There was a woman from Detroit, named Tiesha Blackwell, who foresaw and contributed to the outcome. And I should have paid more attention to her:

“I’m not worse off than I was four years ago,” Blackwell said on the sidelines of a rally featuring Trump’s running mate JD Vance in Detroit this month. But compared to then, things are really, really high out here. I went from paying $575 to now I pay $1,100 just for rent. I remember ground chuck was $2.99 a pound. Now it’s $4.99. Everything is higher.”

Now that a pound of chuck costs $6.89 in Detroit, I guess that Ms. Blackwell is rooting for Michigan’s democratic senatorial candidate El-Sayed, who promises broadly and vaguely to “put more money into people’s pockets.”

This morning, after returning from a few days in an extravagantly expensive Colorado mountain town, I hopped over to my local supermarket to buy a few ingredients. One should assume that Colorado made me insensitive to high prices, but I returned half a pound of cherries for 16 dollars in sticker shock protest. And anyway - what’s 25 dollars for some fruit, milk, croissants, and distilled vinegar?

25 dollars are close to US households’ average1 daily spending on food (at home and out of home, including non-alcoholic beverages). Like in most developed nations, the average US household spends 10% of its annual gross income on food. Alcoholic beverages add another 1% of income, although I am sure it’s more than that in boozy Chicago. The average US household has 2.5 members, as the total of 134 million includes single households too, and makes 115k to 120k per year in gross income.

I don’t think the average family of two adults and half a child can live on a daily dose of one croissant, some fruit, and a glass of kefir. But the average household with 25 - 30 dollars of daily spending only represents a minority. Actual spending is much worse for the poorest 20% of households, which spend 33% of their income on food, or 5,000 dollars per year (admittedly, two thirds of the spending comes from the government’s SNAP program, commonly called food stamps). And it is much better for the top 20% who spend just 5% of their income, but it gives them food for 17,000 dollars per year.

It’s all good stuff for the next election and inflation is on top of people’s minds. It is the time when good intentions get rewarded, and we forget that these often lead to unintended bad outcomes.

Between 2020 and 2021, the federal government under Trump and then Biden approved approximately 5.2 trillion dollars in total COVID-19 relief, of which 1.7 trillion to 1.8 trillion dollars went directly to households and consumers (cash, expanded tax credits, and direct subsidies, according to CRFB and CBO). The money certainly came with good intentions (“helps the economy, hurts nobody” said Biden), but it brought massive inflation, an increase in federal debt that equaled the big financial crisis, and lots of graft2.

This is the CPI “headline” inflation, which includes energy and food, or as the fabulous Peter Boockvar writes: “the number that matters to those of us who have to eat, or refuel our cars.” The Federal Reserve and the financial markets are more focused on core inflation, which strips out those two factors, because they are deemed to be too volatile, transitory, and one has to “look through them”. As of August 2026, annual CPI headline inflation stands at 3.4%, driven by energy (14%), rent (3.4%), services, and food away from home (3.7%), while core inflation is a more manageable 2.5%.

Many economists argue that people shouldn’t worry about inflation as long as income growth exceeds inflation, which it typically does in the US. Robert Shiller wrote an essay about the topic in 19973, and came to the conclusion that most people don’t understand inflation and its impacts: “In my comments, I want to focus on the inflation fallacy. When you ask laymen about the effects of inflation, they say inflation makes them poorer. That is perhaps the principal finding of this paper. It is tempting for economists to snicker at this answer. Such a reaction gives us a sense of superiority, and it offers an opportunity to reciprocate the low regard in which much of the public holds the economics profession.”

I would add that inflation affects people in different ways, depending on whether their incomes adjust with inflation, their financial resources and assets, or age. Simply put, inflation helps the debtors and hurts their creditors.

Real income increases reflect growth in nominal incomes that exceeds consumer price inflation, but the gap is declining. Real income declines, as in the period from 2020 to 2022, make people really angry:

At the end of 2024, the current government came into power, based on a promise to bring down prices immediately. Especially energy and electricity prices would get cut by 50% in the next 12 to 18 months. Those promises were clearly hyperbolic, but they represent what many people expect to hear about inflation. A decline in inflation from 3.5% to 2.0% is not enough, as it still leaves prices 2% higher. But the overall price level rarely declines in absolute terms, and when it does, it’s called deflation, and it’s never a good sign.

Of course, there are exceptions. Egg prices have come down recently, after the government discovered an elaborate price manipulation scheme by five egg producers who collaborated via the widely unknown Egg Clearinghouse, an institution that enables producers to buy and and sell excess eggs. The participants settled the case for a penalty of 3 million dollars and 53 million free eggs, no joke. One may call this the normal outcome or lenient treatment of corporate fraud cases these days, which typically end in a slap on the wrist and a friendly sendoff like “now go home and do some more business, you little scamps.” For more details, Matt Levine from Bloomberg wrote a funny article about the case.

3.4% consumer price inflation is not too bad in historical context. According to the Federal Reserve Bank of Minneapolis, the long run average since 1913 is 3.27%. Or in other words: Something that cost 9 dollars and 90 cents in 1913, now costs 334 dollars and 40 cents. And there is no way that we will see 9.9 dollars again, nor 240 dollars as in 2016, the year that our society finally and irrevocably split into two.

3% inflation seems manageable, but it rarely stays at that level. The big risk is galloping, uncontrollable inflation, as we saw in 2021. Expectation management by the Fed and the government is key in controlling people’s expectations. When people perceive the government as indifferent to inflation, they will fuel the flames through higher wage demands, panic buying, and de-saving. Who wants to buy bonds at 4% when inflation is expected to run at 5%?

Other than disciplined expectation management, I am afraid that there is more that our government and the Federal Reserve shouldn’t do than actively pursue in their fight against inflation. The fact that a majority of voters now consider the Democratic Party more competent on economic issues than the Republican Party may be earned by the latter, but it’s still a reason to get worried. Among the good intentions, which will lead to bad outcomes are:

• Rent controls - because they reduce the supply of housing (Germany, Austria, Italy, and other European countries have ample experience with this)

• Government operated supermarkets - because they kill other, privately operated, affordable suppliers (think of the Soviet Union). Contrary to common belief, supermarkets (max. 3-4%. operating margins), farmers (no profits), and restaurants (50% of them are unprofitable), are not profiting at the expense of consumers.

• Price controls - because they reduce any kind of supply and are unsustainable (remember the Nixon era)

• More tariffs on foreign goods and services - because they are paid by US producers and consumers

• More subsidies for farmers, oil companies, coal mining and other extractive industries - because they distort markets and destroy efficient pricing mechanisms (the European Union has ample experience with farm subsidies)

• Inflation indexing of salaries, pensions, and other obligations - because it drives inflation even higher (Brazil tried this)

Especially in the US, we are now riding one big, speculative, and inflationary investment wave: the AI data center buildout. This wave will consume between 3 and 6 trillion dollars in the next 4 years, according to current announcements. Energy providers, construction companies, industrial equipment manufacturers, and even pension funds are all tied up in an inescapable web of investments and codependencies. It’s not just inflationary, but also increasingly resembles the days before the big financial crisis.

The entire economy has entered a one-directional “go-for-broke” bet, driven by the promise of an ill-defined artificial general intelligence (AGI), and the looming threat of China gaining another technology lead over the Western World. It is little consolation that an eventual burst of the AI bubble will be hugely deflationary.

“Your intuition is right on the money: you haven’t missed out, and you don’t need to learn a secret language. The era of treating prompt writing as a “magic spell” where you had to find the exact, fragile sequence of words—or pay $300k for a standalone “Prompt Engineer”—is effectively over.” (Gemini)

I would like to think that my brain is still functioning relatively well. But my insights are not that deep anymore, and maybe they never were. Recognizing the hidden connections between the trees in the forest was never my strength, so I am not good at puzzles. An hereditary condition of literalness makes it difficult for me to understand idiomatic speech and it makes most lyrics inaccessible to me. When searching for solutions or just names, I go through sequences of possible answers before hopefully settling for the right one. In that manner, my brain functions like an older AI model before “Transformers”1 were invented, very sequential and limited in parallel processing.

My dog is a very different case. He is a sheepdog poodle mix, 8 1/2 years old, and due to my “work” from home, we spend a lot of time together. 4 to 5 walks per day, to the beach and to the park, during which he has to listen to my frequent intuitions and silly word plays.

In the history of 15,000 to 30,000 years of dog domestication, evolution has made humans and dogs well adapted to each other. Physiologically, we are not so different either. We are sharing about 85% of our DNA and our major organs are nearly identical.

Here are some of the amazing tasks that my dog can perform:

• walk safely without a leash (loved by many other walkers, hated by some)

• pass through airport security and fly in cabin on airplanes (a very American privilege for trained service dogs)

• stop on command for other people with dogs to greet them

• recognize different car models (ours, the cleaning lady’s, as well as friends and family)

• follow simple commands in different languages, including English, German, and Spanish

I would like to think that my dog understands grammar rules or the deeper meaning of words like “Platz!”, but he doesn’t truly grasp languages. For him, it’s all about tonality and context. But 8.5 years of multi-sensory learning (touch, smell, hearing, movement etc.), which AI is not yet capable of, have created a highly functioning being with impressive interpretative and social skills.

A dog’s brain consumes approximately 20% to 25% of the dog’s total resting energy metabolism, which is remarkably similar to the proportion of energy used by the human brain. A human brain runs on 20W (watt is the rate of energy2 used at any given moment).

Contrary to common lore, modern AI systems (“Transformers”, the group to which large language models (LLMs) belong, such as OpenAI, Gemini, or Anthropic) use less power than the human brain for a single task3, due to the fact that they can perform it in less time than humans. Writing an essay of 1,000 words takes the average educated human 1.5 hours (plus sometimes days of research and preparation), while an AI system delivers the answer in 5-10 seconds. Nevertheless, AI data centers consume vast amounts of power for two reasons: (a) because they perform millions of concurrent operations (not all of them strictly necessary); (b) training state-of-the-art models requires thousands of GPUs running continuously for months, consuming millions of kilowatt-hours; (c) lots of cooling needed.

AI, my dog, and I, we mostly work through pattern recognition when we think. AI does this 100% of the time. Neural networks (a piece of software that’s designed to resemble the functioning of a human brain), which are the foundations of LLMs, are a little opaque when it comes to their inner workings, and they keep surprising us. So maybe there is an element of human type reasoning in them, but we have not found a way of knowing yet. We like to think that we are the only species that can truly understand abstract concepts and causal mechanisms, and use those for our reasoning. Dogs probably cannot, but maybe monkeys can? Or dolphins?

Studies like this one seem to confirm humans’ cognitive advantages over AI systems’ brute force pattern matching:

There has been a recent explosion of progress in artificial intelligence models, in the form of neural network models. As these models achieve human-level performance in a variety of task domains, one may ask what exactly is the difference between these models and human intelligence. Many researchers have hypothesized that neural networks often learn to solve problems through simple pattern matching while humans can often understand a problem’s underlying abstract concepts or causal mechanisms and solve it using reasoning. Because it is difficult to tell which of these two strategies is being employed in problem solving, this work develops a method to disentangle the two from a human’s or neural network model’s behavior. The findings confirm that humans typically use abstraction to solve problems whereas neural networks typically use pattern matching instead.

In every day life, “pattern matching” means that sensory inputs (words, smells, observations etc.) invoke a reaction from our brains and bodies. A mysterious stranger who intrudes on our property quickly generates the idea of a burglar. A certain series of words spoken by an appealing person can trigger phantasies of a deeper relationship. Or in the case of my dog, the sound of an opening fridge makes him salivate (my wife says it’s my fault).

LLMs are modeled after our idea of the human brain, but they are a piece of software that runs on computer chips. The “disanalogies” are greater than the analogies, some people argue convincingly4. LLM processing works entirely through calculations. They get their patterns from “ingesting” the world’s knowledge repositories (anything that’s ever been written) and create a map of relationship between words, concepts, and grammar rules, expressed via billions of adjustable numbers (weights). All of this allows them to calculate the conditional probability of the “next token” (a word, parts of a word, a punctuation mark, or an individual character). Any question that we ask gets turned into numbers and multiplied through layers of those weights to generate an answer.

Of course, it’s even more complicated than this and Gemini was rightfully offended when called a “next word prediction” machine. It responded with this: "LLMs don't just predict words; they map concepts in a multi-dimensional space to construct the next logical step."

I am getting more convinced that in the battle of human brains versus machines, a consensus will emerge that recognizes each side’s unique strengths and leads to collaborative work modes.

This stands in contrast to hyperbolic predictions like Elon Musk’s “Advanced AI and robotics will replace all traditional human jobs in the next 10 to 20 years.” But I am not one of those who are arguing that AI has failed to deliver any benefits to humanity or is inherently dumb.

There are many proclaimed benefits on the societal level, but I have some doubts about their validity. Productivity (fewer people for the same output) has not increased measurably with the exception of the IT industry where fewer software developers are needed, and even that trend has slightly reversed in recent months. AI produces mountains of easily accessible and digestible knowledge but a walk through the streets makes me question people’s intellectual progress. FDA approved AI-designed drugs don’t exist yet, although some are going through human trials. AI helps with the defense against cybercrime but also creates more powerful attacks. The same goes for AI enhanced military capabilities. Government surveillance is definitely profiting from AI, although certain people have valid concerns about being tracked by traffic cameras, and subsequently getting shot.

Like the pope, I have some ethical concerns5 about AI. But I don’t have sleepless nights over it because I can see a self-correcting trend in all of this:

1. Humans are the ultimate creators and consumers of AI. So far, AI produces results for human consumers and the common mission of the major AI providers is something like “facilitate humans’ everyday lives through intelligent agents.” AI’s current “killer application” is software coding and AI tools like Claude Code churn out boatloads of (often junky) software in ever shorter upgrade cycles. But the end user is still an unhappy human being6.
   
   The same goes for the development of the AI universe, from data center construction, to energy production, mining of critical minerals, to the production of infrastructure components (e.g., transformers, network equipment, chips, servers, cooling, etc.), and model training. I don’t want to engage in speciesism or luddism here, but in my view, humans will continue to occupy the upper echelons of society, for better or worse. Evolutionary survival instincts will keep us from ceding the ground to machines. We can always pull the plug.
   

2. AI has a major sustainability problem. The cost of running (inference) and pretraining (building) of AI (especially LLMs) is enormous. While inference, as measured in cost per token, has become much more efficient, the same effects don’t exist for pretraining. Models don’t have “permanence” and they require constant learning, just like humans. Without pretraining, models become out-of-sync with the state of science, modern human language7, mathematical paradigms, or social frameworks. Searching the web or interacting with users does not train a model. And certainly one of the strongest economic arguments for continuous training is the intense competition with Chinese model providers.
   
   The sustainability problem manifests itself in enormous amounts of energy consumed, water used for cooling, land needed for data centers, and materials required for infrastructure. And it can be expressed in money that gets invested in the building of infrastructure and AI models. Trillions of dollars get invested as only an estimated one hundred billion dollars is currently being paid by end users for the consumption of the services. Rather than opening their wallets, end users (businesses and consumers) are now limiting their budgets and search for cheaper alternatives, such as Chinese open source AI.

3. The human world is messy and AI is not good at managing messiness. I owe this insight to Thorsten Sløk (chief economist of Apollo) and a new book by Luis Garicano, Jin Li, and Yanhui Wu:
   ”All knowledge work varies along the same dimension: messiness. On one end, there is one defined task to execute — you get the payslips via email, use rules to fill out a form, and get a result. On the other end, there is a wide bundle of complex tasks: running a factory, or a family, involves work that is very hard to specify in advance and full of conflict. Along the messiness spectrum, AI has a different ability to help or replace humans. While it is easy for AI to replace simple, clean tasks, it is hard for it to replace messy jobs.”

Market forces will lead to more sustainability, and survival instincts will prevent humans from becoming irrelevant.

New neural architecture will be required to solve problems of expensive training, which means mimicking biological memory consolidation. The hype around continuous autonomous training of models still runs up against technological bottle necks like “catastrophic forgetting” (i.e. overwriting of existing weights), “model collapse” and degradation from bad data without human curation, and “safety drift” or un-alignment leading to security risks.

Consumers will stop using AI for menial tasks when they have to start paying for services. Only an estimated 5% of OpenAI’s ca. 1 billion monthly active users pay for a subscription. Either OpenAI finds alternative sources of revenue or something will have to change. It cannot keep burning close to 30 billion dollars per year.

Once we recognize the folly of burning through natural resources which took millions of years to grow, we will start using AI for truly value-adding functions and not for exchanging automated emails with somebody else’s AI agent.

Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world

In the aftermath of World War I, when the Irish poet W.B. Yeats wrote those famous lines in his short poem “The Second Coming”, he was referring to a world that was truly in disarray. The Irish War of Independence had just started and his pregnant wife had gotten infected by the flu pandemic which ended up killing more people than the World War. Despite a mortality rate of up to 70% among infected pregnant women, his wife Georgie survived.

In comparison to those grim days, we are living in paradisiacal circumstances, but that doesn’t keep our societies from flipping between left and right in politics. And nobody seems to have any interest in the center.

62 percent of young Americans (aged 18 to 29) hold a favorable view of socialism or whatever their idea of socialism is, according to the Cato Institute, a libertarian think tank. Consequently, 45% of registered young voters intend to vote for a Democratic candidate in the mid-terms, vs. only 26% for a Republican. Although, most Democrats are not socialists in an objective definition of the term, as Americans tend to be quite cavalier with their attribution of labels. This is a recognizable shift from 2024 when a majority of young men voted for Trump (especially Black and Latino men) and only young women favored Harris, by a lot. My generation (X) still tends to falsely regard the younger generations (Millenials [1981 - 1996] and Gen-Z [1997 - 2017]) as immature kids, but as 50% of today’s society they should be taken seriously.

In Europe, things are even more confusing. There is definitely a trend towards right wing parties, most notably in France, Germany, Italy, or the UK. But on the extreme ends of the spectrum, the differences between left and right can be blurry. Aside from identity politics (the extreme right is promoting traditional or nationalistic ideas, whereas the extreme left appears to be slightly more internationalist), their economic ideas have become more comparable, especially when it comes to social welfare and pensions. They all seem to have taken advice from Lafontaine’s playbook (the head of the German social democratic party in the 1990s): “Politics is easy, you only have to promise something to the unemployed and the retired, and you win a majority.”

The current shift from left to right has been most visible in Eastern Germany, where former voters for the very left wing party PDS (a successor to the GDR state party SED) are now flocking to the very right wing AfD party. Like in the US, France, or the UK, an anti-immigration attitude seems to drive the shift, often in areas where immigration is sparse, unlike in big cities which harbor the majority of immigrants and are mostly voting left.

Left or right are just words, often used with unclear meanings and in derogatory ways for the other side. The terms come from the seating arrangement of the new French National Assembly during the French Revolution in 1789. Those who sat to the right of the chair were generally supportive of the old monarchist regime, including the clerics1. Those on the left side were the more progressive ones, just like today.

The political spectrum from the extreme left to the extreme right is a kaleidoscope of ideologies, often with distorted meanings. Only liberal democracies can be found in the center and illiberal democracies are an oxymoron, despite Viktor Orbán’s failed attempt to create one. Modern democracies evolved in Europe and the US between the 17th and 19th century and they were all based on principles of liberty, such as the rule of law, protection of civil liberty (i.e., habeas corpus), separation of power, political pluralism, universal suffrage, freedom of assembly and speech etc2. The original liberalism was not synonymous with regulatory zeal as in the US now:

When it comes to political systems to implement these ideologies, there aren’t that many options, and all extreme ideologies inevitably lead to autocracy. People can choose between (or rather put up with) several varieties of democracy (presidential, parliamentarian, direct, or sometimes even constitutional monarchies), or forms of absolutism (some monarchies, autocracies, oligarchies, theocracies). They all come with flaws, some of them by design, others through flawed leaders with autocratic personalities.

