World Affairs

Calculating to A Fault

Angela Merkel once promised to rescue Germany from its torpor. But the country has had a change of heart about her reforms—and so has she.

By Stefan Theil | NEWSWEEK

From the magazine issue dated Oct 29, 2007

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Posted By: blackforest @ 11/05/2007 12:25:14 PM

Comment: FIRST PART
our translation from STERN Magazin no. 42/2007, p. 52 , Oct. 1o.
Our Heart So White, Unser Herz so weiss
The CDU ( Christian Democratic Union party) has lost its politico-economic competence, now the CDU holds out its hand for the extension of the unemployment pay. A never delivered speech by Merkel???s critic Friedrich Merz reveals the unrest among the Blacks.
Heckler???s Shout from Berlin by HANS-ULRICH JOERGES
Dear Friends, I???m happy to see all of you again after such a long time, although the occasion is extremely unpleasant. Our circle is small, very small, and we are meeting under practically secret circumstances; nowadays, however, meeting under different circumstances is practically no longer possible in our party without exposing the participants to a high risk for their political career. Volker Kauder and Norbert Roettgen have requested to be excused from attending. As you know all too well, both of them have decided to serve the Lady from the East, which requires total dedication. It makes me all the much happier, though, to see that Josef Schlarmann and Michael Fuchs, the last upright members of our middle class, have shown up. I had to promise these friends, however, to remain silent about their attendance. Everybody knows what will happen to them if word goes around. (Grumbling, reluctant applause.)
Dear Friends, we have gotten right to the subject. Our CDU has no more politico-economic heads. And it has lost its competence with respect to political order. That is a dramatic process, although is has not really been noticed yet by the public. The CDU has lost its programmatic heart. This heart???s former place is now white! (Lively applause.)
I have realized this earlier than others, and have drawn the necessary conclusions. I did not want to burn myself in an hopeless fight with the Lady. The friends who stayed have surrendered, or they were subjugated. Volker Kauder and Norbert Roettgen I have mentioned already. Mattthias Wissmann has fled to the automobile industry. Roland Koch plays the Lady???s game. And whatever Guenther Oettinger did not do to himself by delivering his unfortunate speech, the Lady finished up without hesitation. Nowadays, he is no longer a person of weight. (Babble, calls: We have abandoned him!)
These days, I am being urged to take a public stand against the removal of the politico-economic core of the CDU. Once more, some are advising me to establish a new party. However, I will not become the Oscar Lafontaine of my party, although any more, I am hardly able to recognize it as such. Furthermore, I do not want to spare the cowards the moment of disgrace, when they consent to the extension of the unemployment pay out of plain populism, arm in arm with Kurt Beck???s SPD which has turned to the left.
Posted By: blackforest @ 11/05/2007 12:19:41 PM

Comment: SECOND PART
our translation from STERN Magazin no. 42/2007, p. 52 , Oct. 1o.
Against their own conviction, that is the disgrace in the disgrace. Not even in my worst nightmares of that Lady, I would have imagined that Franz Muentefering would some day appear to be the most daring reformer, with the CDU being located to his left. The CDU, dear Friends, is no longer a reform party, it is softened, without principles! (Shouts of bravo, long applause.)
Six decades of successful trademark establishing have been smashed in only one year. Since the party convention at Dresden, when the Lady had Juergen Ruettgers??? suggestion to extend the unemployment pay period for older people adopted as a resolution. All of you know what I think of Ruettgers. NOTHING would be an exaggeration. (Laughter.) Ruettgers sucks up the political genetic code of the opponent! (Wild applause.) The Lady, however, went for the party convention???s resolution because she counted on the SPD blocking it in the coalition. Now our resolution is a heavy weight dropping on our feet. Still demanding a politico-economic and a socio-political revolution during the 2003 party convention at Leipzig, we are giving up now. We are handing out sweet poison ??? an extension of the unemployment pay, minimum wages??? (Heavy commotion, shouts of disgust.)
Ludwig Erhard knew why he never joined the CDU. Can you hear the noises from the cemetery? Erhard is rotating in his grave today. Today, Horst Koehler is our last steadfast fighter for the reorganization of the welfare and fiscal state. Today, the FDP appears like the outsourced politico-economic working group of the CDU. Imagine our Minister for Economic Affairs, Michael Glos, being a Social Democrat ??? we would chase him through all the Chambers of Industry and Commerce in the country! (Strong applause, whistling here and there.)
My prognosis is gloomy, dear Friends. When the 2009 elections take place, five Social Democratic parties will be fighting: the Left Party, the SPD, CDU, CSU, and the Green Party. It may be possible to win the Nobel prize by saving the global climate, but that is not enough for 40 PLUS X! The Lady is counting on the positive economic situation. But among the voters, the pessimists regarding the economic situation dominate the optimists again: 37 versus 32. In July, it was still the other way around: 29 versus 38. I am aware of the unrest among the CDU. Surely a considerable unrest. But unrest does not suffice! A revolt is what it would take. Have the courage for it! (Slight applause, shouts: And you, Friedrich?)
Posted By: blackforest @ 11/05/2007 10:21:55 AM

