Tuesday, November 07, 2006

How Bad Is It...Really?

First, a couple of caveats. I'm not an economist. Neither have I read the local press much over the years. But one thing is crystal clear: Berlin is in serious trouble.

It's not exactly headline news; anyone who's spent a little time here knows it. As the once-and-future capital of Germany, it wound up absorbing a hugely disproportionate percentage of the costs of reunification. With less than seven years remaining until the government moved from Bonn, Berlin had to get its transportation system, telecommunications system, water and power lines, and, well, just about everything else up to world-class speed before 2000.

Given that half the city had been East Germany, that meant that the eastern part of town got a lot of preferential treatment: I never had touch-tone dialling before moving to the former east in 1996, for instance. But I got it because the East Berlin telephone system was so out of date it couldn't be updated. It had to be replaced. The equipment had already been manufactured before the unification even happened, and it was reassigned to the east.

This caused several problems. For one, taxes were raised to help pay for all of this, and much muttering was heard in the west about having to pay for those damn lazy Ossis, who didn't make enough to even pay those taxes. For another, Helmut Kohl's government made some serious mistakes, starting with a one-for-one currency exchange: one Ostmark for one Deutsche Mark. As I said, I'm not an economist, although I've read numerous accounts of why this was a very bad idea (not only in Germany, but in other East Bloc countries where "shock therapy" tactics were used), and if I understand correctly, it helped dig the hole we're in a little deeper. There was also the matter of some of Kohl's buddies buying up eastern properties and flipping them for huge profits, and there was also a bank some of them were in charge of that went belly-up. Predictably, nobody involved in any of this actually did any hard time.

And the government coming here meant a building boom. Not only the Spreebogen complex of hideous Alphaville buildings stretching along the (rebuilt and rechannelled) Spree River away from the Reichstag, which itself was given Sir Norman Foster's new dome, but a huge amount of retail and residential space went up for all the people who'd be living and shopping here once Berlin became the gleaming new hub of Europe. That explains the eyesore that is Potsdamer Platz, and the mighty scrubbing Friedrichstr. between Kochstr. and Unter den Linden underwent. This was another disaster: plenty of ex-Bonners hated Berlin, and never moved, preferring to rack up frequent flier miles between Berlin Tegel and Cologne-Bonn Airport. And while it's true that Sony, for instance, established their European music center here, very few of its employees wanted to live here, either, and once the merger with Bertelsmann looked like it was happening, they scampered off to Munich, happy as can be. That big old Sony Center at Potz Platz has lots of vacancies, if you're looking for office space. Of course, if you are, there's lots cheaper office space to be had, too. Lots.

As someone covering the culture beat here, as I did for the Wall Street Journal Europe from 1996 to 2003, it all became distressingly obvious after the Millenium. Suddenly, the culture funds started disappearing, and the support the city used to give just dried up. I remember the night this became crystal clear: I went to cover an exhbition of new Australian art that was the keynote of the new arts season at the Hamburger Bahnhof museum, and it was so godawful the editor rejected it. How on earth did this atrocity get mounted, anyway? And then it dawned on me: it had been 100% paid for by the Australians. All Berlin had to give was the space. And that's the way it's been ever since: the big museum shows here have either been wholly assembled elsewhere and set up here (the Museum of Modern Art show of a couple of years ago was the template for that), or else some curator has just re-shuffled Berlin's own holdings into a show.

As for the music scene, that was a scandal, too: the city voted to keep supporting three opera companies, despite the fact that one is almost totally artistically moribund, and totally de-funded Podewil, the scrappy little avant-garde outfit near Alexanderplatz which attracted worldwide audiences and worldwide attention because of them. And forget popular music: that never had any government support at all, and with people's incomes declining, attendance at gigs tapered off so badly that most touring acts totally skip Berlin these days.