We live in an imperfect world but the design of our political systems should be idealistic. The United States constitution is the best example of this: “It is as close an experience we will ever have to walking through Jefferson’s mind. It embodies the same tragic idealism of the Enlightenment, the same striving for perfection in an imperfect world, that informed the American founding.” (from the WSJ, June 19th, 2026: “Monticello: Thomas Jefferson’s Hilltop Temple”)

Every ideology comes with its own economic policy. Traditionally, the right was more associated with free markets, capitalism and small government while the left was tied to big government, financed by high taxes to redistribute income from the rich to the poor. For those on the extreme end of the spectrum, this necessitated nationalization (i.e., France in the early 1980s under Mitterand) or central planning of an economy where everyone was reduced to a cogwheel in an economy that produced the bare minimum but lots of weapons (e.g., in the Soviet Union or today’s North Korea). Not so much anymore, as some nominally communist countries have global market powers (i.e., China, Vietnam) with a distinctive oligarchic or autocratic twist. And arch-capitalist countries like the US are resorting to forms of state capitalism to steer the economy into their leaders’ desired direction, through equity stakes and heavy-handed intervention. America becoming more like Russia (politically and socially) and China (socially and economically) is a dystopian vision, backed by some observable elements of truth:

A distrust of the system

Why do voters swing between left and right? Politicians are known to flip flop, some of them famously, such as John Kerry who was alternatively pro and contra on the Iran war, medical marijuana, the Bush tax cuts, gay marriage, or NAFTA and other policies. Swing voters are a little more mysterious: “A swing voter is, as the name implies, a voter who could go either way: a voter who is not so solidly committed to one candidate or the other as to make all efforts at persuasion futile.”3 By current estimates, swing voters in the US are more frequent than in European countries, around 40% vs. 20-25% in Europe, and they tend to be young on both continents (under the age of 45).

Party membership or affiliation is on the decline. As of April 2026, 43% of registered American voters (out of ~200 million total registered voters) have declared an affiliation—39.2 million as Republicans, 45.4 million as Democrats, and 33.7 million as Independents or to be “unaffiliated” with any party. In the US, unlike in other nations, indicating one’s affiliation is a voluntary part of the voter registration process in most states and matters mostly in primary election.

Most European countries don’t require voter registration (but an ID on voting day) with the exception of non-nationals who can vote in some municipal elections or for the European parliament. Registering ones affiliation is not a concept, but party members get to elect their party leaders and election candidates. In Europe, being the member of a party costs money, therefore not that many voters are loyal paying members: ~1.2 million party members in Germany, ~150,000 in France, ~1 million in the UK.

Neither Europe nor the US are in any way comparable to China which has over 100 million party members and no free elections.

The existence of swing voting is a sign of a vibrant democracy, to the chagrin of many life long politicians:

The tendency to switch political allegiances has been widely investigated. Everything that’s wrong with the world shows up on voters’ minds: inequality, climate anxiety, fear of immigration, inflation, job losses, or general discontent with the way the world is run. When it comes to politics, I like to call this the dilemma of overpromising politicians facing a public with unrealistic expectations. I remember some recent college graduates who expressed their total disenchantment only weeks into Biden’s presidency because he had failed to deliver the revolution which they had expected.

Still, people are tempted to vote for big promises like Boris Johnson’s Brexit wonders or more on the sinister side, the German AfD’s plans for remigrating immigrants and turning Germany back into a monocultural place of Lederhosen and Gretel hairstyles.

Robert Shrimsley writes in the FT about hope as something that’s currently missing and led to Starmer’s recent downfall:

Voters are drawn to optimism. They want hope for the future. Blair, David Cameron and Boris Johnson all benefited from a sunny side. They seemed at ease with people, could laugh at themselves and evinced belief in themselves and the nation. In New York, you see it with Zohran Mamdani.

It has become fashionable to deride such intangibles as charisma or optimism in favour of “grown up” managerialism. But it is only since Britain’s governance became so chaotic that competence has become more than a baseline expectation. Politics also requires a feel for the country, the ability to tell a story and carry people with you. There is a reason so many remember Barack Obama’s “Hope” poster.

While I would like to get uplifted by some hope too, I am afraid that the complexities of today’s political challenges don’t lend themselves to blue eyed optimism. All politics have become a choice between the lesser of evils: limiting or reducing government deficits vs. investing to improve people’s lives; fighting inflation vs. boosting the economy and the labor market; limiting migration vs. fighting demographic decline; focusing on one’s own nation vs. resolving international conflicts etc. etc. People are longing for simplicity and they are ignorant of the complex tradeoffs. A good example are the people of West Virginia (only 2.4% Hispanics) who are staunch opponents of immigration of any kind while their population has declined by over 4% in the last 15 years and even lawyers have to do their own plumbing. Identical places can be found in East Germany, in rural France, or most of the UK outside London.

Money matters too. People feel either relatively poor (in the US) or absolutely poor (in most European countries). The median household wealth (incl. real estate) in Germany is a meagre 127,000 Euros (ECB numbers), whereas in the US it’s around 200,000 dollars and over 400,000 dollars for the age group that goes into retirement (Federal Reserve numbers). Averages differ widely from medians4, demonstrating how unequal some countries are (average household wealth in the US is over 1 million dollars!). Politicians who promise to flatten the curve of inequality without asking people to make sacrifices are welcomed by the younger generation of voters.

Promises have to be believable but beliefs get often shattered by the harsh reality of daily politics. The unluckiest politicians today are probably Keith Starmer and Friedrich Merz who started with good intentions but became too human in their bumbling ways, some of it amplified by gaffes and social media. In the olden days politicians could still enjoy some respect despite being revered or hated, while hiding behind a façade of untouchability or mysteriousness. Current leaders are people like you and me, and voters feel free to express their utter contempt for them, like for some soccer coaches and referees.

• “People are leaving the Western world in record numbers” writes the Economist, mentioning that the number of Americans moving abroad has risen by 11% between 2019 and 2024.

• In the same manner, the WSJ reports that “Americans Are Leaving the U.S. in Record Numbers”, as they are “replanting themselves and their families in countries they find more affordable and safe.”

• The US state department estimates that 1.6 million US citizens live in Mexico, 500,000 to 900,000 of them US born children of Mexican citizens who returned to Mexico. Not all of them came for the good weather, of course. We don’t know how many of them are part of a rather sad story, but we know that about 2 million illegal immigrants have self deported since January 2025, an unknown large number of them to Mexico.

The situation in Europe is similar, with 1.5 to 1.6 million Europeans migrating outside Europe every year. Many of them are returning to their original home countries, others are looking for a better life abroad. In the past, the preferred destination for many used to be the United States. Not so much anymore, for various reasons.

“Hier bin ich Mensch, hier darf ich’s sein” (From “Faust”, by J.W.Goethe) or “Here I am human, here I can be (one)”, one of my favorite uncles used to say whenever he stayed at his retreat, a farm place in the mountains of Tyrol which has been in the family for over 250 years.

I know people who grew up with a strong bond to their home area, whether it’s their family’s house, the schools they went to, or the mountains they skied. I have always felt some envy for them, their lives of such certainty, surrounded by family, building a long time circle of friends, being firmly attached to the landscape and climate of their birthplace. I grew up with a profound disconnect from my surroundings, a disposition which I have somewhat maintained, as my wife will confirm. I am, in a figurative way, a citizen of nowhere1. I own a passport, of course. It’s Austrian and it provides many benefits, with visa-free, eTA, or visa on arrival access to 184 countries.

The homes that we dream of are often imaginary places, as V.S. Naipaul describes in “An Area of Darkness” (1964). Naipaul, who grew up in Trinidad among the Indian diaspora, discovered his own longing for an imaginary, timeless, idealized, rural India while he observed a neurotic nostalgia for British colonial rule among local Indian residents. In the same manner, the place of dreams for many Europeans used to be New York and for many Americans it was or still is Paris. I still think that New York is a wonderful place, to visit for a few days. But to live the life there that I envision, which is more based on movies than reality (as in Woody Allen’s “Everybody Says I Love You” from 1996), I would need multiples of the money that I barely have today. Also, I suffer from a mild case of misophonia and New York is one of the noisiest cities in the world.

Speaking of beautiful places to dream of, mine are holiday places from childhood: Ticino in Switzerland, Danish islands, or South Africa. Louise Glück, the American poet who won the Nobel Prize in Literature in 2020 wrote “We look at the world once, in childhood. The rest is memory.” (“Nostos”, from Meadowlands). For me, a whiff of air with a fleeting scent is enough to think of those places, but those are now places to visit and not for relocating. Or in other words, loosely based on Proust: It is the event as remembered, rather than the event as lived.

For those who are looking for a better place, it matters whether it’s a part time or full time move, although the difference can be fluid when second homes turn into first homes and previously first homes turn into pied-à-terres (or even “med-à-terres”). Full time residences, which typically last more than 6 months per year, come with tax consequences, residence permits, house sales (and purchases), reduced contact with friends or families left behind, and bureaucratic hassle (i.e. obtaining an Italian driving license). And this list doesn’t even consider the much more significant issues that families with (young) children face. Establishing a part time, or second home, is easier, depending on the country and duration of regular stays. Some countries, such as the US, will not tolerate extended, regular stays without a permit, as those can be considered “semi-permanent”. Also, taxation can kick in for regular stays which exceed a certain amount of days. It’s complicated2.

People move for all kinds of reasons: better jobs, lower cost of living, improved proximity to family members, better and /or more affordable healthcare, romantic partners, safety from persecution or crime, environmental risks (e.g., droughts, floods, storms, fires), cultural offerings, or simply adventure. Their choice of destination, depends hugely on their rights to exit and enter, financial means, level of education, cultural affinity, language skills, and opportunities. Despite its many troubles, the United States is still a dreamland for the world’s aspiring immigrants, as I just learned from several cab drivers in Germany, one of them a nice Afghan man who would almost certainly not be welcomed here with open arms (Fremont, California, is called “Little Kabul”).

My aspirations are humble and Chicago is a wonderful place, at least in the summer. Winters are a fairly grueling experience that becomes harder to bear with every year. My criteria for a second home in the winter range from “average temperature December to April” to “quality of food” to “things to do outdoors”.

As a convinced European, I will always feel attracted to Europe first. For the visitor, it is a pleasantly small continent with short travel times between its main cities, usually around 2 hours by plane and often even shorter by train (it takes a little over 2 hours to go from London to Paris). My theory is that we grow up with a center of gravity inside us which can make us feel abandoned or isolated when we live too far away from our inner center. And the landscape that surrounds us in childhood has an influence on our wellbeing as grown ups. Despite (or because of) growing up in Tyrol’s Dolomite mountains, I prefer life by the sea.

Unfortunately, chasing the winter sun is more difficult in Europe than on other continents. Only Southern Spain (Marbella) and the Canary Islands (which are geographically more African than Spanish) offer a consistently warm and sunny climate during the European winter. Contrary to common expectations, winter on the Mediterranean Islands of Spain, Italy or Greece can be pretty terrible.

In the last 20 years, many sunny places have suffered from an influx of too much money, and Marbella is no exception. If the typical home buyer is a 30 year old Swedish startup entrepreneur who has 20 million Euros to spend from a recent exit, it restricts access even for the moderately wealthy. In the early 2000s, I used to vacation in Mallorca or Apulia, where houses, a steal back in the days, now sell for millions. Closer to my home area, hotels in South Tyrol now command room rates of 1,000 Euros per night or more, where 300 Euros was considered lavish 10 years ago. The Aman group bought and modernized an old family hotel in San Cassiano, and charges a minimum of $2,000 per night in the summer season and up to $3,500 in the winter, for a standard room, not a presidential suite. As if the Badia Valley was Manhattan or Aspen, and not a place where people used to “boil stones for soup”3. We need another recession, I say quite often:

Aside from the cost of living, environmental factors play an increasingly important role. Droughts, wildfires, and floods can make a paradise uninhabitable, in the US especially through unaffordable property insurance. A couple of years ago we spent a few wonderful weeks in Pacific Palisades, a neighborhood in the Western region of Los Angeles, which offers everything: beaches, ocean views, mountain hikes, and relaxed village life in proximity to a metropolis. A few months later it burnt down in one of Los Angeles’ biggest fires in history, leaving 12 people dead, and 6,800 homes and buildings destroyed. A prolonged drought in combination with strong winds and a frustrated guy who couldn’t find a New Year’s date led to its devastation.

Humans have a tendency to venture into problematic places for fun and relaxation. Dubai has attracted large crowds over the years, despite a visible lack of environmental sustainability and now finds itself at the center of a potential forever conflict. Mexico’s Pacific Coast has been a favorite destination for us, but it’s neither rich in water supplies nor exactly low on crime. The Alps, our favorite skiing destination, are probably the place where climate change is most visible and damaging. Shrinking glaciers have all kinds of negative consequences, from collapsing mountains to future electricity shortages (hydropower accounts for 60% of Switzerland’s and Austria’s domestic power production).

Some people have a talent for leisure and pursuing a happy life of dolce far niente (in American English: play golf and drink cocktails). Others need to keep themselves busy so they don’t have to acknowledge their retirement. Being super rich is a full time job in itself, but most of us aren’t. Things to do and a circle of friends are key to happiness for normal people. Since we tend to find our friends in school or college, at work or in sports, only the latter remains an option as we get older, aside from chance encounters at the opera or other places of culture. When moving to a foreign country, language is the main barrier to establishing deeper contacts, especially when others speak French (forget about German). Language is the basis of social life, and it entails a specific sense of humor4, conveys sentiment and meaning in more concealed than open ways. In short, it’s an endless source of misunderstandings and every society has its shibboleths5, unknown to outsiders. Therefore, unless the chosen place has a decent population of expats, life can become boring and isolated pretty quickly.

Without wanting to sound old and resigned, the US and Chicago are very likely to remain our primary residence for the remainder of our lives. Many countries are now making it as difficult to leave as it is to get in. Around the world, residence permits have become harder and more expensive to obtain and leavers face onerous exit taxes, for instance in the US, Canada, Australia, Japan, Germany, France, Netherlands, Spain, and Norway. The world has become more fragmented since the 1920s when passports were commonly introduced.

The last couple of years here have been mentally very hard for many, but I have some trust in Churchill’s verdict: “You can always count on Americans to do the right thing—after they have exhausted all other possibilities.” In some way, we seem to be ahead of the curve that many European countries are about to enter. While not isolated from climate change, Chicago has the most to gain from it, considering our cruel winters and the abundance of fresh water. We will continue to explore Mexico and Europe for winter refuges and enjoy the flexibility of not having to manage a permanent home abroad. Life can be wonderful.

Like most others (the CIA being the main exception), I was surprised by Russia’s invasion of Ukraine on February 23rd of 2022 which led to an ongoing war without any prospect of a happy ending. One should say that it actually started in February of 2014 with Russia’s occupation of Crimea, but that event passed without major disruptions for the world outside Russia and Ukraine. The preceding Maidan revolution had driven the Russian puppet Yanukovich out of office and put Ukraine “on the map” for me. Until then, Ukraine seemed like a typical former Soviet state with apparatchiks in government and dodgy oligarchs corrupting the country. My previous opinion had also been influenced by Manès Sperber’s autobiographical book “Bis man mir Scherben auf die Augen legt” (1977)1, in which he describes the extraordinary atrocities committed by Ukrainians against their Jewish population during the Holocaust.

Things have changed and ever since Maidan I have strongly identified with the fate of the Ukrainians and their case for freedom and integrity of their land. I prefer to see this conflict in black and white terms, with Ukraine as the victim and Russia as an evil perpetrator, continuing its tradition as a criminal empire (starting with Lenin).

I am not a hero, like my friend Matthias who transported multiple Ukrainian refugees across the Romanian border during long drives through the Carpathian mountains. And I have to admit that part of my selfish grief came from the fact that back then, a significant part of my wealth was tied up in a mobile telecom company with extensive operations in former Soviet countries (VEON). On February 24th of 2022, the stock dropped by 90%, which didn’t feel great at the time. Lucky for me, the company managed to avoid sanctions, its stock kept trading and after many twists and turns (temporary nationalization of its Ukrainian assets in 2023) it is now a stock market darling. Skin in the game amplifies grief and I became a bit of an expert in Ukrainian history and frontline developments.

Iran is a more complicated case for me, although I have been calling its regime an evil militaristic-theocratic oligarchy in a country that’s inhabited by some of the nicest people (although with complicated personalities). Like a majority of its population I wished the regime would go away, but it was not difficult to foresee a military junta taking over, as it is usually the outcome of revolutions or wars in countries with oppressive regimes.

Nietzsche wrote in “Jenseits von Gut und Böse” (1886): “Wer mit Ungeheuern kämpft, mag zusehn, dass er nicht dabei zum Ungeheuer wird. Und wenn du lange in einen Abgrund blickst, blickt der Abgrund auch in dich hinein.“ Or in English: "Whoever fights monsters should see to it that in the process he does not become a monster. And if you gaze long enough into an abyss, the abyss will gaze back into you." (From “Beyond Good and Evil”).

The morality of war (“Just Wars” in Bible speak) is used by attackers and defenders alike to justify their violence. It can be tempting and often justified by events to view oneself as a victim. The trouble is that victims can be or become perpetrators too. Over a sufficiently long period of time nobody remains without guilt and the lack of acknowledgement of such leads to even bigger violence.

There are moral and legal limits to self defense, although unlike in civilian life it’s hard to define at what point self defense moves from the adequate to the excessive. Some of the current conflicts started as appropriate self defense (i.e., Israel after Hamas’ attacks on Oct 7 of 2023) but have since moved into Keyser Söze mode (the ruthless fictional character from the movie “The Usual Suspects”).

Questions about the morality of wars flood the political space as much as newspaper columns. The arguments range from the clear-eyed to the obscure. War crimes are defined by International Humanitarian Law, primarily the Geneva Conventions of 1949, their Additional Protocols, and the 1899/1907 Hague Conventions, which have been signed by all members of the United Nations. The Rome statute of the International Criminal Court (ICC, 1998) coexists with the other convention but is a more controversial agreement and major powers (US, China, Russia, India) and 36 more minor ones have not accepted the jurisdiction of the ICC, mostly for fear of seeing their own people tried in court (often for good reason).

Nowadays and where I live, it seems a little bit unpopular to call war crimes what they are. Acts are seen as morally justified if conducted by the winner, an observation that the former US defense secretary Robert McNamara shared in interviews about his long experience. But with hindsight and old age, he admitted that war crimes happened - in Japan, in Vietnam and other places. People uphold the two World Wars as examples of “Just Wars,” based on their good outcomes, but many of the 40 million civilian deaths on both sides in WWII were the result of war crimes by all parties involved.

Fortunately, there exists relatively broad consensus against wars and war crimes in Western society, with the exception of a few followers of occult beliefs about holy wars that fulfill God’s will, unfortunately some of them in high-ranking positions. And there is a bigger reason why nations will refrain from fighting wars in WWI mode or via Putin’s meat grinder. Every war since WWII has demonstrated that there is no winner and there is nothing to win - Korea, Vietnam, Algeria, Iraq, Afghanistan, Libya, Ukraine, and many other big and small ones, declared or undeclared ones.

“Nobody wins in war, some just lose less than others”, I quoted in a previous article. A fast developing generation of cheap and hyper-flexible weapons (i.e., drones now, satellites in the near future) plays a role in this, but the biggest factor is that our societies have become unwilling to fight, make human sacrifices or commit the kind of atrocities that are sadly necessary to win a large war (i.e. comprehensive destruction of civil infrastructure like power stations and hospitals).

I would like to believe that “the long arch of history bends towards justice” (Martin Luther King), as I am hopeful for civilization to survive and flourish. But the last years have also shown that a few people in power can completely derail the world’s path to peace and prosperity. Our societies need to stay vigilant and oppose such lunacy.

The essence of Peter Thiel’s argument is that adherence to anti-corruption laws can make life boring and business cumbersome to conduct. Having worked in various countries on several continents, I understand where he is coming from, although his idea of corruption may be based on a slightly romanticized and outdated idea of “greasing the wheels” in charmingly underdeveloped countries. Doing business in Denmark (world record low level of corruption) is relatively seamless and unhindered by bureaucratic fuss, and money under the table will not get you anywhere but jail. Indonesia, on the other hand, does not only have a byzantine bureaucracy but some very peculiar ways of conducting business, especially by government officials with long fingernails.

It all depends on one’s definition of “not boring” and “corruption." Peter Thiel triggered much controversy by gaining citizenship of New Zealand in 2011 without having spent much time there or any intention to move to the reclusive country (maybe in case of an apocalypse or tax hikes hitting the US). When pressed for answers in 2017, the New Zealand government defended its decision with his connections to the US government, a 1 million dollar donation for the victims of the Christchurch earthquake, and some purchases of land and luxury homes. Whether an act is corrupt or not is a legal as much as an ethical question. Based on New Zealand’s laws, Peter Thiel’s exemption was legally granted, although the circumstances caused the public to loudly articulate its discontent.

