File under “Not Quite Getting It”

While a general strike cripples both Portugal and Spain today, as the people protest their seemingly endless — and worse, needless — suffering in the only way they can, the news continues to feature articles about the growing divide between those who suffer, and those who decidedly do not.

As an example of the latter, I offer the senior managers of Deutsche Bank, who were called to Berlin last week to discuss cost-saving measures for their bank during a 3-day period of meetings. In clear keeping with the grim nature of their discussions, the managers stayed at the Adlon Hotel, one of the most expensive hotels in the city. Rooms there rent from a low of €320 to a high of €15,000 per night — and the bank rented out the entire hotel. For three days.

This was just a few weeks after the two highest chiefs of Deutsche Bank announced that they were going to change the bank’s culture, in order to move past the “ugly excesses of the past.” Somehow I don’t think everyone got the memo.

One of the cost-saving measures discussed at this meeting? Firing 2,000 employees by the end of the year. But hey, somebody got to enjoy that €15,000 suite.

(Original German article here.)

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About Fletcher DeLancey

Socialist heathen and Mac-using author of the Chronicles of Alsea, who enjoys pondering science, politics, well-honed satire (though sarcastic humor can work, too) and all things geeky.
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7 Responses to File under “Not Quite Getting It”

  1. Lisa Shaw says:

    Genuinely curious to know, because I don’t understand the situation over there all that well, why you call general suffering “needless”? Is there a viable alternative?

    • oregon expat says:

      Yes, there is. Unfortunately it involves politicians making decisions for long-term goals and not their own re-elections, which we all know is not the way of things these days.

      In general, the best way for a nation to reduce its debt is to grow its economy. Austerity is a much harder way of reducing debt, but it can be effective in a good economy. In a recession, the only thing austerity measures do is make everything worse — including both the recession and the debt. When an economy shrinks, the debt as a percentage of GDP increases even if the actual monetary value hasn’t changed by one cent. And that is exactly why the sovereign debt of Portugal and several other nations has increased after several years of austerity measures that were supposed to reduce it. When you raise people’s taxes, cut their wages, increase expenses of every kind, and reduce services — lo, people do not buy things. The economy shrinks. It’s very basic economics, which does not seem to be understood by the people in charge, because they would rather see, frame and treat the entire situation as a morality play: “They messed up, now they have to pay.” Except that it’s not that simple, it’s not accurate, and it has caused unbelievable suffering.

      Even the IMF has concluded that austerity without stimulus, in a global recession, has only made things worse. But Merkel is calling for five more years of it. In the meantime, the unemployment rate in Portugal is 16%, and that’s low compared to Spain, which is almost 26%. People are losing jobs and homes, and young people are losing their futures. Emigration increases every year, and it’s something my wife and I are seriously considering as well.

  2. Kitty says:

    Just absurd! Meanwhile energy companies possibly conspiring (similarly to the Libor market conspiracy) to keep wholesale energy prices high. The everyman is screwed all round and big corp and government always seems to win. Makes me angry!

  3. Michele says:

    Ideology seems to trump logic and reason every time these days. Story after story tells this kind of tale – excesses by the already wealthy and everyone else having to pay for them. When the cold war ended I was full of hope that the world would become a better place – for all. Its seems that, instead, the world is becoming a place where the rich get richer at the expense of all, including this planet we call home. My sixties sensibilities are deeply offended. And I’ll bet FDR is spinning in his grave at the way these people are dealing with economic problems so like the ones he had to deal with.

  4. M. says:

    This is peculiar that during the crisis most banks recorded a utmost profit.

    I wonder how went this meeting of 15 countries organized by Portugal and Poland to discuss opposition to Germany’s politics of cuts.

  5. xenatuba says:

    Not the message the execs should be sending. And I thought the Americans had cornered the market on hubris. To grow the economy, you must stimulate it, not cut it.

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