Comment: Blackforest English-Translation of comment in German10/31/2007
This Newsweek article dated 29 October 2007 about Ms Chancellor A. Merkel was overdue! As this article confirms, such an outspoken statement is no longer possible in the German-speaking press (Switzerland, Austria, and Germany); i.e. to write openly about the development toward a DEMOCRATIC SOCIALISM, which cannot be overlooked any more, and which is nothing but a cover-up of a tendency toward Neo-Communism, i.e. since the so-called WENDE (time of the German reunification), BANDITS cooperating with a Neo-KGB and a Neo-Stasi have been filling their pockets with hundreds of billions (gas and oil in preparation and/or will follow) without being prosecuted ??? which I am able to prove (documentation is stored on external data storage media - SOS from a Dead Man walking). Regardless of the reasons Newsweek may have had for publishing this article and the related comments, it may be considered a key article for Newsweek and the Washington Post, respectively, and their owners and persons in charge, or maybe even a beginning, comparable to Watergate! As a friend of America (therefore having been called an AMERICAN JEWISH PIG), I???m happy to see that the American people have learned from the past and, after having experienced two World Wars, do not wait until the next big bang takes place and their sons die as soldiers overseas, but think ahead about disclosing the actual situation and/or asking questions as long as Germans still have the guts to speak up (cf. STERN magazine no. 42-2007, page 52, OUR HEART SO WHITE - UNSER HERZ SO WEISS by commentator Hans-Ulrich J??rges). Anyone reading this Newsweek article and the above-mentioned HECKLER???S SHOUT in Stern will be well informed ??? Mr. Bush may address Ms Chancellor Merkel and Mr. Putin accordingly. Peter Heimig, 68, Founder of TAX FREE SHOPPING EUROPE cf. google Peter Heimig
Did you know that from Germany, you cannot contact U.S. Senators by E-mail any more? Did you know that Litwinenko had sent out an S.O.S. to America via a U.S. Consulate ??? without any success. Would you believe that this Newsweek article could have also been written on the basis of my family???s situation on the German island of Ruegen, which happens to be Ms Merkel???s electoral district? If there will be a new world order ???aircraft carriers and hundreds of billions for weapons will no longer count, but print media ( cf. Oct. 10. 1939 Gesetz zur Gleichschaltung der Presse: RGBl. I, S. 713 ff, until 1945) and TV will defeat aircraft carriers. Peter Heimig: I trust in God.
Posted By: blackforest @ 11/05/2007 10:18:54 AM