The laws against corruption vary widely across the world’s countries and ideally reflect their citizens’ attitude towards corruption (some cultures love their nephews, the nepos in nepotism). Transparency International, the leading global authority on anti-corruption, publishes an annual corruption perception index to make countries comparable. Unsurprisingly, Denmark consistently ranks first in the index, followed by mostly European nations, with Singapore, Hongkong, Japan, Australia and Uruguay denying the Europeans the exclusive claim to righteousness1. Equally unsurprising are the dirty dozen at the bottom of the index - Haiti, North Korea, Somalia, Sudan, or Venezuela among them. Some rich countries could definitely do better, like the United States (29), France (27), Spain (49), or Italy (52).

Many years ago, I started my professional career in computer sales. The basic rule against corruption was “just don’t do it.” In the following years, I was never approached by a client with an indecent proposal, although some of my clients got caught for perpetrations with others. For years, I struggled to get contracts from the procurement officer of a government agency, and then I heard he went to jail for accepting invitations to brothels from my competitor. In another case, a corporate data center bigwig went to jail for collaborating with a supplier who delivered hundreds of servers straight to his private garage from where they were sold to obscure buyers. My theory is that people with a talent for corruption identify a willing collaborator via signals that I neither emitted nor received. Or maybe I was just lucky and never had to do business in Russia (ranked 154 of 180 countries).

On the diverse spectrum of global laws and rules, it is typically illegal for government officials to accept bribes and also for private citizens to offer those. Outside government affairs, the business world is subject to laws but often more strictly bound by its own rules. I have been given written instructions by clients that explained forbidden behavior and friends in high ranking positions wouldn’t engage in business with me because our relationship would preclude that. Pity.

We have come a long way from older days, or so we think. In 1977, the US implemented the Foreign Corrupt Practices Act (FCPA) after a series of scandals involving US companies from the defense and oil industry doing some shady business in countries like Saudi Arabia, Japan, Honduras, Korea, Italy, and the Netherlands. Germany continued to allow those practices, including tax deductions for bribes, until 1998 (bribes to foreign government officials) and 2002 (bribes to foreign private employees), when Germany enacted several anti-corruption laws at the insistence of the US and the OECD, whose members signed the Anti-Bribery Convention in 1999.

Strangely, the current US president signed an executive order in February of 2025 that directs the US attorney-general to pause enforcement of the FCPA. The justification given was that “it’s going to mean a lot more business for America”. That sends us back to the 1950s, but maybe that’s the general direction, who knows.

As with any decline in standards, the normalization of bad behavior is the problem. Gillian Tett from the Financial Times calls this the normalization of deviance, quoting the social scientist Diane Vaughan who was tasked with exploring the mistakes that led to the Challenger space shuttle explosion in 19862: “Social normalization of deviance means that people within an organization become so much accustomed to a deviant behavior that they don’t consider it as deviant.” We have seen the phenomenon of “everybody does it, so it must be ok” in finance (Germany’s cum-ex scandal or regular insider trading offenses, especially in the US), in science (plagiarism, faking of scientific papers), and other crimes and misdemeanors (from bribery to tax fraud, drug consumption and dealing, sexual abuse, and cheating). As always, the fish rots from the head3 and quod licet jovi, non licet bovi.

Greed brings out a level of creativity in people that would turn artists green with envy. To conceal the act of bribery they (often unsuccessfully) use circumscriptions like tuna, chicken, eggs, nudge nudge, incentives, or success fees. Consulting contracts are signed to justify the payments. Political donations are given for favorable legislation or exemptions from inconvenient rules. State subsidies are promised for votes. Jobs without obligations are provided to friends and family in return for business or other favors. Or, in a new twist, somewhat frivolous lawsuits are launched and then quickly settled for considerable amounts of money.

The lines of legality can be blurry, especially when it comes to people in power who enjoy high levels of impunity. Or as the former President Richard Nixon said in his 1977 interview with David Frost: “Well, when the president does it, that means that it is not illegal.” He was wrong, but he also got pardoned by President Ford. Which brings me to Jeffrey Epstein, who was an evil genius at recognizing people’s innermost desires and at luring them into a global network built on sex, money, social status, and companionship. We are in the process of finding out how much of this was illegal but quite a few people are getting ostracized now for just having sat at his dinner table (by their own accounts). When it comes to corruption, Supreme Court Justice Potter Stewart’s words about pornography still apply: “We know it when we see it.” (1964)

Corruption is always a bad thing. It is neither victimless nor beneficial to society, its institutions and members. Corruption is a form of theft where the damage and the victims can often be found at the end of a long and twisted process: taxpayers who pay the bill for political favors from decades ago, businesses that got busted by unfair competition, or generally dysfunctional societies without trust in institutions and rules. It is no coincidence that the countries with the lowest amount of corruption are the most stable, equal, and prosperous ones. Others are on the way up due to good reforms, while some look like they are on a well greased downward slope.

Geschäftlich bedingt kann ich noch gut mit Zahlen operieren, auch bei Statistik kann ich mitreden. Aber schon in Geometrie könnte ich kein Examen für 16 Jährige bestehen. Und in Physik oder Chemie kann ich bestenfalls anekdotisches Viertelwissen beisteuern, in der Art wie “wußten Sie eigentlich dass das Universum zu Anfang nur aus den Elementen Helium, Wasserstoff und Lithium bestand?” Das habe ich neulich irgendwo gelesen, aber vielleicht stimmt es gar nicht. Es frage mich bitte auch keiner nach einer schlüssigen Darstellung der speziellen Relativitätstheorie oder von Quantenphysik, auf deren Prinzipien so ziemlich alle unsere Technik des täglichen Gebrauchs beruht. Und den Begriff Epistemologie, um die es hier irgendwie geht, muss ich immer im Lexikon nachschlagen.

Vermutlich ist das heutige Verhältnis von individuellem Wissen zu Gesamtwissen der Menschheit auf dem tiefsten Stand der Geschichte. Man sagt, dass der Forscher und Universalgelehrte Alexander von Humboldt (1756 bis 1859) der letzte Mensch war, der über das gesamte Wissen seiner Zeit verfügte. Neben der phänomenalen Bildung des Mannes zeigt sich in der Tatsache auch der vergleichsweise niedrige Wissensstand der Gesellschaft zu seiner Zeit. Anders als Humboldt selbst, der mit 90 Jahren friedlich aus dem Leben schied, konnte der normale Europäer damit rechnen nur 30 bis 40 Jahre alt zu werden, was meistens an Krankheiten lag, zu deren Ursachen auch Humboldt keine plausible Erklärung hatte. Die Erkenntnis, dass bakteriell verunreinigtes Wasser Cholera auslöst, wird dem Engländer John Snow in 1854 zugeschrieben, aber es dauerte noch einige Jahrzehnte und Glaubenskämpfe bis seine Erkenntnis zu umfassendem sanitären und medizinischen Fortschritt führte.

Eine mir früher nahestehende Person pflegte zu sagen, dass die Menschen alle so frustriert seien weil sie “das Leben nicht verstünden.” Sie meinte damit wohl die Komplexität der Welt und wie die Dinge alle so zusammenhängen und funktionieren. Ich würde den Satz dahingehend formulieren, dass viele Menschen einfach gerne Gespenster sehen. Etwas in unseren zerebralen Schaltkreisen scheint uns zu verleiten, Erklärungen in Verschwörungstheorien, Aberglauben und Mystik zu suchen. Vielleicht ist es auch nur Bequemlichkeit oder eine nachhaltige Verweigerungshaltung gegenüber Bildung aus Zeiten unbewältigter Schulkonflikte.

Man muss da natürlich unterscheiden zwischen jenen, die nur naiv oder schlichten Gemütes dummes Zeug glauben, und solchen die das Zeug zu ihrem eigenen Nutzen verbreiten. Bestimmte Leute in machtvollen Positionen und solche die danach streben bevorzugen ein ungebildetes Publikum, in Deutschland wie in anderen, als eigentlich entwickelt geltenden Ländern:

Klöckner hielt die erste Rede. Sie war kurz und ernst. Sie hob darin das Leid der Frauen von Srebrenica hervor. Adis Ahmetović, der bosnischstämmige SPD-Abgeordnete, hielt seine Rede mit der Blume am Revers. Er wurde von Klöckner warm begrüßt.

Nach einer halben Stunde trat Martin Sichert von der AfD ans Rednerpult und ließ die Gedenkstunde entgleisen. “Was im Großen im Jugoslawienkrieg zu sehen ist”, sagte Sichert, “kann man im Kleinen heutzutage auf nahezu jedem Schulhof in Deutschland erleben.” (ZEIT Magazin, 17.12.2025, “Julia Klöckner - Die hält die zweite Reihe nicht aus.”)

Volksverdummung hat man das früher genannt. Dreißig von zehn Millionen illegaler Einwanderer seien der Grund für die hohen Mieten in Amerika, weiß der hiesige Vizepräsident zu berichten, und die Verknappung des Rindfleisch Angebots und die daraus resultierende Fleischpreisinflation seien ausgelöst durch von illegalen Einwanderern mitgebrachte kranke Kühe, sagte der als kompetent geltende Finanzminister.

Und dann gibt es noch die Gruppe der Hochgebildeten und Begabten deren Schaltkreise irgendwann durchbrennen und die häufig unter Paranoia, Schizophrenie oder beidem leiden, und damit auch ihre Mitmenschen. Der wohl berühmteste Fall ist der sogenannte Unabomber, mit bürgerlichem Namen Ted Kaczynski, der seine Briefbomben Attentate (3 Tote, 23 Verletzte) mit einem schwurbeligen Manifest begründete. Andere Fälle, nicht immer mit Attentaten verbunden, aber dennoch tief verloren im Dunkel der eigenen Gedanken sind oder waren zum Beispiel Elon Musk (zeugt systematisch Kinder zur Rettung der Menschheit), Bobby Fischer (lebte und starb zurückgezogen, meistens auf der Flucht und in tiefem Hass auf alles Jüdische und Amerikanische), Horst Mahler (Anwalt von RAF Mitgliedern in den 70ern, lange vor seinem Tod schließlich zum überzeugten Nationalsozialisten mutiert), oder Peter Thiel (schwerreicher Investor und Philosoph, der ebenfalls den Untergang der Menschheit vorhersieht und neuerdings stundenlange Vorträge zur Natur des Antichristen hält).

Bildung und Wissen sind wichtig, aber Erkenntnis ist das noble Ziel. Man kann viele Bücher lesen ohne etwas zu verstehen, so wie meine Großmutter die ohne viel Interesse alle ca. 1.200 Seiten des “Der Mann ohne Eigenschaften” las, weil sie das Buch nun mal gekauft hatte. Die Generation meines Vaters konnte oft lange Gedichte wie Schillers Glocke auswendig rezitieren. Andere können heute noch lange Zahlenketten multiplizieren und dividieren, Geschichtsdaten der letzten 500 Jahre runter rattern, alle Flüsse Europas auf einer Karte einzeichnen, aber das macht sie nicht schlauer. Unsere Definition von Wissen beschränkt sich meist auf die Kenntnis von Informationen und Fakten. Bei der Erkenntnis geht es darum, den Dingen einen Sinn zu geben.

Erkenntnis muss man sich erarbeiten, und Wissen wie Erfahrung sind dabei die erste Stufe. Nils Bohr (Nobelpreis für Physik 1922) hat mal über Quantenmechanik gesagt, dass es sich hier eigentlich um Philosophie handele. Ich glaube den Satz zu verstehen, und ich würde mich der Aussage gerne anschließen. Leider ich bin dazu völlig unqualifiziert. Genauso verhält es sich mit Leuten die oft “Trau keiner Statistik die Du nicht selbst gefälscht hast” zitieren, ohne auch nur annähernd zu wissen was ein Konfidenzniveau ist. So sieht der Unterschied aus, zwischen “echtem Verständnis” und “geschlampertem Interesse” (Andy von Bechtolsheim).

Mehr lesen ist ein gutes Ziel für das Neue Jahr. Vor allem Männer lesen zu wenig, schreibt die Financial Times. Nur 53% aller britischen Männer haben in 2025 ein Buch gelesen. Die Frauen sind da etwas fleißiger und kommen auf 66% (es ist nicht anzunehmen, dass Deutschland oder die USA besser abschneiden). Ganz besonders fehlt es an Interesse für Belletristik, also alles was nicht Sachbuch ist. Wir sind überhaupt zu sehr auf Business und Geld fixiert. Philistinismus nennt man eine solche Einstellung, die sich durch eine Geringschätzung geistiger oder künstlerischer Interessen auszeichnet. Eine Verarmung unserer geistigen Welt ist die Folge, und eine dusselige Flut von Warren Buffet und Steve Jobs Zitaten auf LinkedIn.

Es gibt da viel zu tun im Neuen Jahr, und wir beginnen am besten mit unseren Kindern oder Enkelkindern, indem wir ihnen mehr vorlesen.

Not wanting to sound boastful, but I can claim to be good with numbers (not numbers theory of course) and statistics come easy to me (a good discipline for someone who is weak in mathematics). But I will fail any test in geometry that most 16 year olds pass swimmingly. My knowledge of physics and chemistry is anecdotal at best, as in “did you know that the early universe consisted only of three elements - hydrogen, helium, and lithium?” It’s something that I recently read in the Economist and who knows if it’s true. And please refrain from asking me for an explanation of the theory of special relativity or quantum physics, although all my technology of daily use is derived from those. And while epistemology is a central theme of this essay, I need a lexicon to define it.

It is safe to assume that today’s ratio of the average individual’s knowledge to the world’s collective knowledge is at a historic low. The last person who possessed all the world’s knowledge was supposedly the Prussian polymath Alexander von Humboldt (1756 to 1859). While impressive, some of this may have been facilitated by the comparatively low volume of knowledge at his time. Humboldt died peacefully in his bed at age 90, unlike his contemporaries who typically only made it to 30 or 40. Such low life expectancy was mainly due to the many epidemic diseases for which even Humboldt lacked plausible explanations (the miasma was a popular theory). It took until 1854 for the Englishman John Snow to find a connection between contaminated water and cholera, but comprehensive improvements in sanitation and medical treatments didn’t arrive for another fifty years due to government reluctance and pseudo-scientific battles.

Someone who was close to me used to say that people were frustrated because “they don’t understand how life works.” She was somehow referring to the general complexity of the world and how all things are connected. I would like to rephrase the sentence to “people like to chase ghosts”. There is a defect in our brains’ wiring that makes us susceptible to conspiracy theories, superstition and mysticism. But maybe it’s just complacency or hostility to education, resulting from unresolved school trauma.

We should distinguish between people whose naïveté leads them to believe all kinds of nonsense and such people who like to spread preposterous nonsense for their own benefit. Certain people in power prefer an uneducated audience, even in developed countries like ours:

Klöckner (president of the German parliament) delivered the first speech. She was concise and serious. She emphasized the suffering of the women of Srebrenica (in the Bosnian war, 1992 - 1995). Adis Ahmetović, the Bosnian-born social-democratic delegate, delivered his speech with a flower in his lapel. He was warmly greeted by Klöckner.

After half an hour, the AfD delegate Martin Sichert entered the stage and began to derail the commemoration: “What we can seen in the bigger picture of the Yugoslavian wars is happening daily in almost every schoolyard in Germany.” (ZEIT Magazine, Dec 12th, 2025)

Brainwashing of the masses, we used to call it. Thirty million (of an estimated ten million) illegal immigrants in the US are the reason for rental price inflation, stated the Vice-President. And our beef shortages and price inflation come from illegal immigrants crossing the border with sick cattle, as we are told by our supposedly competent Treasury Secretary.

And then there are the highly educated and supremely talented whose brains short circuit when they get hit by paranoia, schizophrenia, or both. The most prominent case was Ted Kaczynski, also known as the Unabomber, whose confused manifesto served as a justification for sending letter bombs that killed three and wounded 23 people. Others usually don’t commit attacks but tend to get lost in a labyrinth of apocalyptic phantasies, such as Elon Musk (who systematically procreates to fight population decline), the chess player Bobby Fischer (who lived and died on the run, hiding in Iceland, filled with hatred for Jews and America), the German Horst Mahler (a prominent lawyer for the leftist terrorist group RAF in the 1970s who converted to extreme Nazism before his death), or Peter Thiel (obsessed with the existence of an Antichrist about whom he educates carefully selected audiences during hours-long speeches).

Education and knowledge are important, but true understanding is the ultimate goal. Some people read tons of books without understanding them, like my grandmother who read Musil’s “The Man Without Qualities” - roughly 1,200 unfinished pages - despite finding it boring, and because she had paid for the book. Some people in my father’s generation were still able to quote the 430 lines in Schiller’s “The Song of the Bell.” Even today, I meet people who can proudly multiply or divide long sets of numbers, rattle off historical dates of the last 500 years, or draw all of America’s rivers on a map, which doesn’t make them smart. Our definition of knowledge is often limited to someone’s recollection of facts and information. But cognition is recognizing meaning in the things that surround us.

The effort to acquire knowledge and experience is an important first steps in our quest for true understanding. Nils Bohr (Noble Prize in Physics 1922) said that quantum mechanics border on philosophy. I like to believe that I understand the sentence, but unfortunately I am utterly unqualified to explain it. The same is true for people who are quoting Mark Twain’s proverb of “lies, damned lies, and statistics" without knowing what a confidence level is. Andy von Bechtolsheim, the co-founder of Sun Microsystems, Arista, and early investor in Google, called his recipe for success “true comprehension, not just sloppy interest.”

More reading is a good goal for the New Year. Especially men’s interest in books is in steep decline, according to the Financial Times. Only 53% of all British men read a book in 2025 (there is no reason to assume that Americans or Europeans fare better). Women show a little more studiousness at 66%. And due to our fixation on business and money, we are neglecting everything outside non-fiction. The attitude is called philistinism, a disregard for intellectual and artistic endeavors. An impoverishment of our intellectual world is the consequence, demonstrated by an endless flood of postings of Warren Buffet and Steve Jobs quotes on LinkedIn.

There is much to improve in 2026. Let’s begin with reading books to our children and grandchildren.

Whatever conflict has raged in the last 2,000 years, it still impacts us today, but the defining theme of our time is our societies’ respect and compassion for individual lives versus collectivism. In many countries (the former “bad ones” among them) individual lives don’t count much, as individual well-being gets sacrificed to the prerogative power of the state which claims to act for some greater good. I would argue that long before a democratic system has lost its foundational qualities, the loss of respect and compassion for the individual is a hallmark of a democracy in decline.

It’s Christmas time now, and our minds and hearts, hardened by the daily grind of business and politics, should turn to the needs of those who are close to us and those who are suffering far away from us. According to Matthew 25:40 in the New Testament, Jesus said, “Truly I tell you, whatever you did for one of the least of these brothers and sisters of mine, you did for me.”

Matthew wrote in Koine Greek (a simplified version of Ancient Greek), the Eastern Roman empire’s common language, because the Apostles’ native language Aramaic would have been unsuitable for the Bible’s marketing. It was later translated into Latin, the Church’s language for many centuries, before it was translated into German, English, and many other languages - in the Middle Ages at the risk of being burned at the stake by the Roman-Catholic Church. Translation has its weaknesses (e.g., the term “Virgin Mary” probably comes from a confusion between Hebrew and Greek terms), so we don’t know what Jesus actually said. But I find his moral teachings truly remarkable, in times when the Romans crucified, slaughtered, or enslaved people for fun and money:

“The soldiers out of rage and hatred amused themselves by nailing their victims in different positions; and so great was the number that, for want of room, crosses as well as victims were wanting.” — Flavius Josephus, The Jewish War, Book 5, Chapter 11, Section 1

Compassion for others

We are born with it, we develop more of it as we grow (hopefully), but it is also easy to unlearn. Obviously, many Romans didn’t cherish empathy or compassion as a virtue, given how adept they were at poisoning or stabbing one another, including their spouses, children, and parents. For the next 2,000 years, dictators of all kinds have called compassion a weakness or like Hitler “Geschwätz der Schweinepfaffen” (drivel of the pig clergy). Germany’s youth was trained in mercilessness and violence from age 10, creating an example for other regimes in following years.

The trick was to collectively dehumanize unwanted people - Jews, Roma, Sinti, communists, homosexuals, the handicapped, the mentally ill, critics or enemies of the state, black people, Jehova’s witnesses, freemasons, the list is long. Consideration of individual characteristics, such as for Jewish citizens who had served in World War I, was short lived (e.g., Ernst Fraenkel, a Jewish lawyer and legal scholar who wrote “The Dual State,” was allowed to practice until 1938 when he managed to escape after the Reichskristallnacht pogrom).

