Thread by @davidfickling

OK this story has everything for me: renewable energy, German fiscal policy, and even here a weird echo of Mefo bills, which always seemed to me a good idea put to evil ends: amp.ft.com/content/68e446…

No German will appreciate the comparison.

But a pseudo-private company financing the country's energy transition outside of its insane fiscal straightjacket isn't so different to a pseudo-private company financing 1930s rearmament outside of its insane fiscal straightjacket.

Hjalmar Schact was a fascinating figure IMO. One of the most brilliant economists of the 20th century, but also a key factor in Hitler's rise to power who gave 1930s Germany an economic boom and thereby built popular support for Nazism. He also squashed the Weimar hyperinflation.

More on Mefo bills from Schacht's Nuremberg trials judgement: jewishvirtuallibrary.org/nuremberg-tria…

Basically it was a way of doing helicopter money to fund rearmament. Good article on the economics here: voxeu.org/article/macroe…

His key insight seems to have been the essentially fictional or consensus nature of money.

He stopped the Weimar hyperinflation by pretending the new Rentenmark was backed by German land rents, which wasn't really true but got people to treat cash as a store of value again.

Then he pulled Germany out of the economic abyss by pretending there was a company, Metallforschungsgesellschaft, which paid the government's bills and whose invoices were exchangeable at the Reichsbank for cash.

This allowed a huge economic stimulus, with the terrible result that the boom probably made a lot of Germans turn a blind eye to what was happening to their country.

If only liberal democracies let themselves finance productive and green infrastructure with the techniques that far-right kleptocrats routinely use to achieve their goals...