/deutsche-bank-germany-financial-colossus-stumbles An why wasn’t the German Elephant discussed Dathi?………………………. Final thought for the day; The Germans are indeed the power house of Europe even after having their country and people chopped up twice last century. Will the Keynesian powers now… Read more »
Instead of Concert of Europe, we have a concert of the Vysehrad Group (dedicated to Cailín Álainn) – four members of the Vysehrad group:
https://www.youtube.com/watch?v=YgVWot_xrxE
And here we have Ireland’s dillemmas regarding being too mellow to Germany, the China problem and letting the refugees in:
“Yip your mellow, yee ‘n yellow
And if you hear a knock on front the door
Do let me in because there might be more”
https://www.youtube.com/watch?v=P_C6lQrhjbg
Yo
https://deltakyklos.wordpress.com/2016/02/08/calais-situation-video-transcript/
‘Freedom is always and exclusively freedom for the one who thinks differently.’ I wouldn’t be in a hurry to take advice from Rosa Luxemburg any more than I would from David Bowie. I am happy to concede that David thinks for himself, and his record bears it out. When it comes to non-economic things (ie the liberal agenda), though, he doesn’t, not that he ever pretended otherwise. The reasons are psychological and understandable. The following is off-topic. I came across it yesterday evening while going through my notes. A few weeks ago David criticized climate ‘deniers’. The standard view is… Read more »
And here is Tol’s summary of Cook’s paper from last March and there was of course more wrong with the paper, much more:
http://richardtol.blogspot.ie/2015/03/now-almost-two-years-old-john-cooks-97.html#!/2015/03/now-almost-two-years-old-john-cooks-97.html
http://richardtol.blogspot.ie/2015/03/now-almost-two-years-old-john-cooks-97.html#!/2015/03/now-almost-two-years-old-john-cooks-97.html
There is so much to jeer at. I’ll content myself with this little gem:
‘Cook later argued that time stamps were never collected. They were. They showed that one of Cook’s raters [described by Tol as ‘a small group of environmental activists’] inspected 675 abstracts within 72 hours, a superhuman effort.’
The science may not be settled but this is wonderful ‘data’ for the independent-minded psychologist. Someone should tell Mary Robinson.
Best article ever, David. I remember you writing years back about the inevitability of the currency union and the union itself collapsing under the weight of its own contradictions, although it might take some years. The paroxysms gripping Europe now may be the harbingers of those events. Whatever happens, history is being made right now.
Anyone who thinks Ireland is bending the rules any more than any other country is quite simply NAIVE. They are all at it. They all have their own little scams and schemes. The one thing Ireland should not be afraid to do is shine the light back at those schemes and say guys you f^cked us up the ass the last time but if you try it this time, we’re off. A Brexit is very likely and followed shortly after by an Eirext….. Well let’s put it like this. To lose one child is unfortunate, to lose two is careless.… Read more »
@Tony brogan.
You don’t need me to tell you Tony; Gold is going parabolic.
If anyone is going to benefit from defrauding the people (of any nation) it’s going to be the German Government and their ‘Deutsche Bank’. DB might need some additional revenue though it is doubtful it will come from getting the US giant Apple to pay tax. DB cannot be credited for their frank German forthrightness in doing things ‘right’ either, after all it has set aside $1.3 billion as litigation reserves, ‘which will mostly be utilized to settle lawsuits’. In my opinion the place of the 1916 rising is unlikely to be resolved/settled because it was a symbolic event. And… Read more »
The Great Reset – That’s a great description Tony. We all sensed your frustration with us. We all agreed (privately) with you that the Great Reset is going to happen but no “Premise” should be allowed go untested. However we also know or feel that we are powerless to do anything (in the global sense) to do anything to prevent the Reset. However here’s another €20T question and the answer is crucial. Do we actually need the banks or perhaps how long could we do without the banks. In the 70’s there was a bank strike in Ireland lasting about… Read more »
It could a bit ironic if Ireland heads off towards Boston only to find that Boston is trying to be more like Berlin. And it is not entirely implausible that the tide of US domestic policy is turning towards social dmocracy and that in a few dacdes, the Post-Obama Era will be just as recognizable a thing ans the Post-Reagan Era. I’d hazard a wild guess that a fair few Irish people might actually like EU integration if we could have the bit that involves a decent, functional health service, as has been rumoured to exist in several coninental member… Read more »
Hiliary or Dinald that may be the question.
Hiliary is a career politician and in hock to the system.
Donald is his own man.
