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


 

 
 

Emigrate While You Can... Learn More

 

 

Dear Readers! We are happy to report that we have reached our turn-of-the-year funding goal and want to extend a special thank you to all of you who have chipped in. We are very grateful for your support! As a general remark, according to usually well informed circles, exercising the donation button in between funding drives is definitely legal and highly appreciated as well.

   

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:

  • mad_professor-600x399A Historic Rally in Gold Stocks – and Most Investors Missed It
      Buy Low, Sell High? It is an old truism and everybody has surely heard it more than once. If you want to make money in the stock market, you're supposed to buy low and sell high. Simple, right?   Successful stock market investing in two simple steps Photo via slideshare.net   As Bill Bonner once related, this is how a stock market advisor in Germany explained the process to him:   Thirty years ago, at an investment conference, there was a scalawag analyst...
  • gold barGold and Negative Interest Rates
      The Inflation Illusion We hear more and more talk about the possibility of imposing negative interest rates in the US. In a recent article former Fed chairman Ben Bernanke asks what tools the Fed has left to support the economy and inter alia discusses the use of negative rates. We first have to define what we mean by negative interest rates. For nominal rates it’s simple. When the interest rate charged goes negative we have negative nominal rates. To get the real rate of...
  • NYSEWhy is the Stock Market so Strong?
      Dismal Earnings, Extreme Valuations The current earnings season hasn't been very good so far. Companies continue to “beat expectations” of course, but this is just a silly game. The stock market's valuation is already between the highest and third highest in history depending on how it is measured.   Photo credit: Kjetil Ree   Corporate earnings are clearly weakening, and yet, the market keeps climbing. The rally is a bit of a “all of worry” type of...
  • 2-XME, dailyWeekly Resistance Levels in the HUI
      Options Expiration Ante Portas -  Just as a Resistance Level is Reached After we had penned our little missive on the breakout in gold stocks on Monday, it dawned on us that an options expiration takes place this week. Normally, gold stocks decline into the expiration date. Don't hold us to this, but the last time we remember call writers being forced to delta-hedge their way out of trouble in gold and silver stocks right at the end of an expiration week was sometime in 2006. Given...
  • 800px-JuergenHabermasCultural Marxism and the Birth of Modern Thought-Crime
      What the Establishment Wants, the Establishment Gets If a person has no philosophical thoughts, certain questions will never cross his mind. As a young man, there were many issues and ideas that never concerned me as they do today. There is one question, however, which has intrigued me for the longest time, and it still fascinates me as intensely as it did back then: Does spirit precede matter or is it the other way around? In other words, does human consciousness create what we...
  • sir_john_cowperthwaite (1)China – A Reversal of Urbanization?
      Economic and Demographic Changes We have discussed China's debt and malinvestment problems in these pages extensively in the past (most recently we have looked at various efforts to keep the yuan propped up). In a way, China is like the proverbial “watched pot” that never boils though. Its problems are all well known, and we have little doubt that they will increasingly find expression. China's credit bubble is one of the many dangers hanging over the global economy's head, so to...
  • upstep-2State of Fear - Corruption in High Places
      Mr. X and his Mysterious Benefactors As the Australian Broadcasting Corporation (ABC) reports, a money-laundering alarm was triggered at AmBank in Malaysia, a bank part-owned by one of Australia's “big four” banks, ANZ. What had triggered the alarm? Money had poured into the personal account of one of the bank's customers, a certain Mr. X, in truly staggering amounts.   A recent photograph of Mr. X. Photo credit; Peter Foley / Bloomberg via Getty...
  • the worst-1Why All Central Planning Is Doomed to Fail
      Positivist Delusions [ed. note: this article was originally published on March 5 2013 – Bill Bonner was on his way to his ranch in Argentina, so here is a classic from the archives] We’re still thinking about how so many smart people came to believe things that aren’t true. Krugman, Stiglitz, Friedman, Summers, Bernanke, Yellen – all seem to have a simpleton’s view of how the world works.     A bunch of famous people with a simpleton view of how the...
  • the-pantsir-s1-a-combined-short-to-medium-range-surface-to-air-missile-and-anti-aircraft-missile-system-the-system-consists-of-12-surface-to-air-guided-missiles-and-two-30-mm-automatiRussian Aggression Unmasked (Sort Of)
      Provocative Fighter Jocks Back in 2014, a Russian jet made headlines when it passed several times close to the USS Donald Cook in the Black Sea. As CBS reported at the time:   “A Pentagon spokesperson told CBS Radio that a Russian SU-24 fighter jet made several low altitude, close passes in the vicinity of the USS Donald Cook in international waters of the western Black Sea on April 12. While the jet did not overfly the deck, Col. Steve Warren called the action "provocative and...
  • 12-Capital vs consumer goods prod LTUS Economy – Ongoing Distortions
      Business under Pressure A recent post by Mish points to the fact that many of the business-related data that have been released in recent months continue to point to growing weakness in many parts of the business sector. We show a few charts illustrating the situation below:   A long term chart of total business sales. The recent decline seems congruent with a recession, but many other indicators are not yet confirming a recession - click to enlarge.   Wholesale...
  • mecca-3Gold Stampede
      Stampeding Animals The mass impulse of a cattle stampede can be triggered by something as innocuous as a blowing tumbleweed.  A sudden startle, or a perceived threat, is all it takes to it set off.  Once the herd collectively begins charging in one direction it will eliminate everything in its path.   Better get out of the way... stampeding bisons Photo credit: Surface Niusance   The only chance a rancher has is to fire off a pistol with the hope that the shot...
  • chart-2-gold and treasury yieldGetting it Wrong on Silver
      Erroneous Analysis of Precious Metals Fundamentals We came across an article at Bloomberg today, talking about silver supply troubles. We get it. The price of silver has rallied quite a lot, so the press needs to cover the story. They need to explain why. Must be a shortage developing, right? At first, we thought to just put out a short Soggy Dollars post highlighting the error. Then we thought we would go deeper. Here’s a graph showing the price action in silver since the...

Austrian Theory and Investment

Support Acting Man

Own physical gold and silver outside a bank

Archive

j9TJzzN

350x200

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]

 

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

 
Buy Silver Now!
 
Buy Gold Now!
 

Oilprice.com