Dear Germany, why all these coalition talks when advice is to be found in Goethe’s ‘Color Theory’?

Rose of Temperaments

Why don’t you listen to your greatest poet? He had it all laid out 200 years ago.

In ‘Theoretical principles’ he wrote:

“Primitive colors are two: red and green.”

Goethe’s circle of colors points out clear qualities of your political parties. In the inner ring: red – beautiful, yellow – good, green – useful.

In his ‘Color Theory’ he wrote about the color RED:

792. In this designation, remove everything that could give an impression of yellow or blue in the red. Think of a completely pure red, a perfect carmine dried on a white porcelain bowl. We have sometimes called this color purple because of its high dignity, although we know that the purple of the ancients leaned more toward the blue side.

796. The effect of this color is as unique as its nature. It gives an impression of seriousness and dignity as well as of grace. It achieves the latter in its dark, condensed state, the latter in its light, diluted state. And so the dignity of age and the loveliness of youth can be clothed in one color.

If we look at Goethe and Schiller’s Rose of Temperaments, red is the color of the ruler, as if one did not already know, while yellow is associated with Hedonists. So some sort of circumspection might be advised.

Goethe was an absolute fan of the color green.

It is created when the first two colors – yellow and blue – are brought together. The eye finds here a real satisfaction. The eye and the mind rest. One does not want and cannot go on. That is why this is the optimal color for rooms where you spend a lot of time.

He had certain reservations about the color yellow though:

It is the closest color to light. It has a bright, cheerful, gently charming quality. As gold it has a splendid and noble effect. It makes a warm and cozy impression and is used in painting to “illuminate”. Yellow, however, is very sensitive and acquires an unpleasant effect when it is polluted, drawn into the minus. Then the color of honor and delight becomes the color of shame, disgust and discomfort.

He went into more candid details elsewhere in his ‘Color Theory’ when he wrote:

When the yellow color is applied to impure and ignoble surfaces, such as common cloth, felt, and the like, on which it does not appear with full energy, such an unpleasant effect is produced. By a slight and imperceptible movement, the beautiful impression of fire and gold is transformed into the sensation of the disgusting, and the color of honor and delight is reversed to the color of disgrace, disgust, and displeasure. Hence may have originated the yellow hats of the banker-rotters, the yellow rings on the coats of the Jews; indeed the so-called cuckold color is really only a dirty yellow.

Lastly, should there still be any illusions about the other, the Caribbean Sea option, perish the thought. Goethe had already dealt with it. A black object on a white background looks about one fifth smaller than in the opposite case. The Prussian Reich does not need that.

So there you go, Germany.

Merkel’s coalition talks peskier than that surplus gibberish

Everybody now seems to be laying into Germany and its surplus (which in the German media translates into ‘awesomely successful export nation’). First the treasury, then Krugman multiple times, then “Mr. Euro” Prodi, and now Olli Rehn.

That is really surprising and he is baffled as well:

Surprise! I (sort of) Agree with Olli Rehn!

  • He acknowledges that Germany’s surplus is a problem.
  • He acknowledges (albeit indirectly) that the initial source of the problem were capital flows from Germany and the core to the periphery; flows that did not go into productive investment but fueled bubbles.
  • He (correctly) argues that over the long run some excess savings from Germany is justified by the need to provide for an ageing population.
  • He points out that investment has been too low and needs to increase (possible within the framework of an energy transition).
  • He also mentions, without mentioning it, the problem of excessively low wages and pauperisation of the labour force, calling for increases in wages and reduction in taxes to boost domestic demand.

The most important and to the point sentence in Rehn’s post is:

First, the creation of the euro prevented the German exchange rate from appreciating to reflect the large surplus.

Of course nobody wants to hear this in Germany and so they urge every member state to become more competitive. The BDI  is speechless how anybody could accuse a country of being so successful and asking for more infrastructure investments and and increase in private consumption would mean taking on more loans. This is not prudent the Germans say.

What seems to be forgotten over this is the conspicuous absence of any signs of an end to the ongoing CDU-SPD coalition talks. At one point the SPD stormed out of a meeting. There is a real possibility that this might lead to a breakdown. New elections?