Any protestation to the contrary is sheer hubris on the part of elites, who eternally overestimate their ability to control the masses. Whatever the consequences of that will be, they are already well beyond the ability of any government, or all of them, to avoid. Simply put, some people somewhere will continue to burn fossil fuels unless and until an equally cheap and reliable alternative is found or we run out of them entirely, which might take quite a while. Even if one or a few extremely creative and/or totalitarian regimes succeed in getting their populations to swallow this particular pill, the chances of this occurring in every nation in the world is basically zero. sooner or later and a choice between climate change or freezing/starving in the dark is not a choice at all. It was/is bound to come up against the human need for energy/food/etc. This is, in a nutshell, why the green movement is doomed to fail sooner or later. “it is becoming increasingly clear that no money in the world can increase the supply of energy if, simply, there is not enough.”īravo to the author for being brave enough to state the obvious. Unless a significant course correction takes place, it will be the final one before a descent into a world of permanent European stagflation and economic decline. That will be difficult to unwind, making this recession unique. The problem is that the current recession and its driver, a serious lack of energy, is part of a massive wave of deindustrialisation across the continent. So, who will be the future investors in an economy that is losing its entrepreneurs? The answer for many Germans seems to be the state, in the hope that every problem can be papered over by massive government spending, entirely ignoring that more spending with less production will lead to ever more inflation.īut this is not the 1870s or 1930s, where, despite the economic depression, German companies founded in the 19 th century maintained their innovative edge. German universities, once the envy of the world and the role model for America’s Ivy Leagues, have fallen well behind. As this paper shows, Germany is losing its competitive edge across the spectrum from education where outcomes are stagnating to entrepreneurship where the number of startups is declining. The most important step would be to ramp up domestic energy production, but neither the Social Democrats nor the Greens have any realistic plans in this regard, with the exception of more wind and solar farms, which will not save Germany’s industry. The government wants to spend up to €200bn (almost 5% of GDP) to “shield” enterprises from energy shortages, but it is becoming increasingly clear that no money in the world can increase the supply of energy if, simply, there is not enough. Current proposals are not addressing necessary steps to maintain the country’s industrial base, but instead consist almost entirely of throwing money at the problem. The tragedy is that the government in Berlin is doing next to nothing to reassure investors. Unfortunately, the current crisis is hitting precisely this sector of the economy hardest, driving up insolvencies among Germany’s so called ‘Mittelstand’. Keen innovators, smaller companies are often investing twice as much in research and development as their larger competitors. They also train the future industry workforce, and are responsible for 1.3 million of the 1.5 million training places in German companies. Almost 40% of total corporate turnover is generated by these enterprises, and they account for 55% of value added in the German economy. The backbone of German innovation and a major source of future growth are its small to medium sized businesses. The problem is particularly acute in Germany, where borrowing costs are beginning to rise and the markets are noticing. One of the worst performers is the Eurozone, which is expected to grow by only half a percentage point - and even that prediction could turn out to be too optimistic. The International Monetary Fund has recently updated its world economic outlook, predicting a global growth rate of only 2.7% (compared to 6% in 2021).
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