The Ratings Scam

The U.S. rating agency Standard and Poor’s has become a something of a joke in Austria. What? They downgraded us? While still awarding a AAA to the United Kingdom?
Since the London riots, every Austrian knows that unemployment in the U.K. is high – in fact 8.6%, whereas here it still hovers around 4%, the lowest in the EU. Our public debt, while too high at 70% of GDP, is far below the eurozone average of 86% and far below the U.K. at 148%, both figures counting financial interventions. All in all, it’s just not funny!
The reasons given were: 1) inflexible government institutions, and 2) exposure to the failing Hungarian economy. Could be they simply don’t seem to know what they’re talking about.
Take flexibility: Austria has many shock absorbers that kick in in hard times – reductions in overtime, further training, and shorter working hours instead of layoffs, steadying consumption until the economy picks up. Then there’s the social partnership – still alive and well – that brings government, business, labour and academia to the table to work out policy that takes all interests into account. It’s not a formal government body, but it works.
And while Hungary is reeling, it’s only a small part of the picture; the rest of the CEE is holding its own, in part through the “Vienna Initiative” of Western and Eastern European bank managers, the IMF and the EBRD, who lobbied the private sector to stay involved in the CEE, preventing panic selling.
All in all, Austria seems to be doing fine. Economist Marcus Scheiblecker of the Austrian Institute for Economic Research (WIFO) expects the Austrian economy to post a very respectable growth rate of 3% for 2011, as Germany is Austria’s largest trading partner and the weak economies of Europe play only a small role.
Fortunately Austrians aren’t paying much attention. In a survey by Marktagent.com, published 19 Jan., 78% of Austrians doubt the competence of the ratings agencies, citing their failure to recognise the build-up to the 2008 financial crisis.
They may be on to something. The stock markets barely quivered in response to the news. As Jeffrey Kleintop, chief market strategist at LPL Financial told The New York Times, “downgrades by rating agencies are really a lagging indicator. The analysts are reacting to the same news and information that the rest of the market has already seen.”
Adjustments have already been made – as we have made ours about Standard & Poor’s.

The Next Big Thing

Look around! Women leaders are everywhere: German Chancellor Angela Merkel and Christine Lagarde of the International Monetary Fund, U.S. Secretary of State Hillary Clinton and Brazilian President Dilma Rousseff. Then our three Nobel Peace laureates: Liberian President Ellen Johnson Sirleaf, and activists Leymah Gbowee, also of Liberia, and Tawakkol Karman of Yemen.

It’s hard not to be inspired!

Until you start thinking about it. We’ve seen patterns like this before … Too many skirts, and the trousers take a walk! Prestige and influence (and salaries!) fall. It’s happened to pharmacists and psychotherapists-, in publishing, real estate and public relations.

But heads of state? Since when have men given up power so easily? There must be a loophole! (Sound of cog wheels turning...)

That’s it! The men don’t want these jobs any more! Think about it: Who wants to be head of state when the societies are a mass of tensions and the economies on the edge of collapse?

You can just hear the bravado at the bar: “Yes sir! What a time we had!” A joy ride of high stakes and conquest, gunning the motor into overdrive and heading for the horizon. So what if they skipped the occasional service check – that’s just a con job for mechanics, anyway – while they ripped off the pressure gauges and ran the wondrous old post-war economy straight into the ground.

“No problem,” you can hear the men congratulating each other, arm over shoulder and glass in hand. “The girls will clean up the mess.” Anyway, they’ve got to get on to the Next Big Thing.

The trouble is, it’s getting harder to figure out just what that could possibly be.

Originalky published in the Vienna Review 27/10/2011

On Technology and the Writing Life.

