by Claudio Grass, Claudio Grass:
The September 26 election was an extremely close race, with the eyes of the world fixed upon the country as it tried to find the successor of Angela Merkel, one the most influential and longest-serving leaders in Europe. But even after the results came in, the suspense was far from over. The two largest parties in the nation, the Social Democrats (SPD) and the center-right CDU/CSU are both scrambling to build a coalition government and they’re targeting the same smaller parties, the environmentalist and extremely left-leaning Greens and the Free Democrats (FDP), for that purpose. This process could take weeks, if not months, and only thing that’s clear as day at this point is that, no matter what party configuration emerges as the winner of this alliance-building race, Germany is set to take a very hard turn to the Left, towards more wealth redistribution and more state control.
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A politician by any other name
The efforts to establish a coalition government have exposed the hypocrisy and structural absurdities that are built into today’s political system, not just in Germany or even Europe as a whole, but in the West in general. While the nation is no stranger to “compromises” by political leaders in order to secure their grip on power, this time the ideological gymnastics the parties have to perform are bordering upon the comedic. There are giant policy chasms and outright contradictions between the would-be governing partners. Just one look at the campaign promises and political platforms of all the parties makes this point clear. Even on fundamental issues and principles, the Greens and the FDP, largely seen as the “kingmakers”, agree on basically nothing between them, while they have very little in common with the SPD or the CDU/CSU as well. They differ on climate, on finance, on taxes, even on the foundational economic theory each one embraces. Essentially, all four camps espouse a different version of reality itself.
Now, that might seem like an impossible barrier to overcome, especially for voters who participate in elections in good faith and who still believe there are true ideological differences between candidates that will manifest themselves in a practical way once they get into office. However, for those of us who are familiar with political history and who have learned the lessons of the past, none of what’s going on in Germany at the moment comes as a surprise. Since time immemorial, politicians and rulers of all stripes have proven that their obsession with power and control is much stronger than their ideological principles or indeed, their sense of duty to the governed. In this sense, what unites them is infinitely more resilient and dependable than what divides them. Securing power is not a means to an end, it is the ultimate end itself.
A realistic assessment
A lot of ink has been spilled since the election by political analysts and “experts” of all kinds, trying to predict the policy implications of each possible coalition combination. They often go into great detail examining the stated positions and track records of each party, trying to guess where the compromises and deals might be struck and what that would mean for taxpayers, investors, various industries and the economy at large. However, all these in-depth analyses and forecasts are based upon the misguided assumption that whoever gets into office actually has a myriad of choices and that the only constraint is ideology and political horse trading.
Even if we accepted that politicians were indeed loyal to the people who voted for them and their interests, the situation we find ourselves in today simply leaves no room for any government to pursue any other direction but the one we’re already seeing all over the developed world. Ever since the beginning of the covid crisis, a historic, seismic shift has taken place in the global political arena. The State has assumed a central role in the citizen’s life, the push for further centralization has been intensified, central planning has expanded to all areas of economic activity and some of the most basic liberties that were once unquestionable have been exchanged for the false promise of security.
Meanwhile, the real economy in virtually all advanced nations is in tatters, decimated by the never-ending lockdowns and restrictions. Government interventionism destroyed most productive activity, while reckless monetary and fiscal policies have already heralded in an era of what is expected to be steep and long lasting inflation. From the point of view of the central planners, the only way to avert a harsh crisis and to retain their grip on power, is to keep doing more, a lot more, of what they have been doing.
At this point, the damage done to the economy is so deep and so irrevocable that any attempt to remove the fiscal and monetary “life support” will undoubtedly lead to one of the worst crises we’ve ever seen. Of course, this would be painful but necessary if there’s any hope of ever developing a healthy and sustainable economic and financial system, but the public anger and the social unrest it would bring about render this option not only politically untenable, but practically unthinkable for any government.
A much stronger State, heavier regulations, more debt, big spending and wealth redistribution are the only realistic ways forward for any political party, no matter their stated goals and manifestos. The only difference will likely be in the “packaging”. Climate change can be used to justify regulatory crackdowns on entire industries and higher taxes, making sure everyone pays their “fair share” can be the reason for penalizing the productive class in society and for targeting savers, responsible investors and business owners, while “social justice” can be an argument for policies like rent control, debt forgiveness and even outright property expropriations.