SYCAMORE TREES
Sycamore trees are really irritating. They are very thin and boring, and they sprout from their boles almost like shrubs. They are also very fast-growing, so they quickly take over a wood if you are not careful.
The reason I am thinking about them is that I am heavily engaged in the 2012 Project, pruning the apple trees down in the orchard. The orchard abuts the wood, so one of my tasks is to cut back the wood a bit, so that the fruit trees on its edge have room to breathe. That means cutting down lots of sycamore trees that are springing up all around my beloved apple trees, and causing them to grow at awkward angles.
Fortunately, thin, fast-growing sycamore trees are easy to chop down, and can be felled with a few strokes of a hand-held saw. In ancient times, the rule for a village wood was that you were allowed to chop down a tree if it was as thick as a man's arm. Between you and me, I have been ignoring that rule rather a lot this weekend.
Walter Blotscher
Saturday, 31 March 2012
Thursday, 29 March 2012
DANISH AGRICULTURE (2)
Denmark is very good at farming. But in today's world, even the best have problems to deal with. The big difficulty is the price of land, which is the normal security for farmers' debts. In the noughties, those debts soared on the back of ever rising land prices. At their peak in the summer of 2008, they reached around kr.280.000 a hectare; today they are around kr.150.000 a hectare, having fallen 13% since the fourth quarter of last year. Experts say that the market has reached bottom, but they were also saying that in 2010.
Falling asset values mean that farmers either have to put up more security (difficult, if you've borrowed up to your eyeballs) or have their loans called. Danish farmers may be efficient, but they are no match for tightened credit rules.
Walter Blotscher
Denmark is very good at farming. But in today's world, even the best have problems to deal with. The big difficulty is the price of land, which is the normal security for farmers' debts. In the noughties, those debts soared on the back of ever rising land prices. At their peak in the summer of 2008, they reached around kr.280.000 a hectare; today they are around kr.150.000 a hectare, having fallen 13% since the fourth quarter of last year. Experts say that the market has reached bottom, but they were also saying that in 2010.
Falling asset values mean that farmers either have to put up more security (difficult, if you've borrowed up to your eyeballs) or have their loans called. Danish farmers may be efficient, but they are no match for tightened credit rules.
Walter Blotscher
Wednesday, 28 March 2012
HEALTHCARE IN AMERICA (4)
The nine justices of the Supreme Court are this week hearing arguments in a case, which is without doubt the most important to be decided for a generation. At stake is the healthcare reform passed two years ago, which represents the biggest domestic achievement of Barack Obama's presidency. If it survives judicial scrutiny, then he will go into November's election in a strong position; conversely, if it does not, then he might well lose.
There are four legal questions to be decided, but by far the most important one is the constitutionality or not of the so-called "mandate". Under the reform, everybody in America will soon have to take out healthcare insurance, or pay a fine; those too poor to be able to afford it will be subsidised. This will do nothing to remedy America's colossally expensive healthcare system (indeed, it may even make things worse in the short term), but will address one of the biggest problems associated with that system, namely that millions of people currently have no healthcare insurance. According to the reform's supporters, the mandate merely extends existing arrangements to those who didn't have them beforehand; according to its opponents, forcing citizens to buy something they perhaps don't want is an unwarranted intrusion into personal freedom and so unconstitutional.
Since the U.S. constitution does not actually mention healthcare insurance, the arguments concern proxies. Much of the federal Government's expansion into social matters has been based on its constitutional power to regulate interstate commerce. Healthcare insurance is undoubtedly an interstate commerce matter; furthermore, the uninsured are already heavily involved in it, since although they can't pay, hospitals often treat them anyway. This in turn creates a "free rider" problem, since insurance premiums rise for everybody else in order to cover this extra unfunded cost. In economic terms, therefore, the mandate internalises an unfortunate externality (an action which is generally considered to be a good thing).
The antis look at the same set of facts, but interpret them differently. For them, it is right and proper for the Government to regulate interstate commerce. However, the uninsured are - by definition - not engaged in the healthcare insurance business, so there is nothing to regulate. What the Government is proposing will force people into commercial activity, an activity which it then regulates. Such coercion is not allowed by the constitution and has no legal precedent.
Judges faced with a tricky legal problem with massive political consequences often try to find a compromise. However, in this particular case, it is hard to see one. What is more important, the freedom of the individual, even if it means the freedom to choose not to purchase health insurance; or the right of the Government, acting on behalf of its citizens, to regulate a public service that every one of those citizens will need, even if only at the end of one's life? We'll discover the answer to that question in June, when the Supreme Court delivers its judgment.
Walter Blotscher
The nine justices of the Supreme Court are this week hearing arguments in a case, which is without doubt the most important to be decided for a generation. At stake is the healthcare reform passed two years ago, which represents the biggest domestic achievement of Barack Obama's presidency. If it survives judicial scrutiny, then he will go into November's election in a strong position; conversely, if it does not, then he might well lose.
There are four legal questions to be decided, but by far the most important one is the constitutionality or not of the so-called "mandate". Under the reform, everybody in America will soon have to take out healthcare insurance, or pay a fine; those too poor to be able to afford it will be subsidised. This will do nothing to remedy America's colossally expensive healthcare system (indeed, it may even make things worse in the short term), but will address one of the biggest problems associated with that system, namely that millions of people currently have no healthcare insurance. According to the reform's supporters, the mandate merely extends existing arrangements to those who didn't have them beforehand; according to its opponents, forcing citizens to buy something they perhaps don't want is an unwarranted intrusion into personal freedom and so unconstitutional.
Since the U.S. constitution does not actually mention healthcare insurance, the arguments concern proxies. Much of the federal Government's expansion into social matters has been based on its constitutional power to regulate interstate commerce. Healthcare insurance is undoubtedly an interstate commerce matter; furthermore, the uninsured are already heavily involved in it, since although they can't pay, hospitals often treat them anyway. This in turn creates a "free rider" problem, since insurance premiums rise for everybody else in order to cover this extra unfunded cost. In economic terms, therefore, the mandate internalises an unfortunate externality (an action which is generally considered to be a good thing).
The antis look at the same set of facts, but interpret them differently. For them, it is right and proper for the Government to regulate interstate commerce. However, the uninsured are - by definition - not engaged in the healthcare insurance business, so there is nothing to regulate. What the Government is proposing will force people into commercial activity, an activity which it then regulates. Such coercion is not allowed by the constitution and has no legal precedent.
Judges faced with a tricky legal problem with massive political consequences often try to find a compromise. However, in this particular case, it is hard to see one. What is more important, the freedom of the individual, even if it means the freedom to choose not to purchase health insurance; or the right of the Government, acting on behalf of its citizens, to regulate a public service that every one of those citizens will need, even if only at the end of one's life? We'll discover the answer to that question in June, when the Supreme Court delivers its judgment.
Walter Blotscher
Tuesday, 27 March 2012
GOOD NEIGHBOURS
A man in Holbæk has just shot dead his neighbour's 10-year old labrador dog, Balder. Balder had got out of the enclosure that was supposed to keep him in, and had run over to the neighbour's property.