At work on a story the other weekend and feeling trapped inside my four walls (as well as my head), I packed up my laptop, stuffed a couple of books in my backpack and headed out for Café Sperl. Perhaps the change of locus would snap me out of my stupor. Sperl is a great place to work: It’s quiet (no canned music) and commodious, with a pleasant staff, just attentive enough without getting in the way.
It was still early, not quite 11:00 on a Saturday morning, and to my delight, the protected corner table in the elbow formed by the glassed-in foyer was free.
I moved in, spreading out on the upholstered banquette, plush and pleasingly worn, that soaks up whatever sound hasn’t already drifted up past the brass chandeliers to the ceiling six metres above. I scanned the menu; the food here is unusually good for a café and the coffee excellent.
It also has free WiFi.
Writing in 1959, Friedrich Torberg, the great chronicler of the Viennese Kaffeehaus of the inter war years, mourned the passing of the literary cafés in the city that was again his home. Why had writers abandoned them, he wondered? Was the coffeehouse responsible?
“The fault,” he decided, “lies with technology, that has formed an eerie three-leafed alliance with politics and sociology. It’s because today’s writers write literature directly into their typewriters – which one cannot take along to the coffeehouse [too heavy and too noisy]; that they dictate their radio scripts to a secretary, whom one also cannot take along to the coffeehouse either (at least not for dictation)”; that producers, directors and editors all want to be visited in their offices. And, he pointed out, “they all have a telephone at home as well as the office, so don’t need to receive free calls in the Kaffeehaus. “
How times have changed. Today, my “typewriter” is a MacBook Pro, powerful and silent, that connects me instantly with staff and stringers, as well as the magic library of the Internet. My telephone is in my pocket, waiting for words spoken, or texted when I don’t feel like talking.
For anyone who writes for a living, a Kaffeehaus is again the perfect retreat, where you can disappear for hours, eat and drink as much or as little as keeps one’s brain in gear and have the pleasure of human companionship that leaves you blissfully in peace. And get a lot of work done.
So, Herr Torberg, be comforted: Rather than signing the doom of the Kaffeehaus, technology may just have given it back its raison d’être.

Graffiti and the "Broken Windows Theory"

Since the new U-Bahn entrance opened in my 2nd District neighborhood, the two and a half blocks between my door and Herminengasse have become a trail of ugliness. Buildings that were just painted a few months ago are already defaced with scrawled tags; it’s a kind of visual violence, leaving scars of arrogance and disrespect that has nothing to do with art.

This is painful to watch. It’s partly the aesthetic assault. But it’s also the creeping malaise that comes with it, the sense that the fabric of life is unraveling, that things are simply coming apart.

Thinking about this the other morning, I remembered the “Broken Windows Theory,” a idea the grew out of a Safe neighborhoods program in Newark New Jersey in the 1970s, when the city put foot police back on the streets in an attempt to address rising crime. And while the rate of reported crime did not go down right away, people sense of civic order began to improve almost right away. The presence of the foot police reduced public rudeness and petty insults that can make urban life intolerable . They discovered that restoring public order in the small, visible ways -- like preventing broken windows, graffiti and noise – enhanced a neighborhood’s sense of well being and discouraged the vandalism that was often the precursor to crime.

Vienna is neither as clean nor as safe as it was when I first moved here nearly 14 years ago. Back then I would leave my bicycle unlocked in the courtyard of my building, or even while I was in a shop without the slightest fear. Nothing ever happened. Once, coming out of the bank a child in each hand, I managed to drop a thousand Schilling note on the sidewalk; a man came running up behind me and gave it back to me.

There was also almost no graffiti in those first years. It was one of the things I admired about Vienna, that the Viennese loved their city and took care of it. Even were it was a little down at the heel, it was well tended.

Then sometime in the late 90s, things began to change. Ugly scrawlings began to appear on the old walls, name “tags” appeared in spray paint on houses, doorways and shutters, on a park bench and an historic marker. It was angry and juvenile. And very unsettling. I had three bikes stolen one after the other, locks broken or chains cut through, killing any enthusiasm for owning a bike the better part of two years.


Today, everyone is more careful. Nice things still happen in Vienna, like the fellow who jumped off the U-Bahn last summer to hand me my forgotten back pack. But it’s not the same. While the city reports that crime is down 8%, it turns out they’re catching the bank robbers and car thieves. Break ins, for example, are up.

