Political Observer scoffs!

Here are the opening paragraphs of Mr. Caldwell’s funeral oration for the Enlightened Merkel Rule:

The drubbing inflicted on Germany’s Christian Democratic Union in the country’s recent elections is a sign that, alongside Chancellor Angela Merkel’s 16-year stint in power, something larger is coming to an end.

Aside from NATO, the Christian Democratic Union is the most venerable postwar political institution in continental Europe. It has led Germany, usually in coalition, for all but 20 years of the country’s post-Nazi political history. Focused on economic growth, Christian traditions, anti-Communism and maintenance of the Atlantic alliance, the party was a guarantee to Germany’s allies that Europe’s largest, richest country would be stable and dependable. With the measly 24 percent of the vote that Ms. Merkel’s successor, Armin Laschet, managed to win, the C.D.U. can no longer play that role. A pillar of the European order has collapsed.

The C.D.U.’s decline has been underway since at least the turn of the century. While Ms. Merkel managed to disguise it, she showed little aptitude for reversing it. In the five elections since 2005, when she took power, her party’s vote share fell in all but one.

Perhaps not every country needs a “people’s party” of the center-right. Big gainers in this election included Greens worried about climate change and Free Democrats worried about supply chains — two preoccupations that didn’t exist at the time of the C.D.U.’s founding. But there has always been more at stake for the party than an up-to-date servicing to voter preferences. In light of Germany’s Nazi past, it fell to the C.D.U. to play a moderating role — to speak to the patriotic longings of ordinary Germans in a way that would dissuade them from drifting to the political fringes.

This role was almost constitutional. Half a century ago, Franz Josef Strauss, leader of the C.D.U.’s Bavarian sister party, the Christian Social Union, justified his own rock-ribbed conservatism by saying it came with a guarantee that “no legitimate political party” could exist to his party’s right. Many felt they could trust Mr. Strauss to police the country’s rightmost ideological boundary.

Only if someone had been asleep, could this essay by Jillian Tett, from the Financial Times of January 16, 2015 have been ignored:

Headline: A debt to history?

Sub-headline: To some, Germany faces a moral duty to help Greece, given the aid that it has previously enjoyed

As the crucial election looms in Greece later this month, newspapers have been full of pictures of demonstrations (or riots) in Athens. But there is another image hovering in my mind: an elegant dining hall on the shores of Lake Lucerne in Switzerland.

Last summer I found myself in that spot for a conference, having dinner with a collection of central bank governors. It was a gracious, majestic affair, peppered with high-minded conversation. And as coffee was served, in bone-china crockery (of course), Benjamin Friedman, the esteemed economic historian, stood up to give an after-dinner address.

The mandarins settled comfortably into their chairs, expecting a soothing intellectual discourse on esoteric monetary policy. But Friedman lobbed a grenade.

“We meet at an unsettled time in the economic and political trajectory of many parts of the world, Europe certainly included,” he began in a strikingly flat monotone (I quote from the version of his speech that is now posted online, since I wasn’t allowed to take notes then.) Carefully, he explained that he intended to read his speech from a script, verbatim, to ensure that he got every single word correct. Uneasily, the audience sat up.

For a couple of minutes Friedman then offered a brief review of western financial history, highlighting the unprecedented nature of Europe’s single currency experiment, and offering a description of sovereign and local government defaults in the 20th century. Then, with an edge to his voice, Friedman pointed out that one of the great beneficiaries of debt forgiveness throughout the last century was Germany: on multiple occasions (1924, 1929, 1932 and 1953), the western allies had restructured German debt.

So why couldn’t Germany do the same for others? “There is ample precedent within Europe for both debt relief and debt restructuring . . . There is no economic ground for Germany to be the only European country in modern times to be granted official debt relief on a massive scale and certainly no moral ground either.

“The supposed ability of today’s most heavily indebted European countries to reduce their obligations over time, even in relation to the scale of their economies, is likely yet another fiction,” he continued, warning of political unrest if this situation continued.

…

https://www.ft.com/content/927efd1e-9c32-11e4-b9f8-00144feabdc0

A valuable link to Prof. Benjamin Friedman essay:

Click to access friedman.pdf

Some sample paragraphs, from the closing of Mr. Caldwell’s essay, proves that it isn’t just Germans who resort to the exercise of a History Made to Measure!

…

Certainly some traditional German conservatives deplore Ms. Merkel’s legacy. But there was one sense in which she was mostly in continuity with her predecessors — her resistance to utopianism. Germany’s society, economy and (since Covid-19) health care system have lately performed more efficiently than those of its neighbors. The great achievement of Ms. Merkel was to understand that in the global economy, efficiency is often a synonym for vulnerability. Like a lot of its best machinery, Germany is both high-functioning and delicate.

…

Overindulging a country’s virtues can be as dangerous as overindulging its vices. More than her predecessors Ms. Merkel ran the risk of exposing Germany to instability — in her case, to an American-style class conflict between the beneficiaries and the outcasts of the global economy. She avoided the worst. But she had some close calls, and the shrinking of Germany’s great, stabilizing bourgeois party is bound to reduce her successors’ room for error.

Political Observer