Mrs. Merkel's CDU/CSU Trounces Rivals

Political scientists in Germany call it the 'Mutti factor' – as German news magazine Der Spiegel writes:

 

“Germans like their quiet. Should a couple raise their voices such that they can be heard in the courtyard of a city apartment building, it is a sure bet that before long, the phrase "Ruhe da!" ("Quiet!") will come ringing out of an open window. Even in big metropolises like Berlin, most flat seekers yearn for silence and tranquility, far removed from the chaotic noise emanating from the busy streets.

Angela Merkel, more than any other politician on the campaign trail this year, has understood her flock's desire for calm.

[…]

The chancellor has even gone so far as to directly appeal to the electorate's longing for quiet. As Reuters correspondent Alexandra Hudson noted in a recent article, the election manifesto for Merkel's party includes the assertion: "One in two Germans feels troubled by noise" and suggests that her party would seek to improve the situation.

[…]

[…] a chancellor who prefers to wait before making decisions and a leader who is sometimes difficult to pin down. It has also helped propel her popularity to dizzying heights. Her followers have taken to affectionately calling her "Angie." The German press has dubbed her "Mutti," the word children in Germany use to address their mothers.”

 

(emphasis added)

Not even the Economist managed to derail Merkel with its recent cover promising 'One Merkel Rule' for all of Europe:

 


 

One to rule them allIn spite of its well-earned and powerful reputation as a reliable contrary indicator, not even the Economist was able to derail Mrs. Merkel with this cover story

 


 

Angela Merkel delivered the biggest victory for her party since Helmuth Kohl's post-reunification heyday, and only barely missed attaining an absolute majority of parliamentary seats (although her party only gathered 42% of the vote, up a respectable 8.2% from the last election according to initial estimates, parties that fail to take the 5% hurdle won't get any seats).

 

And herein lies the problem. You may be wondering why we are claiming that 'socialism was the real winner', given that a nominally conservative party clearly won the election. We explain the reason below. 

 

Sole Voice in Favor of Free Market Capitalism Gone

It would be an exaggeration to equate the FDP with classical liberalism, but as far as German politics goes, it is the party that comes closest to its ideals. It definitely was the sole advocate of free market capitalism in the German political landscape. While it has always been a small party, it was a famed 'kingmaker' through most of the post WW 2 era, managing to influence both social democratic and nominally conservative governments by entering into coalitions with them.

For the first time in the post war period, the FDP failed to garner enough votes to climb above the 5 percent hurdle mentioned above and so won't even be in opposition in parliament. In fact, the result attained by the anti-euro party AfD was slightly better than that of the FDP, which lost more than two thirds of its electoral support. Here are the initial estimates by Germany's two large public broadcasters regarding the distribution of votes:

 


 

Germany voteBoth the conservatives and the social democrats gain, the FDP crashes into oblivion, the AfD proves to be the biggest force in terms of new parties, but fails to cross the 5% hurdle as well – click to enlarge.

 


 

Although the socialist party gained about 3%, leftist-authoritarian movements overall have lost some support, as the Greens and 'Die Linke' ('the Left', the 'democratic' successor party of the former communist East German SED) have together lost more than the SPD gained.

And yet, the new parliament will now consist only of leftists parties and the nominally conservative bloc. We say 'nominally', because Germany's conservatives are really a left-wing party too, at least from our perspective. What does one call a party that recently came out in favor of minimum wages in spite of their well-known destructive economic effects? There is therefore a very good chance that a grand coalition with the SPD will be the result of this election outcome, although the latter is allegedly extremely reluctant. It is rightly fearing that as the junior partner in such a coalition, it will lose support (the FDP's fate is a stark warning in this respect). On the other hand, the SPD has always ruled out a coalition with 'Die Linke', since that would likely prove even more poisonous for it, and it does crave power. The main alternative to a grand coalition will be new elections.

 

The Historic Role of Free Market Capitalism in Germany

It should be noted though that not only has the FDP hit the skids, but the parties of the left have together still garnered a larger percentage of the vote than the conservatives. So what does Germany's relationship with the free market actually consist of? The best analysis is still the one written by the late Professor Hans Sennholz in the 1960's:

 

“[…]it may come as a shock to libertarians to learn that the "miracle" of Germany's revival was not the result of a conscious rejection of socialism, but was rather an accident of political and social conditions. There is evidence, too, that the current market economy of Germany is in grave danger of being destroyed by the very people who built it up.

In 1947, when millions of Germans were starving and living in incredible poverty, and when the full threat of the Morgenthau Plan was upon it, there certainly was no general demand for the free market. Rather, the popular majority was for what its principal advocate, a socialist party leader by the name of Dr. Agartz, called the "new kind of socialism." This called for the ownership and operation of the tools of production by workers under the supervision of government. It amounted to politically controlled producers' cooperatives.

But economic control is not possible without political power, and the "new kind of socialism" had to be deferred. Throughout the postwar period the German political parties concentrated on attacking the occupation powers for the severity of their controls. To libertarians in this country the German call for freedom sounded like a demand for a free market. This was not so. What most Germans meant by freedom was liberation from foreign occupation and, above all, freedom to impose their own controls.”

