Short-termism leads to 'bad politics, bad finance', Swiss Council of States warns
Strategies – both in finance and in politics – should by their nature be long term, according to Filippo Lombardi, president of the Council of States in Switzerland.
He told the audience at the TBLI conference in Zurich last week that while politics and the financial sector both viewed each other in a bad light, they actually had something in common – short-termism.
Lombardi said: “Short-termism is the rule for a bad financial approach and it is the rule for bad politics. Politicians who only [look] to the next election or the next opinion poll and [investors and businesses] that only think of the next quarterly report or tomorrow’s performance at the stock exchange do not try to build on the long term.
“This is the mentality we have to change – in the investment world and in politics. And we have to learn from each other, and we have to listen to each other. We must learn to listen to the advice and concerns of people and the experiences from experts who have been studying and researching certain issues.”
One common goal for everyone, he said, is sustainability in the energy world.
“The real challenge has been, and still is in some countries, to decouple economic growth from energy consumption and greenhouse gas emissions,” he said.
Lombardi said politicians needed a clear, long-term strategy and to be consistent in the details of their political work and in the details of the laws they passed, as well as in the implementation of the laws they had backed.
They also need to work together with other politicians for a common goal.
“The worst thing politicians can do is to be so eager to win the next election, or get some results in the opinion polls, that they immediately react to everything,” he said. ”This makes life very difficult for normal people and destroys the market, and when you achieve destruction of the market, you do not have any progress.”
Lombardi pointed to the European energy market as an example, where several countries fought with good intentions against nuclear energy, which in the end led to involuntary support of the cheapest energy source without subsidies – coal.
“We need jobs, and in Europe we are losing jobs, and with the clean tech challenge comes a possibility to create more jobs and opportunities in the economy,” he said.
However, the clean energy challenge could also make European economies less competitive with the rest of the world.
He said that question had yet to be solved.