A bit of an overreaction, you might think. But what is really surprising is that the enraged gunowner had the law on his side. Under the relevant legislation, which dates from 1872, a property owner has the right to shoot any animal being a nuisance on their property. Although the law was originally intended to apply more to wild animals, it does include pets, provided that the pet owner is warned that the animal is being a nuisance and of the consequences if he doesn't do something about it (which he was). So the police can do nothing.
Which still leaves one dead dog, and one grieving family. I suspect that relations between neighbours in this particular part of Denmark will be strained for some time to come.
Walter Blotscher
A man in Holbæk has just shot dead his neighbour's 10-year old labrador dog, Balder. Balder had got out of the enclosure that was supposed to keep him in, and had run over to the neighbour's property.
A bit of an overreaction, you might think. But what is really surprising is that the enraged gunowner had the law on his side. Under the relevant legislation, which dates from 1872, a property owner has the right to shoot any animal being a nuisance on their property. Although the law was originally intended to apply more to wild animals, it does include pets, provided that the pet owner is warned that the animal is being a nuisance and of the consequences if he doesn't do something about it (which he was). So the police can do nothing.
Which still leaves one dead dog, and one grieving family. I suspect that relations between neighbours in this particular part of Denmark will be strained for some time to come.
Walter Blotscher
Monday, 26 March 2012
INFLUENCE PEDDLING
The video revelations that foreign businessmen (or, indeed, anyone else) can get "face time" access to Prime Minister David Cameron over dinner in return for a £200,000 contribution to his Conservative Party don't look good. True, the party treasurer and video star has resigned his post, and Mr. Cameron has said that that is not the way things work in his party. But as a lady famously said in the 1960's, he would say that, wouldn't he? Accepting Mr. Cameron's position means accepting that the said treasurer has formal meetings with potential donors, at which he mouths complete nonsense. That is just not credible.
British politicians of all parties have got themselves into a mess over expenses and party funding. Remember Tony Blair and the payments from Formula 1? Nothing seems to have changed in the intervening 15 years.
The basic problem in my view - and this is not going to be a popular one - is that British politicians are badly paid. And because they are badly paid, they look for extra cash on the side. The decline set in under Mrs. Thatcher, who wanted to set an example of pay restraint. However, having forced everyone to be miserly, MP's are now hoist with their own petard. It will take a brave one to do something serious about it.
Walter Blotscher
The video revelations that foreign businessmen (or, indeed, anyone else) can get "face time" access to Prime Minister David Cameron over dinner in return for a £200,000 contribution to his Conservative Party don't look good. True, the party treasurer and video star has resigned his post, and Mr. Cameron has said that that is not the way things work in his party. But as a lady famously said in the 1960's, he would say that, wouldn't he? Accepting Mr. Cameron's position means accepting that the said treasurer has formal meetings with potential donors, at which he mouths complete nonsense. That is just not credible.
British politicians of all parties have got themselves into a mess over expenses and party funding. Remember Tony Blair and the payments from Formula 1? Nothing seems to have changed in the intervening 15 years.
The basic problem in my view - and this is not going to be a popular one - is that British politicians are badly paid. And because they are badly paid, they look for extra cash on the side. The decline set in under Mrs. Thatcher, who wanted to set an example of pay restraint. However, having forced everyone to be miserly, MP's are now hoist with their own petard. It will take a brave one to do something serious about it.
Walter Blotscher
Sunday, 25 March 2012
THE 2012 PROJECT (3)
I got started on the 2012 Project today, pruning the fruit trees in the orchard. I was a bit late, I know; but they haven't blossomed yet, so I think we'll be OK.
I only managed to do three trees this morning, two apple and a pear. Most of them are big, 8 metres high or more, and it is not easy pruning such large trees. If, indeed, "pruning" is the right word, when you're chopping something from 8 metres down to 2. Anyway, I will finish the rest of the trees in the course of the coming week.
What I already do know is that this project will be a multi-year one. I will prune half the tree, wait for some new shoots, and then prune the other half next winter.
Walter Blotscher
I got started on the 2012 Project today, pruning the fruit trees in the orchard. I was a bit late, I know; but they haven't blossomed yet, so I think we'll be OK.
I only managed to do three trees this morning, two apple and a pear. Most of them are big, 8 metres high or more, and it is not easy pruning such large trees. If, indeed, "pruning" is the right word, when you're chopping something from 8 metres down to 2. Anyway, I will finish the rest of the trees in the course of the coming week.
What I already do know is that this project will be a multi-year one. I will prune half the tree, wait for some new shoots, and then prune the other half next winter.
Walter Blotscher
Saturday, 24 March 2012
MOLES AND MOWING
A number of readers have asked me what has happened to the moles. I have been asking myself the same question, since they have been absent for much of the winter.
I think the main reason is that the water table has been so high, a result of the unusually mild weather. Moles don't like damp ground, which is not surprising, and there have been a lot of soggy lawns around the house. I know that there has been a mole in the wood, since he merrily makes some of the largest molehills I have ever seen. But I've no problem with him running around in there, just so long as he doesn't attack my lawn. Over the past couple of days, he has been coming closer, so I have set up a couple of traps. Let's see how he copes with them.
Today I got my lawnmower out of the barn and did my first mow of the year. I know it's early, but my mother-in-law - whose view on this matter I respect - says that grass grows at 7 degrees centrigrade, and it's been much higher than that here in Denmark this week. It was not a serious mow, more a kind of "wake up, winter's finished" message. And yes, it was very satisfying.
Walter Blotscher
A number of readers have asked me what has happened to the moles. I have been asking myself the same question, since they have been absent for much of the winter.
I think the main reason is that the water table has been so high, a result of the unusually mild weather. Moles don't like damp ground, which is not surprising, and there have been a lot of soggy lawns around the house. I know that there has been a mole in the wood, since he merrily makes some of the largest molehills I have ever seen. But I've no problem with him running around in there, just so long as he doesn't attack my lawn. Over the past couple of days, he has been coming closer, so I have set up a couple of traps. Let's see how he copes with them.
Today I got my lawnmower out of the barn and did my first mow of the year. I know it's early, but my mother-in-law - whose view on this matter I respect - says that grass grows at 7 degrees centrigrade, and it's been much higher than that here in Denmark this week. It was not a serious mow, more a kind of "wake up, winter's finished" message. And yes, it was very satisfying.
Walter Blotscher
Friday, 23 March 2012
GREEN ENERGY
Denmark has the highest electricity prices in Europe, according to Eurostat, not least because fees and taxes double the production price. Those prices are now set to go even higher.
A broad political agreement on energy hammered out yesterday sets an ambitious target for Denmark to be completely independent of coal and oil by 2050. For that to happen, there will have to be a huge increase in wind and wave power, plus the gradual elimination of oil tanks for heating homes. The bill for doing this will come from new taxes on electricity, starting in 2020.
The problem is that if you want to heat homes by using geothermal instead of oil, then you need extra electricity to power the pumps. Putting taxes on a product tends to reduce demand for it, so new electricity taxes will work against your desired aim. The country's economic "wise men" have already pointed out the inconsistency in the proposed plan.
It is not easy to be green, even in Denmark.
