Economics and politics - comment and analysis

No time for reason – contemplations at the turn of the year

We live in a strange time. Problems are piling up, but the ability to analyse the world in a calm and rational mood and to discuss solutions seriously is declining dramatically fast. Sidebars are increasingly more important than the battles that actually need to be fought. Half of the republic is outraged when someone somewhere forgets to adjust the language to make it gender-appropriate, but at the same time the major blunders of politics go largely unnoticed and uncommented.

The underlying disease is not easy to diagnose. In any case, an important role is played by what might be called the twittering of public discussion. More and more people apparently believe that it is already a discussion if you leave a more or less insane two-liner on a factual issue or express your displeasure and indignation about a certain position via Twitter.

Unfortunately, those who can reach large numbers of people through their medium all too often support this thinking. In the editorial offices of our media, the sheer volume of comments on an article is already regarded as a criterion for success, instead of asking whether there might have been one or two serious opinions and statements among the three hundred utterances that should be taken into account in future work. The raised thumb of some anonymous user is already considered proof of the meaningfulness and importance of one’s own position.

In this climate of perpetual “discussion” with an unmanageable number of irrelevant comments, the ability of society to really deal with a matter is apparently dying. Facts that call for a differentiated interpretation are out, as is the only tool that allows humans to separate sense from nonsense, namely human reason and its logic.

Politics adapts its language…

Politics adapts to this twittering of society by flattening and de-substantiating its language. Only those who avoid making substantive statements and hide behind empty phrases have a chance of avoiding Twitter storms and further unsettling an already disoriented society. Sweeping problems under the rug is the political recipe for success, not pulling them out from under the rug. Consequently, the politician elected as German Chancellor in September 2021 is the undisputed German champion in the ability to systematically say nothing and never answer questions. He was preceded by a chancellor who was only slightly inferior to him.

The phenomenon of tweeting can be found in all areas of public life. I will pick out just a few. In the fight against the pandemic, German politics is lurching helplessly from one wave to the next. The winter of 2021/22 does not feel much different to most people than the winter before, even though the vast majority of them did exactly what the politicians asked them to do, namely, to get vaccinated.

Never once was there any discussion of the internal dynamics of such a pandemic and what to learn from it in perspective. In December 2021, an infectologist is quoted across the republic as saying that the corona waves are now flattening out because basic immunity is in place. One wonders why such a finding, which at least creates an optimistic outlook, does not reach the public until 22 months after the epidemic began. What have this expert and all his fellow virologists and epidemiologists been doing since the beginning of the pandemic?

It was clear by the beginning of the second wave at the latest that the waves of serious illness and deaths (measured by excess mortality, as for example by Euromomo) were flattening out, either because more people were being immunized by contagion or were at least being protected from severe courses by vaccination. Nevertheless, at the beginning of each wave, there were exactly the same panic reactions from politicians and the mass of experts with reference to “exponential” growth and a possible overburdening of the health care system. It is not surprising that many people who still use their brains wonder whether it can really be that our politicians are simply incapable of seeing through even simple relationships, or whether there is more and something quite different behind it.

The situation is even worse when it comes to inflation. Not a day goes by in Germany when a self-proclaimed expert does not paint an inflation à la the 1970s on the wall and demand immediate interest rate hikes from the European Central Bank. In the Süddeutsche Zeitung, commentator Markus Zydra gives the impression that an ECB interest rate hike would primarily benefit the “poorer members of the population,” probably because he suspects that the rate hike will mysteriously eliminate the shortage of and speculation in energy, housing and food. Even squared lumber for hobbyists, he steeply argues, would somehow become more affordable if only interest rates rose.

This is dangerous nonsense (as demonstrated again and again on my home pages) that remains nonsense even when supported by “experts” like Professor Sinn (and his abstruse ketchup-bottle thesis). The kind of inflation that can become dangerous is precisely not a state in which prices are four or five percent higher than a year earlier, but it is a process in which prices and wages continue to drive themselves upward, without this having anything to do with scarcity of certain goods. There is no question of this happening in Germany or Europe. But if it really came to that, the intervention of the ECB via rising unemployment would primarily hit the poorer members of the population.

… or it remains silent

Note well that everyone is allowed to spread nonsense, even such nonsense that results in 500 or even 5000 raised thumbs. In economic questions the basic knowledge of the population is so small and the confusion by the prevailing doctrine so large that one wins the largest agreement with the most primitive theses. It only becomes dangerous where the politics of a large country in Europe is unable or unwilling to confront this “babble” consistently and intellectually convincingly.

Silence, which from Merkel to Scholz is considered the superior method of “taking a stand” on such issues, does not avert harm from society, but causes enormous damage. It prepares the space for nationalist fomenting, which in a Europe that has united into a union on monetary issues – with the approval of all parliaments! – must be immediately eliminated.