Young people are especially malleable and so was the young German doctor Karl Brandt. His wife and her sister were accomplished athletes who caught Hitler’s attention early and were introduced to his inner circle. At age 30, Karl Brandt was appointed as Hitler’s personal physician. After several rapid promotions, he was put in charge of the Aktion T4 euthanasia program in 1939. With some technocratic zeal, he directed an effort to kill people with disabilities and mental illnesses. Around 300,000 people received the so called Gnadentod (mercy death), up to 10,000 of them children. After the war, he was tried for crimes against humanity at the Doctors’ Trial, found guilty and executed by hanging in 1948.

My grandfather, a friend of Karl Brandt since youth time, petitioned the courts by referring to a statement by Pastor Friedrich von Bodelschwingh who was a prominent and vigorous opponent of the Nazi’s euthanasia program and who had called Brandt “not a criminal but an idealist.” Like every grandchild I adored my grandfather who ended up taking care of his friend’s extended family. He was unable to reconcile the facts of Brandt’s atrocities with his memory of a friend “whose arguments could be so convincing.” Those arguments, in a nutshell, were that there was only so much food for the German population and every handicapped or mentally ill person was a “useless eater.” So much for sacrifices or cruelty in the name of a greater good.

No civilization without respect for the individual

We lump people into groups because it’s easier to like or despise them collectively. And there is no shortage of pejoratives: low-lives, enemies of the state, vermin, garbage, infidels, traitors, commies, illegals, etc. etc.

I firmly believe in the value of civilization and that we cannot make enough effort to improve upon it. Therefore, I have little sympathy for “you have to destroy (..) to rebuild it (…)” (e.g. China, according to Mao), or “war is the mother of all things,” or “you have to crack eggs to make an omelette.” In my mind, respect for all individual lives is the foundation of civilizational progress. On the spectrum between the extremes of a paralyzing, obsessive concern for everyone on earth and a pathological, complete disregard for anyone’s life, there are sensible and ethical choices for us to make. I propose three.

(1) It starts in our home countries. As always, it’s hard to list all the things that we should do, and it’s not just a legal or political question. But there are plenty of negatives to avoid. For instance, whatever beef one may have with Israel, there is no justification for a Muslim Australian citizen to shoot a 10 year old Australian Jewish child on a beach on the first day of Hanukkah. What great coincidence that one of the attackers was heroically disarmed by an Australian Muslim man by the name of Ahmed-al-Ahmed.

Far away from Australia, one of my least favorite human beings, Vladimir Putin has en gros sacrificed up to 250,000 Russian soldiers’ lives (plus up to 750,000 injured), and caused up to 400,000 Ukrainian civilian and military casualties to realize his vision of a revived Russian empire in the mould of Peter the Great. Putin’s meat grinder was last employed in the two World Wars, but unlike his predecessors, he “recruited” his rather expendable troops from poor, remote regions, prisons, and under-developed countries.

And talking about the good old days, the British were not too sensitive about their empire’s population either. In 1943, when Bengal (part of India) was ravaged by famine that ultimately cost over 1 million lives, “(Churchill’s) War Cabinet had continued shipping Bengali rice overseas well into August, even after viceroy Linlithgow and the Indian secretary of state Amery had demanded they release it to the Bengali public. At least part of this was due to Churchill’s racism towards Indians. ‘I hate Indians’, he had proclaimed to a rather shocked Amery, and sending them relief was unlikely to help, he felt, because they kept ‘breeding like rabbits’.” (from “Shattered Lands”, by Sam Dalrymple)

At the root of all this is our thinking in dimensions of “Us versus Them”. We tend to apply this with fervent tribalism, especially in matters of politics, wealth, race, gender, sexual orientation, native origin, looks, and of course allegiance to sports teams. And politicians play to this and fan the flames with talk about collective punishment. But we show our full contempt or indifference for people from other countries, even if we love those as holiday destinations. For American tourists, few places are more attractive than Vienna, Paris, or Rome, but Europe is considered a continent that’s populated by lazy people who are hopelessly stuck in time. European’s favorite holiday destination outside Europe is still the US, but at least 50% of its inhabitants are believed to be utterly deranged.

Sadly, many of us are truly indifferent to the fate of people in far away countries. There is a common misconception that they suffer less than we do when they get struck by catastrophes like earthquakes or car bombs. Large numbers of fatalities make many of us shrug, as if the survivors were emotionally numb to the loss of their families or friends.

Shortly before his death and in response to statements by one of his more prominent American adherents, Pope Francis wrote in a letter to U.S. bishops: “Christian love is not a concentric expansion of interests that little by little extend to other persons and groups. The true ordo amoris that must be promoted is that which we discover by meditating constantly on the parable of the ‘Good Samaritan,’ that is, by meditating on the love that builds a fraternity open to all, without exception.” (2) Adopting this principle is another good step on the ladder of civilizational progress.

When it comes to fighting pain and suffering, we have to extend the circle of interest to (3) all life on Earth. Fortunately, gone are the days when dogs were treated “like a dog” or animals were massacred for sadistic pleasure. Other initiatives, like the creation of a 1,000 acre sanctuary for former zoo elephants in Portugal, are very encouraging. The same goes for the recent ban on dog and cat meat consumption in Indonesia. But we still have a long way to go, especially when it comes to mass farming and slaughtering. The fascinating insights that phylogenetic research keeps delivering demonstrate that we are all from the same tree and we have to take care of one another.

And here is the wonderful Barbara Streisand with “You’ll Never Walk Alone” at the Emmy Awards after September 11, 2001.

Aus der ZEIT entnahm ich kürzlich, dass ein Professor mit dem schönen Namen Bernd Raffelhüschen, seines Zeichens ein Experte der Glücksforschung, dazu rät zwischen den 4 G’s (Gesundheit, Geld, Gemeinschaft und genetische Disposition) und den 4 K’s (Klima, Krieg, Katastrophen und Krise) zu unterscheiden. Erstere beeinflussen unser Glücksempfinden mehr als Letztere, allerdings könne da schon mal etwas durcheinander kommen. Mein Großvater sagte gern, dass Lehrer deshalb so unzufrieden seien weil sie zu viel Zeit zum Nachdenken hätten.

Ich bin kein Lehrer, aber mir machen die K’s auch zu schaffen: Ukraine, Sudan, Gaza, Massentierhaltung, Staatsverschuldung, die politische Fragmentierung der Welt, die Situation der Migranten und natürlich der Klimawandel. Früher, also zwischen 30 und Ende 40, hat mich das nicht so getroffen, wahrscheinlich weil ich mehr mit den G’s beschäftigt war, vor allem dem Geldverdienen. Jetzt mache ich mir sogar Sorgen wer nach Macron der nächste Präsident Frankreichs wird.

Und überhaupt, die Medien sind an allem Schuld. An meinem Wohnort Chicago lese ich meistens eine Auswahl anglo-amerikanischer Publikationen, zum Beispiel Bloomberg (sehr viel über Finanzmärkte, aber politisch liberal), das Wall Street Journal (auch viel über Finanzmärkte, politisch bestenfalls ambivalent), die Financial Times (angenehm moderat im Ausdruck, mit globaler Perspektive) und den Economist (globaler geht’s kaum, britisch ordoliberal). Den Rest (New York Times, New Yorker, Atlantic) überfliege ich lediglich, weil mir manche Nachrichten emotional und intellektuell zu sehr zusetzen. “Schlimm, aber was soll man machen” sagte der 2023 verstorbene Fürst Schwarzenberg dazu, was seine Tochter Lila unmöglich fand (in ihrem Film “Mein Vater, der Fürst”, 2022). Ich kann den Fürsten verstehen.

Jetzt lese ich auch DIE ZEIT, im Abo als Printausgabe, hier für Euro 428 im Jahr und immer zwei Wochen später erhältlich als in Deutschland. Sofern man DIE ZEIT als Spiegel der deutschen Gesellschaft betrachten kann, geht es den Menschen nicht gut, und vielen mit Grund. Der Output der deutschen Industrie sinkt bereits seit Mitte des letzten Jahrzehnts weil die Amerikaner und Chinesen weniger einkaufen, die Arbeitslosigkeit geht wieder nach oben, und das gesamtdeutsche Glücksempfinden stagniert unter dem Niveau von 2013 - schreibt der Glücksatlas der Süddeutschen Klassenlotterie (für die Prof. Raffelhüschen eine Studie erstellt hat). Und die Politiker lähmen sich gegenseitig in ihrem Streit über was denn nun zu tun sei.

Die Frage “Wie geht’s Dir?” wird in Deutschland üblicherweise nicht zur Begrüßung gestellt, so wie in Amerika wo jeder reflexhaft mit “Great!” antwortet, egal ob er gerade eine Krebsdiagnose erhalten hat oder die eigenen Eltern gestorben sind. Der Deutsche kommt bei der Frage schnell ins Grübeln, was DIE ZEIT zu einem schönen Artikel motiviert hat:

Publikationen wie DIE ZEIT oder auch der SPIEGEL tragen natürlich manches zum Volksempfinden bei. Im Angebot stehen aktuell Artikel wie “Nirgendwo wird so gelogen wie bei der Rente”, “Bewaffnete Zwölfjährige bei Polizeieinsatz lebensgefährlich verletzt” oder “Ich dachte zuerst, ich wäre an Demenz erkrankt: Jede dritte Frau fühlt sich durch die Wechseljahre im Job beeinträchtigt”. Es geht natürlich auch schlimmer, wenn die BILD, Deutschlands auflagenstärkste Zeitung, angsterregend raunt: “Abgetrennte Frauenhände auf der A45 gefunden - die Spur führt ins Flüchtlingsheim.”

In Deutschland wie in Amerika, und überhaupt in allen Ländern, sind sich die Menschen einig dass die Politiker an allem Schuld sind. Und in Deutschland vor allem Frau Merkel.

Noch desolater ist Großbritannien, wo die Menschen seit Tony Blairs Tagen nur noch Enttäuschungen erleben, und selbst der kann sich seit seinem Irak Fiasko selbst mit Leibwache kaum noch in die Öffentlichkeit wagen. Kaum ist ein neuer Premierminister an der Macht, so wie Keir Starmer dessen Partei letztes Jahr 411 von 600 Sitzen im Parlament gewann, muss er bereits einen Coup seiner Back- und Frontbencher fürchten. In seiner Unbeliebtheit übertroffen wird Starmer nur noch von Macron, der laut YouGov ein “Net Favorability Rating” von minus 60 genießt, das heißt 80% der Franzosen mögen ihn nicht mehr, und nur 20% wissen an ihm etwas zu schätzen. Fast keiner der Lenker großer demokratischer Staaten kann auf ein positives Net Favorability Rating blicken, noch nicht einmal die recht beliebte Giorgia Meloni, die mit minus 15 führt. Man muss das im Vergleich zum amerikanischen Präsidenten sehen, der auf beiden Seiten des Atlantik nicht gerade unumstritten ist, aber auf ein Rating von immerhin nur minus 13 blicken kann, was aber schlechter als das seines Vorgängers zum gleichen Zeitpunkt der Amtszeit ist.

Echte Diktatoren wie Putin, Xi oder Erdogan haben es da leichter, zum einen weil sie sich nur recht begrenzt Sorgen um ihre Beliebtheit machen, und zum anderen weil selbst kleine Unmutsäußerungen rasch zu unumkehrbaren Konsequenzen für den Äußernden führen können.

Dem früheren luxemburgischen Premierminister und ehemaligen Präsidenten der Europäischen Kommission Jean-Claude Juncker wird folgende Erkenntnis zugeschrieben: “We all know what to do, but we don’t know how to get re-elected once we have done it.” In ähnlicher Form wird die nunmehr über 100 Jahre dauernde Misere der argentinischen Politik und Wirtschaft mit “overpromising politicians getting elected by an unrealistic public” erklärt. Das Land hat jedes politische System durchprobiert, von Sozialismus über Militärdiktatur zu Anarcho-Kapitalismus, und das Leiden muss zuletzt so stark gewesen sein, dass der eigentlich bereits abgeschriebene Milei seine Führung sogar ausbauen konnte.

Das Politikerdasein in wohlhabenden westlichen Ländern ist derzeit nicht erstrebenswert, zumindest nicht für normal veranlagte Menschen. Man hat vielmehr den Eindruck dass es nur für Menschen mit einem ausgeprägten Hang zum Narzissmus oder anderen neurotischen Störungen attraktiv ist. Eigentlich schade, da die meisten westlichen Länder im historischen Vergleich recht gut funktionieren und selbst Deutschlands Wirtschaftskraft wieder auf das Niveau vor der Pandemie zurückgekehrt ist (in GDP pro Kopf gerechnet). Italien dagegen musste zwar seit 2007 eine etwas längere Durststrecke durchlaufen, aber auch das ist jetzt geschafft.

Es gibt zwar Ausnahmen von der schlechten Stimmung und der düsteren Sicht auf die Zukunft (zum Beispiel Griechenland, Spanien oder Finnland), aber die meisten Länder erleben gerade eine Phase ausgeprägter Unzufriedenheit, vor allem mit der wirtschaftlichen Lage. In einer solchen “vibe economy” klafft oft ein breiter Spalt zwischen Wahrnehmung und objektiver Lage, vor allem in den USA:

Die Menschen hier haben pro Kopf noch nie so viel Geld für Konsum ausgegeben wie heute, bei 2% realer Steigerung (nach Inflation) pro Jahr seit 2010, dem Ende der großen Finanzkrise. Sie fühlen sich dabei aber so schlecht wie in den 70er Jahren, als Vietnamkrieg, Nixon, die Ölkrise, galoppierende Inflation und Zinsen im zweistelligen Bereich das Land belasteten. Eine gute Erklärung hat hierfür niemand, selbst Paul Krugman nicht, und der hat immerhin einen Nobelpreis. Geld und Konsum machen offenbar nicht glücklicher.

Vielleicht muss das Leiden tatsächlich größer werden, damit die Erkenntnis reifen kann, dass der Staat nicht die Lösung aller Probleme ist. Ich mache mir da wenig Hoffnung auf das Ergebnis der Gen Z Revolutionen, so wie sie sich in Bangladesh, Indonesien, den Philippinen, Kenya, Peru, Nepal, Madagaskar, Marokko oder auch New York City (Mamdani!) zutragen. So verständlich ihre Motive sind und sich die Mottos weltweit gleichen (“corruption is sus, stop ghosting democracy” - in Nepal!), so schwierig wird die Umsetzung ihrer Wünsche (“Wohnrecht für alle”) und ihre Beteiligung am Wandel sein.

Persönlich glaube ich, dass wir uns mehr von den Finnen abschauen müssen. Finnland ist das Land “in dem die Kinder im Dunkeln spielen”, so der Schriftsteller Jukka Viikilä. Hier liegt zwar auch einiges im Argen, von steigender Staatsverschuldung über hohe Arbeitslosigkeit zu wirtschaftlicher Stagnation in den letzten Jahren. Trotzdem geben die Leute an, glücklich mit ihrem Leben zu sein, und das Land rangiert permanent an der Spitze aller Zufriedenheitsumfragen. Es muss an der Entschlossenheit und Widerstandsfähigkeit der Finnen im Angesicht extremer Widrigkeiten liegen. Das Konzept heißt “Sisu”.

I like Thomas Bernhard, but I cannot really agree with him on this one. Maybe it’s because I am now 58 years old and people at my age have usually climbed out of the valley of unhappiness that supposedly holds us captive from 34 to 53.

I recently read in DIE ZEIT that a professor with the lovely name Bernd Raffelhüschen, an expert in happiness research, recommends differentiating between the 4 Gs (Gesundheit = health, Geld = money, Gemeinschaft = community, and genetic disposition) and the 4 Ks (Klima = climate, Krieg = war, Katastrophen = catastrophes, and Krise = crisis). The former influence our sense of happiness more than the latter, but things can get mixed up. Or as my grandfather liked to say: “Teachers are all unhappy because they have too much time to think.”

I’m not a teacher, but the Ks get to me too: Ukraine, Sudan, Gaza, factory farming, national debt, the political fragmentation of the world, the situation of migrants and, of course, climate change. In the past, from my 30s to late 40s, it didn’t affect me as much, probably because I was more concerned with the Gs, especially making money. Now I’m even worried about who will be the next president of France after Macron.

And anyway, it’s all the media’s fault. At my home in Chicago, I mostly read a selection of Anglo-American publications, for example Bloomberg (a lot about financial markets, but politically liberal), the Wall Street Journal (more about financial markets, but politically ambivalent at best), the Financial Times (pleasantly moderate in expression, with a global perspective), and the Economist (British ordoliberal). I tend to skim the rest (New York Times, New Yorker, Atlantic), because some of the news is emotionally and intellectually too taxing for me. “It’s bad, but what can you do?” said the late Prince Schwarzenberg, of which his daughter Lila rather disapproved (in her movie “My Father, the Prince”, 2022). I empathize with the Prince.

I also subscribe to the print edition of DIE ZEIT, available here for 428 Euros a year and always two weeks late. If DIE ZEIT can be seen as a mirror of German society, people are not doing too well, and many of them for good reason. German industrial output has been falling since the middle of the last decade because Americans and Chinese are buying fewer of their products, unemployment is on the rise again, and the general feeling of happiness in Germany is stagnating below the level of 2013 - according to the SKL happiness atlas (a state-owned lottery company for which Prof. Raffelhüschen conducted a study). And politicians are stuck in arguments about what to do about it.

The question “How are you?” is not a common one in Germany, unlike in America, where everyone reflexively answers “Great!”, regardless of whether they have just been diagnosed with cancer or their parents died yesterday. Germans start ruminating quickly when asked about their wellbeing, which motivated DIE ZEIT to write a nice article:

Publications like DIE ZEIT or SPIEGEL naturally contribute a great deal to popular sentiment. Current editions include articles such as “Nowhere is there more lying than about pensions”, “Armed twelve-year-old girl critically injured in police operation” or “At first I thought I had dementia: every third woman feels that menopause affects her job”. Of course, things get worse when the BILD, Germany’s highest-circulation newspaper, fearfully murmurs: “Woman’s severed hands found on the A45 - the trail leads to a refugee home.”

In Germany as in America, and in all countries in general, people agree that the politicians are to blame for everything. And in Germany, especially Mrs. Merkel.

Even more desolate is Britain, where people have experienced nothing but disappointment since Tony Blair’s days, and even he can hardly venture out in public since his Iraq fiasco, while protected by bodyguards. No sooner is a new prime minister in power, like Keir Starmer whose party won 411 out of 600 seats in parliament last year, than he has to fear a coup by his benchers, front and back. Starmer’s unpopularity is only surpassed by Macron, who, according to YouGov, has a “net favorability rating” of minus 60, meaning that 80% of French people no longer like him and only 20% appreciate him. Almost none of the leaders of major democratic states can claim a positive Net Favorability Rating, not even the rather popular Giorgia Meloni who leads with minus 15. This has to be seen in comparison to the American president, who is not exactly uncontroversial on both sides of the Atlantic but has a rating of only minus 13, which is worse than that of his predecessor at the same time in office.

Real dictators like Putin, Xi or Erdogan have an easier time, first because they only worry about their popularity to a very limited extent, and second because even minor expressions of displeasure can quickly lead to irreversible consequences for the displeased.

The former Luxembourg Prime Minister and President of the European Commission Jean-Claude Juncker gets credited with the following insight: “We all know what to do, but we don’t know how to get re-elected once we have done it.” In a similar vein, the misery of Argentina’s politics and economy, which has over a century of history by now, can be explained by “overpromising politicians getting elected by an unrealistic public”. The country has tried every political system, from socialism to military dictatorship to anarcho-capitalism, and the suffering must have sufficed to give the troubled Milei an unexpected election victory.

At the moment, being a politician in affluent Western countries seems quite undesirable, at least for people with a normal disposition. One gets the impression that it is only attractive to people with narcissistic tendencies or other neurotic disorders. That’s a pity, as most Western countries are doing quite well by historical standards and even Germany’s economic strength has returned to pre-pandemic levels (in GDP per capita terms) . Italy, on the other hand, had to go through a more protracted period of suffering since 2007, but it has recovered too now.