Walter Blotscher
Denmark has the highest electricity prices in Europe, according to Eurostat, not least because fees and taxes double the production price. Those prices are now set to go even higher.
A broad political agreement on energy hammered out yesterday sets an ambitious target for Denmark to be completely independent of coal and oil by 2050. For that to happen, there will have to be a huge increase in wind and wave power, plus the gradual elimination of oil tanks for heating homes. The bill for doing this will come from new taxes on electricity, starting in 2020.
The problem is that if you want to heat homes by using geothermal instead of oil, then you need extra electricity to power the pumps. Putting taxes on a product tends to reduce demand for it, so new electricity taxes will work against your desired aim. The country's economic "wise men" have already pointed out the inconsistency in the proposed plan.
It is not easy to be green, even in Denmark.
Walter Blotscher
Thursday, 22 March 2012
THE U.K. BUDGET
British budgets are like an old-fashioned music hall magic act, with the Chancellor of the Exchequer cast as the magician. First, there is the photo-op with the red box outside his house, 11 Downing Street. Then he moves to the theatre, otherwise known as the House of Commons. There he proceeds to conjure up a series of make-believe scenarios, the white doves being replaced by tax breaks and giveaways, known in the civil service as lollipops.
This year's budget, announced yesterday, was never going to be very exciting. The coalition Government has staked all on a 5-year austerity programme, and they will sink or swim on the basis of that. So Mr. Osborne was reduced, faute de mieux, to lots of talk and minor tinkering.
Most of the press comment afterwards focussed on the cut in the top rate of income tax from 50% to 45% and the reduction in additional tax allowances for pensioners. Both of these are sensible changes. On the first, very high tax rates just don't bring in any revenue (the effective rate used to be higher than 50%, as national insurance contributions add an extra burden), since it pays rich people to employ clever accountants to avoid them. Indeed, the Inland Revenue's report on the experience of the 50% rate confirmed this. So reducing the rate may even increase the amount going into the state's coffers; after all, that is exactly what happened when Margaret Thatcher abolished all of the higher income tax rates over 40% some thirty years ago.
On the second, Mr. Osborne reduced the higher personal allowances that pensioners get (i.e. the amount of income they can earn before they are taxed). This is a fiendishly complex system, with one allowance for those aged 65-74, another for those aged 75, an upper earnings limit and a partial clawback scheme. It is so complicated that many pensioners don't bother to claim what is their due, and I am sure that Inland Revenue officials will have been begging successive Chancellors to get rid of it for years. The reductions have inevitably been called a "granny tax", but it is really just an administrative simplification. After all, if you really want to help pensioners (personally I don't, but many people do), then the easiest and simplest way to do so is to put up the basic state pension. Everybody can understand that.
If the above all looks a bit like small beer, then there was one thing tucked away in the small print that was truly revolutionary. Child benefit will be reduced for anyone earning over £50,000, and abolished completely for people earning more than £60,000. This attracted surprisingly little comment, since it is the rich who lose out; but it represents a fundamental break with the concept of universal benefits, paid to all in a category (in this case children), irrespective of need, a concept which has been part of the postwar welfare state. True, only a minority - the rich - will be affected. But the principle has been breached, and future Chancellors will find it increasingly easy either to maintain the upper limit in nominal terms (thereby letting the benefit "wither on the vine") or to reduce it. Watch this space.
Walter Blotscher
British budgets are like an old-fashioned music hall magic act, with the Chancellor of the Exchequer cast as the magician. First, there is the photo-op with the red box outside his house, 11 Downing Street. Then he moves to the theatre, otherwise known as the House of Commons. There he proceeds to conjure up a series of make-believe scenarios, the white doves being replaced by tax breaks and giveaways, known in the civil service as lollipops.
This year's budget, announced yesterday, was never going to be very exciting. The coalition Government has staked all on a 5-year austerity programme, and they will sink or swim on the basis of that. So Mr. Osborne was reduced, faute de mieux, to lots of talk and minor tinkering.
Most of the press comment afterwards focussed on the cut in the top rate of income tax from 50% to 45% and the reduction in additional tax allowances for pensioners. Both of these are sensible changes. On the first, very high tax rates just don't bring in any revenue (the effective rate used to be higher than 50%, as national insurance contributions add an extra burden), since it pays rich people to employ clever accountants to avoid them. Indeed, the Inland Revenue's report on the experience of the 50% rate confirmed this. So reducing the rate may even increase the amount going into the state's coffers; after all, that is exactly what happened when Margaret Thatcher abolished all of the higher income tax rates over 40% some thirty years ago.
On the second, Mr. Osborne reduced the higher personal allowances that pensioners get (i.e. the amount of income they can earn before they are taxed). This is a fiendishly complex system, with one allowance for those aged 65-74, another for those aged 75, an upper earnings limit and a partial clawback scheme. It is so complicated that many pensioners don't bother to claim what is their due, and I am sure that Inland Revenue officials will have been begging successive Chancellors to get rid of it for years. The reductions have inevitably been called a "granny tax", but it is really just an administrative simplification. After all, if you really want to help pensioners (personally I don't, but many people do), then the easiest and simplest way to do so is to put up the basic state pension. Everybody can understand that.
If the above all looks a bit like small beer, then there was one thing tucked away in the small print that was truly revolutionary. Child benefit will be reduced for anyone earning over £50,000, and abolished completely for people earning more than £60,000. This attracted surprisingly little comment, since it is the rich who lose out; but it represents a fundamental break with the concept of universal benefits, paid to all in a category (in this case children), irrespective of need, a concept which has been part of the postwar welfare state. True, only a minority - the rich - will be affected. But the principle has been breached, and future Chancellors will find it increasingly easy either to maintain the upper limit in nominal terms (thereby letting the benefit "wither on the vine") or to reduce it. Watch this space.
Walter Blotscher
Tuesday, 20 March 2012
THE ARTIST
I showed The Artist to the pensioners at the local cinema this morning. This was the (almost 100%) silent movie, that won most of the main Oscars this year, notably best picture, best director and best actor.
It's very well done, and looks like an old silent film, including the slightly jerky movements that they had in those days when film speeds were slower. It's also a nice story, about a silent movie star, George Valentin, coping with the arrival of sound at the end of the 1920's, and being redeemed by the new star of the "talkies", whom he discovered by chance.
But is it really the best film to have been made during the past twelve months, better than (say) the Iron Lady which I saw not long ago? I have to say no, not in my view. I think it got chosen, since it's a film that makes Hollywood feel good about itself, with a bit of nostalgia and a nod to the old days.
Still, it's worth going to see if you get the chance. Mission Impossible 4 is coming up soon, that will be a bit different.
Walter Blotscher
I showed The Artist to the pensioners at the local cinema this morning. This was the (almost 100%) silent movie, that won most of the main Oscars this year, notably best picture, best director and best actor.
It's very well done, and looks like an old silent film, including the slightly jerky movements that they had in those days when film speeds were slower. It's also a nice story, about a silent movie star, George Valentin, coping with the arrival of sound at the end of the 1920's, and being redeemed by the new star of the "talkies", whom he discovered by chance.
