On "plaster", "bandaids" and "bazookas"

This is written in white-hot anger, after reading an article in the Handelsblatt. Economics is of course known as the dismal science, and most economically-minded people I know are indeed rather dismal fellows overall. But this mean-spiritedness cannot be accepted as a narcissistic affectation and a game of being wiser than thou (Besserwisserei) regardless of its consequences in the lives of real people and societies. But since the beginning of the crisis two years ago this is precisely the attitude of experts at every turn of events, no matter what the measures introduced by the political leaders or anybody else in Europe. If psychology is in the main what feeds the current downward spiral in the Eurozone, the goal of these wise analysts seems to have been all along to stoke the fires of despondency, systematically dismissing every new attempt at a solution as half-measures. In this way they incited the stampede of the herds in the marketplaces of the world that kept upturning the wagons of the politicians, only triumphantly to proclaim that, alas, the governments were driven by the markets and not the other way around. But this is what these commentators have convinced us that they wanted in the first place.

Yesterday all the major central banks of the globe undertook a series of concerted actions which at least signified a new determination to act decisively to reverse the rot. I cannot evaluate the economic reasoning behind these measures, but psychologically they provided a lift. They were immediately dismissed by all the commentators I read as window-dressing that leaves the core problems intact. Of course, in a sense, they are: for who in his/her right mind thinks at this stage that the core problems can be put away in one blow?!!! This churlishness, this niggardliness, this stinginess, this Schadenfreude is at best a puny little fart of a truism. A truism moreover that they will keep on applying no matter what comes next, on December 9 or any other date. If you do not give to any conceivable proposal the benefit of the doubt with respect to its future efficacy, then it will certainly fail because you are thus inculcating in the general psychology the a priori certainty that it will fail. But then the cause of the failure of the measure is not the ineptness of the measure itself, but rather your determination to bad-mouth it in advance no matter what. Yesterday's actions surely dealt with symptoms of the crisis. But these are critical symptoms, which if left unchecked will precipitate the universal collapse feared. But, oh!, the fact that they took those measures just shows how dire the situation has become, came the retort. So, in this reasoning, they should have done nothing in order not to appear to admit that the situation is desperate! This is so deep, it is way past my philosophy. What is wrong dealing with these symptoms, threatening a universal drying up of credit, first? This world coordination may just be a sign of a new policy beginning in the direction of tackling the core of the matter, which includes forcing Germany to abandon its bloody-mindedness about all sorts of things (as well as forcing Greece to abandon its habitual stupidity on just about everything). How can you exclude this possibility in advance? What lends to your insights such an implacable and indubitable grasp of the future. Extreme adversity is a persuasive teacher, and we may be facing the writing on the wall at this point, concerning the Euro and even the very existence of the European project in all its dimensions. Who can absolutely exclude that in these circumstances the various leaders will (under world pressure) abandon their petty bickering to commit themselves to something truly thoroughgoing? W. Muenchau says in the Financial Times that he is not certain that this law of extremity holds any longer in Europe and he gives just ten days to the Eurozone before it breaks apart. He may be right, but he might also turn out to be a Muenchausen on this one (I have the highest respect for this guy, don't misunderstand me). All I am trying to say is that I am sick and tired (and today positively incensed) after every turning point, great or small, to hear again that familiar carping drone of the experts, the same one from from yesterday and the day before, that "this does not go far enough", "this is merely plaster" etc. etc. If that is the depth of their analysis I am prepared to take up economics late in life for I can do it much better. Gloom-mongering is a secure line of business given the human condition.

There is another aspect to this compulsive nay-saying which is equally misguided. It is also premised on the notion that there are no longer in Europe political leaders "great" enough to rise to the occasion. This is to me plainly silly. Europe is the victim of its success, not its failure. The "great" leaders of the past made a mistake in opening the doors of the European house for all and sundry (including Greece) to enter, before the cement holding it together had solidified. But this was a "great" (meaning noble, great-hearted) mistake. It was also based on a plausible calculation that letting everyone in and forcing a common currency on most would in time blackmail them to adopt common ways of prudence as well as solidarity, besides inexorably pushing in the direction of a complete political union. This may have not been spelled out in so many words from the beginning, so there is indeed an element of dishonesty and deficient democratic legitimation here (as Issing and Sinn and Stark and Weber and other, open or hidden, foes of the Euro have consistently argued). On the other hand, no one can say that nobody suspected or even wished that to be the case. The Brits trumpeted it and stayed out, the Greeks for all their folly equally recognized and enthusiastically welcomed it in their official pronouncements. Well, the time for this radical turn has come. This is the crux of the matter. The decisions demanded are the most weighty possible, fraught with immensely complex consequences. So. what's the wonder that there is hesitation, dithering, backtracking etc.? When so many, great or mediocre no matter, have joined together collective deliberation is onerous and inefficient, but there is no other way -and it is the best way (this incidentally is straight out of Aristotle). When it was just between De Gaulle and Adenauer or even Kohl and Mitterand decisions could be reached in half a day. Today this is no longer possible irrespective of the caliber and worth of the participants. Hence, the complaint that there are no leaders in Europe today is a worthless side-show. The reason that the markets rush ahead of them is simply that this is what markets do in the pursuit of gain from a day to the next. If the politicians began to imitate the behavior of the markets, spasmodically reacting to any fancy or rumor that the economic press spread around in order to pacify the baby, their decisions would be of an immeasurably poorer quality. As it is, they have to balance the need for speed against the need for substance and seriousness -with a view to a political and a cultural future that the markets do not give a fart about. In this contest they may lose out, but if they are to succeed this is the way. And in this I, for whatever it is worth, am an optimist. If even the Greek political class were forced to abandon some of their destructive habits (and there is no more obstinate beast around), then European leaders will eventually find the way, and the glow of the vision will be restored. For nothing succeeds like success, and the markets know that better than anyone.