The Bear’s Lair: Will the Germans never learn?

Germany’s voters last week produced a massive demand for greater freedom, with the nationalist AfD’s share of the vote more than doubling to 20.8%. The outgoing government parties all did badly, the SPD losing 9% of the vote, the Greens 3% and the free-market FDP damaged so badly by its participation in the socialist coalition that it fell out of the Bundestag entirely. Yet the likely incoming chancellor Friedrich Merz promptly ignored the will of the voters and announced his intention to coalesce with the SPD, thus condemning Germany to another half decade of explosive immigration and climate change mania economic collapse. Learning from history is not a German skill and nor is responsiveness to voters.

First, a shout-out to an area where German efficiency reigns triumphant. The German election was carried out by paper ballots, 50 million of which were successfully counted in the 8 hours after polls closed. That sheds a harsh light on the incompetence and fraud in U.S. elections, especially in Western states such as California, where votes take three weeks to be counted, and in close races “lost” batches of Democrat votes keep arriving during those three weeks until the Democrat has won. Democracy in which fraud is allowed is no democracy, as we saw at the Presidential level in 2020. The U.S. election system needs to be tightened up by Federal legislation by 2028 or ideally by the 2026 mid-terms, with voter ID, paper ballots, continuous counting without breaks and results declared within 12 hours of polls closing.

In the German election, the regional breakdown between the former East and West Germany was instructive. In the former East Germany, the AfD vote exceeded 40% in much of the region and 36.2% overall, while the CDU/CSU coalition did especially badly, polling only 18.9%. Conversely, in the former West Germany, the AfD was limited to around 18% in most constituencies although there were a couple of seats such as Kaiserslautern in which it broke through to the leading place.

The divergence between voting patterns between the two regions was simple: the East Germans had experienced the tyranny of Communism in living memory and recognized that the CDU-CSU rule of Angela Merkel (2005-21) had many of the same vicious characteristics. They were unattracted by a CDU-CSU coalition that appeared utterly unreformed, not least by its refusal to do business with the dynamic and hopeful new force of the AfD.

Merkel, like Vladimir Putin, was a rising star in her local Communist party organization before the Wall fell. The difference between them is that after 1991 Putin rapidly came to understand the advantages in freedom and economic growth of the capitalist economy, whereas Merkel never grasped them. As Chancellor, she was continually issuing central planning decrees expecting the economy to be guided by her whimsical preferences, without taking advantage of price signals. This led her to close Germany’s nuclear facilities and restrict its supplies of coal, while subsidizing the development of solar and wind power projects that were both uneconomic and unreliable. Like any good GOSPLAN apparatchik, she believed that the economy would respond to her directives, without paying attention to their economic folly.

After 2015, Merkel followed the same principle on immigration. Allowing in an unlimited flood of foreign riff-raff was morally desirable in her eyes (the sillier forms of Christianity from her pastor father were an influence, as well as Communism) and hence the enormous social and economic costs to ordinary German people were an irrelevance. Now the Deutsche Bundesbahn has poorer timekeeping than British Rail, a disgrace that would have been unthinkable when I rode its spotlessly clean and utterly reliable trains in the 1980s and 1990s. I suggested as early as 2017 that the great CDU-CSU founder Konrad Adenauer would despise Merkel, and I stand by that view.

Since Merkel’s departure, the dozy socialist Olaf Scholtz, encouraged by the eco-fanatic Greens in his government, followed Merkelism, albeit without her Stalinist intensity. This election offered the first chance for the German people to reject the central planning approach and return to a market economy, even the modified “social market economy” that is the German ideal. Alas, Merz is rejecting that possibility and, by allying with the Social Democrats, is offering the German people nothing but four more years of the bankrupt central planning approach.

Economically, Merz has announced that his first priority is to remove the “fiscal brake” from the Constitution, a law passed at Europe’s maximum moment of fiscal folly in 2009, restricting Germany’s structural budget deficit to 0.35% of GDP. While in practice various ways have been found to get around this, it has nevertheless forced Germany’s debt position to remain the soundest in Europe, with a debt to GDP ratio of 62.7%. Merz had professed to favor the fiscal brake during the election campaign, and it is favored by the AfD. His first action after the election being to repudiate such a sound rule, pushing its repeal through the outgoing leftist Reichstag, indicates that his intention is to waste more money and thereby intensify the public sector bloat that has over the last decade made Germany the sick man of Europe.

With the SPD in his government, it is also unlikely that Merz will be able to remove Merkel’s suicidal “green” policies that have made German energy costs the highest in Europe, three times those in the United States and have decimated German export industries. Even on immigration, the utter failure of the British “Conservatives” in 2010-24 suggests that Merz will give his voters little to be satisfied with.

Flouting the wish of their electorates appears a disease among German-speaking politicians, despite the good sense of their electorates. Ursula von der Leyen, President of the European Commission and a former German defense minister, recently described free speech as a virus and censorship as the vaccine against it, a sentiment that would have will fitted the late unlamented Lavrentiy Beria. The Austrians have performed the same trick as the Germans, preventing the duly elected Freedom Party from taking office even though it came first in Austria’s elections last year and participated successfully in government in 2000-05 and 2007-19, albeit with much whining from the European Commission. Even the British, Germans with an extra “sense of humor” attachment, fiddled the system after 2007 with David Cameron’s “modernization” nonsense, allowing Conservative Campaign Headquarters to prevent any actual Conservatives from being selected as parliamentary candidates. That has met its just reward by the flourishing of the ‘Reform’ party, which with luck will eat the Conservatives’ lunch at the next General Election.

As I pointed out in a recent piece, this behavior has ended badly in the past, notably when in 1930 Heinrich Brüning of the Center party refused to include Adolf Hitler’s NSDAP in his governing coalition. That did not end well – within three years Hitler was Chancellor with an outright majority, having escaped blame for the massive economic downturn that occurred on Brüning’s watch. That is the problem with ignoring the will of your voters; if you govern badly or if (as in Brüning’s case) a global catastrophe overtakes you, then the system has no defense against the party that has been blocked out of power.

In the case of a truly frightening party, the risk of allowing them into government might be so great that you would block them anyway. However, none of the AfD, Austria’s Freedom Party nor indeed Britain’s Reform party (or for example Spain’s Vox) are remotely in that category. They represent alternative, very likely superior approaches to policy that are simply disliked by the woke bureaucrats and the leftist media, which dislike itself is sufficient reason for sensible statesmen to give them the share of power that their electoral success deserves.

Vice President J.D. Vance put it well in his Munich speech the other week, when he pointed out that German and British censorship, the “firewalls” against nationalist parties and the encouragement by EU bureaucrats to Romanian judges to nullify an election whose results they didn’t like are all betrayals of the fundamental values of free speech and fair elections that define a democracy. Should Europe fail to return to democratic values, said Vance, the two continents must necessarily politically and strategically diverge.

With the U.S. having rectified its democratic backsliding by electing Trump, Europe must now do the same. Merz made it pretty clear on Election Night that he had no problem with European-U.S. strategic divergence. His aristocratic ancestors would doubtless be horrified that the Swabian peasant Drumpf could be the world’s most powerful leader. However, unlike in Germany, democracy has delivered a clear and unambiguous result in the Swabian peasant’s favor. Europe in general and Germany in particular must recognize when the electorate has spoken and honor the results of their choice.

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(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)