But is it really the best film to have been made during the past twelve months, better than (say) the Iron Lady which I saw not long ago? I have to say no, not in my view. I think it got chosen, since it's a film that makes Hollywood feel good about itself, with a bit of nostalgia and a nod to the old days.
Still, it's worth going to see if you get the chance. Mission Impossible 4 is coming up soon, that will be a bit different.
Walter Blotscher
Monday, 19 March 2012
GREECE (6)
Greece's rescue package required private holders of Greek Government bonds to "voluntarily" accept a haircut of more than 50% on the face value of their bonds, and a lower coupon. In the end, they did. Greece needed a two thirds acceptance for bonds issued under Greek law, following which they could force the remainder to accept the revised terms. A small minority held out, but they will now be ignored. The effect is to reduce Greece's oustanding debt of roughly Euros 350 billion by about Euros 100 billion. Together with the restructuring measures forced upon them by their fellow Euro members, Greece is supposedly now able to haul itself out of the abyss into which it had fallen.
Three things are noteworthy in this, I think. First, Greece has avoided leaving the Euro. I have always felt that this was unlikely, not because Greece doesn't want to, but because Germany doesn't want it to. So far, this hunch is being proved right.
Secondly, because some private bondholders held out against the restructuring, it couldn't be classed as voluntary. As such, it triggered a credit event, following which holders of credit default swap insurance will be paid out to cover their losses. The requirement for a voluntary restructuring was supposedly triggered by fear (nay, panic) amongst policymakers about the prospect of huge CDS payouts. However, the markets appear to have taken the news with a shrug. Which suggests in turn that it is unwise to rely too heavily on doomsday predictions of what markets will or won't do in a specific situation.
Thirdly, however, although the restructuring and payment of CDS contracts did not precipitate a crisis, the process of saving Greece will inevitably mean that the make-up of Greece's creditors changes. It is estimated that in 2011, the European Central Bank, IMF and other E.U. Member States held roughly a third of Greece's debt, private investors the rest (though some of those private creditors are in fact state-owned banks). After the restructuring, those proportions will have reversed; furthermore, by 2015, after the new rescue package is fully implemented, it is likely to be 85:15. In other words, what we are seeing is a further transfer of financial risk from the private sector to the public sector (i.e. taxpayers). The big questions for all rich countries is whether taxpayers are willing to continue to accept that risk transfer.
Walter Blotscher
Greece's rescue package required private holders of Greek Government bonds to "voluntarily" accept a haircut of more than 50% on the face value of their bonds, and a lower coupon. In the end, they did. Greece needed a two thirds acceptance for bonds issued under Greek law, following which they could force the remainder to accept the revised terms. A small minority held out, but they will now be ignored. The effect is to reduce Greece's oustanding debt of roughly Euros 350 billion by about Euros 100 billion. Together with the restructuring measures forced upon them by their fellow Euro members, Greece is supposedly now able to haul itself out of the abyss into which it had fallen.
Three things are noteworthy in this, I think. First, Greece has avoided leaving the Euro. I have always felt that this was unlikely, not because Greece doesn't want to, but because Germany doesn't want it to. So far, this hunch is being proved right.
Secondly, because some private bondholders held out against the restructuring, it couldn't be classed as voluntary. As such, it triggered a credit event, following which holders of credit default swap insurance will be paid out to cover their losses. The requirement for a voluntary restructuring was supposedly triggered by fear (nay, panic) amongst policymakers about the prospect of huge CDS payouts. However, the markets appear to have taken the news with a shrug. Which suggests in turn that it is unwise to rely too heavily on doomsday predictions of what markets will or won't do in a specific situation.
Thirdly, however, although the restructuring and payment of CDS contracts did not precipitate a crisis, the process of saving Greece will inevitably mean that the make-up of Greece's creditors changes. It is estimated that in 2011, the European Central Bank, IMF and other E.U. Member States held roughly a third of Greece's debt, private investors the rest (though some of those private creditors are in fact state-owned banks). After the restructuring, those proportions will have reversed; furthermore, by 2015, after the new rescue package is fully implemented, it is likely to be 85:15. In other words, what we are seeing is a further transfer of financial risk from the private sector to the public sector (i.e. taxpayers). The big questions for all rich countries is whether taxpayers are willing to continue to accept that risk transfer.
Walter Blotscher
Sunday, 18 March 2012
DANISH INTEREST RATES
Danish interest rates are incredibly low at the moment. The interest rate for this year for a flekslån (flexible loan), a type of mortgage where the rate is set for a year at a time, is between 0.87% and 0.90%, the lowest ever.
Good for borrowers (like me); not so good for savers.
Walter Blotscher
Danish interest rates are incredibly low at the moment. The interest rate for this year for a flekslån (flexible loan), a type of mortgage where the rate is set for a year at a time, is between 0.87% and 0.90%, the lowest ever.
Good for borrowers (like me); not so good for savers.
Walter Blotscher
Saturday, 17 March 2012
A VERY GOOD DINNER
It's difficult for country hotels ("kro" in Danish) to make money in Denmark, so they have to be inventive. The latest idea is to offer gourmet dinners as part of a weekend break, or just a night's stay.
Last night my wife and I went for one of these deals at a country hotel in southern Jutland. For £50 each, we got a five-course dinner, with five different types of wine, a bed for the night, and full breakfast the next morning. The food and drink were delicious, and the kro was packed, so it seems that they are pressing the right buttons.
Walter Blotscher
It's difficult for country hotels ("kro" in Danish) to make money in Denmark, so they have to be inventive. The latest idea is to offer gourmet dinners as part of a weekend break, or just a night's stay.
Last night my wife and I went for one of these deals at a country hotel in southern Jutland. For £50 each, we got a five-course dinner, with five different types of wine, a bed for the night, and full breakfast the next morning. The food and drink were delicious, and the kro was packed, so it seems that they are pressing the right buttons.
Walter Blotscher
Friday, 16 March 2012
Thursday, 15 March 2012
RESIGNING FROM GOLDMAN SACHS
Greg Smith, an executive director at Goldman Sachs and head of derivatives for Europe, the Middle East and Africa, decided to leave the company yesterday by writing his resignation letter in the New York Times http://www.nytimes.com/2012/03/14/opinion/why-i-am-leaving-goldman-sachs. He says he is going because Goldman no longer has the culture of integrity and of "always doing right by our clients" that it used to have, now it is only concerned with making money, usually at their expense.
I have a couple of comments on this. The first is that the culture thing is tosh. Liar's Poker was written long before Mr. Smith joined the firm 12 years ago; and although Michael Lewis worked for Salomon Brothers rather than Goldman Sachs, he described an industry in which all of the major players were milking their clients. The only thing that has changed since then is the amount of money involved.
Secondly, after twelve years of helping Goldman to milk them, Mr. Smith can afford to leave, even if it means unemployment for the rest of his life.
Resigning after 6 months might have impressed me. Resigning after 12 years, and then trying to claim the moral high ground, does not.
Walter Blotscher
Greg Smith, an executive director at Goldman Sachs and head of derivatives for Europe, the Middle East and Africa, decided to leave the company yesterday by writing his resignation letter in the New York Times http://www.nytimes.com/2012/03/14/opinion/why-i-am-leaving-goldman-sachs. He says he is going because Goldman no longer has the culture of integrity and of "always doing right by our clients" that it used to have, now it is only concerned with making money, usually at their expense.