Here's the bottom line, though: Berlin is 60 billion Euros in the hole. You read that right. The other night a bunch of us were sitting around and some lightning-fast calculator heard that figure and, after a minute, said "Uh, that's three-quarters the GNP of Australia." Yup. And even higher than the debt of the state of California, which is considered a scandal in some quarters in America.

The schools here, I hear, are falling apart. I do know that the new U-Bahn line that was supposed to run between the Reichstag and Alexanderplatz, the U 5, can't be completed now, even though enough holes have been dug for it. (Exactly why we need to connect the Reichstag and Alex, however, hasn't been explained).

That's why I love it when people extol Berlin's virtues to me. "It's so cheap to live here!" Sure, dude. You're probably too young for the phrase "a cheap holiday in other people's misery" to resonate.

And, just the other week while I was in the States, a small item in the Times caught my eye: the German equivalent of the Supreme Court denied Berlin's appeal for money to help alleviate the debt. Nope. Not gonna happen.

So when I say I need to get out of here, it's not just personal. It's about living in a place where everyone is depressed by the lack of opportunity, not just me. It's about wanting to live somewhere where people are more likely to be employed than not, where you can start a business and maybe have it succeed because people have money to spend.

If you look at people's faces here, unhappiness is written large on a striking number of them. I don't want to become one of those people, scowling, mouths turned down, shuffling along the street. I'm not sure how I'm going to do it (no, I didn't sell my book and I don't know if I actually have an agent to do it, thanks), but it's going to happen. And, I hope, soon.


The Haarbüschel said...

Huh? For me, Berlin is in the middle of a new, internet-based "startup-boom". The makers the the Riesenmaschine-blog just released a much talked about book namend "We call it work" that draws the layout of being employed without having a full-time job with a working contract. I think the mood hasn't been as good here for years.

Alternative cultural projects never got much money from the Senat anyway, except for some selected projects.

I also don't know why you think that "most touring bands are skipping Berlin". I believe there are more concerts here that ever, and the ticket prices have raised.

My perception of the city is pretty much different. But I really like it here, maybe that's the difference.

Ed Ward said...

Heh, that "internet-based startup boom" is a recurring fantasy. I have a copy of Wired here somewhere with that story in it, dated 1998 or thereabouts.

Podewil was one of the alternative cultural projects that did get Senat money, though.

And it seems to me the bands-in-clubs scene is worse than I've seen it. I can't afford to go out much, though, so maybe I'm wrong.

If you like the place, you're welcome to it. Pretty much everyone I've known here has given up and left.

Anonymous said...

Ed. One word. Prague.

Large blog post to follow...

Ed Ward said...

Prague? You've read The Russian Debutante's Handbook, I gather?

Anonymous said...

i love our dark city of lazy pleasure seekers as well - thank the devil that misery loves company! there is always something interesting and sinister happening around town...readings at the Funeral Parlor, the PornFilmFestival, Hannah Arendt Thinking Space and Diamanda Galas the weekend after next! Now that the judges have drawn the pursestrings, we will just have to whore ourselves out again, but that is something Berlin has always been good at...

Jens Jessen sums it up well

The Haarbüschel said...

Ed, are you sure the Wired-story is about the same idea as the Riesenmaschine-Book?

I think it's amazing that most of the things you write about when you write about Berlin are so negative. It's true that the places and maybe sometimes the creative content in Berlin has changed, but have you ever lived in, like, Dortmund? ;)

Prague is great, though. A place I'd love to live sometime.

Ed Ward said...

Listen, if anyone had asked, I never really wanted to live in Germany, let alone Berlin. I got stranded here. But if I had to be in Germany, Berlin was better than anyplace else I've seen.

I didn't say the Wired story was the same as this other one; I just said that the internt boom in Berlin is a recurrent fantasy.

As for readings at the Funeral Parlor, I'm too close to being a client of a funeral parlor at my age. And Diamanda Galas? Boy, that's entertainment!

Sorry, I'm just fed up with the adolescent craving for negativity here. And with Eastern Europe in general. Prague? Nein, danke!

