Who Saw the Economic Crisis Coming and Why?
Hans-Olaf Henkel is Professor of Business Economics at the University of Mannheim. Previously he was chairman of IBM Europe, Middle East and Africa and President of the Association of German Industries (1995-2000). He is a leading advocate of a split of the eurozone.
Henkel is also a leading figure in a new political group, “Alternative for Germany”, which is expected to be an official party in time to contest the September general election. Its main plank is the abolishment of the euro. (See here.) On March 4, Deutsche Bank Research published an analysis concerning its prospects. (See here.)
In the following article, Lars Schall revisits a debate over comments Henkel made in 2009 in which he attributed the cause of the sub-prime crisis and subsequent global financial crisis to political “do-gooders” ending the practice of banks in the US “redlining” specific areas, such as slums, often with a specific ethnic population, as no-go zone for home-loans.
You have heard the widespread thesis that no one saw the current financial crisis coming. That thesis is simply wrong. However, it makes sure that those are not seen and heard, who a) did see it coming, who b) could have prevented it, and who c) have the knowledge of how we can get out of the schemozzle we’re in.
A prime example for those contemporaries who say that no one saw the crisis coming is Hans-Olaf Henkel, the former head of the Federation of German Industries. Currently, he is, among other things, Bank of America’s senior advisor in Germany and a regular columnist for Das Handelsblatt, Germany’s most respected financial newspaper. Mr Henkel is in Germany a household name among people who follow economics and politics.
Thus, what Henkel says has some impact on the perception and thinking of the general public in Germany. Or, as he himself explained quite well during a 2009 interview with the German stock market commentator Michael Mross: ”If you don’t know the reason for the crisis, you automatically don’t know the right means to prevent the next one.”