I have a couple of comments on this. The first is that the culture thing is tosh. Liar's Poker was written long before Mr. Smith joined the firm 12 years ago; and although Michael Lewis worked for Salomon Brothers rather than Goldman Sachs, he described an industry in which all of the major players were milking their clients. The only thing that has changed since then is the amount of money involved.
Secondly, after twelve years of helping Goldman to milk them, Mr. Smith can afford to leave, even if it means unemployment for the rest of his life.
Resigning after 6 months might have impressed me. Resigning after 12 years, and then trying to claim the moral high ground, does not.
Walter Blotscher
Wednesday, 14 March 2012
HELPING CRIMINALS
The British T.V. chef Jamie Oliver has set up restaurants, using unemployed people, whom he then trains. A well-known chef in Denmark, Claus Meyer, is doing the same thing here. Except that he is using prisoners in the country's maximum security jail rather than the unemployed. The project is being shown as a fly-on-the-wall documentary on DR1, the Danish equivalent of the BBC.
And is already running into a fair amount of opposition. Victims object to the possibility of seeing their attackers on television, becoming quasi-celebrities in the process. More generally, is society doing too much to rehabilitate criminals and not enough to support victims? A question not confined to Denmark, of course.
I think Mr. Meyer has a good idea. But I think it was a mistake to turn it into an 8-part TV series.
Walter Blotscher
The British T.V. chef Jamie Oliver has set up restaurants, using unemployed people, whom he then trains. A well-known chef in Denmark, Claus Meyer, is doing the same thing here. Except that he is using prisoners in the country's maximum security jail rather than the unemployed. The project is being shown as a fly-on-the-wall documentary on DR1, the Danish equivalent of the BBC.
And is already running into a fair amount of opposition. Victims object to the possibility of seeing their attackers on television, becoming quasi-celebrities in the process. More generally, is society doing too much to rehabilitate criminals and not enough to support victims? A question not confined to Denmark, of course.
I think Mr. Meyer has a good idea. But I think it was a mistake to turn it into an 8-part TV series.
Walter Blotscher
Tuesday, 13 March 2012
QUANTITATIVE EASING (2)
In my post a year ago, I highlighted how European central banks were printing money in order to buy Government bonds in their domestic market place, bonds which had been previously issued to finance said Governments' fiscal deficits. This was supposedly a "good thing", and qualitatively different from merely printing money to finance the deficit in the first place, a supposedly "bad thing".
Now comes a variant in this story. The European Central Bank is prohibited by its statutes from financing Member States' fiscal deficits (though it can buy bonds in the market place, which have already been issued). However, in the past three months, it has lent roughly Euros 1 trillion (there's that trillion word again) for three years at an interést rate of around 1% to hundreds of European banks. The official word is that those banks will in turn lend the money to hard-pressed European businesses. However, everybody knows that the banks will invest at least some of the money in European Government bonds that yield much more than 1%. The two-stage domestic QE ruse now has an equivalent two-stage European QE ruse.
Don't get me wrong, I am not saying that this is a bad idea. I am merely pointing out that supposedly sacrosanct ideas (namely that central banks should not print money to finance Government deficits) are falling like ninepins during this financial crisis. And people will remember that, if and when the crisis eventually comes to an end.
Walter Blotscher
In my post a year ago, I highlighted how European central banks were printing money in order to buy Government bonds in their domestic market place, bonds which had been previously issued to finance said Governments' fiscal deficits. This was supposedly a "good thing", and qualitatively different from merely printing money to finance the deficit in the first place, a supposedly "bad thing".
Now comes a variant in this story. The European Central Bank is prohibited by its statutes from financing Member States' fiscal deficits (though it can buy bonds in the market place, which have already been issued). However, in the past three months, it has lent roughly Euros 1 trillion (there's that trillion word again) for three years at an interést rate of around 1% to hundreds of European banks. The official word is that those banks will in turn lend the money to hard-pressed European businesses. However, everybody knows that the banks will invest at least some of the money in European Government bonds that yield much more than 1%. The two-stage domestic QE ruse now has an equivalent two-stage European QE ruse.
Don't get me wrong, I am not saying that this is a bad idea. I am merely pointing out that supposedly sacrosanct ideas (namely that central banks should not print money to finance Government deficits) are falling like ninepins during this financial crisis. And people will remember that, if and when the crisis eventually comes to an end.
Walter Blotscher
Monday, 12 March 2012
EARTHQUAKE IN JAPAN (2)
Yesterday was exactly a year since the east coast of Japan was hit by a devastating earthquake and tsunami.
Much of the coverage has been about rebuilding the small fishing communities that were destroyed by the waves. Generalising, much debris has been cleared away, but not much new has been put in its place. Officials are saying that it will take at least ten years.
I can understand people's desire to return to the place where they may well have lived for most, if not all, of their lives. However, the thought that kept coming back to me was the following; what is the point of rebuilding these communities, when it is quite possible that another tsunami will strike in exactly the same place in x years' time? Relocation is hard, but perhaps it would be a better idea in this particular case.
Walter Blotscher
Yesterday was exactly a year since the east coast of Japan was hit by a devastating earthquake and tsunami.
Much of the coverage has been about rebuilding the small fishing communities that were destroyed by the waves. Generalising, much debris has been cleared away, but not much new has been put in its place. Officials are saying that it will take at least ten years.
I can understand people's desire to return to the place where they may well have lived for most, if not all, of their lives. However, the thought that kept coming back to me was the following; what is the point of rebuilding these communities, when it is quite possible that another tsunami will strike in exactly the same place in x years' time? Relocation is hard, but perhaps it would be a better idea in this particular case.
Walter Blotscher
Sunday, 11 March 2012
STREET LIGHTING
Street lighting is the archetypal public good. Yes, it lights up the area around the nearest house(s); yet it also lights up the road where cars pass, and the pavement where pedestrians go. If street lighting were to be privatised, then all those motorists and dog-walkers would get a free ride (an economic "bad thing").
Yet that is precisely what the Danish Government is planning to do. True, the proposals are hedged around with caveats; it wouldn't be all street lights, for instance, just those in private areas (eg a defined housing estate). Yet this could be the thin end of a very large wedge.
The Danish state is unusual in that, in contrast to most other rich countries, public goods are still free. Healthcare, for instance, or motorways or university education. This is great for Danes, but is also increasingly unaffordable. I suspect that the proposals on street lighting are a kite-flying prequel to more fundamental suggestions for user charges.
Walter Blotscher
Street lighting is the archetypal public good. Yes, it lights up the area around the nearest house(s); yet it also lights up the road where cars pass, and the pavement where pedestrians go. If street lighting were to be privatised, then all those motorists and dog-walkers would get a free ride (an economic "bad thing").
Yet that is precisely what the Danish Government is planning to do. True, the proposals are hedged around with caveats; it wouldn't be all street lights, for instance, just those in private areas (eg a defined housing estate). Yet this could be the thin end of a very large wedge.