Comment: Blackforest English-Translation of comment in German10/31/2007
This Newsweek article dated 29 October 2007 about Ms Chancellor A. Merkel was overdue! As this article confirms, such an outspoken statement is no longer possible in the German-speaking press (Switzerland, Austria, and Germany); i.e. to write openly about the development toward a DEMOCRATIC SOCIALISM, which cannot be overlooked any more, and which is nothing but a cover-up of a tendency toward Neo-Communism, i.e. since the so-called WENDE (time of the German reunification), BANDITS cooperating with a Neo-KGB and a Neo-Stasi have been filling their pockets with hundreds of billions (gas and oil in preparation and/or will follow) without being prosecuted ??? which I am able to prove (documentation is stored on external data storage media - SOS from a Dead Man walking). Regardless of the reasons Newsweek may have had for publishing this article and the related comments, it may be considered a key article for Newsweek and the Washington Post, respectively, and their owners and persons in charge, or maybe even a beginning, comparable to Watergate! As a friend of America (therefore having been called an AMERICAN JEWISH PIG), I???m happy to see that the American people have learned from the past and, after having experienced two World Wars, do not wait until the next big bang takes place and their sons die as soldiers overseas, but think ahead about disclosing the actual situation and/or asking questions as long as Germans still have the guts to speak up (cf. STERN magazine no. 42-2007, page 52, OUR HEART SO WHITE - UNSER HERZ SO WEISS by commentator Hans-Ulrich J??rges). Anyone reading this Newsweek article and the above-mentioned HECKLER???S SHOUT in Stern will be well informed ??? Mr. Bush may address Ms Chancellor Merkel and Mr. Putin accordingly. Peter Heimig, 68, Founder of TAX FREE SHOPPING EUROPE cf. google Peter Heimig
Did you know that from Germany, you cannot contact U.S. Senators by E-mail any more? Did you know that Litwinenko had sent out an S.O.S. to America via a U.S. Consulate ??? without any success. Would you believe that this Newsweek article could have also been written on the basis of my family???s situation on the German island of Ruegen, which happens to be Ms Merkel???s electoral district? If there will be a new world order ???aircraft carriers and hundreds of billions for weapons will no longer count, but print media ( cf. Oct. 10. 1939 Gesetz zur Gleichschaltung der Presse: RGBl. I, S. 713 ff, until 1945) and TV will defeat aircraft carriers. Peter Heimig: I trust in God.
Posted By: blackforest @ 10/31/2007 2:04:40 PM

Comment: Comment Translation in English follows. Dieser Newsweek Artikel 29. Oct. 2007 ??ber Frau BK A. Merkel war ??berf??llig! In Deutschland so best??tigt dieser Artikel in Newsweek ist eine solche klare Aussage in der deutschsprachigen Presse (Schweiz ??? ??sterreich und Deutschland) ??berhaupt nicht mehr m??glich. Soll hei??en offen auszusprechen die nicht mehr zu ??bersehende Entwicklung in Richtung ???Demokratischer Sozialismus??? nichts Anderes als eine Umschreibung einer Tendenz zum Neo-Kommunismus ??? soll hei??en ???Banditen??? machen sich seit der ???Wende??? nachweisbar im Zusammenspiel mit Neo-KGB und Neo-Stasi straffrei die Taschen mit hunderten Milliarden (Gas und ??l Vorbereitung bzw. folgen) voll ??? den Nachweis kann ich antreten ??? die Unterlagen sind auf externen Datenspeicher ausgelagert. Egal was die Beweggr??nde waren diesen Artikel mit den Gastkommentatoren in Newsweek zu ver??ffentlichen ??? ist er f??r einen Konzern wie Newsweek bzw. die WashingtonPost und Ihre Inhaber und Verantwortlichen ein Knackpunkt bzw. Anfang wie ???Watergate???! !!Es freut mich, dass ich als Freund Amerikas (deshalb als American Jewish Pig bezeichnet) erleben darf dass die Amerikaner erwachsen geworden sind und dieses mal nach 2 Weltkriegen nicht zuwarten bis es wieder knallt und Ihre S??hne sich verbluten m??ssen ??? sondern vorher ??berlegen ??? die Mi??st??nde aufzudecken bzw. Fragen zu stellen ??? sofern noch jemand in Deutschland den Mund aufmacht (vgl. Magazin STERN Nr: 42 ??? 2007 Page 52 ???Unser Herz so wei????? von Hans Ulrich J??rges bzw. Friedrich Merz). Der Artikel von Newsweek und dieser Stern und Sie sind gut informiert ??? was Bush Frau BK Merkel und Putin vortragen kann. Peter Heimig 68 ???Founder of Tax Free Shops Europe???. Wu??ten Sie, dass man sich aus Deutschland nicht mehr an amerikanische Senatoren per E-Mail wenden kann. Wu??ten sie dass Litwinenko sich ??ber ein amerikanischen Konsulat mit Hilferuf an Amerika gewendet hat ??? ohne Erfolg. Glauben Sie dass der Artikel in Newsweek auf Grundlage auch des Schicksals meiner Familie auf der Insel R??gen ??? der Wahlkreis von A. Merkel entstanden sein k??nnte?! Gibt es eine neue Weltordnung ??? nicht mehr Flugzeugtr??ger und hunderte Millarden f??r Waffen sondern Zeitungen ??? TV setzen Flugzeugtr??ger matt.
Posted By: strassburg @ 10/26/2007 7:49:39 PM