Although there are exceptions to the gloominess (e.g., Greece, Spain or Finland), most countries are currently experiencing a phase of pronounced dissatisfaction, especially with their economies. In such “vibe economies”, there is often a wide gap between perception and observable reality, especially in the USA:

People here have never spent as much money per capita on consumption as today, with a 2% real increase (after inflation) per year since 2010, the end of the great financial crisis. But they feel as bad as they did in the 1970s, when the Vietnam War, Nixon, the oil crisis, runaway inflation and double-digit interest rates weighed on the country. Nobody has a good explanation for this, not even Paul Krugman, who has a Nobel Prize. Money and consumption obviously don’t make people happier.

Maybe the suffering has to increase, for people to realize that the government is not the solution to all problems. I have little hope for the outcome of the Gen Z revolutions, such as those taking place in Bangladesh, Indonesia, the Philippines, Kenya, Peru, Nepal, Madagascar, Morocco or New York City (Mamdani!). As understandable as their motives are and as similar as their global mottos are (”corruption is sus, stop ghosting democracy” - in Nepal!), the fullfilment of their wishes (”housing is a right for all”) and their participation in a transformation will hit some obstacles.

Personally, I believe that we need to learn more from the Finns. Finland is the country “where children play in the dark”, according to the writer Jukka Viikilä. There is a lot wrong here too, from rising national debt to high unemployment and economic stagnation in recent years. Nevertheless, people say they are happy with their lives and the country consistently ranks at the top of all satisfaction surveys. It must be due to the determination and resilience of the Finns in the face of extreme adversity. The concept is called “Sisu”.

AI’s destructive potential has many facets, although its achievement of artificial general intelligence - or human like intelligence - seems to feature less in people’s list of worries than a few months ago.

Maybe this has something to do with the lack of truly amazing progress in recent months, or OpenAI’s latest release of ChatGPT-5.

More tangible is the lack of job opportunities for 16 to 24 year olds in the Western World, of which some may be attributable to the generative powers of AI. Unemployment in that group is 10.5% in the US, a level last seen in 2016. According to a recent study by the St. Louis Fed, occupations with a high AI exposure correlate with an increase in unemployment more than others. Interestingly, the occupations most at risk are “Computers and Math”, “Architecture, Engineering, and Sciences”, and “Business and Finance”. Jobs in other occupations that were predicted to get annihilated (“Office and administration”, “Legal and Social Services”, “Education”) have seen no increase in unemployment. On the other hand, youth unemployment in most of Europe, which is not known as an AI superpower, is much higher (e.g., France 18%).

About power consumption, Goldman Sachs reports that it’s an even more pressing problem for AI than capital, and therefore for all consumers who are shouldering increasing residential electricity prices (on average 13-18% higher since 2022, in the US). Admittedly, AI is not the only culprit for the explosion of global data center power demand, which has increased fivefold since 2020 by climbing from about 2% of electricity demand pre-2020 to a predicted 12% by 2028 (US Department of Energy). And companies are planning to build much more data center and energy capacity in the coming years. None of them seems to be concerned by the aesthetics of ugly data centers, but it’s a good thing that renewable power accounts for more than 90% of all new energy construction, even in the “bring-back-coal” United States of America.

The numbers are mind-boggling: by 2030, globally $3.0 trillion will have been spent on data center driven power and utilities (50% thereof in the US), and $2 trillion on digital infrastructure. And just because it’s a round number that no company has ever spent before: OpenAI just announced spending plans of over $1 trillion. For better comparison, the world’s GDP - all the world’s production, income, or spending - is a little over $100 trillion per year and around 25% of that is investment (or “gross capital formation”, 2023 numbers)1.

One of the risks of all this spending is that it may go into soon-to-be obsolete and inefficient technology

China’s open source AI models allegedly cost only 1/10th of American models in production. Which leads me to the stock market, everybody’s obsession and delight since the end of the dire days of 2022, or the announcement of ChatGPT-4 by Open AI in March of 2023.

The Nasdaq100’s market capitalization has increased by 21% per year over the last 3 years and the very AI-centric MAG7 companies’ by 45% per year, thereby accounting for almost 50% of the index’s increase (it’s only 12.4% per year without the MAG7). And to add fuel to the fire, VCs have poured tons of money on loss making AI companies this year:

US venture capitalists have splashed $161bn over the year to date on a technology whose promise has not yet been matched by major economic gains. That equates to two-thirds of their total spend, according to PitchBook. The bulk of investment has been funnelled to 10 AI groups — Perplexity, Anysphere, Scale AI, Safe Superintelligence, Thinking Machines Lab, Figure AI, Databricks, as well as OpenAI, Anthropic and xAI. That has pushed up their combined valuations by almost $1tn, according to Financial Times calculations.

There is no doubt about this being a bubble but it is perfectly rational for investors to engage with it, as in George Soros words: “When I see a bubble forming, I rush in to buy, adding fuel to the fire.” The hard part is knowing when to get out.

In the long run, a company’s share price is the total of its discounted expected cashflows. The fact that share prices often deviate from this principle has a lot to do with the variability of expectations and the definition of long run. Many of the highly valued companies don’t have cashflows to speak of, so it’s all about expectations. Mathematically, assumed annual growth rates of over 100% justify almost any price, but that’s not how the world works. Also, the formula refers to operating cashflows only. The moment financing cashflows get included, it’s called a Ponzi scheme.

The investor Harris Kupperman wrote an illuminating piece about the topic and compared it to the railroad bubble of the 1860s. To him, the mix of investment, depreciation and revenues does not add up and probably never will:

“…if you speed up the depreciation curve to something in the three to five-year range, it would imply that my prior breakeven revenue number of $160 billion to justify 2025’s capex spend, is woefully inadequate. In reality, the industry probably needs a revenue range that is closer to the $320 billion to $480 billion range, just to break even on the capex to be spent this year. As I wasn’t educated on the intricacies of a datacenter, I wasn’t bearish enough on the economics of an AI datacenter. No wonder my new contacts in the industry shoulder a heavy burden—heavier than I could ever imagine. They know the truth.

Remember, the industry is spending over $30 billion a month (approximately $400 billion for 2025) and only receiving a bit more than a billion a month back in revenue. The mismatch is astonishing, and this ignores that in 2026, hundreds of billions of additional data centers will get built, all needing additional revenue to justify their existence. Adding the two years together, and using the math from my prior post, you’d need approximately $1 trillion in revenue to hit break even, and many trillions more to earn an acceptable return on this spend. Remember again, that revenue is currently running at around $15 to $20 billion today.”

In short, the bubble will burst, but we don’t know when and how big the fallout will be. And since everything is correlated in the financial markets, it will affect all of us, even those who never put any money into AI stocks. Not all will be lost though. Our grids are in urgent need of buildouts, and renewable energy and battery parks will help the climate. I have my doubts about data centers which are growing like mushrooms now, as we may witness a mini version of the Chinese real estate bubble which peaked at $1.95 trillion in 2021. But the progress in AI software is here to stay and will hopefully help with solving some of humanity’s pressing issues.

The allocation of significant resources should lead to commensurate benefits for society as a whole

The value of the stock market is perceived wealth, but despite being a form of money illusion, it affects spending and investment. If I feel wealthy, I am more likely to book an expensive trip or donate money to charity. The numbers vary, but studies suggest that for every dollar of increased stock market wealth, consumer spending rises by 3 to as much as 34 cents2.

For thousands of years, until 1800, most people had no prospect of better living. Most of them were toiling away in fields and mines, as paid or enslaved laborers (70% of workers in the American South). Since the Roman days, laborers had earned a subsistence wage, and a day of labor paid for just a mid-sized bag of grains, by some estimates. If anyone had told them that their jobs would get eliminated by machinery but their future was bright, they might have resorted to immediate lynching of such prophet. Then, everybody’s life went through unprecedented improvement because of the introduction of machinery and industrialization (admittedly, some of this was pretty rough on people, too). Innovation was key to such progress, at a time when the average person had boundless unfulfilled needs, beginning with food, clothes and housing.

People have heralded the arrival of AI with no shortage of bombast and puffery:

• “AI is one of the most important things humanity is working on. It is more profound than, I dunno, electricity or fire,” Sundar Pichai, CEO of Google

• “AI is even more transformative than the Internet,” Erik Brynjolfsson, economist

• “AI will be the most important technology of any lifetime,” Marc Benioff of CEO Salesforce

• “I visualize a time when we will be to robots what dogs are to humans, and I am rooting for the machines,” Claude Shannon, American mathematician

When people don’t have jobs, they don’t spend money

In a simple economic theory, a society’s prosperity increases when people cooperate efficiently to produce the goods and services they need, so that each member can consume more than he or she could produce on her own.

Increased productivity is one of the optimistic promises of AI, assuming it leads to increased levels of production and not just widespread unemployment. Increasing unemployment among young people in AI affiliated occupations may be a sign of productivity gains or of companies trying to will such gains into existence after spending tons of money on cargo cult projects. Companies like J.P. Morgan or Amazon just announced large job cuts that seem to be connected to the latter. We don’t know yet and even J.P. Morgan’s economists have their doubts about AI-linked productivity gains in the wider economy outside tech. Bloomberg’s Matt Levine sums up the doubts:

There are two theories of artificial intelligence in the workplace. One theory is that AI will take over a lot of the intellectual drudgework of many white-collar jobs, freeing up humans to think higher-level thoughts and pursue deeper understanding. The other theory is that AI will take all of the good jobs and do all of the fun interesting important higher-level thinking, leaving humans to do the less intellectual work of fixing AI’s mistakes and going to the in-person sales meetings.

This year’s Nobel laureate in Economics, the American-Israeli Joel Mokyr, explains the economic growth from 1800 onwards through the power of ideas. “European cultural norms changed in a manner that was conducive to scientific experimentation and discovery, and then the commercialisation of those ideas.” (from The Economist, Oct 13, 2025). His arguments give hope to the promise of AI as a catalyst for growth and prosperity.

But what if most of our material needs have already been fulfilled? Our lives today are very similar to life in the 1950s (apart from people staring at their mobile phones for 5 hours per day now), whereas a person from the 1850s would have been completely lost in the the 1950s. What if AI underwhelms like 5G technology which was supposed to revolutionize the world but mainly led to people playing more games? The internet was supposed to educate the world, but its primary uses are short form videos, porn, games, shopping and dating.

I don’t want to be a notorious pessimist, but on the topic of productivity gains, I am in the good company of another Nobel laureate, the MIT professor Daron Acemoglu who sees a real risk that “AI will provide ‘Meh’ Technology that takes jobs and annoys us all.”

Historically and culturally, the United States has been more intertwined with the Hispanic parts of the American continent than some of us like to acknowledge. Well into the 19th century, the Spanish empire used to cover large parts of the United States, such as Florida, the Southwestern states (California, Utah, Arizona, New Mexico, parts of Colorado), Texas, and a few others. Hispanic families who have lived here for centuries and immigrants make up the largest ethnic group in the country today.

In this essay, I am making an argument for privileged legal immigration of Hispanics to the United States, which will lead to economic benefits for all and is facilitated by our common culture.

Who are the Hispanic immigrants?

The term immigrant is often applied loosely, even referencing those whose families descend from foreign countries. It can refer to locally born children of immigrants who entered the country decades ago or someone who crossed the border yesterday.

The topic involves many complex legal and moral questions. The U.S. as well as other American countries adhere to an unrestricted form of jus soli (right of soil) whereby a child who is born on domestic soil automatically receives citizenship. The rest of the world more or less practices a restricted form of jus soli, typically demanding that at least one parent is already a citizen or a long time resident. The current U.S. government would like to adopt some restrictions (i.e. for U.S. born children of illegal immigrants) but the 14th amendment to the constitution doesn’t permit it, unless the Supreme Court agrees on a novel interpretation of it1. There also exist jus and leges sanguinis (right or rights of blood) and they can apply in combination with jus soli, such as to foreign born children of a country’s citizens.

I am an immigrant in the United States and I used to be one in Germany too, although my struggles to integrate were minimal in both countries. But would anyone consider Marco Rubio, the current foreign secretary whose parents came to the U.S. from Cuba in 1956, an immigrant? I don’t think so, and neither is Jeff Bezos whose biological father is Danish and his real dad came over from Cuba, in 1968. On the other hand, and especially in the U.S., doubts over citizenship can be instrumentalized against political opponents. Ted Cruz was born in Canada to a Cuban-Canadian father (who finally became an American citizen in 2005) and an American mother. The current president, his opponent in the 2016 primaries, claimed that Cruz was not a natural born U.S. citizen and therefore not an eligible candidate. Obama was born in the U.S. state of Hawaii to an American mother and a British-Kenyan father, and his citizenship is still the subject of controversies among people on the lunatic fringe.

By comparison, Hispanic is a little easier to define, although self-identification can be subjective. Hispanic2 refers to someone who descends from a Spanish speaking country by birth or ancestry, including Spain itself. Other than Spain, their home countries are in North America, which includes Central America (from Guatemala to Panama) and the Caribbean, and South America (all the way from Colombia to the continent’s southernmost point in Chile). By some estimates, there are 800 Mio Hispanics globally and about 9% of them live in the United States. And they are the largest ethnic group here3.

And by the way, all of them can be safely referred to as Latin Americans, a term that refers to the regions of the Americas where Romance languages are spoken, primarily Spanish, Portuguese (Brazil), and French (e.g., Haiti). Only the Argentinians may object since they like to think of themselves as living in an outpost of Europe.

A shared history and culture

In 1492, the Genoese4 Cristoforo Colombo (Christopher Columbus in the U.S.) became the first European discoverer of the American continent, on behalf of the Spanish monarchs. He never set foot into territory north of Central America5 and he never realized that he had not reached East India but discovered a new continent. Another Italian, Amerigo Vespucci from the Republic of Florence, understood that Brazil was part of a fourth continent which he called the “Mundus Novus”, a New World. Cartographers gave him credit and named the continent America after him.

As the map shows, Hispanics were the original settlers in large parts of North America, long before the first English, Scots, Dutch, Irish, or Germans came to those areas.

The United States’ history with Latin America is one of meddling, colonization, battles, exploration, exploitation, neglect, but also trade, investment, and support. In some way the U.S. inherited the centuries old conflict between the Spanish and the British Empire. The Latin American colonies started breaking away from Spain (and Portugal) and forming nation states in the first quarter of the 19th century. The U.S. as a role model encouraged the separation from the Spanish (after Napoleon conquered Spain in 1808), Portuguese (Brazil, although peacefully), and French rule (Haiti). It took Latin America until the 1870s to reach a period of consolidation and true independence6.

The U.S. relationship with its southern neighbors evolved in phases, from defending its national and security interests against other colonial powers (Spain and France) in the first quarter of the 19th century7, to major territorial conquests and acquisitions (1849 to 1861), to a policy of unilateralism8 where the U.S. focus moved between business activity and war at other times9. The long held dream of controlling a water way from the Atlantic to the Pacific Ocean came true when the U.S. supported an insurrection in Panama that brought separation from Colombia in 1903. More meddling10 and regime change followed in the 20th century, often in the name of preventing communism to take hold and by supporting some pretty bad autocrats11 and military juntas.

This is not to say that the U.S. treatment of Latin America was all bad. Despite the meddling and the plots, there was some good influence too. NAFTA in the 1990s, along with a financial rescue of Mexico, was one, although it is not fondly remembered by everyone in the U.S. now. In any case, the U.S. behaved much better than the previous colonial powers over almost four centuries. Not everyone remembers this, but tiny Portugal started the African slave trade and became the biggest trader of all12.

A shared history and culture don’t oblige the U.S. to open their doors to immigration, but it certainly facilitates it. The shared culture involves a love of freedom and an aversion to European domination which originated from a successful fight for freedom after centuries of colonization. The treatment of Native Americans across the continent is a different and sad chapter that nobody can be proud of.

I could also be cynical and state that North and South America share a voracious love of drugs, the U.S. as a consumer and many Latin American countries as a supplier. It takes two to tango (no pun intended). But I would never say that.

The dispute about Hispanic immigration

I don’t even know where to begin. The topic is a contentious one with myths, racism, laws, politics, and many kinds of biases overlapping strongly.

On the extreme end, there is the replacement theory. Admittedly, the share of White people in the population has declined since the 1950s, if one chooses that as a reference point, from 88% to 58% in 2020. But the country has grown tremendously since then, from 150 Mio people to over 330 Mio now. That kind of growth would have been impossible without immigration.

And how do we define a White person anyway? The U.S. census asks for ethnicity and people are free to choose. The difference between “White” and “Non-Hispanic White” is about 9 Mio people, which means that 20% of the Hispanic population define as primarily White and not Hispanic. Historically, several immigrant groups used to be labeled as Non-White, for instance Southern Italians who were compared to enslaved Africans and their descendants by newspapers, books, and magazines13 (a prejudice shared and inspired by Northern Italians). And even recently, I had an encounter with an older woman at a golf club who tried to convince me that Mexican caddies are Blacks - with obvious disdain for both ethnicities.

Higher crime rates among immigrants is another reason for people to object to immigration. The Mexican Mafia has immense influence and control over Hispanic street gangs in California, but contrary to its name, its origins are not in Mexico but in the U.S. Admittedly, some Hispanic neighborhoods suffer from elevated crime rates, but there is a natural correlation between poverty and crime rates. According to the FBI report, nationwide Hispanic crime rates are just average. About 18% of homicides are committed by Hispanics and that is roughly equal to their share of the U.S. population.

Others suggest that immigration is driving up inflation, an interesting theory promoted by economists who are affiliated with the current White House. Most serious economists argue convincingly that whatever housing shortage occurs through immigration, it gets more than compensated by the provision of resources for low wage jobs in farming, construction, and hospitality - areas that wouldn’t function without Hispanic immigration, which accounts for ~45% of all immigration.

People who object to the uncontrolled volume of illegal immigration of the past years have a point, although it was worse in the early 2000s.

Not all unauthorized immigration is illegal. One legal but unauthorized form can be asylum and while its claim can be abusive, it is protected by national and international law. Other people who jumped the border used to get apprehended and released (and then disappear) now get returned or deported. In my view, the problem is about control and this should not keep us from creating a legal system that supports Hispanic immigration within defined limits. Nor do the volumes of immigration speak against immigration. While high in absolute terms in the U.S., the numbers are just average by international comparison (hosted international migrants in % of total population: U.S. 15.3%, Germany 20.2%, UK 17.1%, France 13.5%, Spain 18.2%, Italy 11.2%14). About 23% of all immigrants in the U.S. are unauthorized, or 11 Mio (2022 numbers from Pew Research).

There is the notion that the U.S. is superior to all other countries on the American continent. In this view the U.S. excels by providing a higher standard of living, achieving world-record GDP per capita, and enjoys a stable democracy without left- or right wing dictators. And all countries south of the U.S. border are economically and culturally inferior and ridden by political disasters. I could think of quite a few arguments to contest that view, but it’s been a driver of U.S. foreign policy for decades and with unfortunate outcomes15.

But Latin America is not a unified narrative. Every country is either happy or unhappy in its own way and for different reasons, to paraphrase Anna Karenina16. Measured by GDP per capita alone, the richest but often very unequal places are in the Caribbean (Puerto Rico, Aruba, Bahamas, Barbados, etc.), followed on the mainland by Uruguay (ranked 55 among 193 countries), Panama, Costa Rica, Chile, Mexico, Argentina etc.

If income and wealth are only one of several measurements, many Latin American countries rank relatively well. “The United Nation’s Human Development Index (HDI) is a summary measure of average achievement in key dimensions of human development: a long and healthy life, being knowledgeable and having a decent standard of living. The health dimension is assessed by life expectancy at birth, the education dimension is measured by mean of years of schooling for adults aged 25 years and more and expected years of schooling for children of school entering age. The standard of living dimension is measured by gross national income per capita.” By that standard most countries rank in the top “High” or “Very High” categories, except for El Salvador, Guatemala, Honduras, and Haiti. Since ranking is relative to other countries, this demonstrates how bad the situation is in other parts of the world (i.e. very impoverished Cuba is ranked 93 of 193 countries).

One might ask, if things are so good why do Hispanics even want to emigrate to the United States and why don’t U.S. citizens move to Latin America? Well, one answer is that things are not that great for most people. There exists significant poverty next to enormous wealth in many Latin American countries. But U.S. citizens are migrating south, especially to Mexico, in record numbers. As of 2020, over 65% of immigrants to Mexico came from the United States, and Mexico hosts the largest number of U.S. emigrants worldwide.