The Danish state is unusual in that, in contrast to most other rich countries, public goods are still free. Healthcare, for instance, or motorways or university education. This is great for Danes, but is also increasingly unaffordable. I suspect that the proposals on street lighting are a kite-flying prequel to more fundamental suggestions for user charges.
Walter Blotscher
Saturday, 10 March 2012
X-FACTOR
X-Factor is as popular in Denmark as it is elsewhere in the world, and for the same reasons. The number of applicants goes up each year; and although last year's winner is quickly forgotten (Danish X-Factor winner is hardly a world-beating item on a singer's CV), we all tune in after Christmas in order to watch the process repeat itself. It helps that the weather outside is usually dark, cold and miserable; much better to stay inside in the warm on a Friday night, and be entertained. I particularly like watching it with my daughter.
The format is reassuringly familiar; best efforts, tension, criticism, decision time, tears for the losers. So it came as more than a bit of a shock last night when the presenter announced at 8.01pm on live television that one of the five remaining contestants had voluntarily decided to drop out of the programme. Since the series is on a countdown to the final three participants' shoot-out in two weeks' time, the air was completely taken out of the balloon, as the remaining four all went through to next week without a vote.
We are so used to people wanting to be in the public eye, at almost any cost, that a decision to forsake that publicity is genuinely newsworthy. Although nobody knows the person's precise reasons, it does seem to suggest an admirably mature temperament. He gets my vote.
Walter Blotscher
X-Factor is as popular in Denmark as it is elsewhere in the world, and for the same reasons. The number of applicants goes up each year; and although last year's winner is quickly forgotten (Danish X-Factor winner is hardly a world-beating item on a singer's CV), we all tune in after Christmas in order to watch the process repeat itself. It helps that the weather outside is usually dark, cold and miserable; much better to stay inside in the warm on a Friday night, and be entertained. I particularly like watching it with my daughter.
The format is reassuringly familiar; best efforts, tension, criticism, decision time, tears for the losers. So it came as more than a bit of a shock last night when the presenter announced at 8.01pm on live television that one of the five remaining contestants had voluntarily decided to drop out of the programme. Since the series is on a countdown to the final three participants' shoot-out in two weeks' time, the air was completely taken out of the balloon, as the remaining four all went through to next week without a vote.
We are so used to people wanting to be in the public eye, at almost any cost, that a decision to forsake that publicity is genuinely newsworthy. Although nobody knows the person's precise reasons, it does seem to suggest an admirably mature temperament. He gets my vote.
Walter Blotscher
Friday, 9 March 2012
KONY 2012
Can the pursuit of justice be carried out by a random group of people, even if they are committed, rather than some kind of organisation with judicial legitimacy? That, in essence, is the question posed by the Kony 2012 project.
Joseph Kony is undoubtably one of the nastiest people on this planet, indeed he may well be insane. For the past couple of decades his Lord's Resistance Army has been fighting a guerilla war in the northern part of Uganda. What makes the LRA different from other rebel movements is the brutality of his methods. Children are abducted from local villages, and forced into being either sex slaves or child soldiers, who then commit atrocities and even kill their own parents. A sign of the seriousness of his alleged crimes is that Kony was the very first person to be indicted by the International Criminal Court. However, by operating in the remote border areas where Uganda, South Sudan, Congo and the Central African Republic meet, nobody has yet managed to arrest him and send him to the Hague for trial.
Jason Russell, an American who had spent time in Uganda and met some of Kony's victims, decided to try to do something about it. The end result is a 30-minute video, Kony 2012, which has just gone viral on You Tube, being seen by more than 50 million people in a matter of days. His basic thesis is that nobody is really trying to capture Kony, because he is not on people's radar screens. If enough people knew about him, then they would in turn pressure the powers-that-be to do something about it. Ergo, the first step is to educate the world about who Kony is and what he has done. By making him as famous as a movie star, and by using the same sorts of social media as movie stars do, "the people" can bring justice to the world.
Having just watched the video, part of me thought the idea was complete tosh and part of me was intrigued. The tosh comes from the tenuousness of the links between me as rich-world social media user (albeit one who already knew who Joseph Kony is) and his possible physical arrest in a country far away. The intrigue comes from the fact that 50 million - and rising fast - represents quite a large, single-issue constituency. Knowing that politicians tend to listen to, and then act in the interests of, large single-issue constituencies, they might just listen to this one.
Anyway, whatever the outcome in this particular case, it seems likely that this sort of thing will be more common in the future. If I am to remain a serious blogger, I will have to learn how to do video.
Walter Blotscher
Can the pursuit of justice be carried out by a random group of people, even if they are committed, rather than some kind of organisation with judicial legitimacy? That, in essence, is the question posed by the Kony 2012 project.
Joseph Kony is undoubtably one of the nastiest people on this planet, indeed he may well be insane. For the past couple of decades his Lord's Resistance Army has been fighting a guerilla war in the northern part of Uganda. What makes the LRA different from other rebel movements is the brutality of his methods. Children are abducted from local villages, and forced into being either sex slaves or child soldiers, who then commit atrocities and even kill their own parents. A sign of the seriousness of his alleged crimes is that Kony was the very first person to be indicted by the International Criminal Court. However, by operating in the remote border areas where Uganda, South Sudan, Congo and the Central African Republic meet, nobody has yet managed to arrest him and send him to the Hague for trial.
Jason Russell, an American who had spent time in Uganda and met some of Kony's victims, decided to try to do something about it. The end result is a 30-minute video, Kony 2012, which has just gone viral on You Tube, being seen by more than 50 million people in a matter of days. His basic thesis is that nobody is really trying to capture Kony, because he is not on people's radar screens. If enough people knew about him, then they would in turn pressure the powers-that-be to do something about it. Ergo, the first step is to educate the world about who Kony is and what he has done. By making him as famous as a movie star, and by using the same sorts of social media as movie stars do, "the people" can bring justice to the world.
Having just watched the video, part of me thought the idea was complete tosh and part of me was intrigued. The tosh comes from the tenuousness of the links between me as rich-world social media user (albeit one who already knew who Joseph Kony is) and his possible physical arrest in a country far away. The intrigue comes from the fact that 50 million - and rising fast - represents quite a large, single-issue constituency. Knowing that politicians tend to listen to, and then act in the interests of, large single-issue constituencies, they might just listen to this one.
Anyway, whatever the outcome in this particular case, it seems likely that this sort of thing will be more common in the future. If I am to remain a serious blogger, I will have to learn how to do video.
Walter Blotscher
Thursday, 8 March 2012
URBAN PLANNING
Hong Kong is a pretty small place for more than 7 million people, so it's important to plan properly, or everything would fall apart. And in general, the authorities there do it pretty well. We stayed in a part of the city called Sha Tin. Back in the 1950's, the Government realised that it would require more urban areas, so it designated ten (yes, ten) new cities in the suburbs, of which Sha Tin was one. At the excellent Museum of Culture, we saw pictures of Sha Tin at that time, a sleepy village set in rice paddies alongside a river. Today, it is a bustling area of 750,000 inhabitants, as big as Denmark's second city Århus.