And there is definitely more graffiti. For half a century, Vienna was eastern outpost of what used to be the West. Now Central Europe really is central and the city is at the heart of the new Europe. This is mostly good -- and at moments seems even miraculous: the new openness, energy and ideas are unmistakeable.

But so are the down sides. The EU Expansion has brought the development gap into harsh relief, and the extending of the Schengen Open Borders agreement to the new member countries opened Vienna to the pressures of Eastern European poverty. The EU has tried to address these down sides; there has been a lot of swapping of criminal data bases that has helped to cut down on some of the organized crime rings -- including the bicycle theft -- and the sources have moved farther and farther east: from Slovakia and Hungary, then Poland, and more recently Bulgaria and Romania.

This neighborhood is one of the ones at the heart of these growing pains of change, acted out at least for now, in vandalism and spray paint.

Media Carnival - the CUNY Journalism Summit

        So many smart people, so few answers. 

Since getting back to Vienna from the CUNY 2nd Journalism Summit on New Business Models for the Media, the abiding impression has been of a profession in shock, a lot of talented, thoughtful people reeling, disoriented, dizzy with confusion as if they had just stepped out of the tilt-a-whirl at the carnival.  Some of the talk was simply nonsense: People who should have known better were suggesting a media future without form, virtual newsrooms without editors, journalism without journalists, competence and quality without training or experience.  A little eerie, and some of it astonishingly glib. 

But people in shock get a little nuts. We are standing over a seismic shift.  And we are all stumbling from pillar to post, hoping to find one strong enough to hold us up.  

Still there is a real carnival aspect to all of this -- it's raucous, colorful, confusing, creative. Also dangerous, but we knew that.  Best of all is the feeling of wild abandon,  because when everything is thrown into question, all things seem possible. This is what counts because it frees up everyone's thinking. There are few assumptions and fewer rules.  

So in this sense the CUNY Summit brought an extraordinary sense of possibility, a lot of new ideas and -- what I didn't expect -- more respect for what we are already doing.  When no one has any convincing answers, and none of the models are working all that well, an oddball project is worth considering.  In our case a small, university based, commercial non-profit print-plus-web English language newspaper in a European capital sounds like as good a guess as any, and better than some. Which -- admit it! -- is fun. 

Americans Abroad: Still Ugly

We had just paid the bill and reached for our coats, when a weathered woman at the next table under a thick Russian bear hat, leaned over and addressed me in English, her voice heavily accented:

“And which American racket are you part of?” I turned and stared.

“Excuse me?” I asked, bewildered.

“Is it USAID? Or UNIDO? The IMF?”

“None of them,” I said, starting to get annoyed. “I’m a journalist and an academic. I’m on the faculty at Webster University.”

“Ah, Webster! Same thing,” she sighed, clearly feeling vindicated. “Sucking money out of all those desperate people trying to buy their way into the West. Look at you! You’re all living off the backs of the Europeans.”

Europeans? The hat looked Russian – from Odessa, actually, it turned out. She worked there for an NGO, but was herself French. But that wasn’t the point, except that it allowed me to switch languages and get a little further than I might have otherwise been able to. It could have been another country, and her list of complaints was hard to dispute: America was pirating resources, she said, destabilizing progressive governments and imposing crippling free market rules on emerging economies – all in its own interest, not theirs.

“But I am no happier about all that than you are,” I protested.

“Perhaps,” she said. “But all of you, you picked this government; you chose it – even re-elected it a second time. That is, the ones who vote at all. Most of you don’t even bother!”

What can one say, except that this is an election year and change is in the air? The realities are hard to dispute – worse under this government, perhaps, but certainly not new.

Since 1945, the United States has embarked on 17 major military “interventions” (the Pentagon euphemism for war) around the world, almost all in support of repressive governments that would protect our access to resources and markets. Counting the embargoes and covert operations of the CIA, the number quickly multiplies to at least 70, and by some counts nearly 100. We claimed it was against communism and in defense of democracy, but that was never the real issue. We wanted control.

