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!

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:

  • What Do “Think Tanks” Think About?
      “Russiagate” WEST RIVER, MARYLAND – We’re back at our post – watching... reading... trying to connect the dots. And we begin by asking: What do “think tanks” think about? The answer in a minute. First, there is a dust-up in the Washington, D.C., area. “Russiagate,” it is called. As near as we can make out, some people think the Trump team had or has illegal or inappropriate contacts with the Russian government.   It's all very obvious, if one looks...
  • Parabolic Coin
      The Crypto-Bubble - A Speculator's Dream in Cyberspace When writing an article about the recent move in bitcoin, one should probably not begin by preparing the chart images. Chances are one will have to do it all over again. It is a bit like ordering a cup of coffee in Weimar Germany in early November 1923. One had to pay for it right away, as a cup costing one wheelbarrow of Reichsmark may well end up costing two wheelbarrows of Reichsmark half an hour later. These days the question is...
  • Quantitative Easing Explained
      [Ed. note: This article was originally posted in November of 2010 - we have decided to republish it with updated charts, as it has proved to be very useful as a reference - the mechanics of QE are less well understood than they should be, and this article explains them in detail.]   Printing Money We have noticed that lately, numerous attempts have been made to explain the mechanics of quantitative easing.  They range from the truly funny as in this by now 'viral' You Tube...
  • The Three Headed Debt Monster That’s Going to Ravage the Economy
      Mass Infusions of New Credit   “The bank is something more than men, I tell you.  It’s the monster.  Men made it, but they can’t control it.” – John Steinbeck, The Grapes of Wrath   Something strange and somewhat senseless happened this week. On Tuesday, the price of gold jumped over $13 per ounce.  This, in itself, is nothing too remarkable.  However, at precisely the same time gold was jumping, the yield on the 10-Year Treasury note was slip sliding down...
  • Jayant Bhandari on Gold, Submerging Markets and Arbitrage
      Maurice Jackson Interviews Jayant Bhandari We are happy to present another interview conducted by Maurice Jackson of Proven and Probable with our friend and frequent contributor Jayant Bhandari, a specialist on gold mining investment, the world's most outspoken emerging market contrarian, host of the highly regarded annual Capitalism and Morality conference in London and consultant to institutional investors.   As soon as Jayant touches down in London, he is accosted by...
  • Monetary Madness and Rabbit Consumption
      Down the Rabbit Hole “The hurrier I go, the behinder I get,” is oft attributed to the White Rabbit from Lewis Carroll’s, Alice in Wonderland.  Where this axiom appears within the text of the story is a mystery.  But we suspect the White Rabbit must utter it about the time Alice follows him down the rabbit hole.   Pick a rabbit to follow...   No doubt, today’s wage earner knows what it means to work harder, faster, and better, while slip sliding behind. ...
  • Central Banks – Tiptoeing Toward the Exit
      Frisky Fed Hike-o-Matic We haven't commented on central bank policy for a while, mainly because it threatened to become repetitive; there just didn't seem anything new to say. Things have recently changed a bit though. A little over a week ago we received an email from Brian Dowd of Focus Economics, who asked if we would care to comment on the efforts by the Fed and the ECB to exit unconventional monetary policy and whether they could do so without triggering upheaval in the markets and...
  • The Anatomy of Brown’s Gold Bottom – Precious Metals Supply and Demand
      The Socialist Politician-Bureaucrat with the Worst Timing Ever As most in the gold community know, the UK Chancellor of the Exchequer Gordon Brown announced on 7 May, 1999 that HM Treasury planned to sell gold. The dollar began to rise, from about 110mg gold to 120mg on 6 July, the day of the first sale. This translates into dollarish as: gold went down, from $282 to $258. It makes sense, as the UK was selling a lot of gold... or does it?   Former UK chancellor of the...
  • The Valium Era
      Don’t Be Fooled by These Calm Markets What is happening in the world of money? Well - the most striking thing is: nothing. It doesn’t seem to matter what happens. Dysfunction in Washington. Meltdown of the techs. No matter how rough the seas get, the markets glide along... scarcely noticing the storm-tossed waves below.   Thankfully the world's central planners are so well-versed in egging on the creation of an ever greater mountain of debt and seemingly limitless asset...
  • Is Trump a Modern Caesar?
      Putting on the Purple   Mayor: Drebin, I don’t want any more trouble like you had last year on the South Side. Understand? That’s my policy. Drebin: Yes. Well, when I see five weirdos dressed in togas stabbing a guy in the middle of the park in full view of 100 people, I shoot the bastards. That’s my policy. Mayor: That was a Shakespeare in the Park production of Julius Caesar, you moron! You killed five actors! Good ones. – The Naked Gun   Laura Loomer,...
  • The Fed Rate Hike and Gold – Precious Metals Supply and Demand
      Shrinking the Balance Sheet? The big news last week came from the Fed, which announced two things. One, it hiked the Fed Funds rate another 25 basis points. The target is now 1.00 to 1.25%, and there will be further increases this year. Two, the Fed plans to reduce its balance sheet, its portfolio of bonds.   Assets held by Federal Reserve banks and commercial bank reserves maintained with the Fed – note that while asset purchases and bank reserve creation are connected,...
  • How to Discover Unknown Market Anomalies
      Seasonax Event Studies As our readers are aware by now, investment and trading decisions can be optimized with the help of statistics. After all, market anomalies that have occurred regularly in the past often tend to occur in the future as well. One of the most interesting and effective opportunities to increase profits while minimizing risks at the same time is offered by the event studies section of the Seasonax app.   A recent event that had quite an impact on certain...

Support Acting Man

Austrian Theory and Investment

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