But it is not chaotic, like many cities are in India or Africa. The river has been straightened into a kind of rowing regatta, there are cycle paths and jogging tracks along the banks, and lots of parks and other public spaces. Modern metro lines connect the whole thing to the central districts. Yes, there are lots of high-rise apartment blocks. But there is no grafitti, almost no litter or rubbish, and many trees.
The same thing applies in the rest of Hong Kong. The main airport was in the middle of the city, so they built a new one on reclaimed land off the coast of Lantau Island. Planes fly in to the airport from the sea, so there are no irritated residents (contrast that with Heathrow's flight path up the Thames); and there will be no problem with expansion in the future, they would just reclaim more of the sea. Elsewhere, they are building a 50km bridge and tunnel system across the Pearl River delta to Macau, making a high-speed train link to Shenzhen and Guangdong, and expanding various metro lines. And everything is supposed to be ready before 2017.
The contrast with Europe couldn't be more stark. Expansion at Heathrow and other London airports has been a running sore for decades, and the idea of an airport in the Thames Estuary has been just that for years. The Crossrail project has started, and a decision has been made to build a high-speed train line from London to Birmingham. But both projects have been around for years, and won't be finished for years either. There just doesn't seem to be the same urgency about things over here.
The day after we came back from Hong Kong, the Danish Government announced the demise of its flagship project to introduce a congestion charge for Copenhagen. Not really an infrastructure project on the Hong Kong scale, and now not even a project.
Walter Blotscher
Hong Kong is a pretty small place for more than 7 million people, so it's important to plan properly, or everything would fall apart. And in general, the authorities there do it pretty well. We stayed in a part of the city called Sha Tin. Back in the 1950's, the Government realised that it would require more urban areas, so it designated ten (yes, ten) new cities in the suburbs, of which Sha Tin was one. At the excellent Museum of Culture, we saw pictures of Sha Tin at that time, a sleepy village set in rice paddies alongside a river. Today, it is a bustling area of 750,000 inhabitants, as big as Denmark's second city Århus.
But it is not chaotic, like many cities are in India or Africa. The river has been straightened into a kind of rowing regatta, there are cycle paths and jogging tracks along the banks, and lots of parks and other public spaces. Modern metro lines connect the whole thing to the central districts. Yes, there are lots of high-rise apartment blocks. But there is no grafitti, almost no litter or rubbish, and many trees.
The same thing applies in the rest of Hong Kong. The main airport was in the middle of the city, so they built a new one on reclaimed land off the coast of Lantau Island. Planes fly in to the airport from the sea, so there are no irritated residents (contrast that with Heathrow's flight path up the Thames); and there will be no problem with expansion in the future, they would just reclaim more of the sea. Elsewhere, they are building a 50km bridge and tunnel system across the Pearl River delta to Macau, making a high-speed train link to Shenzhen and Guangdong, and expanding various metro lines. And everything is supposed to be ready before 2017.
The contrast with Europe couldn't be more stark. Expansion at Heathrow and other London airports has been a running sore for decades, and the idea of an airport in the Thames Estuary has been just that for years. The Crossrail project has started, and a decision has been made to build a high-speed train line from London to Birmingham. But both projects have been around for years, and won't be finished for years either. There just doesn't seem to be the same urgency about things over here.
The day after we came back from Hong Kong, the Danish Government announced the demise of its flagship project to introduce a congestion charge for Copenhagen. Not really an infrastructure project on the Hong Kong scale, and now not even a project.
Walter Blotscher
Wednesday, 7 March 2012
SUPER TUESDAY
The Republicans' Super Tuesday was not as "super" as in previous electoral cycles, but it still covered ten U.S. states, ranging from Massachusetts to Georgia, and North Dakota to Tennessee.
Mitt Romney confirmed his status as the front runner, winning six states and the most delegates; he now has 404 to his nearest rival Rick Santorum's 165, and is more than a third of the way to the magic figure of 1,144 that are required to win the nomination. His problem, though, is that he didn't deliver a knockout blow. Mr. Santorum won three states, and almost took the bellweather state of Ohio. Given that he wasn't on the ballot in Virginia, that was enough to convince him that he can still win.
Of the two others, Newt Gingrich won his home state of Georgia. He is probably trying to position himself as the compromise candidate, if the party splits right down the middle between Mr. Romney and Mr. Santorum, even if his temperament makes him an unlikely candidate for compromise and unity. While the quirky Ron Paul, who hasn't won any state to date, will continue to the end, whatever happens.
All of which makes it much more likely that the race will go all the way to the convention in Tampa in August. And so makes it more difficult fior the eventual winner to beat the incumbent Barack Obama in November. All four Republican candidates were smiling on Tuesday, but I suspect that the President's smile was the biggest of the lot.
Walter Blotscher
The Republicans' Super Tuesday was not as "super" as in previous electoral cycles, but it still covered ten U.S. states, ranging from Massachusetts to Georgia, and North Dakota to Tennessee.
Mitt Romney confirmed his status as the front runner, winning six states and the most delegates; he now has 404 to his nearest rival Rick Santorum's 165, and is more than a third of the way to the magic figure of 1,144 that are required to win the nomination. His problem, though, is that he didn't deliver a knockout blow. Mr. Santorum won three states, and almost took the bellweather state of Ohio. Given that he wasn't on the ballot in Virginia, that was enough to convince him that he can still win.
Of the two others, Newt Gingrich won his home state of Georgia. He is probably trying to position himself as the compromise candidate, if the party splits right down the middle between Mr. Romney and Mr. Santorum, even if his temperament makes him an unlikely candidate for compromise and unity. While the quirky Ron Paul, who hasn't won any state to date, will continue to the end, whatever happens.
All of which makes it much more likely that the race will go all the way to the convention in Tampa in August. And so makes it more difficult fior the eventual winner to beat the incumbent Barack Obama in November. All four Republican candidates were smiling on Tuesday, but I suspect that the President's smile was the biggest of the lot.
Walter Blotscher
Monday, 5 March 2012
DANISH AGRICULTURE
Denmark is a rich, post-industrial country. So it may come as a bit of surprise to know that it is also really good at that most basic of economic activities, namely agriculture.
Figures just released show that in 2011, the country exported agricultural produce worth kr.120 billion (roughly US$16 billion) and had a trade surplus on this account of kr.46 billion (US$6.1 billion, or more than US$1,000 per person). The biggest element of this is pork products, where Denmark is a world leader; but an innocuous element, namely mink pelts, also contributed more than US$1 billion. Overall, more than half of the Danish trade surplus comes from agriculture.
Danish agriculture is highly capital intensive. My father-in-law was an onion farmer, and ran his farm with seven tractors, yet only one other man. In Tanzania, where I lived at the time, the same amount of land would have been cultivated with 100 men and no tractors. If Tanzania had the same level of agricultural productivity as Denmark, then it could probably feed the whole of Africa. But that's another story.
Walter Blotscher
Denmark is a rich, post-industrial country. So it may come as a bit of surprise to know that it is also really good at that most basic of economic activities, namely agriculture.
Figures just released show that in 2011, the country exported agricultural produce worth kr.120 billion (roughly US$16 billion) and had a trade surplus on this account of kr.46 billion (US$6.1 billion, or more than US$1,000 per person). The biggest element of this is pork products, where Denmark is a world leader; but an innocuous element, namely mink pelts, also contributed more than US$1 billion. Overall, more than half of the Danish trade surplus comes from agriculture.
