Flying Elephants

Have you seen any elephants flying yet? In the information society, big data And of micro-stories, they say they reproduce like mushrooms in autumn. You can see that they happen when we blink. This isn't fake news, it's worse. It's the effect produced by the narrative crisis. It's the loss of the shared narrative, the one that is woven slowly, with the arguments of some and the counterarguments of others, and that defines the consensus on which democracy and its institutions are built. Without that point of union, the reality in which everyone lives becomes more distant. If it becomes too distant, we all end up thinking that others see strange things. What seems impossible to some is real to others. The philosopher Byung-Chul Han argues this in Infocracy (Ed. Taurus). And I buy it. In the field of economics, which is what I'm concerned with, the extreme gap between points of view puts the functioning of the main economic institutions at risk. From my point of view.

Extreme views of reality have reached the Board of Governors of the United States Federal Reserve. Stephen Miran, the ideologue of the White House's economic agenda, has just joined, and his differing position was already clear in the first meeting. In his opinion, interest rates must fall more than 100 basis points before the end of the year. From my perspective, he's setting the stage for a dove. The American economy could slow down, believes Miran, who must also feel pressure to reduce the cost of the enormous debt the United States is accumulating. But the American economy has high inflation, which could continue to grow due to rising tariffs and immigration policy. The push for a rate cut of that magnitude would be counterproductive. Within the Board, at the other extreme of Miran, there are those who would raise interest rates slightly. The majority would maintain them or lower them slightly. Strong disagreements about where rates should be four or five years from now are common and reasonable. But now there is strong disagreement in the reading of the current moment.

Miran's position at the Fed could be just another piece in the indecipherable mosaic of statements and plot twists that dominate the news scene. It could remain an anecdote alongside Donald Trump's pressure on the Fed. Unabashed. Brazen. Or it could be a clue of what awaits us. One of the twelve voting members of the Board, Lisa Cook, has been denounced by Trump. Her continued tenure rests in the hands of the Supreme Court, where a majority of those appointed by the President of the United States are present. If necessary, he would also name Cook's replacement. Furthermore, several more members of the Board will be up for renewal next year, and although they will not be directly appointed by Trump, it could influence their confirmation, or not, in office. Miran's view, which is now anecdotal, may no longer be so.

The clash of extreme views on the current situation also alters the functioning of the other pillar of economic policy: fiscal policy. This is most starkly evident in France, and advanced economies with fragmented parliamentary structures, or at risk of fragmentation (i.e., all of them), would do well to take note of these developments. In France, parliamentary fragmentation, and the rhetoric of individual parties, makes it impossible to pass next year's budget. It may seem like just another anecdote in the indecipherable patchwork that the political scene in democratic countries has become. How many economies function, and some even grow strongly, with prorogued budgets?

But in France, economic activity hasn't taken off for years. It's growing little. "Little" means an average of 1% over the last 10 years. Furthermore, in France, public debt has been growing significantly for years. "Strength" means that, if no action is taken, within four years it will have increased by 12 percentage points, exceeding 120% of GDP. The combination of figures is dangerous, but the situation can be turned around with the approval of a budget that addresses both dimensions: boosting growth and restoring the sustainability of public finances. That's my point of view. There's no need to suffer. Everything will be fine. Achieving this will only require a consensual vision of reality. Achieving this will only require constructive dialogue between different points of view. Hey, have you seen that? I think a flying elephant has gone by.