The Angry Republic

"Schroder is stupid." That's how a Berlin daily, Die Welt, sums up German public opinion. A more intellectual--and vicious--insult these days is to compare Chancellor Gerhard Schroder to Heinrich Bruning, the hapless Weimar-era chancellor whose incompetent handling of the Great Depression helped bring on Adolf Hitler.

Ouch. Never has a postwar German leader experienced such a sharp reversal of political fortunes--or met such a wave of public and editorial invective. Just two months ago, Schroder and his Social Democrats celebrated their narrow re-election. Today, half the people who voted for him wish they hadn't. Were the election held again, the opposition Christian Democrats would get 50 percent of the vote, the Social Democrats 28.

Germans see plenty of reasons to be angry. After pledging during the campaign not to raise taxes, Schroder's government just slapped citizens and businesses with up to ¤23 billion in new levies, effective Jan. 1. Instead of passing a tediously negotiated "breakthrough" compromise to loosen Germany's job-killing labor regulations, Schroder bowed to the unions and defanged the law of its most potent measures. Thanks to these "fixes," say economists, the new law will now likely destroy more jobs than it creates. Schroder also reneged on a promise to finally start reforming Germany's teetering social-security system. Instead, he just hiked premiums by ¤1.3 billion. Tacked onto wages, they'll make the country's workers even more expensive--already the costliest in the world.

With Germany verging on recession, Schroder's flip-flops have made a terrible national mood even worse. "What more has to happen before the government announces a fundamental reform instead of just another tax increase?" fumes Helmut Panke, CEO of Munich-based carmaker BMW. Here's the dilemma: Germany's problems are known in perfect clarity, as are the solutions. Yet again, another new government has utterly failed to deal with them effectively. More and more Germans have begun asking whether their country can, in fact, reform at all. If not, the prospect is upsetting indeed: withering prosperity, continuing economic decline, ultimately social disorder.

Even the most staid newspapers and magazines are thus almost hysterical with rage. The country needs a revolution, the editor of the conservative Frankfurter Allgemeine newspaper, Frank Schirrmacher, wrote in a seething editorial last week. On a recent cover, the liberal NEWSWEEKly Stern calls for a revolt of the young against Schroder and a generation of politicians that the magazine says has ruined them. TV talk shows are full of professors and scientists fulminating against the government. One such, the historian Arnulf Baring of the Free University of Berlin, goes so far as to suggest that the nation's economic calcification and political paralysis threatens to turn it into a "light" version of communist East Germany. His remedy: tax boycotts, demonstrations and street barricades.

Ordinary citizens aren't storming the Reichstag just yet. Instead, they've gone gaga over a viciously sarcastic rap-song parody of Schroder, boosting it to the top of the pop charts all but overnight. Called "The Tax Song," the tune portrays the chancellor as a rapacious tax collector. "All you nerds have money buried somewhere," raps Schroder sound-alike Elmar Brandt, "and I'll get it, I'll find it, wherever it is." It had sold more than half a million copies by last Friday and gets radio-station play day and night. In response to a manifesto posted on the Internet, Germans are sending thousands of used T-shirts to Schroder's chancellery in Berlin--as in the shirt they believe he's stealing off their backs. These gimmicks are more than just gallows humor, says Andreas Petzold, editor in chief of the NEWSWEEKly Stern. "The moment has come that our citizens understand how deep our country is stuck in the muck."

The question now is, who will get Germany out of the muck, and how? Schroder and his crew show little sign of understanding the true dimensions of Germany's disease, or its remedy. If there's a problem with their policies, says Economics Minister Wolfgang Clement, it's that they haven't been explained properly. Schroder himself admits that "some mistakes were made"--but calls his critics "selfish." Taxes have to be raised to "preserve solidarity and participation in the country's wealth," he says. His former Finance minister, Oskar Lafontaine, joins in that soak-the-rich rhetoric. "Today's enemy of the state wears diamonds," he recently declared in Bild, Germany's biggest tabloid. Against this backdrop, the Social Democrats announced plans for yet another tax hike last week: a 1 percent "wealth tax" on everyone with assets of at least ¤300,000.

For Germany's furious majority, there's no alternative in sight. Voters don't believe the opposition Christian Democrats would do things all that differently. What's shocking, says Manfred Gullner, head of the Forsa polling institute in Berlin, is that "Germans don't trust anyone to solve their problems anymore." Amid such deadening pessimism, a few courageous commentators have begun to suggest the country might need a figure like Ronald Reagan or Margaret Thatcher to break the gridlock. That's stunning, considering that Germany's chattering classes--and especially journalists--have long viewed these two as capitalist devils incarnate.

Absent dynamic new leadership, it's tough to see where the protests will lead. Since the German Constitution bars popular referendums, there's no chance for something like Proposition 13, the grass-roots antitax revolt that forced California lawmakers to cut taxes and rein in spending. And because voters elect parties rather than candidates, pro-reform outsiders who fall foul of party orthodoxy have no chance of gaining office. Moves like last week's call by the German Taxpayers' Association for its 430,000 members to send protest postcards to their deputies are good PR--but they carry little sting.

In their unlucky past, Germans have gone down dead ends before, unable to make the hard choices necessary to break political paralysis and set the country on a healthier course. Hence the painful references to the debacle that was Weimar. History seldom repeats itself. But barring a sudden change of heart or leadership, there's a real risk that Gerhard Schroder's Germany will keep muddling through with halfhearted and superficial reforms, unable to arrest the country's decline. "I wish there were a real crisis," historian Baring says. "But I'm afraid that won't happen until a lot more people are a lot worse off than they are now." If it comes to that, will there be anyone competent enough to pick up the pieces?

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