Anonymous said...

Ed, if your age is as advanced as you insist I urge you forthwith to abscond to a place you can enjoy! Life is too short and too precious to spend it griping (unless, of course, griping is what floats the proverbial boat)! perhaps it isn't that you've been stranded in Germany, but that Germany has been stranded in you....

Anonymous said...

just a quick correction: berlin's debt is about 10 percent of australia's boomin' economy, give or take a few billion. But your point's valid though: such a level of debt can't be overlooked because servicing the interest alone will kill many a fragile alt-initiative... And unlike CA, which actually produces many things/ideas sold the world over, can the same be said for berlin? especially if berlin's expected to dig itself out of the debt hole? just a thought to keep economists fond of berlin awake at night...

Anonymous said...

Ed – I meant, if you think Berlin is bad, try Prague. It's that bad.

Ed Ward said...

wi11iam, I'm ready to get out of here as soon as I raise the money to pay off my debts and acquire enough to get a new apartment. Sadly, as a journalist I'm caught in a situation where American publications don't want stories from Germany, and particularly Berlin, unless they involve Nazis and Jews. I know lots of Jews, but they're all American. This is why I'm trying to sell this book.

And Bowleserised, I'm looking forward to reading this. And you should get Shteingart's book anyway.

Olaf said...

Ed, I have my fantasies about moving back to Berlin (lived there in the 1970s) due to my last two visits there. I don't know why exactly that I love it like I do, but I'm close to your age and find myself completely invigorated by the place. The Berliners themselves are MUCH nicer than they were in the 70s.

If it's really that cheap to live there (and how cheap is cheap?) I may just pull up roots here in the Southwest US and get me some of that good ol' Berliner Luft.

Or am I nuts?

Anonymous said...

where to next? France? or back to the Homeland? I hear DoD has a few openings! ironic about those american jews - the few nazis i know are also all americans! but then anyone who has done a long bit in the californian penal system has to deal with AB...

Jimbo said...

Maybe your generation just needs to believe that there's somebody tending that light at the end of the tunnel. I moved to Prague after living in a residence hotel in downtown Los Angeles (my car got burned in a riot and I used the insurance money to get out) Grim and bleak made me feel at home. I found the kids just come from Bennington or Santa Cruz who wanted to keep that spring break going on for another year (and be part of something edgy at the soamt time) or two pretty fucking irritating. But hey you want to move to France like I said I'd be ready to help you if you'd see what you'd do about helping me move to Berlin.

Ed Ward said...

Let's see if this works this morning; Blogger's had some troubles these past couple of days.

First, Olaf: last question first. Of course you're nuts! Unless you're living in Phoenix, in which case it's a fair trade on the ugly scale, and you actually gain a bit because your electric bill will sink; you won't be running the air conditioner. In fact, you won't have an air conditioner. The only ones I've seen are on the American Embassy.

If you're serious about moving, check the online resources Olivier posted in the comments on the post about renting an apartment. You'll see how cheap cheap is. Keep a map nearby so you can check whether you're being offered something halfway to Poland or Hamburg and convert those square meters to square feet.

wi11iam, I have no doubt I could do that job better than Rumsfeld, but the job security isn't so hot. Pass.

And jimmy, I don't remember this conversation, but where are you? Prague? L.A.? You know people in Montpellier? I'm confused.

Jimbo said...

I’m living in Lyon, France. I knew somebody who moved to Montpellier but I haven’t been in touch with them since. I’ve had some internet discussions with people who live in Monpellier. Why are you so set on that town in particular. What about Grenoble or Toulouse ? I might know some people in these places. Maybe you should think about working as an English teacher in one of these journalism/communication/marketing mba/mfa schools that seem to be sprouting up all over the place just like the spontaneous manifestation of a divine will to impose a brighter vision upon this grim world. Hey sure English teacher kinda ryhmes with centless leecher but these schools have to have some sort of government approval so they pay the union wage which is actually more than you’d expect. Seeing that you worked for the Wall Street Journal and Rolling Stone you’d probably have a good chance.