The more I see the more I’m leaning towards the Donald.
http://www.goldcore.com/ie/wp-content/uploads/sites/19/2016/02/gold_week.jpg?eee114
World economy at a glance
A handful of people are warning about the risks of the coming crisis and again they are largely being ignored. Investors and savers will again bear the brunt for the inability to look at the reality of the financial and economic challenges confronting us today.–Market Watch
http://www.cnbc.com/2016/02/11/is-the-us-economy- running- out-of-gas.htmlImport prices fell 6.2 percent compared to January 2015. The dollar has gained 21 percent against the currencies of the United States’ main trading partners since June 2014. U.S. oil prices were near 12- year lows this week.
Economic data from US gov sources is lies, deceit, or seasonally adjusted!!
http://investmentresearchdynamics.com/the-mysterious-janet-yellen-plus-the-retail-sales-data-farce/
http://lawrieongold.com/2016/02/11/u-s-fed-continually-wrong-in-its-forecasts-why/
By Stefan Gleason*
“The last duty of a central banker is to tell the public the truth.”
– Alan Blinder, former Federal Reserve Board Vice Chairman
Send this to the local papers and to your political reps.
http://www.gmwatch.org/news/latest-news/16706-argentine-and-brazilian-doctors-name-larvicide-as-potential-cause-of-microcephaly
So much for peace talks. Is Saudia Arabia still a proxy for the US middle east and oil policies.
We just gotta have that pipeline thru Syria to Europe no matter the cost.
http://www.infowars.com/saudi-arabia-prepares-to-invade-syria/
Except that Iran has the backing of both Russia and China. Otherwise correct Mike. I suspect it is the dollar going in to the dumpster this time. Neither Russia (Cause for Sanctions ) or China trade in US Dollar.
I suspect that China could dump all US dollars it has (1.2 Trillion) and ruin the value of the dollar and has told the US to back off. Saudi Arabia has its own motives as does Israel when it concerns Iran.
Brilliant article David, just got to reading it now as I have been busy, but have been following the comments by email. Best article for months, if not years. Really wondering how all of this is going to play out.
“when talking to Germans you get a pervading sense of crisis here.”
https://www.youtube.com/watch?v=va9sBElkG_s
Critical thinking.
Don’t make me laugh.
When you have a nation of cute hoors the one thing you will be guarranteed is a lack of a critical thinking.
You and a few others were told to try suicide when you suggested some critical thinking.
There is something that feels like the summer of 1914 going on at the moment. A range of small countries, each linked in various ways, to major countries, are taking increasingly intransigent positions in arguments over ownership of disputed territories and activities. This has flared into limited direct conflict. It has the potential to drag in the major countries, first indirectly, and then, as the conflicts don’t go the hoped for way, directly. It’s been coming for quite a while, but war seems to continue to approach . NATO has positioned offensive military units of all of Russia’s western borders,… Read more »
https://www.facebook.com/dougie.brimson/posts/10153258247215863
Is this sentiment prevalent enough to propel a Brexit
http://schiffgold.com/key-gold-news/china-realizes-imf-goal-whats-next/
China moving to enhance the strength of its currency by backing it with gold.
UTOPIA UPDATE
http://lofi.phys.org/news/2016-02-intelligent-robots-threaten-millions-jobs.html
Utopia is now less than thirty years away and likely sooner
It’s great to have Joxer on this board. I know he posted in the past but on this thread it’s like having a newbie, a replacement for Colm and George, someone I can rely on to disagree about everything and equally sure he is right, just like them. And me! I’m in Athlone and using a tablet so I’m not going to type any more for now.
Joxer, do you believe in global warming? Please say you do. I ‘know’ you do! Pseudoscience, astrology and spiritualism? You don’t like them do you? Wonderful!
Does David think the last hundred years were a cruel joke? That we would have been better off in Britain? What is ‘Bureaucratic Ireland’? I am a bureaucrat and I don’t agree with most of what we do but that is because we are directed by authoritarian political and media class who enforce the rules of others. There is no more sense blaming Bureaucratic Ireland than Opus Dei or the Knights of St Columbia!
This says it all really. The calibre of politician in Ireland is just pathetic:
“Eight billion, plus two, minus credibility”
http://www.independent.ie/opinion/columnists/gene-kerrigan/eight-billion-plus-two-minus-credibility-34430171.html
” but the hard-money fanatics of the old Bundesbank will find it very hard to bear. ” What is hard to bear? Why the printing of more money in order to lower the interest rates to even more negative than they are. Seems to me the real fanatics are those who think anything good can come out of QE to infinity. Just when is someone going to see the stupidity of the central bank actions. Repeating the same mistake time after time with the same results, or negative results is insanity. The only other question to ask is whether it… Read more »