Comment: The economic "reforms" in Germany have focused entirely on wage costs and taxes. What's so bizarre about this, is that so much attention has been paid to cutting wage costs by a few percentage points in order to make German companies competetive in the world market, when at the same time, the fact that the value of the Euro has increased by more than half, raising the cost of German exports accordingly, has been largely ignored - and actually exacerbated by the restrictive policies of the European Central Bank. In spite of the supposedly high labor costs, and the high valuation of the Euro, Germany has a huge trade surplus.

Germans are unhappy with the reform agenda for the simple reason that the benefits of them have gone primarily to a small minority. Does it seem unusual that they would be dissatisfied with such changes? Would Newsweek write such a one-sided article if it were Americans reacting to a similar situation in the U.S.? I doubt it.

It's disappointing to see Newsweek quoting a journalist from the tabloid Bild, a newspaper that combines advertising with journalism, for example in a recent alliance between Bild, T-Online and the Allianz insurance company, in which advertising for retirement insurance was supplemented by editorial content. That is not serious journalism.

What this article and its accompanying "expert" opinions amounts to is a continuation of the German reform propaganda on American soil. The experts whose articles were published in this Newsweek edition have been part of the campaign against the welfare state in Germany. Joschka Fischer, as part of the Schroeder government, Hugo Mueller-Vogg and Josef Joffe as advocates for reforms in their respective newspapers. It would have been much more credible had Newsweek included articles from other macro economists, such as Albrecht Mueller, Heiner Flassbeck, Gustav Horn and Peter Bofinger, or from the sociologist Christoph Butterwegge, or American economists of the likes of Robert Solow, Joseph Stiglitz or Paul Krugman.

Unfortunately, your coverage was entirely one-sided, and presented only those facts that the reform propagandists in Germany use in pushing for their changes - presented by the same talking heads we've been watching here for years.

By the way, I'm an American living in Germany.

Roger Strassburg
Posted By: strassburg @ 10/26/2007 7:46:50 PM

Comment: What's ailing the German economy at this point isn't its supposed lack of competitiveness in the global market, but the lack of consumer demand. This situation hasn't been helped by the VAT increase, slow wage growth, and the shifting of health care and retirement costs away from the payroll tax to private coverage. Since the employer contributions to employee health care, unemployment insurance and retirement income are essentially part of employee compensation, shifting the burden of those costs from the employer to the employee amounts to a wage cut, further weakening consumer demand.

The article's reference to the leftist party, Die Linke, as radical is exaggerated. The leftist party stands about where the social demokrats used to stand politically. And Lafontaine isn't any more xenophobic than your average Democrat in the U.S (and less than many Republicans). He simply opposes the practice of exploiting foreign workers in order to drive domestic wages down. It's not the former social democrat chairman Lafontaine who's moved to the left, it's his former party that's moved significantly to the right, and abandoned its traditional party constituency.

It's also true that most Germans oppose privatisation of public services and utilities. It's hard for most people to see why selling publicly-owned concerns well below their actual value to private investors makes sense, given the fact that private providers not only need to cover the costs of the services they provide, but must add a profit margin on top of it, adding costs for the consumer without providing any benefit in return. Whereas German Telekom managed to dramatically cut their prices since privatisation, the opposite has been true in other areas, such as the largely unregulated electric and gas utilies, whose prices have increased considerably in the wake of privatisation and consolidation.
Posted By: strassburg @ 10/26/2007 7:38:57 PM

Comment: Theil cites the increased employment for those who used to have little chance of finding jobs, like those over 50(!). What he doesn't say is that the increase in employment has been primarily in the form of low-paid jobs, some paying as little as one or two Euros (less than $3!) an hour, and that these workers require income subsidies from the government in order to cover their living costs. Income subsidies have had the effect of making more cheap labor available to employers - at the expense of taxpayers.