Ed Ward said...

I'm set on Montpellier because I like it. I know a couple of people there slightly, but basically it's big enough to be comfortable, small enough to also be comfortable, it's accessible to a whole lot of places I can very likely sell stories about, and it's possible to get to Paris without too much trouble.

Teaching English is for mugs; pays badly, and a lot of the "schools" (ie Wall Street) have very bad reputations among people who've worked for them. I'd rather keep on doing what I do, and have done for 41 years.

Jimbo said...

The American beigocracy is strong in France and wishing to enlarge their power base on this continent in view of the impending collapse of the nation you've parasited to death. The kultchur and travelle Rolling Stone Wall Street Journalistas can continue to self righteously moralize to justify their tan existence right up till the march of the red and the black.

Olaf said...

I checked the Wohnung Immobilien website and a couple of others and I'm astounded by the number of rentals available, as well as the low price of some of the units for sale. Also, there is a huge difference between rents in Wilmersdorf, where we stay on our trips to Berlin, and Friedrichshain, which I have come to really like on this last visit. I mean, is it really possible to rent a livable apt. for 350-400 Euros a month, or even less? Also, if one rents an unrenovated place, any idea of the out-of-pocket cost to fit out the place with basic amenities?

Also, I get the idea that buying a place to live is really not a wise thing to do in Berlin. Is that because rents are very stable or that property taxes and maintenance costs are too high, or that it's just not how Germans live???

If I sold my house here in AZ (I'm in Flagstaff, not Phoenix, thank the Flying Spaghetti Monster) it seems like I could live reasonbly well there, that is if the residence permit can be had. I don't know if I'm employable there (I'm a software weenie), but this is really kind of a semi-retirement move anyway as I transition into a lousy novelist in my twilight years.

Sorry to be so long-winded, but Berlin being so cheap has got me really wound up (and yes, I do feel guilt at benefiting from the misery that appears to be arising there).


Ed Ward said...

Well, yes, it is possible to get an apartment that's that cheap, but you need to see it first. Does it have coal heat? You don't want that, believe me. Is it above a bar? In Friedrichshain, it might well be; there sure are enough of them.

As for "unrenovated," you should be aware that even new apartments come basically empty. You might, if you're lucky, have a stove. Toilet, shower, etc. will almost certainly also be there. Otherwise: nothing. At all. So you'd have to buy a bunch of stuff.

I don't know what kind of software weenie you are, and likely wouldn't even if you told me, but they're desperate for IT types here, so getting a permit might not be too hard, especially if you found someone who wanted to hire a native English speaker for some reason.

Come check the place out in, say, January. See it at its absolute worst.

Olaf said...

Thanks for the info, Ed. I had a coal-heated apartment in Schoeneberg in the 70s, and it was a real drag--those big ovens take forever to start radiating heat and the dust and hassle of cleaning the damned thing made winters a misery, which you've written about. It's zentralheizung or nothing.

Yes, January that far north is mighty dark, cold, and glum--a prolonged visit in January should prevent any romantic notions overcoming the dank reality of Berlin winters. I guess that would be a good time to be auditioning apartments as well.

The only thing that surprises me is how ugly you think Berlin is. It's no Paris, that's for sure, but compared to the post-nuclear downtown of Phoenix or its pink-stucco, red-tiled suburban ghettos that have the community feeling of a parking lot, Berlin is a lively, green, urban paradise. Phoenix is indeed, to quote Henry Miller, an air-conditioned nightmare.

Of course, I can't argue with your desire to move to southern France--I'm surprised that there are still pockets that are affordable. And the food is infinitely better, to be sure. Good luck in getting there.

Anonymous said...