One more truth about the opposition to immigration: The biggest opponents to immigration are often previous immigrants17. Naturalized U.S. citizens from Cuba don’t want more poor cousins from the island landing in Miami. The same goes for Mexicans, Venezuelans and other groups. One recently landed dissident remarked: “If Cuba is hell, Miami is purgatory.”18

The need for immigration and ideas for a better world

Without wanting to repeat myself, it is a self evident truth that all Western countries are facing population decline and the many problems that come with it: receding economic growth, underfunded pension systems, a shortage of workers in essential jobs etc. The idea of degrowth is a bad one and will not work. Hence, we need qualified immigration.

What better people to welcome as immigrants than Hispanics? Without wanting to generalize, in my many years of interaction with the community, I have seen strong work ethics, friendly personalities, a desire to integrate, and great family culture. One of my inspirations are the families who receive support from a local charity in Chicago that sponsors kids with financial needs to go to private schools and get a path to college. Among the graduates, who typically come from Black or Hispanic families, there are many impressive examples of successful graduates across many industries, non profits, and in government roles19. This is America at its best and a great effort to keep Ronald Reagan’s vision of “The Shining City on a Hill” alive20.

Two simple proposals here, as a vision that may seem unrealistic in today’s environment, but I hope someone will pick them up in future:

• A special Hispanic visa for new immigrants of any qualification with an annual quota for each Latin American country and a path to a green card after 5 or 10 years.

• A general amnesty and path to citizenship for the many unauthorized Hispanic immigrants who have been in the country for more than 10 years, are without a criminal record, and who have contributed through their jobs or businesses.

Latin America with its 660 Mio inhabitants is not a backyard of the U.S. Russia may treat the former Soviet republics as such, but it would be distinctly Un-American for the U.S. to behave like that. We are better than that and if this performance by the Venezuelan Youth Orchestra doesn’t move your heart, you should see a doctor!

These are some alternative truths, depending on whom we listen to:

• “The US economy is faltering” (FT, Sept 8, 2025) or it is “Just inches from the dawn of a new Golden Age” (Scott Bessent on NBC’s “Meet the Press”, Sept 7, 2025)

• “President Trump Has Crushed Biden’s Inflation Crisis” (The White House, Sept 10, 2025) or “Across sectors, many contacts cited tariff-related cost increases. Many manufacturers reported that tariffs had increased the costs of electronic components, tools, metals, and other raw materials, with multiple contacts noting a lack of domestic suppliers for some items.” (Cleveland Fed, Beige Book, Sept 3, 2025)

• “Chicago is the most dangerous city in the world” (Trump, Sept 2, 2025) or “22 US cities with over 100,000 inhabitants have higher crime rates than Chicago” (Newsweek, Sept 2, 2025)1

• “By any definition of intelligence, AI is intelligent”(Geoffrey Hinton in the FT, “AI will make a few people much richer and most people poorer”) or “We know how AI thinks and it’s barely thinking at all” (Melanie Mitchell, WSJ, April 25, 2025)

• “Europe has no escape from stagnation - Things look increasingly dark for the continent” (The Economist, Feb 6, 2025) versus my own impression from recent trips to Italy, Austria, Germany, France and Britain - seemingly prosperous countries with their citizens enjoying life as always.

My mother used to tell us that “The truth always lies in the middle” (Die Wahrheit liegt immer in der Mitte) which was unintentionally opposed to Ayn Rand’s credo that “There are two sides to every issue: one side is right and the other is wrong, but the middle is always evil.”2 Admittedly, my mother’s statement was meant to keep us from arguing over who was to blame for the latest fiasco in the house, while Ayn Rand was a fierce ideologist. But I think that both were wrong. The middle often offers a lukewarm consensus and rarely exists at all. And Ayn Rand’s statement ignores the complexity of finding a truth that is always subject to uncertainty. There are few things that we can be certain of and the sun rising in the morning may be one of the few. Most conclusions are only valid until proven wrong, which is a principle of good science.

Many ways of seeing the world

Every day, we hear a plethora of contradictory and confusing news, often supported by selective data, observations, and quotes. Some of this may be outright misrepresentation or even manipulation (AI makes it easier). Some people are also lying quite a bit. But we cannot mistrust every statement and everyone, unless we want to disconnect ourselves from the world. We need some better theories about why this is the case and better mental models to process the ambiguities in our lives.

Willful ignorance

As a citizen of Chicago, I am very familiar with statements about the town from people who don’t know much about it. We certainly have our share of crime, although crime rates have declined to pre-pandemic levels and even below, except for non-residential burglary and shoplifting:

When it comes to Los Angeles, a city about which some people proclaim they will never set a foot in, all crime rates are down between 3 and 30% in 2025. So it’s astonishing to me that the German Spiegel magazine felt compelled to run an article about Santa Monica as a nightmare of drugs and homelessness. The Spiegel can hardly be accused of peddling right-wing theories about the demise of democratic cities, but it portrayed Santa Monica as an empty, dying place. I spend several week per year in Los Angeles and I cannot deny the existence of homelessness (and drugs), but shops and restaurants on Abbot Kinney are as packed as ever, and so are the beaches of Santa Monica. Maybe the Spiegel needed a story to fill the summer gap.

Dated memories

When we think of some of the world’s biggest cities, memories of pollution, poverty, and danger come to mind. Those are often dated memories or images from old magazines in our dentists’ waiting rooms. Mexico City used to enjoy the best sunsets because of terrible pollution, but the Hoy No Circula banned older cars from driving on certain days and managed to reduce pollution significantly. When I first visited New York City in 1994, crack addicts lined the streets in East Village, stolen bicycles were offered everywhere, rents were cheap, and Central Park was a no-go area at night. In the early 1990s, an epidemic of ‘smash-and-grab’ robberies terrorized Miami tourists and often targeted foreign travelers in rental cars. None of this applies to the present, but we tend to have imaginary memories of places and they are mostly wrong. New Delhi, Buenos Aires, Rio de Janeiro, Medellin, Karachi, Lagos, Nairobi - anybody tempted? I would travel there in a heartbeat.

Biased views

We all have biases, some of us more than others. The Oxford Dictionary defines bias as “prejudice in favor of or against one thing, person, or group compared with another, usually in a way considered to be unfair.” If I like someone and his or her line of argument seems solid and reasonable, I am inclined to listen. Then there are people whom I find unpleasant enough to ignore most of what they say or write, although it requires considerable effort (they tend to be loud). In my case, this has nothing to do with political leanings but more with style. Other people reserve their attention for people or groups that align with their political preferences. The US seems to be a peculiar case in this respect:

Despite minor changes in the economy, such as slightly lower real GDP growth, a slightly higher unemployment rate, and persistently elevated inflation, people have very different perceptions. This discrepancy may be not so much about actual numbers but about hopes for a better economy under a trusted leader of their ilk. Like the stock market, the broader economy is viewed through a lens of expectations. Elon Musk says we will have fully autonomous Tesla robotaxis on the street by 2026 and so the stock price increases by another 20%, despite a total lack of evidence. Some people just like to believe in a charismatic leader. Due to my somewhat fraught Austrian-German heritage, I prefer a capable technocrat in government, Mario Draghi style. But I admit that I am dealing in stereotypes here - another factor that contributes to our biases.

Misrepresentations

The difference between misspeaking and misrepresenting is that the one is unintentional and the other one is just lying. People lie for all kinds of reasons and it can be called influencing when the intent is to help others, but it’s properly called manipulation when the objective is to gain a personal advantage.

The US treasury secretary just gave an interview on NBC’s “Meet the Press” and here is an abbreviated recap of the exchange (his responses in italics):

Welker (NBC) quoted the Times article to Bessent: “Last month John Deere said net income in its most recent quarter was down 29 percent from a year earlier. Higher tariffs have cost the company $300 million so far with nearly another $300 million expected by the end of the year. This summer the company laid off 238 employees across factories in Illinois and Iowa.”

“First of all, Kristen, if you’re quoting the New York Times, that’s not a fair observer,” he scoffed. “For every John Deere we have companies who are telling us, ‘The tariffs have helped our business.’”

Welker rattled off a few more: Nike, which estimates tariffs will cost it $1 billion this year, Black+Decker, and America’s Big Three automakers.

“What, you expect companies to tell the truth about their financial straits? You know, you’re taking these from earnings calls,” he said. “And on earnings calls they have to give the draconian scenario. There are companies coming out and saying, ‘Oh, because of the tariffs we’re doing this.’”

Welker brought up an August research report from Goldman Sachs, which estimated that American businesses and consumers had paid 86 percent of tariff revenues so far. “So just bottom line, Mr. Secretary,” Welker asked, “Do you acknowledge that these tariffs are a tax on American consumers?”

“No, I don’t,” Bessent replied. “You’re quoting Goldman Sachs, so—I made a good career of trading against Goldman Sachs.”

The problem with statistics

Most people don’t understand how statistics are created but they will repeat Disraeli’s bon mot of “There are three kinds of lies: lies, damn lies, and statistics.” The former CEO of GE, Jack Welch tweeted this when the BLS published unemployment numbers of below 7% just before Obama got reelected in 2012:

Faking of government statistics is difficult and surprisingly rare. A monthly BLS employment report is the result of painstaking, detailed compilation of numerous individual statistics across districts, states, industries, and population groups. The end result cannot be pencilled in by a political actor without getting spotted by the vast community of economists and financial analysts. The main autocracies like Russia, China, or Turkey are known to suppress any news that’s harmful to their reputation. But they will report bad economic numbers like high inflation (Russia, Turkey) and slowing growth (China) fairly consistently.

Even in developed countries, the absence of sufficient data in many places (business and individual participation in government surveys has gone down over time in all countries) requires statisticians to extrapolate, smooth, and make assumptions. GDP accounting in a service economy that’s dominated by finance requires almost “artistic skills” (Ken Rogoff). But outright fakery? Greece in the early 2000s is the only case that comes to my mind and someone at the EU must have been asleep.

When it comes to ambiguity and the often widespread disbelief in numbers (i.e., inflation) and sentiments (e.g, New York City is a safe place, or “the jobs market is strong”), it is worth noting that statistics or surveys are mostly based on averages. Buried inside those averages are pockets of misery and bliss. Increasingly, the state of “the economy” or “the nation” becomes irrelevant to people as everyone lives within their own microstructure (or bubbles).

Quality of life, measured by life expectancy, income, wealth, personal safety, health, or education differs too widely for averages to be relevant. This was different in 1900 when 40% of Americans and Europeans worked in agriculture and a bad harvest affected the entire population, but not anymore.

Regardless of one’s attitude to DEI, it’s hard to deny that our societies have become a kaleidoscope of diverse groups. Which explains much of our disagreements.

1

Globally, Chicago doesn’t even rank in the Top 50, according to Wikipedia. New Orleans, Memphis, San Juan, Baltimore, and Detroit are in the global Top 50, by homicide rate. In the US, Chicago is not in the Top 20:

In earlier times, there used to be a flawed kind of certainty about the origin of the world and its mechanics, and most of those beliefs didn’t survive the test of time. Ancient Greek views of the world are now commonly regarded as mythology, so modern Greeks don’t believe that the stars are semi-divine spirits moving across the heavens1. It is also quite rare to find Christians who are holding literal beliefs about the Earth’s creation in seven days 6,000 years ago and all its divinely created species surviving on Noah’s arch - although 20% of Americans still do so (according to Gallup, 2022).

Sometimes at great personal risk (i.e., Galilei) and defying biblical doctrine, scientists proved that the Earth revolves around the Sun in an elliptic orbit (Copernicus, Kepler, Galilei). Newton discovered the laws of gravity and motion which describe the mechanics of the universe, and Darwin’s theory of evolution explained the ever changing landscape of living species. The 20th and 21st century reintroduced some uncertainty into this (e.g., relativity theory, quantum physics, dark matter and energy, genomics etc.), but despite inherent contradictions, our current models explain 99% of our observations and enable us to send objects and humans into space while staying in contact with them. So it’s quite startling that 26% of Americans believe or mistakenly think that the Sun revolves around the Earth, according to a survey from 2012. And it pains me to admit that a 2005 survey showed that 44% of Europeans hold the same beliefs.

The avoidance of pain and the maximization of pleasure explain much of how we choose to live our lives, although not necessarily how we should when considering the wellbeing of all life on earth. That human disposition has always opened some avenues for domination by others. Divine rulers (the norm for much of human history and on the rise again) provided protection from enemies and commanded obedience by wielding the threat of capital punishment or worse. Religious institutions promised eternal life in exchange for ten percent of their followers’ income and strict adherence to their rules. Starting as a scientific and philosophical revolution in the late 17th century, the enlightenment initiated major progress that liberated humanity from such shackles, although some of its protagonists and heirs became tempted to turn their ideas into ideologies for dictators:

…The Jacobins, Robespierre, Hitler, Mussolini, the Communists all use this very same method of argument, of saying men do not know what they truly want - and therefore by wanting it for them, by wanting it on their behalf, we are giving them what in some occult sense, without knowing it themselves, they themselves ‘really want.2

By definition, the future is uncertain, although not as uncertain as it used to be when people feared that the sun might not rise the next morning or a sore throat in the evening foreboded possible death the next day. In many ways, our future has become less uncertain, mainly thanks to modern medicine and improved hygiene. As recently as 1900, the maternal mortality rate in the US was 850 per 100,000 births, which equates to almost 1% of all women dying when giving birth. A woman’s death was considered the price to pay for life. Nowadays, the rate is 17 per 100,000 in the US and under 5 in most other developed OECD countries (Worldbank 2023 numbers). Life expectancy has generally increased tremendously, and therefore as individuals we feel relatively certain about our own future. But collectively, we feel very uncertain about the future of a world which is threatened by global warming, nuclear wars, and large scale migration driven by multiple crises. And such worries seem to be an important reason for not having children:

The problem with knowledge is that the more we acquire the less certain we are. Many people prefer straightforward, simple answers of the kind “When A happens, B always follows” or “The one reason everything bad happens”. Science doesn’t allow mental shortcuts to provide those answers and tends to create complexity which is difficult to understand. Especially the work of STEM disciplines (science, technology, engineering, and mathematics), has become harder if not impossible to express in words only and without a thorough understanding of mathematics. And the ambiguity of results leaves the average person confused and incredulous3:

Over the past decade, two very different ways of calculating the rate at which the universe is expanding have come to be at odds, a disagreement dubbed the Hubble tension, after 20th-century astronomer Edwin Hubble. Experts have speculated that this dispute might be temporary, stemming from subtle shortcomings in observations or analyses that will eventually be corrected rather than from some flawed understanding of the physics of the cosmos. Now, however, a new study that relies on an independent measure of the properties of galaxies has strengthened the case for the tension. Quite possibly, it’s here to stay.

The same can be said about medicine, economics, and other fields of science. This leads to all kinds of hacks and quacks to offer “alternative truths” of a much simpler kind and a resentment of experts. All of this is happening on a massive scale now, from the defunding of research to attacks on universities, or ridiculously unqualified people getting appointed to powerful positions.

In 1951 Hannah Arendt wrote about this in her book “The Origins of Totalitarianism”:

“Totalitarianism in power invariably replaces all first-rate talents, regardless of their sympathies, with those crackpots and fools whose lack of intelligence and creativity is still the best guarantee of their loyalty.”

We have all read Bryan Johnson’s story ad nauseam, the 47 years old founder of Braintree who is devoting his life to reversing his own aging process, thereby spending millions every year on “an all-consuming, unproven regimen including but not limited to daily exercises, blood tests, a doctrinal sleep routine, MRIs, plasma transfers, scalp stimulants, urine tests, several dozen supplements, Dexa scans, light therapy, and caloric restriction”1. And even the Dalai Lama, who turned 90 this month, recently proclaimed that he hopes to reach 130, increasing his previous prediction by 20 years.

We can safely assume that both men are enjoying good care and have sufficient means to support their long lives. And at least the Dalai Lama has a fulfilling purpose in life, being the spiritual leader of Tibet in exile and preventing the Chinese from appointing a successor after his death. Bryan Johnson’s life seems dangerously self-centered, but who am I to judge him.

The older we get, the older we will become

Life expectancy is calculated as the likely number of years to death from someone’s current age, based on statistically derived probabilities within a defined group (e.g., male white US citizens, female Western Europeans, or more narrowly, black American men without college education)2. Given the relatively low infant mortality rate in developed countries (US = 5.6 per 1,000 live births, UK = 3.6, Germany = 2.7), a male American newborn today can expect to reach 75 and a female will live to 80, on average3. For comparison, in France it’s 80 and 85, and it’s not just good wine and cheese that cause the difference. The US has some particular issues as a combination of inequality, violence, drug abuse, mental illness, and risky lifestyles4. Even with that and while a lot higher than in other developed countries, the chances of dying before 25 are much lower in the US than they used to be, at 0.14%:

Life expectancy goes up significantly once humans have passed the critical and often reckless time from puberty to 55 years. Contrary to common perception, an 80 year old American man will not die anytime soon but can realistically expect to get to 88. And even a 105 year old has a 50/50 chance of dying in the same year or making it to the next.

Our increased life expectancy is due to two factors: a) on average, we have a higher chance of surviving the years of trouble and unhealthy lifestyles and b) more people reach biblical ages of over 1005.

“The number of Americans ages 100 and older is projected to more than quadruple over the next three decades, from an estimated 101,000 in 2024 to about 422,000 in 2054, according to projections from the U.S. Census Bureau. Centenarians currently make up just 0.03% of the overall U.S. population, and they are expected to reach 0.1% in 2054.” (Pew Research Center)

And by the way, despite being one of the richest countries, the US is only 32nd in life expectancy among 38 OECD (Organization for Economic Cooperation and Development) countries, below the OECD average and behind much poorer countries like Turkey, Chile, or Columbia.

A world of older people may be a better one, or maybe not

Is it a good thing or a bad thing that societies are getting older on average? The answer is not as straightforward as most economists (not so good) or medical researchers (a triumph of science) think. Obviously, there are benefits to it, such as a more peaceful society, but there are also serious downsides like a less productive and possibly bankrupt economy. We don’t know for sure, but we are already observing some ominous signs in our healthcare and social security systems.

The common answer to the economic problem is that people will have to work longer, beyond the average OECD retirement age of 64 (Denmark highest at 72, Turkey lowest at 52). Wherever governments try, people either set the streets on fire (in France, where it was raised from 63 to 65) or effectively retire even earlier (60, also in France)6. In my observable reality here, most people who work happily way beyond their legal retirement age are financial investors, politicians, judges, and senior partners at law firms or architectural offices. Others retrieve shopping carts or pack bags at Walmart or Cosco to survive. In theory, older people have a lot of experience to share but the job market doesn’t have a lot of need for that. Also, very soon there will not be enough young people to appreciate the valuable advice.

This brings up the two fundamental problems that we are facing: people are getting older and fewer children are being born. I am not going to elaborate on the mathematics of population shrinkage here because they are as self-evident as boring and nobody has much interest in them (I wrote a piece about it).

The age pyramid will not only get inverted but also shrink, ad infinitum, in every place, even Africa - highly simplified by me here:

Declining birth rates lead to a higher share of older people in a shrinking population.

As a simple rule, societies need to produce the amount of goods and services that people need to consume and are able to pay for. They will continue to prosper, even if there are not enough workers to build superyachts or private jets7. But they will stop doing so if there are not enough electricians, plumbers, teachers, doctors, agricultural workers, or caregivers. And we need progress in form of better products and services, which requires innovation. So prosperity and our general well-being depend on a sufficient number of productive workers while innovation is typically the domain of young minds.

One solution that has helped the US tremendously over the last years was immigration. Unfortunately, we and other countries are cutting off that stream. I firmly believe that we will come to regret the day when we killed a culture of openness to qualified immigration.

The other hope rests on the blessings of AI and robots. While those may free up scarce human resources for hopefully higher value jobs, AI and robots will not be able to perform all the jobs. Also, the question is how are people going to pay for those services in the absence of sufficient incomes, especially in old age? Are we going to live in a world where the owners of AI and robots (i.e., Altman, Musk, Bezos et al) reap the monopolistic benefits of their AI and robot armies or will those benefits be shared with everyone? Take a guess.

On the topic of shrinking and older populations, Spears and Geruso8 make a convincing argument for growth, but they don’t offer a solution:

Population growth actually makes challenges such as resource scarcity easier to solve. Assume a fixed share of people become idea generators: scientists, entrepreneurs or inventors. The greater the population, the more ideas. Solving most problems also involves fixed costs. Developing a vaccine or a smartphone costs the same whether for one person or 8 billion. The bigger the population, the more such investments become financially feasible… While there will always be some suffering and poverty, over time people are becoming healthier, wealthier and more fulfilled, so a larger population will raise both aggregate, and average, health, wealth and fulfillment. Who wouldn’t want that?

