Man Without Qualities

Monday, November 18, 2002

UPDATE: The Piper Bills Germany

Germans unwisely re-elected their paralytic government, one singularly unsuitable for addressing the country's pressing and growing internal and external needs. As noted here previously, the bills for their self-indulgence are starting to come due.

Now the Economist is taking note of the swelling mess. Chancellor Schroeder's approach both to internal reform issues and foreign policy issues has been heavy on opportunism and media manipulation, and light on real ideas, insight and reform, and that has made his and Germany's problems worse than they need to be.

But to be fair to the Chancellor, Germany is a self governing Democracy, and its voters aren't getting anything they didn't choose for themselves. If Economist means to join with the German opposition by insinuating that Herr Schroeder obtained reelection by misleading the voters, that insinuation is a disservice to the Economist's readers, as with this passage:

Right up to the general election, Mr Schröder's then government had assured voters that it had everything under control. Times were certainly difficult, it said, but it was still expecting modest growth of 0.75% this year, rising to 2.5% next year. Tax increases? No question of that: to do it during an economic downturn would be “economically absurd”, Mr Schröder insisted. Welfare contributions? They would be “stabilised”. And the public deficit? Hans Eichel, the finance minister, was “certain” that Germany would keep within the European Union's 3% limit. All that has now been turned on its head.

The government no longer expects the economy to grow by more than 0.5% this year and 1.5% next. And even that looks optimistic. Germany's “five wise men”, the government's independent economic advisers, now forecast growth of just 0.2% this year and 1.0% next. The ZEW institute's monthly index of business expectations plunged this month to its lowest level since just after the terrorist attacks on New York's twin towers, suggesting, according to the institute's president, Wolfgang Franz, a “nosedive” of economic activity in Germany in the first half of next year. Europe's biggest economy is in crisis. .... Many Germans feel cheated and betrayed. Support for Mr. Schröder's Social Democrats has plummeted. Less than two months after scraping back into power, they now trail the opposition Christian Democrats by 14 percentage points.

All very rich.

During the campaign many independent economists, as well as the opposition political parties, vigorously pointed out how precarious the government's economic predictions really were. Germany's structural problems are discussed constantly and with great sophistication in that country's media. So while it is true as the Economist reports that [o]pposition leaders accuse the government of carrying out “the biggest electoral fraud in German history," it is equally true that voters who relied on the government's inevitably sunny campaign forecasts chose to rely on those forecasts in the face of enormous countervailing authority that was adequately explained to them.

Democracy requires, among other things, that voters train themselves to understand that an incumbent government will try to put the best spin on its performance, and that while the government is not evil to do this, the voters have an obligation to be skeptical and listen seriously to the other stories. Indeed, Herr Schroeder's party was trailing badly in the polls at the time it was attempting to rely on this sunny message - meaning voters weren't buying it. It was only with his handling of the massive floods and his opposition to the US Iraq policy that Herr Schroder made up his ground. It is preposterous and irresponsible for Germans to now argue that they were "tricked" by this entirely normal aspect of Herr Schroeder's campaign. The Germans weren't "tricked" or "defrauded." Rather, fully apprised, German voters chose to focus on the wrong issues at the wrong time for the wrong reasons. Now they are living with the consequences.

The Germans are their own problem. Germans' need to shed their own responsibility for their own choices by arguing they were misled where they were provided with all of the relevant information is a big part of their problem. It is certainly not the first time its been their problem.

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