It is taking revenge every day to this day that the Merkel/Scholz government did not explicitly and clearly oppose the grotesque ruling of the Federal Constitutional Court on ECB policy from 2020. Instead of quietly burying this ruling, one should have had the political courage to tell the German Constitutional Court that it ruled without any expertise and formally violated the European rules – again democratically approved by all parliaments (see my comment on the matter in 2020).

…until the next big conflict

Those who take empty phrases for answers will always fall flat on their face politically and, in the case of Europe, will have to pay dearly for their refusal to answer. At the moment, this is particularly true of Olaf Scholz’s phrase that the European Stability and Growth Pact has proven its flexibility. This is wrong in terms of content (as shown here). However, and more importantly, it is an attempt to avoid a discussion that cannot be avoided.

It is a historically significant event when the two heads of state of the second and third largest countries in the EU join forces to write an article together (in the Financial Times, significantly). Moreover, if these are the heads of state of two countries where hardly anything has gone together politically in the past, it is hard to overstate the significance of the event. Emmanuel Macron and Mario Draghi don’t say very much in terms of content, but they make it clear that there must be a reform of European debt rules that prevents the – post-crisis – completely inflexible pact from blocking the way out of recession and unemployment for European partners.

In this, they are right on the merits (for a piece on this, see here), and any dogmatism from the German side is absolutely inappropriate given Germany’s continued extremely high current account surpluses, which clearly violate the commonly agreed macroeconomic rules. But one already suspects that Lindner and Scholz will duck away from an open and honest discussion of this issue and end up agreeing to a formulaic compromise that will allow them to pretend at home that they continue to be the apostles of the black zero. Again, anyone with a bit of sense will realize how they are being led around by the nose, and frustration among those who already think the entire policy is a sham will once again increase.

Climate policy is not honest either

Even in the area that large parts of politics rightly regard as fateful for the survival of mankind, climate and nature protection, there can be no talk of pouring pure wine for the citizens. On the one hand, one downplays the adaptation processes that will be necessary to decouple the development of the economy and society from the use of fossil energy. On the other hand, one is unjustifiably optimistic about the solution to the electricity question.

One has to imagine that the same SPD that in the coalition with CDU/CSU at least accepted that the expansion of renewable energy sources was massively slowed down, now that it is going with the Greens, acts as if it would be easy to transform the German electricity supply in a few years in such a way that even a much higher demand for electricity can be safely served. How could the party and how could the decisive people, one has to ask in retrospect, reconcile it with their conscience to have been part of a coalition for many years that – for whatever reason – failed to complete the energy transition?

But worst of all, despite the obvious global dimension of the problem, almost all those involved act as if all we as individual nations have to do is implement what is proclaimed as the goal at the climate conferences and the problem is solved. Many years of global failure are interpreted only as a lack of political will, instead of acknowledging that there is a systematic gap in the United Nations strategy (see here for a piece on the Glasgow conference with Friederike Spiecker). In the absence of concerted global action to limit fossil fuel production, any attempt by an individual country to break its dependence on fossil fuels is no more than conscience-soothing.

Closely related to the climate issue is the question of how to enable developing countries to offer a positive perspective to the people in their countries, despite climate-induced structural change. Here, the entire Western world is completely blank and regularly feeds the poorer countries with phrases. While we would like to prevent people without prospects from migrating northward, we are not prepared to provide even the slightest assistance if, for example, the interests of the financial markets might be affected. Directly at Europe’s borders, in Turkey, a drama is currently unfolding that could have an enormous impact on the flow of refugees, but which is treated in the West only under the rubric of “Islamist president in trouble” (for a well-founded piece on Turkey, see Friederike Spieckers home page).

The political inability to communicate sensibly

The answers to all the questions raised here are not predetermined, but must be worked out in a process organized according to democratic rules and the rule of law. But this process does not fall from the sky. It must be initiated by politicians who are competent and willing to discuss the issues. But that is exactly what we do not have. Cabinet posts are distributed according to all kinds of criteria, but not according to the potential incumbents’ ability to initiate serious discussions and to hold them – even with the willingness to revise one’s own opinion in the face of good counterarguments.

There is much that a democracy can tolerate. However, permanent gobbledygook from the political centre and the associated inability to deal rationally and confidently with the diversity of opinions fundamentally weakens it. Those who consider serious political discussion dangerous and do everything to prevent it strengthen precisely the political fringe, which considers democracy too weak a form of government precisely because of its diversity and the joy of discussion. When in democratically constituted states the foundations for reason-driven problem-solving are increasingly eroded, this prepares the ground for forms of government that quite explicitly no longer rely on reason and diversity. This may be called fascism directly or “just” Trumpism. As a result, the end of reason as a guideline for human action is a catastrophe for humanity and for its planet.