OK, yeah, but what about the question of buying? Coming from the Bay Area (not a chance of buying anything, ever), it seems irresistible. Given the city debt, what sort of loss might I be setting myself up for? What about a business proposition -- rent it fully furnished most of the year to vacationers/short-termers? I found it IMPOSSIBLE to find anything nice and furnished when I came here. And the Maklers, scheiße! Is there any real market for tourism here?

Anonymous said...

Diamanda Galas!? Where and when? URL please!

Olaf, yes you can rent a livable apt. here for 350-400 Euros a month but not for much less, not if you want something reasonably nice. Kitchens can cost a small fortune, so make sure the flat has one (look for "EBK" in the ad). Berliners mostly rent, I gather, first because many are indeed rather poor and, second, because the mortgage scene here is nothing like the la-la-land it has become in the US: here it is still difficult to get a mortgage; the lenders are picky and put up high barriers. The latter is probably the dominant reason because I know for a fact that, e.g., most people in Munich also rent, even though that is a very affluent (and expensive) town.

In the East a third reason was the deflationary environment; a corner seems to have been turned recently (i.e., the market in the big cities seems to have bottomed at last) but it is too early to be sure. Right now, though, that should not detain you because the prickling of the real estate bubbles in America and elsewhere means that the real estate market in lots of countries is going to become deflationary (soft landing my foot) and East Germany could once again prove counter-cyclical.

Katchyta, yes you won't find anything furnished for the long term. For the short term, though, there are lots and lots of fewos (short for Ferienwohnungen), many of which are quite nice (and cheap).

As for seeing Berlin in January "at its absolute worst", I saw it in late December and I did not run away screaming. Architecturally Berlin is much better preserved than you might think from reading WWII history books and has plenty of Gründerzeit, Jugendstil and (in the very center) neoclassical architecture to offer. What it lacks is good modern architecture, esp. residential (check out Switzerland for that).

Finally I maintain that Berlin is a fine place to live in if you happen to derive your income from abroad. I don't know Prague but I know that was frenzied real estate speculation there in the wake of the liberation and I very much doubt it is affordable. It has a lively software business scene, though: e.g., two of the major Java IDE makers happen to be Prague-based (but maybe it's just a fluke), whereas I am not getting any special vibe from Berlin in software. IMO if Berlin has a future in high-tech it lies more with biotechnology, of which there is quite a lot already. I couldn't care less about the music and club scene since I am almost deaf. If you want fresh exhibitions, Hamburg and Leipzig (and many more if you are willing to fly) are just an hour away: as it happens I am going to Hamburg soon to see the major Caspar David Friedrich exhibition there. The only thing I truly deplore about Berlin is that good bread and pastry should be so difficult to find in it. Gastronomically this place is very nondescript, that much is true. And it snows in winter, which sucks.

Anonymous said...

France sounds delightful...though watch out for the burning cars in the banlieue's!

Olivier -
Diamanda Galas is playing on the 18th as part of the international women's music festival.

Olaf -
you can definitely get something nice in your price range. I am renting a nice renovated place in a central neighborhood with elevator and balcony for 500 plus electricity. what kind of software engineering are you doing? one note - the salaries in berlin are lower than many cities in germany and way lower than in the us of a.

Katchyta -
buying has its own issues (heavy tax penalties if you sell before ten years) but the market is warming up. also the city is going to have to sell the 280,000 city owned apartments to assist in paying off the debt - who knows how that will affect the market. as far as long term rentals check out

you can find me over at http://www.squirm.com if you need more info

Ed Ward said...

Hey, Olivier, I find it rather tragic that to see major art exhibitions you're adding 30-40 Euros onto the cost of going to the museum just to travel to another city. I mean, I used to get paid for that, but for the casual museum-goer, I can't see why, for instance, a definitive Caspar David Friedrich show shouldn't be in one of the Berlin museums.

And you're dead on about the food here. As I always tell people, you don't come to Berlin to eat or shop.

