Two Sinns and Soros

Felix Salmon published a pretty gloomy post on the euro crisis based on a debate between Soros and Sinn. Now some of what this Sinn is writing seems to be at odds with what the German Prof. Sinn thinks. We are either talking about a person who is extremely flexible when it comes to his positions, or actually different persons, sharing the same name, profession, and awesome beard. So, since it would be quite strange to let the German Prof. Sinn answer to himself, I will to make it easier to keep the two apart call the one debating Soros just Sinn.

Sinn claims:

Leaving the euro zone is precisely what the newly founded “Alternative for Germany” party, which draws support from a wide swath of society, is demanding.

This is actually not correct. The AfD (German pdf) does in fact say that a return to the DM should not be off the table and that each country should have the right to chose its own currency in a democratic referendum, but it will also accept "smaller and more stable monetary unions". The kicker here is how they want to achieve such a new euro:

 We demand that Germany enforces this right to leave the euro by vetoing further emergency loans by the ESM

Wir fordern, dass Deutschland dieses Austrittsrecht aus dem Euro erzwingt, indem es weitere Hilfskredite des ESM mit seinem Veto blockiert

Prof. Sinn is closer to the AfD here than Soros is. In an interview on May 6th 2013 with Welt he stated:

When a country can't make due with the euro because it is not competitive it would be better for it to leave. Germany should stop artificially keeping such countries in the euro with ever increasing public loans, which will never be payed back.

Well, Prof. Sinn's position is in fact the same as the AfD's it is just note formulated as, well, precise or honest for that matter. In another interview with FAZ he said that the "arguments of the party are for the most part reasonable." So if Prof. Sinn, who thinks that Bernd Lucke et. al. "know what they are talking about", is in the eyes of Sinn probably playing with napalm.

Sinn goes on to write:

In order to regain competitiveness, the southern countries will have to reduce their goods prices, while the northern countries will have to accept higher inflation.

Prof. Sinn is against wage increases above 3 % in Germany because they should be lower than productivity growth (how exactly is that supposed to make us less competitive compared to the other countries?).  He claims that we would need a inflation of 5.5 % in Germany for a decade to achieve this without deflation in other euro zone countries, but how is that supposed to happen without wage hikes, higher government spending, or lower taxes (he was all for lower taxes a few years back, but now: *crickets*), and while industry production is stagnating? Sinn also feels that blaming Germany for austerity is "unfair" because, well, we "mitigate" the crisis. Here both Sinns agree for once and both complain that we are spending the most money and still nobody loves our government, but Prof. Sinn quite bluntly states that what "we are letting happen" in Greece is a "catastrophe" but he claims that we have "little say" (he mentions the ECB but forgets about the ESM) and still are the "old maid".

This is something the expert Hans-Werner Sinn (obviously a third and absolutely unrelated person to the other Sinns) cannot agree with. He argued in December 2012 that Germany can "force through anything" since we have veto power in the ESM.

 It is sad that the German quality journalism (TM) lets him get away with it. We are talking about a man who wants to go forward almost exactly like the AfD does, but warns that others might help the party. He believes that Germany has little say in austerity decisions, but at the same time can force through any decision. He thinks Germany should accept higher inflation, but he is against wage increases and stimulus programs  that would make that possible in a time where monetary policy has "lost its impact". So, not only has Hans-Werner Sinn "deliberately distorted and obfuscated [Soros'] argument" he is also quite capable of doublethink.