In the 1940s we supported fascist regimes in Italy, Greece and the Philippines over popularly-supported leftist governments. In Korea, our suppression of the progressive forces is described by writers like former state department official William Blum as leading to “a long era of corrupt, reactionary and brutal governments.”

In Iran, a joint US-UK operation overthrew Prime Minister Mossadegh for seeking to nationalize the country’s only oil company, then British-owned, returning the Shah to power as a puppet dictator, where for 25 years he protected the US and UK’s shared interests.

It was a similar story in Guatemala, where progressive Jacobo Albenz had nationalized the United Fruit Company, leading to a CIA coup and 40 years of death squads, torture, kidnappings and mass executions.

In British Guyana as in Viet Nam, the U.S. fear was of a successful alternative to the American capitalist model, so that even a moderate like Guyana’s Cheddi Jagan was a threat finally ousted in 1964. In Viet Nam, Ho Chi Mihn’s initial overtures to the United States were rebuffed and the protracted disaster there destroyed a country and a culture, stripping and poisoning the landscape and leaving behind generations of genetic damage. Not to mention what we did to ourselves.

Then along with various interventions in Cambodia, Cuba and Chile, Afghanistan and El Salvador, we next overthrew liberal Georges Papandreou in Greece, the Sandinistas in Nicaragua, progressive Maurice Bishop in Grenada, Jean-Bertrand Aristide in Haiti and former U.S. collaborator Manuel Noriega in Panama.

Which brings us up to the First Gulf War in 1991, with its 40 days of relentless bombing that reduced the capital of one of the most advanced countries of the Middle East to rubble. The more recent history of Iraq we know all too well. Nothing has changed. It has always been about American corporate ascendancy and control of resources and never been about democracy. It is a history of cynicism and exploitation on a grand scale.

“It’s been a driving doctrine of U.S foreign policy since the1940s that the vast and unparalleled energy resources of the Gulf region will be effectively dominated by the United States,” wrote American linguist and philosopher Noam Chomsky at the time, “and no independent, indigenous force will be permitted to have a substantial influence on the administration of oil production and price.”

But perhaps even more remarkable is the extent to which this has been carried out behind the veil of American heroism, the myth of the United States as the defender of freedom, as the model for democracies worldwide. An American president is routinely referred to – with complete seriousness – as the Leader the Free World.

A reputation earned in World War II, and cemented by the generosity of the Marshall Plan, which set a new standard for enlightened self interest, has served as a screen for an entirely different America, one whose foreign policy was conducted largely in secret, out of sight of the majority of its citizens and out of reach even of its own politicians. This was a foreign policy conducted in the interests of American business and of free-market consumer capitalism increasingly unaccountable to the civil society at home and disconnected from the values most Americans think their country stands for.

And whatever we want to say about this gap between Americans and their government, it has, at least until recently, been real and widespread.

"I think we can be reasonably confident that if the American population had the slightest idea of what is being done in their name, they would be utterly appalled," wrote Chomsky following the attacks on the World Trade Center in 2001.

And the rackets? Well, they seem well positioned to make sure the rules work in our geopolitical favor. The USAID describes its assistance programs as having “the twofold purpose of furthering America's foreign policy interests in expanding democracy and free markets while improving the lives of the citizens of the developing world."

However many doubt the sincerity of this second objective. The fundamental problem, as pointed out by Stanford’s Sara Kramer, is that these goals are often in conflict. Often it is not in America’s national interest to promote self-sufficiency in developing countries; U.S. economic interests are often better fed by foreign dependency on US imports and loans.

“The critics of globalization accuse Western countries of hypocrisy and the critics are right,” writes Nobel Prize-winning economist Joseph Stiglitz in Globalization and its Discontents, pushing poor countries to eliminate trade barriers while keeping their own, with the United States “one of the prime culprits,… ensuring that it garners a disproportionate share of the benefits at the expense of the developing world.”

Which leaves me in the wine bar, with little I can possibly say. Still, the personalness of the attack startled. After all, why come after me, whom you don’t even know? And in a public place?

The woman in the black bear hat gave an exhausted, soulless laugh.

“When I hear an American voice, I want to strangle someone.”