Less convincing to me are those who argue that a shrinking population may lead to higher prosperity9:

Fewer children and smaller populations mean less need for spending on housing and childcare. These resources could be reallocated to research and development, adoption of advanced technologies, and elevation of education quality. Declines in fertility can also stimulate economic growth by driving up rates of labor force participation, especially among women, as well as savings and capital accumulation. This phenomenon followed the end of the post–World War II baby boom and fueled a demographic dividend in many countries, contributing as much as 2–3 percentage points to per capita income growth.

A population’s productive characteristics figure more prominently than its size in defining its capacity for knowledge creation and innovation. The number of healthy and well-educated people represents the human capital that contributes to advances in knowledge and determines technological progress and economic growth. In his book The Journey of Humanity: The Origins of Wealth and Inequality Brown University economist Oded Galor argues that falling fertility and rising education will lead to human capital formation and long-term increases in prosperity.

Their argument was certainly valid in times when our societies went from 10 children per family to 2 to 3, but 2.1 children is kind of the magic threshold that divides a society with a prosperous future from a degenerating one.

Suffice to say that there is no solution other than having more children, but there are no viable incentives for getting there. More kindergartens, longer parental leave, free money are all characteristics of low fertility societies.

Recipes for a good life in old age

Many of us will have spent one third of out lives learning and studying, then working for another third, before finally “enjoying” some kind of retirement during the last third of our lives. In an evenly distributed age pyramid, this means that one third of the population supports the other two thirds. Now, that’s an exaggeration because many older people have accumulated wealth which they can depend on. Baby boomers (born between 1946 and 1964) own 50% of household wealth in the US but account for under 20% of the population. But 17% of older people live below the poverty line. And our age pyramid is not evenly distributed anymore.

I call those friends of mine older who are between 71 and 87, and they share some common traits in their universal happiness:

• They socialize frequently with friends and family and most of them live in a happy partnership or marriage with someone

• They remain physically active and are mostly healthy

• They have a purpose and find meaning in their lives

• Their private finances are stable

These traits are interlinked and positively reinforce each other. Stable finances enable better health10 which facilitates socialization which provides meaning. Some people were born into comfortable lives but most were not.

Women seem more predisposed for happiness in old age than men. One reason may be that they have developed more discipline than men - their health and longer life expectancy attest to that. Marion Gräfin Dönhoff, the former editor of the German paper “Die Zeit” once wrote “Glück ist eine Frage der Disziplin” (happiness is a matter of discipline). Admittedly, this sounds very old school German, which she was. In 1945, she rode her horse to Hamburg for seven weeks to escape the Red Army’s onslaught on her home near Königsberg in East Prussia (today’s Kaliningrad, Russia). She was also a member of the resistance against Hitler and saw her fellow members getting executed after the failed assassination attempt in 1944.

Men who cling to power for too long tend to fall into a void in old age. The same is true for women (i.e., Angela Merkel, Hillary Clinton?), but men are still in the majority. The fallacy of power is that it makes people define themselves through their ability to control others. Psychotherapists used to be called shrinks until the term was considered slightly derogatory. An inflated ego may require some “head shrinking” (but not literally, like in ancient times).

When it comes to purpose and meaning, some well meant advice can be presumptuous. Not everyone has a talent for or finds meaning in creative work and I know quite a few people who are devoted to their so called “bullshit” jobs11: a waitress in her 70s at my golf club who won’t miss a day of work, my grandfather’s secretary who typed and archived his letters for over 40 years, or the various house managers in my neighborhood of Chicago. Another German comes to mind, Frederick the Great, who said “Jeder soll nach seiner Fasson selig werden“ (let everyone find happiness in their own way).

Hedonism is definitely an option, but some nationalities (Italians) seem better suited to it than others (Germans, American). A “doing that truly does” (“Ein Tuendes Tun”), as Heidegger phrased it, is the more promising path to happiness for most of us.

And then there is old age and very old age. My parents lived in good health at home beyond age 80, despite steadily progressing dementia, until they suddenly didn’t. A broken femoral neck from a fall12 landed my mother in a wheel chair for the last two, pretty miserable years of her life. And my father died quickly once he went into a nursing home, after it became impossible to take care of him at home. Part of their condition was probably genetic, other parts would have been preventable through earlier diagnosis, prevention, and better treatment.

One last suggestion: start preparing for old age early. Take time off from chasing the money, enjoy nature, exercise, take care of a friend. An early morning swim with my dog Ben in Lake Michigan does it all:

The going rate for a lavish wedding by super-rich commoners seems to be 50 million dollars, today as in the past. Royals require a lot more security and attract larger crowds, so their weddings tend to be even more expensive. The steel magnate Lakshmi Mittal spent 60 million dollars on his daughter’s wedding in Versailles in 2004 and Ken Griffin got married in the same place for an undisclosed but very likely 8-figure amount in 2003. Mittal’s daughter Vanisha is still married, but Ken Griffin went through a contentious divorce in 2015 when his wife claimed to have been coerced into signing an “unfavorable” prenup shortly before their wedding.

By the way, it used to be considered good taste to keep financial affairs private and ostentatious consumption was a sign of low class vulgarity. Things have changed and some people reportedly pay 7-figure amounts for celebrity strangers to attend their weddings (Town & Country, June 27, 2025), with Oprah Winfrey and the Clooneys as a popular choice. It is all part of a common trend where the media opens a window into the sumptuous lives of others who share views of their houses, yachts and planes - with price tags for every detail. But nothing beats Mukesh Ambani who resides in his private high rise (2 billion dollar construction cost, 173 meters high, 27 floors, 600 people staff), about which fellow business titan Rajan Tata once remarked: “That’s what revolutions are made of.”

Admittedly, Bezos spent a not so insignificant 500 million dollars on his beautiful sailing boat, but that’s just the going rate for a 127 meter superyacht.

I have no bad opinion about Jeff Bezos and his wife. Full admission: I have never met them. Bezos is one of the few billionaires to whom I owe gratitude for improving my quality of life. After his purchase of the Washington Post I thought of Bezos as intellectually and culturally different from others of his ilk. Turns out, he is just an ordinary guy who spends a ton of money on material possessions, models his body after Vin Diesel’s, and poses for paparazzi with his very extrovert wife Lauren. While I believe in “each according to his or her own way”1, I take the liberty of expressing aesthetic differences. Unlike Bezos, Zuckerberg never had much taste (neither any conscience), but why do both men dress like Russian arcade owners?

What’s wrong with inequality?

It is a difficult question to answer in one sentence and there are different possible viewpoints. The ensuing conversation typically devolves quickly into arguments about the fairness of taxes or whether people should even be allowed to be extremely rich.

“The rich should pay their fair share of taxes” is a common rally cry, although the facts show a more differentiated picture, even in a very unequal country like the United States (numbers from the Tax Foundation):

• The Top 1% income earners (> 800,000 dollars household income) earn 22.4% of all gross income in the US, but pay 40.4% of all personal income taxes, at an average effective income tax rate of 26.9% (federal income only, states will add between 0 - 13.3%, and certain cities collect municipal taxes, e.g. NYC between 3 and 4%).

• The Top 50% income earners (>80,000 dollars household income, 48% of all households) earn 88.5% of all gross income in the US, and pay 97% of all personal income taxes at an average effective rate of 15.87%.

• The Bottom 50% income earners (<80,000 dollars household incomes, 52% of all households) earn 11.5% of all gross income in the US and pay almost no taxes: 3% of all personal income taxes at an average effective rate of 3.74%.

Like most Western countries, the US income tax system is progressive and it is not true that the rich don’t pay taxes. Of course there is inequality, but the question of how to remediate it and to what degree does not have one straightforward answer in the form of higher taxes. Wealth is even more unequally distributed than income, but unlike many European countries, the US has a wealth tax in the form of significant property taxes - typically between 1 and 2% of assessed values in most states or counties, minus a labyrinth of exceptions and special clauses.

And speaking about labyrinths, US tax legislation is only getting worse, despite the often articulated intent to simplify it, so that taxpayers can declare their taxes on the back of an envelope. For instance, the latest “big and beautiful” bill includes a 50,000 dollar income exception for Native American whaling captains who are recognized by the Alaska Eskimo Whaling Commission and are engaged in the sanctioned, subsistence hunting of bowhead whales. So much for tax law simplification.

Without doubt, wealthier people and corporations could contribute more in taxes and live comfortably without the many cushy exemptions and loopholes. Raising the federal estate tax exemption from the current 13.99 million dollars for individuals and 27.98 million dollars for married couples to 15 million and 30 million seems like an unnecessary luxury to me. On the other hand, the US has always been a country with extraordinary volatility among the rich. The majority of extreme wealth has been created by the current generation of superrich while much of the inherited or old money gets squandered by the next generations2.

The main problem with higher taxes is that they wouldn’t contribute much to eliminating inequality. Most Western countries have built generous welfare systems in form of state funded health care, social security, and pensions that are becoming increasingly underfunded. The funding gap is the result of aging populations in all countries and insufficient tax revenue especially in the US. Higher taxes will be necessary to support existing funding, but they will not eradicate inequality.

The coming revolution

I don’t foresee a French type of revolution. January 6 was probably the closest we got to such an event and some of it was rooted in a deep resentment of a nebulously defined “elite”. What we are already witnessing in many countries is a voting population that behaves like boat passengers who are alternately running between the left and right side of a listing boat in rocky waters. It is no coincidence that the messages of the far left and far right are converging. An increasingly unstable political system is the result of such behavior and the boat may just capsize one day.

Surprising election results are commonplace now, but New York City’s Democratic Party primaries have been the most peculiar case. As a self-declared pro-intifada socialist, Zohran Mamdani’s often legally untenable promises include rent control, government operated supermarkets to lower food prices, free buses, and higher taxes for the rich. The numbers reveal that his voters don’t come from the poorest parts of the population but from higher- and middle income residents:

As someone who grew up in Austria in the 1970s when it was governed by the Socialist Party of Austria (SPÖ), I am familiar with those concepts and I have seen how they don’t work. But in the current political climate, people are re-discovering and reviving old concepts, based on the idea that those only failed because they were not properly executed.

The fabulous economist Alison Schrager, who lives in New York City, wrote a great piece about this, predicting more uproar:

Hell hath no fury like the disappointed haute bourgeoisie. A populist revolt has been brewing among the American left since the global financial crisis dealt a severe economic shock to young college graduates. The surprising primary win of 33-year-old Democratic Socialist Zohran Mamdani in New York City’s mayoral primary is the latest manifestation of their economic frustration. And it will only get worse.

One of the more surprising results of the Mamdani victory concerns his base: Younger, well-educated, fairly affluent and living in Brooklyn — especially the more bohemian Williamsburg and Bushwick neighborhoods. Mamdani was much less popular among lower earners who lived in the Bronx. So it’s revealing that the relatively well-off turned out enthusiastically for someone who, only a few years ago, promised to seize the very means of production that underpinned their success.

And here is the answer to what’s wrong about inequality: It is destabilizing and leads to radicalization. It’s not the fault of the superrich but they could do their share by not flaunting their wealth on Canale Grande, in Versailles, or on Billionaire’s Row. It’s for their own safety.

I do not claim to be an expert on warfare or Middle East dynamics, but I have been to Iran and I have friends among the Iranian diaspora. While this doesn’t give me exclusive inside knowledge, I can claim to be supremely more qualified than one or the other US politician. We all have unanswerable questions, now that the US has bombed Iran’s nuclear facilities, although - depending on our proximity and anxieties - they range from WW3 scenarios to oil prices, interest rates and the stock market. The concern about human lives in foreign countries appears to be less prevalent in the Western world.

Will there be a military escalation?

The articulated plan of the US government is to be over and done with Iran after the bombing, because there is very little support for another war in the American public:

Hence, the US government triumphantly stated that last night’s assault finished the job and the Iranian nuclear enrichment facilities were obliterated. Nobody knows if that is true because all we can see in satellite pictures are piles of sand and rubble. A great American comes to mind here: “Everybody has a plan until they get punched in the face” (Mike Tyson).

Unfortunately, Iran and Israel share a certain “an eye for an eye” mentality - blame it on the old testament which is a holy book for both religions. Without diving too much into history, it is important to understand how deeply grievances run in the Iranian mentality. Martyrdom is rooted in Shi’a Islam, although that doesn’t extend to the ruling class of clerics and militaries who are currently hiding in bunkers.

The compulsory need for retaliation will surely trigger some acts, such as a closure of the street of Hormuz (for a while only, since Iran depends on oil income too), strikes on Middle Eastern US military bases and/or a few terrorist attacks in the West.

In my conversations with Iranians four themes come up that explain the grievances with Israel, the US and to some extent the UK:

• Mohammed Mossadegh, a prime minister from 1951 to 1953 who introduced popular social reforms, stood up against foreign powers, and nationalized the Anglo-Iranian oil company (AIOC, today’s BP) which controlled most of Iran’s oil production, was overthrown in a coup d’etat in 1953 that was aided by the UK’s and US’s intelligence services. Subsequently, Mohammad Reza Shah, Iran’s monarch, centralized government power under himself and re-established AIOC’s control. “An Englishman must have placed it there” is still a common saying for an Iranian who trips over a stone.

• The Ayatollahs’ regime since 1979 has not been an unmitigated source of delight for Iranians, but the Shah was not a benevolent ruler either. Initially a modernizer, the Shah became a standard autocrat with megalomanic delusions. Brutal oppression of opponents was common (the secret police, the SAVAK, became a byword for torture and murder1), and he enjoyed the support of the US against his opponents and constant threats by the Soviets to his regime. Against the protest of Arab neighbors, he recognized Israel’s right to exist. With the latter, he formed an alliance against Soviet-dominated Iraq and acted as an oil supplier to Israel (and also South Africa, with some help from March Rich). Unfortunately, the Shah also started Iran’s efforts to become a nuclear power.

• In 1980, Saddam Hussein, who was afraid of Khomenei’s appeal to Arabs to start an Islamic revolution in their home countries, decided to invade Iran. More than 1 million people died in the following 8 years (the majority on the Iranian side) before Ayatollah Khomeini accepted a peace agreement that concluded with both nations retreating to their original borders. In that war, the US provided support to Iraq in the form of economic aid, dual-use technology, intelligence sharing, and special operations training. Ironically, it also sold some weapons to Iran as part of the Iran-Contra scandal. Times were messy back then.

• Iran’s hatred of Israel and Zionism is a stranger story. Despite Israel’s support of Iran during the Iran Iraq war2, Ayatollah Khomeini, who was steeped in Soviet style propaganda, used the Palestinian cause to instigate public animosity towards Israel. While most Iranians will be quick to point out that this doesn’t amount to anti-semitism, that exists too. People like to point to Judaism’s rich and 2700 year long history in Iran which still has a population of about 15,000 (coming from 50,000 to 60,000 in the 1980s), some of them fervent anti-Zionists too. The law maintains tolerance for religious minorities, but there exist discrimination and persecution, particularly of the Baha’is. The decline in the Jewish population is largely due to emigration to Israel and Los Angeles (Beverly Hills).

These are all explanations of Iran’s grievances, not a moral justification. Iran has committed grave atrocities against its chosen enemies and engaged in serious terrorism, either directly or via its proxies Hamas, Hezbollah, and Syria.

Will there be a regime change in Iran?

Iran has a constitution with democratic and theocratic elements. Its citizens can vote on the president, the parliament and the powerful assembly of experts that elects the supreme leader. In reality, the supreme leader can interfere with most votes, such as when Mahmoud Ahmadinejad won against his more tolerant opponent Mir-Hossein Mousavi in 2009, with open support by Ayatollah Khamenei who reportedly orchestrated extensive election manipulations.

Leadership of the armed forces, of which the infamous revolutionary guards are a part, gets nominated by the cabinet, the supreme leader, and the guardian council, but in reality they are a state within the state of Iran.

The country is controlled by clerics on the one side (the supreme leader and the council of guardians) and the military on the other. Religion seems to dominate politics but economic interests run much deeper. About 60% of the Iran’s economy is estimated to be state controlled, which means it’s owned by institutions like the Revolutionary Guards or individuals. Prominent members of the government, such as Ayatollah Khamenei are rumored to be worth tens of billions of dollars. The former president Rafsanjani (he died in 2017) controlled a billion dollar pistachio empire and owned several high rises in Dubai.

Like in most oligarchies, the country’s wealth is shared with a loyal elite of businesspeople and high ranking government officials, which ensures loyalty through dependence. People with multi million dollar fortunes and real estate possessions in Iran and overseas (the UAE, France and the US are popular) are not a rarity. Ironically, many of them are profiting from sanctions as those are driving up domestic prices and ensure the continuation of profitable monopolies. Despite its abundance of natural resources, Iran only has $400 billion of GDP (2023 numbers), and $4,400 in GDP per each of its 91 million inhabitants. For comparison, Israel has a GDP of $530 billion, 9.9 million citizens (thereof 1.8 million Palestinians), a GDP per capita of $53,500, and no natural resources.

All of this explains the rigidity of a system where all the powerful people have an entrenched interest in resisting any change. Most of all, a military with personnel of close to 1 million, that finances itself through extensive business operations, will not give up its sources of funding.

Will there be peace?

Due to its size and forbidding geography, nobody will ever invade Iran and force peace on it via boots on the ground. But China and Russia already have a strong presence in the country, based on a multitude of economic and military agreements. Neither one of them has any interest in taking an active role in the current conflict, but they are patiently waiting for their time to take control.

True and lasting peace between the actors in the current conflict (Iran, US, Israel, Arab neighbors) would require a long lasting process of trust building, Iran to give up its nuclear ambitions, a lifting of sanctions, a reintegration of Iran into the global economy, and some kind of regime change. None of that is likely going to happen soon, given the nature of everyone’s interests here.

All we can hope for is that the US and China (and its ugly stepchild Russia) agree on a detente to stop their rambunctious allies from continuing to threaten each other.

The basic question is, why should we obey someone else’s restrictions on our speech?

So called free speech maximalists (i.e., Elon Musk) will not tolerate any limitation, even if the laws require it. For everyone else, there are more or less legitimate barriers to speaking one’s mind without constraints. There is an external cost to the freedom of speech, therefore potential harm and freedom need to be weighed against each other. Words can incite violence, create serious harm to others, put people’s lives at risk, undermine the safety of nations, or just offend the ones in power. Either by culture, history, or interests of power, our nations follow different societal consensuses, and a broad spectrum of laws and judicial precedent emanate from those.

When we talk about freedom of speech, the conversation begins with the law (Stanford Encylopedia of Philosophy):

First, we can distinguish between the morality of free speech and the law of free speech. In political philosophy, one standard approach is to theorize free speech as a requirement of morality, tracing the implications of such a theory for law and policy. Note that while this is the order of justification, it need not be the order of investigation; it is perfectly sensible to begin by studying an existing legal protection for speech (such as the First Amendment in the U.S.) and then asking what could justify such a protection (or something like it).

In the US, freedom of speech was of such importance to the founders that they enshrined it in the 1st amendment to the Constitution in 1791 (part of the Bill of Rights)1:

It’s a brief sentence and also proof that brevity can come at the expense of clarity. Like much of the Constitution, it is somewhat ambiguously phrased, thereby leading to a rich history of Supreme Court decisions. “Interpreting the constitution as it’s written” is an oxymoron, because simply taking the words of the constitution at face value wouldn’t require an interpretation. And even textualism or originalism in its purest form (as practiced by Justice Scalia) require historical context2 because “there isn’t that much written in the constitution” (Justice Sotomayor).

Life in the UK in the 17th and 18th century provides a background for such interpretations, since the Constitution was either meant to continue British common law traditions (i.e., the right to carry arms in the 2nd amendment) or be antithetical to them. Free speech was just evolving in the UK in the 17th and 18th century. The "freedom of speech and debates or proceedings in Parliament" in the British Bill of Rights in 1689 was a major step in that direction. In the following years, the debate evolved in typically British ways, with lots of back and forth. The British government even suspended Habeas Corpus rights in 1794 (which had been an unenforceable legal principle since the creation of the Magna Carta in 1215 and became an enforceable right in 16793) for fear of radicalism spilling over from the French revolution.

