Year: 2010

The fall of the Berlin Wall in November 1989 brought the Cold War to an end. It also ended a decades-long division of Europe. At an event hosted by The Centre for Independent Studies, four academics shared their recollections of the historic events and analysed their long term impacts. They show how the change originated in Poland; how fast the revolution spread to East Germany; how Germany mishandled the process of national reunification; and the lessons for the Chinese leadership from the collapse of the communist East German government.

Economists should take the time to ask themselves what they can learn from the events of the past three years. If they were honest with themselves, they would come to the conclusion that many of them had been too optimistic about their abilities to predict the future with certainty. They would have to confess that the world is too messy a place to be expressed in models of ‘general equilibrium’ or ‘perfect competition.’

As you can tell from their statements, the political class is not amused about the result of the federal election. Forming a government is all too difficult, they complain. There was no clear mandate, and getting bills through both houses of Parliament could become a bit of a nuisance.

It may be nerve-wrecking for the Australian public to watch the negotiations between the parties and the independents in the wake of the federal election. However, there is no reason to believe that the election result poses a fundamental challenge to Australia’s political system. Other countries have managed and are managing with far more complicated political situations.

Maybe we should not be too critical of economists writing open letters. At least they have kept a few journalists busy writing newspaper columns about economists writing letters.

The stronger the fears about a double-dip recession in the US grow, the better it looks for the euro. Only a few months ago, experts were discussing the possibility of a quick break-up of Europe’s monetary union. The same experts have now shifted their attention to the US dollar. However, this does not mean that the euro is off the hook. Far from it.

Wahlkämpfe sind selten die beste Gelegenheit für nüchterne Bestandesaufnahmen. Australien ist da keine Ausnahme. Nach dem Sturz von Premierminister Kevin Rudd infolge einer Palastrevolte Ende Juni benötigte seine Nachfolgerin Julia Gillard dringend ein Feld zur Profilierung bei den anstehenden Neuwahlen. Sie fand es in der Furcht vor einem weiteren Bevölkerungszuwachs. Seither wiederholt sie mantrahaft, dass sie sich kein grösseres Australien wünsche, sondern ein «nachhaltiges».

Europe’s problems remain painfully real. But it was wrong to believe that they would inevitably lead to a cataclysmic crisis. It now looks as if it’s going to be much worse. There is never going to be a solution, just a slow, ongoing decline. Not a purgatory from which there is an eventual escape route to heaven, but a Dantean inferno with its famous inscription above the gates: ‘Lasciate ogni speranza, voi ch’entrate’ – ‘Abandon all hope, ye who enter here.’