Watching the world going through its worst financial crises over the last couple of months was an interesting experience to say the least. It was stunning for me to watch that truths that were held and thought of being indestructible, were thrown overboard in no time. Many times they were replaced with the exact opposite of what was held sacred before. Point in case: the saving of AIG and the American Banks by the government in the worlds most open capitalist system. Government intervention was usually favored by the socialists, not so much this side of the atlantic though – or at least so I thought… (I can hear the spin doctors: “black, the new white”)

Another interesting example is the government funded stimulus called “cash for clunker” program in the US and “Abwrackpraemie” in Germany. While a very similar concept (in fact the US took a page from Germany’s play book, after seeing it vastly successful in Europe), both programs were judged very differently in each country. Despite both countries being capitalist systems, operating in a similar macroeconomic environment, the German program was perceived as a huge succes, hailed by the press, the industry and the general public. In the US the government wasn’t so lucky and the public opinion perceived the program as the biggest waste of government stimulus money. The discrepancy in perception puzzles me to this day.

Through this crisis I came to realize that certain truths coexist at all times, just the weights they’re believed and applied shift over time – like fashion. Some of it is influence by lobbies, media and politicians, but to a large part the swing in opinion and conviction is real and comes from experiences gained in the current or very recent environment. Historical influences take a back seat.

When I try to understand how this all works, I am often reminded of the system response of a PID controller: when a change in desired output value leads to an overreaction and oscillation past the target value. It eventually settles on the new found equilibrium, but only after having kicked up plenty of dust.