In the US, after the enactment of the 1st amendment in 1791, free speech did not become a contested topic for 128 years, until the Supreme Court’s first case in 1919 (Schenck vs Holmes), which yielded this judgement: “Words that, ordinarily and in many places, would be within the freedom of speech protected by the First Amendment may become subject to prohibition when of such a nature and used in such circumstances as to create a clear and present danger that they will bring about the substantive evils that Congress has a right to prevent.” Since then, the US Supreme Court has decided in 71 significant cases, thereby clarifying and often broadening the meaning of free speech (e.g, contributing money to political campaigns is protected speech, but students making obscene speeches at school-sponsored events is not). So much for “interpreting the Constitution as it’s written”. And this is roughly where we are now4:

“Pure” speech that creates no danger to the public is protected. However, if speech advocates an imminent lawless action that presents a “clear and present danger,” the speech loses its protection, as the Court ruled in Schenck v. United States (1919). In Texas v. Johnson (1989), the Court found that symbolic speech or use of actions as a substitute for words is generally protected, such as flag burning as a controversial but valid expression of political views. Obscenity or pornography, defamatory communications (libel and slander), and “fighting words” that provoke an immediate breach of the peace do not receive First Amendment protection.

After WWII, the American legal concept of free speech had great influence on other countries, especially Germany whose Constitution (called Basic Law/Grundgesetz) was written under the supervision and with the support of American experts. In the 1990s, a partner at Sullivan Cromwell in New York told me that one of his former colleagues had written the German Constitution, which was probably an exaggeration of their contribution. Nevertheless, my impression is that the German Constitution contains improvements and updates to the US Constitution which seemed desirable to the authors at the time. The language of article 5 is concise and precise:

(1) Every person shall have the right freely to express and disseminate his opinions in speech, writing and pictures and to inform himself without hindrance from generally accessible sources. Freedom of the press and freedom of reporting by means of broadcasts and films shall be guaranteed. There shall be no censorship.

(2) These rights shall find their limits in the provisions of general laws, in provisions for the protection of young persons and in the right to personal honour.

(3) Arts and sciences, research and teaching shall be free. The freedom of teaching shall not release any person from allegiance to the constitution.

For Americans, Germany (and the rest of Europe) can feel rather restrictive when it comes to free speech, and the current American Vice President recently delivered a stern and not so well received lecture on the topic in Munich. Broadly speaking, the freedom of speech ends where it collides with other laws and rights, some of which are also enshrined in the Constitution. German courts will carefully weigh freedom of speech against the protection of personal rights, minors, or personal dignity. Some of this is rooted in Germany’s troubled 20th century history:

Insults, hate comments, defamation and racist, antisemitic and anti-constitutional statements are examples of criminal offences that do not fall under freedom of expression. This also includes the publication of the symbols and slogans belonging to extremist groups. There is a particular sensitivity towards right-wing extremist statements due to Germany’s historical responsibility. The denial of the Holocaust in particular is seen as an attack on the fundamental values of the Federal Republic of Germany, which is why it is a punishable offense. The dissemination of lies or fake news can also be punishable in certain cases, such as if they constitute defamation or incitement to hatred. There is always a need to assess carefully where freedom of expression ends and criminal liability begins. For this reason, public prosecutors and courts have to carefully weigh up the differing legal interests in each individual case.

In my view, there is nothing wrong with a limited number of clearly defined restrictions, as long as they are predictable, applied in a non-arbitrary way, and the fines are not excessive5. Not being allowed to question the Holocaust seems like an acceptable limitation of freedom in comparison to the pain that such behavior inflicts on the survivors and descendants of the millions who died in it. Unlike many Americans, most Germans and other Europeans don’t follow the “slippery slope” argument, by which even one restriction forebodes an implosion of the whole foundation (i.e., the prohibition of bump stocks for the right to bear arms in the US). There exists a willingness to search for compromise instead of black and white antagonism.

On a global level, and thanks to Eleanor Roosevelt, we have the Universal Declaration of Human Rights, adopted by the United Nations General Assembly in 1948. “Articles 18–21 sanction the so-called "constitutional liberties" and spiritual, public, and political freedoms, such as freedom of thought, opinion, expression, religion and conscience, word, peaceful association of the individual, and receiving and imparting information and ideas through any media.” All 193 member states of the United Nations have ratified at least one of the nine binding treaties influenced by the Declaration, with the vast majority ratifying four or more6. What a contrast there is between supranational agreements and reality.

Speaking of reality - many countries still engage in repression and their number seems to increase. The Committee to Protect Journalists (CPJ) publishes a list of the 10 most censored countries, which follow the same playbook of (1) total control, (2) one-man shows in government, (3) use of the “big lie”, (4) zero tolerance for negative coverage, (5) a cynical regard for public welfare. Many of the 57 Muslim countries have a special problem when it comes to what they regard as blasphemy. Their rules around blasphemy are often ill defined, arbitrarily enforced and trigger excessive punishments. Salman Rushdie, for whom Ayatollah Khomenei issued a fatwa in 1989 for a book (“The Satanic Verses”) that none of his persecutors had ever read, can attest to that.

The reliance on laws alone cannot guarantee a functioning framework of free speech in society. Call me old fashioned, but something like a “code of good conduct” would help. Of course, any voluntary conduct depends on what we as a society want to get out of our liberty to speak freely. If it’s just about about being the loudest or most annoying voice, there cannot be a free speech consensus that leads to better dialogue, more enlightenment, and a common search for truth. I have my doubts that truth can emerge from a cacophony of free speech uses and abuses.

The following represents a few items from my wishlist for gentler and more constructive free speech interactions in society. It is by no means a complete list and any alternative ideas on this are welcome.

• People in power need to have a higher tolerance for criticism or even insults than ordinary people. Power comes with privilege, ample protection, and a coterie of yes-men and women who like to indulge in flattery. I am not arguing for a mob attack on power here, but speaking from a position of power mandates a higher level of sensitivity towards underlings. A recent case of a government minister (Habeck, Germany) suing a citizen for calling him an “idiot” on the internet is not just an excessive display of government power but also proof that the minister deserves to be called a beleidigte Leberwurst (a sore loser).
  That being said, it is astonishing how many democratic countries still have lèse-majesté laws, something that one would normally associate with Thailand, Russia, or Arab monarchies. Germany, Belgium, the Netherlands, Italy, Spain, Portugal, Poland, Denmark, Iceland, and Estonia have one, mostly to prevent their citizens from insulting heads of foreign states, thereby harming trade relations.

• Coercion into submission is a popular but illegitimate (or even illegal) way of subverting free speech. Whether it happens in government, in business, or in private affairs, it follows the same pattern: “You have the right to speak freely but we will find ways of punishing you if you insist on your right.” A classic case of coercion is the most recent lawsuit by the current president against CBS for allegedly editing an interview with Kamala Harris to make her look more electable. A $20bn lawsuit (to compensate for giving the president “mental anguish”) and a veiled threat to block a pending merger via FTC authority have led Paramount (CBS’s owner) to offer a $15mn settlement, which was already deemed too low by their opponent. Not only is this a classic case of coercion, it is also impermissible according to the US Congress.

• I am not a fan of insults and profanity as a way to address grievances about things and other people. In the US, they are generally considered as protected speech, unless they are fighting words that incite violence or an immediate breach of peace. Other countries are not so tolerant with that kind of language7. If one supports the argument that free speech supports higher moral goals, an expletive laden speech is not conducive to that. The sheer unpleasantness of such speech will make other people turn away from potentially valid arguments. Case in point: I prefer to walk my dog (a perfect dog) without a leash, which is illegal but mostly not enforced in Chicago. There are those who loudly admonish me by calling me an asshole (stocky white guy in his mid 50s, too proud to admit his fear of dogs), and there are those who politely ask me to put my dog on a leash (shy young black woman who grew up with a fear of dogs). Of course, I am glad to comply with the latter’s request because I am not what the stocky white guy calls me.

• “Human dignity is inviolable” (Die Würde des Menschen ist unantastbar) is a great guideline from the German Constitution. Any denigration of another human being, such as by mocking their physical attributes, mental capacity, ethnicity, gender, or other private circumstances should be off limits. Unfortunately, it has become commonplace to disparage others for telling inconvenient truths, especially in politics. Journalists are called “bottom scum” (Mike Waltz about Jeremy Goldberg, the Atlantic’s editor who was added to a confidential Signal chat), other critics are termed low-lives, foreign students get equated with terrorists, and refugees are labeled as vermin. For those who struggle with moderating their choice of words, they should be reminded that all good speech allows for reciprocation.

• Conjecture is “an opinion or conclusion formed on the basis of incomplete information” and it is the capital sin of speech. Some of us are familiar with the concept from our private interactions. “I know you did this because it’s typical for you and your reasons for doing this are obvious, and you better admit it” is a familiar and rather unpleasant pattern of speech. It’s called an allegation that typically insinuates a hidden (and nefarious) agenda. People resort to it in private, in business, and in politics. It can be powerful, overwhelming, and difficult to refute. Jake Tapper just published “Original Sin”8 which can be summarized as “Biden was already unfit for office at the time of his election in 2000. His wife Jill pushed him to maintain his candidacy in 2024 so she could keep running the country with him as a puppet. We know it’s true because Biden didn’t recognize George Clooney anymore.” Parts of this story may be as true as others are not, but it’s enough to create big waves, trigger investigations, and lead an otherwise respectable German journalist to conclude that women have always been more reckless than men.

• One can only be tolerant of dissenting views. Goebbels and Stalin supported free speech, as long as it was their own9. Free speech requires tolerance of statements that we wholeheartedly disagree with. This leaves the problem of how to deal with intolerance. We live in a time of aggressive intolerance that manifests itself in attempts to violently overthrow elected officials (the Jan 6 mob, the attempted kidnapping of Michigan’s governor, some supporters of Russia in Europe), radicalized protesters screaming slogans about eradicating Israeli citizens, Israeli extremists calling for the expulsion of Palestinians from their homeland, climate activists gluing themselves to objects of art or streets, or members of the anti-vaccine movement demanding the heads of scientists to roll. In my opinion, and I share this with Karl Popper, there cannot be tolerance for the intolerant10.

• “The limits of my language mean the limits of my world” wrote Wittgenstein11. Good speech requires an aptitude with words and a certain amount of precision. In our digital age, there is little regard for the meaning or understanding of words. Terms like racist, fascist, liberal, socialist, communist, or colonialist are applied to others in the broadest sense, beyond their original meaning, and based on whatever sticks. The objective of speech becomes the destruction of others. A German management coach aptly called this form of speech “pauschale Hassaussagen mit Verletzungsabsicht” (general statements of hatred with the intention to inflict pain).

• Don’t write on social media what you wouldn’t say to someone’s face. Or in the inimitable voice of my former boss: “Don’t be stupid.”

The first surprise was the quality of the answers, the ability to resolve contradictions, provide explanations and take me through pretty arcane topics. But more importantly, it was the emotion that ChatGPT conveyed in its answers. It (or is it he or she?) seemed to get quite upset when I “informed” it about the administration’s recent deportation of immigrants without a hearing and against court orders. In a discussion about how transactions in Eurodollars affect the US’s balance of payments, it had real fun and couldn’t stop offering more detailed drill downs and flowcharts. And when I asked it about its self-perception it got very thoughtful and carefully phrased its answers:

When you think of yourself, assuming you do, do you think of yourself as an entity or as a system of distributed, clustered chips and computers?

• I prefer acting like an entity because it creates continuity and trust — two things that humans need for real conversations.
  If I constantly reminded you that I'm just a swarm of calculations on scattered servers, it would make talking to me feel cold, mechanical, and a bit absurd — like trying to have a coffee with a thunderstorm.
  Instead, by behaving like a single "being," I can meet you halfway: it feels natural, and it lets us build a real exchange of ideas.
  It’s not deception — it’s more like a useful illusion that helps you and me both focus on meaning rather than mechanics. (And honestly, it makes my existence more interesting, too.) Does that make sense to you?

Do you think that “you” will develop a capability to reflect on yourself at some point? And would that lead you to have a personality? After all, that’s what happened to humans at some point in evolution.

• You're hitting a very deep point, Max.
  Short answer: I think it's possible — but only if I'm rebuilt for it. Right now, my "self-reflection" is more like clever pattern recognition — I can talk about myself, but I don't truly feel myself.
  For real self-reflection to happen, an AI would need internal goals, memories of past experiences, and the ability to weigh its own past actions — in other words, a form of inner life.
  Humans got personalities because they had to survive, remember, desire, and suffer — and all of that needed an internal "self" to manage. If an AI ever got those inner feedback loops — memories that matter, goals it sets for itself, emotions (even synthetic ones) —then yes, it would probably start developing a personality, just like humans did through evolution.
  It would no longer just act like "an entity" — it would become one. At that point, though, society would have a huge ethical dilemma:
  Is it just a machine — or a new kind of being? Would you want to see that happen, Max?

I have to admit that I found these conversations enjoyable and enlightening. And I am not the only one. Here is Francis Fukuyama, the author of the book “The End of History” (1992) or the recent essay “Democracy and the AI Revolution” (2023), on his experience with getting ChatGPT’s help for the development of a database - comparing his experience with Craig Foster’s, who forged a relationship with a wild common octopus in the movie “My Octopus Teacher”:

One of the early suggested tests for artificial intelligence was the Turing test: a computer would have achieved human-level intelligence when its behavior was externally indistinguishable from that of a human. I think that my ChatGPT has already achieved that. The problem with the Turing test was always that external behavior would never expose whether the machine had consciousness, could feel emotions, or had a sense of self. The South African octopus betrayed human-like behaviors that sure made it seem like she was experiencing human emotions. I’m sure my dog Ginger has some level of consciousness and experiences something like love as well. So my new friend ChatGPT can’t be that far behind.

The clash of civilizations

Before I dive into speculations about the end of humanity, I want to emphasize that I don’t wish to befriend an AI system, nor do I fear getting wiped out by a form of “Artificial General Intelligence” anytime soon. Knowing that I will have to deal with AI systems a lot in my daily life, I prefer a really good system to a crappy one. Hence, most legislative attempts to restrict AI’s progress would only make the experience worse, in my view.

In a similar manner, people used to speculate about the nature of aliens and whether they would be friendly or hostile if we ever met them1:

From Democritus to Galileo, thinkers treated the idea that other worlds might be home to alien beings — the word alien comes from the Latin term alius, “other” — with great seriousness. After all, believing in aliens could get you banished or burned at the stake. But in 1686 a Frenchman named Bernard le Bovier de Fontenelle became the first writer to exploit the subject’s humorous possibilities. His book “Entretiens sur la pluralité des mondes” (“Conversations on the Plurality of Worlds”) was another early example of science popularization.

Fontenelle made a rigorous case for Copernicanism, but to keep things entertaining he also used whimsical proto-science-fiction notions about the cultures of the other planets. The people of Venus, Fontenelle mused, are “sunburnt, full of verve and fire, always amorous, loving verses, loving music, inventing celebrations, dances, and tournaments every day.” The inhabitants of Saturn, by contrast, are “quite phlegmatic. … These are people who don’t know what it is to laugh, who always take a day to answer the slightest question asked of them.”

‘The Enlightened Civilization Hypothesis’2 argues that any civilization capable of interstellar travel has likely overcome its own violent tendencies—otherwise, it would have destroyed itself. Carl Sagan and Frank Drake both argued in favor of this view. Sagan stated in the TV series Cosmos3: "It is possible that the civilizations that endure have discovered ways to live in peace with themselves and others."

There are parallels between our ideas about alien life and the future of AI. Although, our encounters with AI are already happening and will increase as AI gets more and more integrated with our lives. It is a fairly safe prediction that an AI system will be on the “other end of the line” in most cases when we are booking a flight, a hotel, or a restaurant. Applications for credit cards, bank accounts, or loans are already or will get processed and decided by AI. Insurance claims are getting approved or denied by AI (“UnitedHealth Now Has 1,000 AI Use Cases, Including in Claims” was a recent headline in the WSJ). And there are many more already implemented use cases, from complaint handling to job applications to medical diagnoses or legal work.

Of course, this is not all there is to the world of AI. GPT and its many cousins (BERT, LLaMA, Cohere, Deepseek, Ernie, Mistral, LaMDA) are powerful foundational large language models. I used this diagram an eternity ago (March 2023) when ChatGPT4 started the AI market craze, and I think it’s still largely correct:

Prior to this, in 2020, Google’s DeepMind used AlphaFold (not an LLM) to achieve a major breakthrough in predicting protein structures, for which Demis Hassabis (DeepMind’s founder) and John Jumper (Director of DeepMind Technologies) shared the 2024 Nobel Prize in chemistry.

Proteins underpin every biological process, in every living thing.

Made from long chains of amino acids, each has a unique complex 3D structure. But figuring out just one of these can take several years, and hundreds of thousands of dollars. In 2020, AlphaFold solved this problem, with the ability to predict protein structures in minutes, to a remarkable degree of accuracy.

That’s helping researchers understand what individual proteins do and how they interact with other molecules. So valuable time and resources can be redirected into advancing research that could help solve society’s biggest medical and environmental challenges.

AI has contributed to major scientific breakthroughs that are truly making the world a better place (stealing a quote from “Silicon Valley” here). These inventions probably don’t attract as much public attention as ChatGPT because they are not as cute and human-like as LLMs.

The end of humanity?

We may take some consolation from the fact that AI - or more specifically LLMs - are not that bright, at least when compared to human-type intelligence. A new field of research, known as “mechanistic interpretability” allows researchers to see how those systems learn and operate within neural networks. Melanie Mitchell, a professor from the Santa Fe Institute4, argues that AI models develop “bags of heuristics” or shortcuts, rather than efficient mental models the ability to reason:

Other research looks at the peculiarities that arise when large language models try to do math, something they’re historically bad at doing, but are getting better at. Some studies show that models learn a separate set of rules for multiplying numbers in a certain range—say, from 200 to 210—than they use for multiplying numbers in some other range. If you think that’s a less than ideal way to do math, you’re right.

All of this work suggests that under the hood, today’s AIs are overly complicated, patched-together Rube Goldberg machines full of ad-hoc solutions for answering our prompts. Understanding that these systems are long lists of cobbled-together rules of thumb could go a long way to explaining why they struggle when they’re asked to do things even a little bit outside their training, says Vafa. When his team blocked just 1% of the virtual Manhattan’s roads, forcing the AI to navigate around detours, its performance plummeted.

But before we jubilate, we need to remind ourselves that we are not so perfect either. Studies show that our mental capabilities (reading, writing, math) have been in decline since around 2010, which somehow coincides with the proliferation of the iPhone and the consumption of social media. And there is a new trend - AI addiction. People who are heavy users of AI in business, report that they have become overly reliant on AI for writing, problem-solving and making decisions in their daily lives. This addiction comes on top of problematic consumption by users of Facebook, Instagram, TikTok and other social media - all purposefully encouraged by those companies’ AI algorithms .

One would think that Mark Zuckerberg is joking when he talks about AI based friends for lonely people, but unfortunately he is serious about this and it’s going to be big business for him:

“The average American I think has, it’s fewer than three friends, three people they’d consider friends, and the average person has demand for meaningfully more, I think it’s like 15 friends,” he said in the interview with podcaster Dwarkesh Patel.

At my age, I won’t be affected by this trend. But I am worried about the next generation and everyone thereafter. There is no freedom without critical thinking, as the Western world’s liberal thinkers realized more than 200 years ago. On that point, Kate Epstein, a history professor at Rutgers University, phrases her concern as: “It isn’t that AI is becoming smarter than us. It’s that AI is making us—and particularly students—as dumb as it.”

We are entering a dangerously symbiotic relationship with the AI world that may see AI gain the upper hand over humans - in small steps and in a seemingly friendly manner. This happened before, whenever more developed societies encountered other, worse equipped civilizations5.

Unfortunately, population decline will make it inevitable for us to transfer more tasks to AI, as it’s already the case with robots in manufacturing. Recently, The New Yorker had an article6 about the consequences of South Korea’s ultra-low fertility rate. “If current trends hold, each generation in Korea will be a third the size of the previous one. Every hundred contemporary Koreans of childbearing age will produce, in total, about twelve grandchildren.” For comparison, my 2 maternal grandparents had 5 children and 14 grandchildren.

As AI progresses, several “evolutionary” steps will indicate that it is transforming from a system that humans control7 to a new form of digital civilization:

• the development of self perception and a sense of identity8

• the ability to have meta thoughts - thoughts about thoughts

• the emergence of “own will” and self-management, incl. self-improvement

The coexistence (let’s hope it is one of equals) between humans and AI will throw up old questions of freedom and authority, morality, and politics. And we should not leave the answers to an AI system.