Speaking of taxpayers, recent tax reductions have benefited exclusively business and those in upper income brackets, whereas consumers have been treated to a hike in the value-added tax from 16% to 19%. The tax rate for the upper income bracket has been reduced, various business taxes reduced or eliminated, such as taxes on private equity funds. The Hans-Boeckler Foundation wrote in 2005 that despite a nominal tax rate of 38.7%%, the actual tax burden for companies in Germany was a meager 22.6%, well below the EU average of 29.8%. In spite of this, the reform evangelists continue to call for further cuts in business taxes and taxes on the rich.

Given this shift of the tax burden from business and higher incomes to wage earners, it's not hard to understand why business leaders, who normally see government intervention and subsidies to be damaging to the economy, favor government wage subsidies. Wage earners pay for them with their taxes, and business benefits.
Posted By: strassburg @ 10/26/2007 7:37:53 PM

Comment: Stefan Theil's article about Angela Merkel and reforms in Germany is filled
with half-truths and clichees.

It is true that most Germans favor a welfare state. However, I would dispute
the assertion that Germans are shifting to the left. The fact is, they had
never really shifted to the right, but rather were sold right-wing recipes for
saving the welfare state. So far, those recipes have done more to tear down
the welfare state than to save it.

It's also true that German industry is growing. Unfortunately, the part that's
growing involves primarily the export-oriented sectors. Markets reliant on
domestic demand have stagnated, and those make up over 60% of the GDP. The
"incredible boom" of Germany's economy amounted to a whopping 2.9% in 2006, and
an estimated 2.4% for 2007 and 2% for 2008 (Bloomberg.com). The only thing
incredible is that this modest growth is being called a boom.

It also seems strange to see minimum wages being called a "policy that makes an
economist's hair stand on end" in an American news magazine. The fact is that
Germany has no minimum wage at all, though most European countries do, as does
the United States. Where are the economists with their hair standing on end in
those countries? Indeed, those countries with minimum wages show for the most
part more growth and higher employment than Germany. Could it be that higher
wages help the economy by stimulating demand?

Roger Strassburg
Oberpframmern, Germany
Posted By: Terry Hershoff @ 10/24/2007 9:20:08 AM

Comment: From what I can see, the article primarily is based on statements of a few conservative, pro-management (as opposed to pro-labor) commentators. They naturally see the social-democratic model characteristic of most European countries as an obstacle in competing with more laissez-faire oriented countires, such as the U.S., not to mention such growing markets as China, India, and others. What passes as reform for most managers is viewed as demolition of the social-democratic model by many workers. They dread the outsourcing and downsizing of companies globalization has in store for them and fight back, as the current strikes of German railworkers shows. Merkel has a difficult job trying to push for business-friendly reforms while protecting some very costly welfare features benefiting particularly the socially week. She has to do this as head of a very fragile coalition that may break apart over just those issues. By most objective accounts from all sides involved, she is doing much better Than was initially expected, and she has, accordingly, received much credit, including in the mainstream media.

It should be counted in Merkel's favor that she is doing all of this as the first woman head of state in Germany. Not to ever mention this suggests that the writer of the article harbors an anti-feminist bias. Also, claiming that she was born and raised in East Germany, something that purportedly contributes to her reluctance to dismantle past social-democratic achievements, while she was born and raised as a small child in Hamburg, suggest that the writer negleted essential background checking for this article, something no first-year student of mine would get away with.

Horst Freyhofer
Professor of History
Plymouth State University
Plymouth, NH 03264
Posted By: schmitzc@njc.org @ 10/23/2007 10:36:34 AM

Comment: ???Dummschwaetzer???

It is quite remarkable to see Germany on its way to socialism using the conservative Allensbach institute as your source giving up the power of ???capitalist economy??? and characterizing Angela Merkel as part of the problem being born in the former DDR.
Beside economic growth, increase of employment, a strong euro and strong export results, the first time in more than a decade the consumer behavior inside Germany is picking up. Thanks to the german society and Angela Merkel.
Your article would be more truthful if you would have referred to another poll saying that only 20% of the germans feel the growth of its own economy. We are living in a democracy and you have to seek for compromises to make sure that more people participate in the economic growth of their own country in order to keep social peace. This is called ???Soziale Marktwirtschaft??? and has little to do with the socialism you are referring to.

Carsten Schmitz, Denver