 

(emphasis added)

As Professor Sennholz noted, resistance against the occupation automatically meant resistance to American New Deal policies and British socialism. So the extent to which a free market was adopted was for one thing out of sheer necessity – there was 'nothing left for the socialists to redistribute or ration' after the war – and for another due to resistance to the political philosophy embodied by the occupying forces, which at the time was thoroughly socialistic. As a result of the success of the market economy,  Sennholz noted that classical liberal thought finally managed to get a little bit of recognition in Germany. We wonder what he would have said about today's Germany?

 

“Professor Wilhelm Röpke of Geneva became the intellectual spokesman of the new era. It was mainly through him that the German public became aware of the fundamental changes of policy. His interpretation of the economic comeback as the inevitable outcome of capitalist policies found increasing acceptance. Today there exists a German school of political and economic thought for freedom and free enterprise which has its roots in the writings of Professors Röpke, Eucken and others.

 

However, readers will surely be surprised to learn how Professor Sennholz characterized Ludwig Erhard, the father of the so-called 'social market economy', who is today widely regarded as a paragon of the free market. As Sennholz wrote:

 

Secretary of Economy, Ludwig Erhard, the world famous inventor of "Professor Erhard's social market economy," is about to introduce a new economic bill of his liking, one that would give him power to regulate prices wherever he deems them "unreasonable." The bill is to replace a similar provision in the German Police Order which the Bundestag recently revoked against the ardent opposition of Professor Erhard. This brilliant politician, who certainly is no champion of capitalism, stubbornly clings to foreign exchange control, the most formidable means of government control over the economy.

[…]

It appears logical to Professor Erhard to threaten businessmen with severe penalties for "unjustified" price increases and simultaneously to raise the price of agricultural products by way of government restrictions on imports.”

 

(emphasis added)

In short, even the conservative politician whom most Germans would today regard as a supporter of the free market par excellence was in reality 'no champion of capitalism'. The same holds for the conservative party as a whole, especially its modern-day incarnation.

This is why we say, the real winner of Germany's election is socialism. We can expect the EU 'centralization and harmonization' project to be pursued with fresh vigor, and both the regimentation of the economy and taxation are set to continue to increase across Europe – presumably until there is once again 'nothing left to redistribute or ration'.

 

 

Chart by: Der Spiegel


 

 
 

 
 

Dear Readers!

You may have noticed that our so-called “semiannual” funding drive, which started sometime in the summer if memory serves, has seamlessly segued into the winter. In fact, the year is almost over! We assure you this is not merely evidence of our chutzpa; rather, it is indicative of the fact that ad income still needs to be supplemented in order to support upkeep of the site. Naturally, the traditional benefits that can be spontaneously triggered by donations to this site remain operative regardless of the season - ranging from a boost to general well-being/happiness (inter alia featuring improved sleep & appetite), children including you in their songs, up to the likely allotment of privileges in the afterlife, etc., etc., but the Christmas season is probably an especially propitious time to cross our palms with silver. A special thank you to all readers who have already chipped in, your generosity is greatly appreciated. Regardless of that, we are honored by everybody's readership and hope we have managed to add a little value to your life.

   

Bitcoin address: 1DRkVzUmkGaz9xAP81us86zzxh5VMEhNke

   
 

One Response to “Germany Elects Mama – The Real Winner is Socialism”

  • JE Stater:

    While I generally agree to these statements, I also believe reality is a little more complex than described. 10 years ago, Germany went through a period of re-adjustement that became neccessary due to lost competiveness, high-wages and high unemployment. This adjustment was driven by Gerhard Schröder, a SPD! chancellor. While the SPD is very left-wing (but Greens and die Linke are both even more extreme today), they put-up a rather conservative candidate to get the majority at that time.

    Germany is relatively successfull today also because of this adjustement. The problem is the fallout of this decision for the SPD. The formerly great party split-up (“Die Linke” was formed) and when the Green party started it’s large jump to the left, the SPD got killed.

    Also, you need to count FDP + AFD + Pirates (well, maybe not) as parties that address liberal rights. In total that’s >10%.

Your comment:

You must be logged in to post a comment.

Most read in the last 20 days:

  • Can Germany Be Made Great Again?
      When Germany Was Great! Ever since the start of the deliberately conceived “migrant crisis,” orchestrated by NWO elites, the news out of Germany has been, to say the least, horrific. Right before the eyes of the world, a country is being demographically destroyed through a coercive plan of mass migration.  The intended consequences of this – financial strain, widespread crime and property destruction, the breakdown of German culture – will continue to worsen if things are not...
  • Yanking the Bank of Japan’s Chain
      Mathematical Certainties Based on the simple reflection that arithmetic is more than just an abstraction, we offer a modest observation.  The social safety nets of industrialized economies, including the United States, have frayed at the edges.  Soon the safety net’s fabric will snap. This recognition is not an opinion.  Rather, it’s a matter of basic arithmetic.  The economy cannot sustain the government obligations that have been piled up upon it over the last 70...
  • Incrementum Advisory Board Meeting, Q3 2017
      Global Monetary Architecture The quarterly Incrementum Advisory Board meeting was held last week (the full transcript is available for download below). Our regulars Dr. Frank Shostak and Jim Rickards were unable to attend this time, but we were joined by special guest Luke Gromen of research house “Forest for the Trees” (FFTT; readers will find free samples of the FFTT newsletter at the site and in case you want to find the link again later, we have recently added it to our blog roll)....
  • Views From the Top of the Skyscraper Index
      Views From the Top of the Skyscraper Index On a warm Friday Los Angeles morning in spring of 2016, we found ourselves standing at the busy corner of Wilshire Boulevard and South Figueroa Street.  We were walking back to our office following a client wire brushing for events beyond our control.  But we had other thoughts on our mind.   Iron workers (the non-distraught variety) atop the 10 ton spire of the Wilshire Grand Center in Lost Angeles. This image is vaguely...
  • Bitcoin, Gold and Silver
      Precious Metals Supply and Demand Report That’s it. It’s the final straw. One of the alternative investing newsletters had a headline that screamed, “Bitcoin Is About to Soar, But You Must Act by August 1 to Get In". It was missing only the call to action “call 1-800-BIT-COIN now! That number again is 800 B.I.T..C.O.I.N.”   Bitcoin, daily. In terms of the gains recorded between the lows of 2009 and the recent highs (from less eight hundredths of a US cent per...
  • Prepare for Another Market Face Pounding
      “Better than Goldilocks” “Markets make opinions,” goes the old Wall Street adage.  Indeed, this sounds like a nifty thing to say.  But what does it really mean?   The bears discover Mrs. Locks in their bed and it seems they are less than happy. [PT]   Perhaps this means that after a long period of rising stocks prices otherwise intelligent people conceive of clever explanations for why the good times will carry on.  Moreover, if the market goes up for...
  • Seasonality: Will Patterns that Worked in the Past Also Work in the Future?
      Historians of the Future Every investor makes trading decisions based on what happened in the past – there is no other way. What really interests us is the future though. After all, what happens in the future ultimately determines investment success.   When in doubt, you can always try to reach the pasture...  In Human Action, Ludwig von Mises described stock market speculators as akin to “historians of the future”. This is without a doubt the most trenchant definition of...
  • Bitcoin Forked – Precious Metals Supply and Demand Report
      A Fork in the Cryptographic Road So bitcoin forked. You did not know this. Well, if you’re saving in gold perhaps not. If you’re betting in the crypto-coin casino, you knew it, bet on it, and now we assume are happily diving into your greater quantity of dollars after the fork.   Bitcoin, daily – adding the current price of BCH (the new type of Bitcoin all holders of BTC can claim at a 1:1 ratio), the gain since the “fork” amounts to roughly $1,000 at the time we...
  • What Went Wrong With the 21st Century?
      Fools and Rascals   And it’s time, time, time And it’s time, time, time It’s time, time, time that you love And it’s time, time, time… - Tom  Waits   Tom Waits rasps about time   POITOU, FRANCE – “So how much did you make last night?” “We made about $15,000,” came the reply from our eldest son, a keen cryptocurrency investor. “Bitcoin briefly pierced the $3,500 mark – an all-time high. The market cap of the...
  • Czar vs. Pope
      Vladimir the Great Sums Up Pope Francis the Fake Vladimir Putin has once again demonstrated why he is the most perceptive, farsighted, and for a politician, the most honest world leader to come around in quite a while.  If it had not been for his patient and wise statesmanship, the world may have already been embroiled in an all-encompassing global conflagration with the possibility of thermonuclear destruction.   Vladimir Putin is sizing up Pope Francis with his “good...
  • Bitcoin Has No Yield, but Gold Does – Precious Metals Supply and Demand Report
      Bitcoin and Credit Transactions Last week, we said:   It is commonly accepted to say the dollar is “printed”, but we can see from this line of thinking it is really borrowed. There is a real borrower on the other side of the transaction, and that borrower has powerful motivations to keep paying to service the debt. Bitcoin has no backing. Bitcoin is created out of thin air, the way people say of the dollar. The quantity of bitcoins created may be strictly limited by...
  • Is Historically Low Volatility About to Expand?
      Suspicion Asleep You have probably noticed it already: stock market volatility has recently all but disappeared. This raises an important question for every investor: Has the market established a permanent plateau of low volatility, or is the current period of low volatility just the calm before the storm?   All quiet on the VIX front... what can possibly happen? [PT] - click to enlarge.   When such questions regarding future market trends arise, it is often...

Support Acting Man

j9TJzzN

Austrian Theory and Investment

Own physical gold and silver outside a bank

Archive

350x200

THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

Realtime Charts

 

Gold in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Gold in EUR:

[Most Recent Quotes from www.kitco.com]

 


 

Silver in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Platinum in USD:

[Most Recent Quotes from www.kitco.com]

 


 

USD - Index:

[Most Recent USD from www.kitco.com]

 

 
Buy Silver Now!
 
Buy Gold Now!
 

Oilprice.com