It's legendary. Hungary leads the pack in all of Europe, perhaps even in the world. Especially if one considers the relative economic well being of most of the country's citizens. This pessimism is nothing new. A 1991 piece in The New York Times entitled "Hungarians Are Thriving, Gloomily" reported that "Poll after poll shows this nation to be the gloomiest in Eastern Europe–more unhappy and more fearful about the future than neighboring countries where unemployment is twice as high, inflation is about to surge back into the double digits and nationalist extremists are whipping up old hatreds." The author also quoted Jozsef Antall who in an earlier interview had said, "A Hungarian will always see the worst. It comes in part from a peasant mentality, which will never predict a good harvest." Antall continued, "Just as there is American optimism, which is the motor of American life, so Hungarians have a tendency to be pessimistic. Every renewal in our history was always born in pessimism. Even our anthem is pessimistic."
Whatever the cause, people today in countries nearby Hungary with much lower standards of living are more optimistic than the Hungarians. Hungarians bemoan the fact that they have always been the losers of history. All those horrible happenings: the Mongol hordes, Mohács, the Turkish occupation, Habsburg rule, Trianon, two lost wars, 1956. Should I continue? Poland certainly hasn't been luckier than Hungary in modern times. In fact, Poland disappeared from the map after 1795 and yet the Poles always believed that Poland would be reborn one day.
The 1970s and 1980s was one of the few times that Hungarians felt economically superior to some of its neighbors (which, of course, is not the same as feeling optimistic). Hungary was doing well in the sense that living standards were on the rise while in Poland, for instance, eventually there were only empty shelves in the stores. Then Hungarians were self-satisfied and made ugly jokes at the expense of their Polish "brothers." Just think of the Polish saying: "Polak-Węgier dwa bratanki – i do szabli, i do szklanki!" Oh, yes, every Pole knows the saying, including the Polish guy who worked on my roof when he found out my country of origin. But in those days of relative Hungarian plenty Polish-Hungarian brotherhood was forgotten. The saying in Hungary was–and I have to quote in Hungarian because of a word play–"keresztek helyett inkább búzát kellene vetniük." In rough translation, instead of crossing themselves they should work.
Well, now Hungarians think that Poles are doing splendidly while they are the nation that is the worst off, and not just in Europe. Of course, they are wrong. There is a severe financial and economic crisis the world over. But Hungarian politicians keep harping on the theme that the economic problems Hungary is experiencing are unique to Hungary. Certainly Hungary was the first country in the region to be in trouble because of the very high government and private indebtedness and it was the first to receive IMF and World Bank assistance. But just look around the region now. It seems that sooner or later all countries will be in pretty much the same boat. Romania is now trying to get some IMF loans and Slovakia, a country always brought up as a shining example of fiscal management, may end up in a serious recession due to its heavy reliance on the auto industry.
Yesterday I was asked by József Orosz, anchorman of Kontra (KlubRádió), to comment on the Hungarian doomsday attitude toward the economic crisis. He brought up some examples. A former minister in the Medgyessy government announced a few days ago that "Hungary is already in intensive care but not yet dead." Here are some Hungarian headlines of late: "The situation is worse than in October" (Index). "The German chancellor is reminded of the second world war" (Hírszerző). "Crisis: According to Bajnai amputation is necessary" (Hírszerző). "We are sitting on a timebomb of bloody social strife" (Hírszerző). "Hope is not in sight" (Heti Válasz). As opposed to generally more optimistic headlines in English and American papers. One of my favorites (Bloomberg) cited Jeremy Grantham, known as a "perma-bear," who nonetheless in a March 4 commentary entitled "Reinvesting When Terrified" urged a "shift to stocks before 'rigor mortis' sets in." And it was not the economy he was describing as dead; it was the investor. To quote a bit more from his commentary: "Every decline will enhance the beauty of cash until . . . 'terminal paralysis' sets in. Those who were over invested will be catatonic and just sit and pray. Those few who look brilliant, oozing cash, will not want to easily give up their brilliance. So almost everyone is watching and waiting with their inertia beginning to set like concrete. Typically, those with a lot of cash will miss a very large chunk of the market recovery." In brief, a call to action.
I heard an interview on Napkelte (MTV) yesterday morning. The reporter was interviewing a well known economist. Her very first sentences went something like this: "A few weeks ago you said that this recession would end by the middle of the year. What are you saying now?" The poor economist tried to explain that the situation changes from day to day and that it is difficult to predict the future. But that didn't satisfy our reporter who kept outlining the worst possible scenarios. When the economist tried to give a somewhat more nuanced picture, she contradicted him and tried to prove that the situation was dire. One could see that she was very frustrated when she didn't get an answer about the immediate economic collapse of the country.
Okay, one could say: this is just a not too bright reporter who doesn't know much about economics or finance. Or the headlines are simply sensation-seeking. But what about the chairman of the Hungarian National Bank who announced yesterday that the country is in such trouble that it can sink to the bottom of the ocean? In fact, the water is up to "our noses." András Simor, the chairman, almost daily (except during his vacation last week when the country was sinking!) makes some such horrific pronouncement and then seems to be surprised that the Hungarian forint is not doing well. The chairman of the central bank has to be very careful what he says and Simor ought to know that. So why is he saying these things? Inexperience? Ill will? Habit? Hard to say. His predecessor, a former minister in the Orbán government, certainly knew what he was doing. But Simor?
Then there are those economists. Economics the dismal science as Thomas Carlyle called it. It may be dismal, but it isn't a hard science with confirming or falsifying experiments. There are economic theories, different economic schools, different beliefs, but Hungarian economists expound their own remedies as the gospel truth. András Gerő, the historian, rightly pointed out that it would be appropriate for these economists to preface their theories with "in my opinion." However, they do not. The economists of the Reform Alliance are certain that their remedy is the only appropriate one while Lajos Bokros is convinced that his "shock therapy" will be the salvation of the country. Lately he has been making the rounds from television station to television station, proudly announcing that he has just returned from Ukraine where he was obviously invited to fix up the Ukrainian economy. Good luck! His supporters point to the splendid results he achieved in Slovakia. But what will happen if in the next quarter Slovakia will also be in recession? Then what will they say about Lajos Bokros? That his remedies didn't work in the long run? Or that the Slovak government did something that mitigated the results achieved by the Slovak Bokros package? If Lajos Bokros is the key to solving the world's economic and financial crisis then maybe he should be invited to the United States where all the problems started and everything would be okay in a jiffy.
Hungary is not unique and at the moment not even as badly off as some other countries. However, all this negativism can be destructive, creating an adverse feedback loop. A weakening economy and a pessimistic population can become mutually reinforcing. I'm neither an economist nor a medical doctor but I know that in both fields optimism is a critical component of recovery. In the United States and in Canada people who perhaps are hit harder by the financial and economic crisis than are the Hungarians remain by and large optimistic at the same time they are scared. They know that this deep recession will end, even though they don't know when. And some, following the lead of Obama, believe that the downturn provides an opportunity for fresh ideas, new beginnings, a revitalization of American business and society. Who will start a campaign in Hungary to change people's attitudes?