Macroeconomic Rant of the Week

Sabina is one of my favorite tech commentators, and usually never goes beyond wry humor in critiqueing whatever madness is going on. Here she takes on Germany’s decades long descent into self-satisfied stoopidness, beginning with green energy cuckoo-ness.

She is as green as I am, but does not accept fantasy as a solution. That is one of her prime critiques of current German politcal culture.

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“Our trains in Germany are so advanced, we’ve mastered time travel. You board the train in 2024 and arrive in 1994.”

One of the factors she cited… Fake privitization, a process by which control of a publicly funded asset is sold off to a private entity to “operate” as a caretaker because private businesses are SO much more efficient at selling tickets and sweeping the cars every day than government. Such efforts purposely ignore the fact that any sufficiently large public infrastructure requires DAILY routine maintenance and periodic (every five years? ten years?) maintenance and re-investment to preserve functionality and safety.

Of course, those in favor of privitization also understand that routine maintenance can be deferred or eliminated, often for YEARS, before the impact of that skippped maintenance becomes obvious after the damage done by skipping it accumulates and grows exponentially over time. This makes it very easy to DECIMATE that spending in the short term, return OODLES of money to “investors” of the “privitization” and thus enhance the short term argument that “business” is smarter at running infrastructure than the government – see all the cash that began pouring out of operations once WE took it over?

Of course, what actually happened is that all that deferred or cancelled maintenance is accelerating decay of the infrustructure exponentially and creating repair / replacement costs that are so large in magnitude and focused in time they become untenable for the private owner, who has been paying out profits over the prior years to shareholders instead of investing a portion steadily over time or accumulating them for the big bills to come. At that point, the public is back on the hook for the cost of rebuilding or the costs of NOT having appropriate infrastructure in a functional state.

The pattern she is describing is not unique to Germany but has been repeated in virtually every industrial democracy. They all fell for this 1980s de-regulation / privitization fantasy pitched by “business knows best” politicians. Perhaps it is more shocking to her as a German because she believes in the stereotype that, if anything, Germans are well organized, know technology and should at least be able to keep the trains running on time and have Internet service running at rates faster than 5 megabits/sec.



Is that significantly different from what Welchism does to private companies? I think Welch must have learned his craft at the knee of British industrialists. British industry, by the 70s, was notorious for using obsolete designs, and decrepit factories, to build shoddy products that could only be sold on image or nationalism.

This piece of propaganda was produced by British Leyland, in 1977. The film admits their machine tools are worn out. The film admits their factories are obsolete and unproductive. For instance, the film shows line workers using speed braces to tighten fasteners. This was decades after the US big three had switched to power drivers, which are not only faster than a speed brace, they torque the fasteners more accurately.

But, in spite of the archaic design of the products, and the worn out plant and equipment, the management produced film, dumps the entire responsibility for producing a high quality product on the line workers.

The British auto industry has since gone extinct. The only British brands that are still alive are owned by non-British interests, often as vanity projects.



Jesus. That was a training video? They should have called it “Here’s Why British Leyland Sucks.”

Edit: I can’t stop thinking about this video. It is just bonkers. Most BL employees are portrayed as lazy malcontents. The few competent employees have extreme time constraints which prevent them from doing their jobs. Correct me if I’m wrong: Isn’t that a management problem if people don’t have time to do their jobs?

Wendy, the data entry girl, is so hot that she causes her lecherous male colleagues to make catastrophically fatal mistakes. But I’m guessing BL’s QC problems aren’t actually due to Wendy’s hotness.

This is classic negative reinforcement. Instead of saying this is what we want you to be, they said this is what you are. They defined the standard of BL employees as being uncaring, lecherous, slackers, and that’s what they got.

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At least in Chicago what happened is that the city spent more than it had. To raise money (short term, of course) it sold off the operation of things such as parking meters and tollways.


Lots of cities did that during the GFC.

Chicago got an early start with the Skyway in 2005.


That was likely the worst deal of the 20th century, and a disaster for Chicagoans. The VC’s who bought the rights to the parking meters for $1B are already ahead on the deal and there’s 60 years left on the contract. Meanwhile the city has to pay every time they take a meter out of service for a parade or demonstration. Or a park concert or a broken water main - it’s the landlord paying the renter. And parking rates have skyrocketed, surely a pleasure for downtown merchants who have seen pedestrian traffic dwindle.

And the billion was gone within a couple years.

The city has tried to weasel out, but the courts have said “You made a bad deal. Nothing illegal about that.” Shameful, really, for all parties.


Same as nearly all sports stadium deals. They have lofty estimations of how much extra tax revenue will come in, extra development and impact fees, etc, and in reality, most of that money never appears. Meanwhile, the city is still on the hook to pay those bonds down for 20 or 30 years. At least with the stadiums, they can say “we have a big league sports team” and at least the locals can go to games and enjoy them periodically.

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An extremely useful teaching moment in local politics, but almost never taken because our politics are too stupid.

Sports stadium/arena deals are almost always extreme corruption barely covered by city pride thong and financial flim flam pasties.

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It is not just private businesses that defer maintenance. Our county road has a bridge that received no, zero, zip maintenance for over 20 years. Over that time it went from a 45 ton weight limit, basically banning logging trucks, to a 19 ton weight limit a few years ago, to a 3 ton weight limit late last winter. That meant school buses had to change their routes. Early this spring the state inspected it and closed it. Work is scheduled to start on it maybe in August, but I’m not holding my breath. I’m just driving 4 extra miles one way to go to town on smaller and more dangerous roads. I will be voting against all the county commissioners again in a few months. Given how many locals this has endangered and inconvenienced I hope there is a change.


“It is not just private businesses that defer maintenance. Our county road has a bridge that received no, zero, zip maintenance for over 20 years”

I just got done listening to a Peter Attia interview on longevity, he stressed that vehicle accidents are very much something to be game planned for. I was already doing some of the stuff he mentioned, such as driving 1 lane away from center line on non median separated roads unless passing, and being hyper aware of drivers coming toward you that are driving into a low or setting sun, being very vigilant when approaching intersections even if you have the right of way. Attia said he personally knew 3 people in the last 2 months who had been in car-totaling accidents in which they had zero fault, luckily they came thru the accidents intact.

Per your post, I had not given much thought toward the danger of lack of maintenance on the roads and bridges being traveled, but will start considering that as of now. I think the area infrastructure is pretty good, but there are definitely some beat up roads that could cause other drivers to swerve into the oncoming lane of traffic. And the narcissistic smart phone useage while driving of many Americans is also potentially lethal to the rest of us.


Who really controls your local road maintenance budget? In Michigan, counties and cities have road departments, but the money comes from taxes collected by Lansing. For decades, the (L&Ses) in Lansing underfunded road maintenance, among other things, to cover more tax cuts for the “JCs”. A few years ago, the state had a big surplus. The Gov proposed a budget using that surplus for improvements in education and infrastructure. The (L&Ses) in the legislature ignored the Gov’s budget, and passed their own, which “spent” all the surplus on tax cuts. The Gov vetoed the (L&S) budget, and finally got the funding allocated the way she wanted.

If TPTB in a state have one priority, tax cuts for “JCs”, as Michigan has at times, when there is one party control in Lansing, Prols will pay and pay and pay, and get nothing, because the money goes to “unburdening” the “JCs”.

The current Gov made the roads the core issue when she first ran, as they had been some of the worst in the country, while the Proles pay one of the highest tax burdens on fuel, in the country.

From the Wabac machine.

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