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Summary of his messages and my comments
Peter Kopa, 20.3.2020
When it comes to identifying and assessing the key vulnerabilities and risks inherent in the banking and financial system, few have the knowledge and practical experience required to truly understand the magnitude of the problem and its investment implications
Dr. Markus Krall, Managing Director of Goetzpartners Consulting, has worked in the German financial sector for more than 25 years. Throughout his successful career, he has accumulated extensive global experience working with leading international corporations, regulatory bodies, governments and supranational institutions, both from a consulting perspective and from a line role perspective, primarily in banking, primary insurance and reinsurance, and regulatory affairs.
He is also the author of two of Germany’s best-selling books on economics, monetary policy and geopolitics: “Der Draghi-Crash” and “When Black Swans Multiply”. In addition, he is a regular columnist for several of Germany’s leading print and online publications, where he focuses on monetary policy and European affairs. Finally, as a Knight of the Papal Order of the Holy Sepulchre, he is dedicated to humanitarian work and foundations in the Middle East (Source: Wikipedia).
Below is a summary of his ideas, which I believe are very useful for politicians and leaders in Latin America.
Economic Situation in Germany
Dr. Krall published his first bestseller in 2017 under the title “Draghi’s Crash”: it is a work in which he criticizes the European Central Bank and its policy of minimum interest rates, because it leads to excessive indebtedness of the banks, which therefore have a situation of falling results. At the same time, the almost free financing of companies encourages the emergence of ‘zombie’ economic subjects that lead an artificial existence, because they are surviving thanks precisely to very cheap financing, which means that at the moment when a normal interest situation returns as it did 15 years ago, 20% of German companies will go bankrupt, with all the very serious social consequences that this entails. And this phenomenon is also present with its more and less in other European and North American countries.
The political problems
Dr Krall says that the current political system in Germany, which is very similar to the other systems of parliamentary democracy in Europe, should not be based on a party democracy, which is completely obsolete, because it favours the negative selection of people for public service. It shows that among citizens there is a correlation between economic income and professional training, which is why people with a low profile enter a political career, as the only way to ensure a good position in society. In this sense, it is interesting to note that very few politicians have a successful university career or business resume, as is the case with President Trump.
How do you choose a good leader?
On this point, which I consider to be a great truth, we must bear in mind that an honest, well-considered person is not enough, because in the exercise of political leadership the person elected will be faced with a power that demands not only decency and honesty, but there must also be a profound decision to continue being morally impeccable oneself. I ask the reader: How do you find such people, which requires prior knowledge even of the particular lives of individuals who aspire to political office? For example, in the United States, a candidate for president has no chance of being elected if he does not run with his wife and children. A ruler who cheats on his wife, or who leads an immoral life in other orders, will also end up betraying his people.
As for the professional competence of the ruler, should not a similar preparation be achieved as that of an architect, a doctor, etc.? It is interesting to consider that, in all countries, the Law regulates especially those professions whose exercise exposes the citizen to a risk in his physical and psychic integrity, requiring higher studies and an officially defined technical preparation, which will then allow the exercise of Medicine, Architecture, Law, etc. Moreover, the citizen who requests such professional services is also supported by the recommendation of a trusted third party.
However, access to the political function requires only being elected. Here no previous study or preparation is required, due to the dogmatic principle that every citizen has the sacrosanct active and passive political right: that is, the faculty to vote and be voted. And this situation becomes even more complicated when not individuals but parties are elected, which may well be dens of all kinds of manipulation of elements that should never have come to power. Winston Churchill once said that the best thing is to elect rich political leaders, because they would be less inclined to steal from the citizenry and would take more care of their honor.
The dogma that every citizen has all the active and passive political rights has been cradled by the enlightened rationalist thought of Locke, Montesquieu, and others, then vindicated in revolutions and finally imposed on public opinion as a kind of truth of religious faith. Could it be that this legal concept of equality, without any preconditions of due preparation, is based on the Volterian rationalist prejudice that every man is good by nature and only bad influences can degenerate him? If it were always assumed that every man is also inclined to evil, it would probably have been possible to avoid many a catastrophe.
One way of solving this enormous problem could be a constitutional principle requiring a university degree as a necessary condition for access to government positions. In this way, institutions could be created in order to train the candidate in the moral and professional aspect for the good performance of the political leadership. France, for example, has its School of Public Administration. Other leading countries train their political cadres in certain universities, just as multinational companies prefer those who have studied at Harvard. Other forms of preparation and knowledge of the person is the political career. At the same time, there should never be a lack of laws that prevent corruption, waste, and a public administration opposed to digital technology to rationalize and streamline their management. Above all, it is important to have a good Law against corruption, without any commitment that would mean leaving a door open for manipulation, for example, in the awarding of public works. A specific, negative example is provided by an anti-corruption law in a Central European country: it provides that all public works must be subject to public tendering, except in cases of extreme urgency. And this loophole is continuously leaking projects that do not have to be subject to open tendering.
Relevance of Ethics
Although ethics refers primarily to personal behaviour, if millions of people do not abide by natural moral principles in their lives, social and political life suffers a profound deterioration, which manifests itself in corruption, hedonism, uncomplicated living, and the tendency to live comfortably, all of which leads to pushing problems into the future. All this is a dead weight that ends up being discharged in the form of a social crisis or bubble burst. Another serious point that Dr. Krall considers is the sexualization of society and the tendency of the state to substitute the family in the control of the education of its children. He also criticizes the problem of media manipulation and the ridicule of religion.