And wi11iam, it's stupid I don't have a link to your blog up. Going to try to remedy that today.

Anonymous said...

when that caspar david friedrich show was hanging in essen, they still had two of his best hanging here in the altes nationale ('monk at the sea' and 'abbey') which had just come from the melancholia show at the neue nationale and couldn't make it to essen in time. the show closed at the end of august and i am not sure if they were reunited with the others in hamburg... also in a couple of weeks the kupferstichkabinett is showing some his drawings - a season cycle from 1803...

Anonymous said...

wi11iam13, thanks for the festival link.

the city is going to have to sell the 280,000 city owned apartments to assist in paying off the debt. I was told by a developer just last Friday that these buildings (we were talking about the Plattenbau eyesores in desirable locations, such as Linienstr.) have been on sale forever but nobody is buying because the asking price is way too high. It is unclear whether the increased urgency of Berlin's finance will make the city more reasonable: it could just as well work the other way.

Ed, I don't mind too much travelling to see major exhibs. Statistically (except in major, major cities like Paris and London) most exhibitions are going to be in some other place anyway, though it would be nice to have a few here also.

Ed Ward said...

Well, not to belabor the point, although I've just been talking on the phone with a friend about how unaffordable the New York museums have gotten, but why should I have to spend €35 to go to Hamburg to see a show that should be in the capital city of Germany?

And thanks for reminding me about the Melancholie show, wi11iam; my (since moved away) painter friend was driven nuts by that: "The middle of the winter! Everyone's depressed! And what's the big art show? Melancholy!!

Turn-away crowds, too. What a culture...

Anonymous said...

yes, the melancholie show was suberb...twas a dream of gloom made manifest...not to mention the accompanying films and cultural programming...sigh...if only every day could be as bleak...

Olaf said...

Wow! Lots of good info. Thanks.

One thing in the difference in our perceptions, I'm guessing, is that I remember Berlin as being especially glum in the 1970s. The "insulaner" mentality made living there feel like a caged death match sometimes. So when I returned these last two years as a tourist I was rather amazed and delighted to see the contrast with my memories of places. Mind you, I loved Berlin 30+ years ago. If that makes me unhinged, so be it. I survived seven summers in Phoenix and got out alive--how could anyplace be worse than that?

Still can't get a lot of greens to eat in Berlin though. Why are the Berliners so resistant to salad? A little fiber never hurt anyone.

Anonymous said...

There are lots of Bio stores and at least one large Bio restaurant in P'Berg: Viv (the store on Schönhauser Allee is actually 2 locations: store + restaurant). But it's true there isn't here the veggie culture I noticed, say, in NYC.

Olaf said...

Olivier, thanks for the tip. Seven locations! I'll be sure to hit Viv on the next visit.

Don't get me wrong--my favorite meal is schinken, stinky tilsiter cheese, and Danish butter on vollkornbrot--but a nice big vegan salad served by dreadlocked and pierced sirens in Grateful Dead whirly skirts is something I've come to enjoy here in our little mountain town. So I was shocked to find a lack thereof in the world city on the Spree.

Of course, I could just stay in and make my own--but then there are no dreadlocked sirens.

Ed Ward said...

You can get your dreadlocked sirens fix, but whirly skirts are too girly for Berlinerinnen. Also, they tend to work in cafes rather than health-food restaurants. In fact, I can't really think of a health-food restaurant as such in Berlin, although I guess there must be one somewhere, somewhat like the ones in the States. Oh yeah, the new Viv joint in P'berg that Olivier mentioned has one. But don't forget: you're moving to another culture! Deadheads are thin on the ground here.

Hey, I just said something positive about Berlin!

Anonymous said...

Olaf, there are smaller "bio" stores scattered throughout the central districts: they just don't have an internet presence.

Ed, In fact, I can't really think of a health-food restaurant as such in Berlin. Like I said, me neither, which is really odd in such an öko-obsessed place as Germany.