Bsoon gas will be scarce in Germany. In purely rational terms, this is clear to everyone. But the federal government is doing everything to ensure that the Germans do not take this to heart. It can not go on like this.
feelings are important. They usually help people to make good decisions in a short amount of time and with little energy. That is why it is often good that feelings guide human actions. And for politicians, it is all the more important to take feelings into account and not just be guided by cold facts. Actually.
In recent years, one feeling has received a lot of attention: loss aversion. People don’t like it when they have less than before – losses affect them emotionally about twice as much as gains of the same amount. And when too many people lose too much, they may choose extreme parties. So politicians have been trying for years not to expect people to lose anything.
It all started with the financial crisis
It all started with the financial crisis. At that time, Germany was experiencing the worst economic crisis since the Second World War. But the Germans didn’t notice much of this – short-time work and economic stimulus programs helped with a lot of state money to avoid hardship. It went on like this. Corona crisis? never mind Everyone stays at home, the state compensates for the losses generously and across the board. Not everyone came out of it without a loss, but others rehabilitated themselves. While economic output collapsed in the first year of the pandemic, the net income of lower and middle income earners even rose by five percent, as DIW, OECD and Bertelsmann Foundation have just determined.
The whole thing may be due to Angela Merkel’s political style. The traffic light coalition, however, continues in exactly the same way. This applies to Chancellor Olaf Scholz, but Economics Minister Robert Habeck also speaks clearly more about what is expected of Germans than about actually distributing them.
It is becoming increasingly clear that if the federal government soon saves the energy company Uniper and maybe a few others, then it will come up with a way to do it that means that as little as possible of the rising gas prices reaches consumers. Consumers should not pay, but the state. Economically, the difference is not very significant, but psychologically it is enormous.
Now is the end of packing in cotton wool
But this principle is now reaching its limits, three at the same time.
First, the crisis becomes worse the less people are aware of the seriousness of the situation on a day-to-day basis. As long as you don’t feel the problems on the gas market, it’s harder to cut back.
Second, the state is running out of money. For years, the federal government was able to borrow and sometimes even received money for it. Overall, interest payments have fallen from almost EUR 40 billion annually since 2000 to EUR 7 billion. This created additional leeway for government benevolence. But now interest rates are rising. Now the Minister of Finance has to be prepared for the fact that this year’s expenditure will rise again to 16 billion euros – this increase alone will cost almost as much as Robert Habeck’s entire ministry.
The third problem is perhaps even greater. Actually, the Germans should become more resilient. You would have to be prepared for the fact that the next few years will be difficult – perhaps make provisions mentally and economically. Instead, the opposite is happening: for more than a decade, the Germans have been increasingly weaned from the harshness of the world. Some people only know difficult economic times from history books. If there are problems now, then the shock is all the greater.
That is why the political discussion is going in the wrong direction. Germany must not consider how the state can keep people away from the problems. No, politicians have to think about how they can hand over responsibility for their fate to the Germans themselves again – in a socially acceptable but consistent manner.