Danish agriculture is highly capital intensive. My father-in-law was an onion farmer, and ran his farm with seven tractors, yet only one other man. In Tanzania, where I lived at the time, the same amount of land would have been cultivated with 100 men and no tractors. If Tanzania had the same level of agricultural productivity as Denmark, then it could probably feed the whole of Africa. But that's another story.
Walter Blotscher
Sunday, 4 March 2012
Saturday, 3 March 2012
GOODS AND SERVICES (3)
Readers of this blog will know from an earlier post my view that rich, globalised societies (like Denmark) no longer repair anything, since it simply costs too much in comparison with a new purchase.
I confirmed my theory this week. When we bought this house some 10 years ago, we found a huge amount of junk in the barn. One item was a garden table and two chairs. They were remarkable for two things; the fact that they were completely made out of wood, and their colour, a dreadful bright yellow. I have had my eye on them for some time, not least because some of the planks that made up the table top were beginning to warp and the paint was flaking.
So I got to work. I stripped off most of the old paint and used the last of my black-blue oil paint to give them a new colour. Then I put new slats underneath the planks and screwed the planks down so that the table top is flat again. In a couple of weeks, I will give them a second coat of paint, and they will be ready for the summer. When my roses blossom, I will invite my rose consultant mother-in-law to come and have a look at her work, and we shall have tea by the rose garden using my new(ly restored) garden furniture.
In terms of paint, screws and labour, it was a ridiculous waste of money, it would have been much cheaper to burn the old things and buy some new, plastic rubbish. However, it was also immensely satisfying, which just goes to show that economics isn't everything.
Walter Blotscher
Readers of this blog will know from an earlier post my view that rich, globalised societies (like Denmark) no longer repair anything, since it simply costs too much in comparison with a new purchase.
I confirmed my theory this week. When we bought this house some 10 years ago, we found a huge amount of junk in the barn. One item was a garden table and two chairs. They were remarkable for two things; the fact that they were completely made out of wood, and their colour, a dreadful bright yellow. I have had my eye on them for some time, not least because some of the planks that made up the table top were beginning to warp and the paint was flaking.
So I got to work. I stripped off most of the old paint and used the last of my black-blue oil paint to give them a new colour. Then I put new slats underneath the planks and screwed the planks down so that the table top is flat again. In a couple of weeks, I will give them a second coat of paint, and they will be ready for the summer. When my roses blossom, I will invite my rose consultant mother-in-law to come and have a look at her work, and we shall have tea by the rose garden using my new(ly restored) garden furniture.
In terms of paint, screws and labour, it was a ridiculous waste of money, it would have been much cheaper to burn the old things and buy some new, plastic rubbish. However, it was also immensely satisfying, which just goes to show that economics isn't everything.
Walter Blotscher
Friday, 2 March 2012
LEGO
Lego is a shortening of the Danish expression "leg godt", which means "play well". The company was founded in the 1930's by Ole Kirk Christiansen, a carpenter from Billund who started off by making wooden toys. The family still own the business 100% and are reckoned to be one of the richest in Denmark.
Lego's great breakthrough came in 1949, when they began making the interlocking rectangular plastic bricks that have become famous the world over. Since then, billions if not trillions of the things have been churned out, giving joy to millions if not billions of humans. I was a Lego fan as a boy; and both my sons were when I became a dad, so I went round the course twice. I suspect that I will do it a third time if I get to have grandchildren.
The company had a wobble in the mid-noughties, when it tried to move away from its traditional product. Since then, however, it has been a roaring success. Its 2011 results published yesterday showed sales up 17% to kr.18.7 billion, despite flat or negative toy markets in most of the countries where it operates; and after-tax profits of more than kr.4 billion. Its share of the worldwide toy market is estimated to be about 7%.
Furthermore, this stunning growth is likely to continue in the next decade. Lego may be ubiquitous in Europe and the U.S., but it is relatively unknown in Asia, which has fast-growing economies and lots of children. Expect this Danish success story to keep going for some time.
Walter Blotscher
Lego is a shortening of the Danish expression "leg godt", which means "play well". The company was founded in the 1930's by Ole Kirk Christiansen, a carpenter from Billund who started off by making wooden toys. The family still own the business 100% and are reckoned to be one of the richest in Denmark.
Lego's great breakthrough came in 1949, when they began making the interlocking rectangular plastic bricks that have become famous the world over. Since then, billions if not trillions of the things have been churned out, giving joy to millions if not billions of humans. I was a Lego fan as a boy; and both my sons were when I became a dad, so I went round the course twice. I suspect that I will do it a third time if I get to have grandchildren.
The company had a wobble in the mid-noughties, when it tried to move away from its traditional product. Since then, however, it has been a roaring success. Its 2011 results published yesterday showed sales up 17% to kr.18.7 billion, despite flat or negative toy markets in most of the countries where it operates; and after-tax profits of more than kr.4 billion. Its share of the worldwide toy market is estimated to be about 7%.
Furthermore, this stunning growth is likely to continue in the next decade. Lego may be ubiquitous in Europe and the U.S., but it is relatively unknown in Asia, which has fast-growing economies and lots of children. Expect this Danish success story to keep going for some time.
Walter Blotscher
Thursday, 1 March 2012
DATA DUMP (3)
It's one thing to have a brush with death, escape from a data dump with an external hard drive, and get a brand new laptop. It's quite another to make said laptop work properly.
Fortunately I have a neighbour who knows how to do that sort of thing. There are five houses on the cul-de-sac off a cul-de-sac where I live. Ours is the only one on our side of the road, and there are four on the other. Right at the end, close to the sea, lives my IT-expert neighbour. It was he who got us the high-speed fibre optic cable, since he worked for the electricity company that dug up half of Fünen.
Today I spent three hours round at his house. He got rid of all the unnecessary rubbish that a new computer has on it, showed me how to extract data from the external hard drive and take a back-up, and downloaded all of the windows upgrades that I need, including an anti-virus package. I learned more about computers in that time than I have done in the past 10 years. Enough to be able to go home, configure my E-Mail and get it working, and download a printer driver from the internet so that I can print things out. I am now back on-line.
Walter Blotscher
It's one thing to have a brush with death, escape from a data dump with an external hard drive, and get a brand new laptop. It's quite another to make said laptop work properly.
Fortunately I have a neighbour who knows how to do that sort of thing. There are five houses on the cul-de-sac off a cul-de-sac where I live. Ours is the only one on our side of the road, and there are four on the other. Right at the end, close to the sea, lives my IT-expert neighbour. It was he who got us the high-speed fibre optic cable, since he worked for the electricity company that dug up half of Fünen.
Today I spent three hours round at his house. He got rid of all the unnecessary rubbish that a new computer has on it, showed me how to extract data from the external hard drive and take a back-up, and downloaded all of the windows upgrades that I need, including an anti-virus package. I learned more about computers in that time than I have done in the past 10 years. Enough to be able to go home, configure my E-Mail and get it working, and download a printer driver from the internet so that I can print things out. I am now back on-line.
Walter Blotscher
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