The German Question, Again

It is a truism of economics and political science that “institutions matter.” Just ask Hillary Clinton about the electoral college, for example.

Right now we are seeing an object lesson in the hazards of institutional design of parliamentary government playing out in Germany. Angela Merkel is the Theresa May of the continent, a person who ought to be fatally weakened by the election result. Check out this chart of the party share of the vote from the last election to this one:

It is interesting that the same people who complain that Trump is president while having won only 46 percent of the popular vote in the U.S. generally have nothing to say about the fact that Merkel’s party only won 33 percent of the vote. Two-thirds of Germans prefer someone else to be chancellor, yet the major media continue to portray Merkel as a colossus bestriding Europe. To the contrary, this result is a sign of the continuing loss of public support for the traditional ruling parties in Europe’s leading democracies (see: France, Brexit, Italy, etc). One wonders what the result might be if Germany used the French system of electing their chief executive separately from the legislature, and there was a runoff election.

Right now Merkel is apparently looking at forming a coalition that will probably include the Green Party, which really only cares about one thing: getting rid of nuclear and coal power. So more energy silliness in Germany’s future. I recall visiting Germany in 2008 as a guest of the government to have a close look at the early part of their energiewende (“energy revolution”), where even the environmentalists in the delegation were unimpressed by the huge exertions the Germans were making in the name of renewable energy. Solar power in northern Europe with a subsidy of 45 cents per KwH? $1 billion to build a mere 3MW geothermal plant with “district heating”? Seriously? (My contribution to the meetings was to observe that two of the most magical words in the English language are “German engineering.”)

But one of the most interesting common themes with every expert we met was that Germany would have to keep its nuclear power if it was to stand any chance of meeting its climate goals. In 2008 Merkel was in a coalition with the Green Party, and as such had to accede tot his demand. For some unfathomable reason, after the Fukushima disaster in 2011 Merkel doubled down on ridding Germany of its nukes, even though after her next election she went into coalition with the Social Democrats and left the Greens out of it. As anyone knows who follows this story, Germany’s greenhouse gas emissions have been flat to rising in recent years, and the government as acknowledged it will not come anywhere close to its emission targets for 2020, while its emissions target for 2030 are a joke.

The other coalition partner is likely to be the Free Democrats, which is the closest you get to a libertarian party in Germany. David Goldman observes:

It is noteworthy that the Free Democrats, the party of lower taxes and free enterprise, polled well over 20% among voters under the age of 30. That is good news. Young Germans want economic opportunity rather than redistributionism. Merkel polled best among the elderly, particularly elderly women, that is, pensioners. To accommodate the deadbeats of southern Europe, Germany let the European Central Bank push interest rates into negative territory. For retirees living on fixed income, that is economic asphyxiation.

We’ll see if this strange coalition can work. But with five parties now in the Bundestag—the most in 60 years—Germany is starting to look a little like it did in the fractious Weimar period, when no one could form a stable government, and, in the ringing words of Leo Strauss, presented “the sorry spectacle justice without a sword or justice unable to use the sword.”

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