Dear Fellow Eurozone Members: German Voters need your Help !

Germany’s current chancellor Angela Merkel used her power to influence important elections in your country. Why not return the favor ? By doing that, you could help your own austerity-damaged economies AND help German voters at the ballot box on September 22.  

Here is the problem: 

According to the latest polls (Emnid), Germany's voting populace is evenly split (45% vs. 45%) between the governing coalition of Merkel's CDU/CSU & FDP (liberal party) and the opposition combination of social democrats (SPD=25%), Greens (12%), and the left (Die Linke = 8%). Even when including the new party AfD (Alternative for Germany) on the conservative side and the pirates on the left (3 % each), we still have a stalemate. Furthermore, a large portion of the German voting population say that they might change their minds (72%) and the rest (roughly 30%) still does not know whom to vote for. 

Why not help German voters make up their minds ?

In fact, you should, as this national German election will largely determine future economic policymaking in the entire euro zone. As it stands now, the choices are not great: we will either remain stuck with Merkel, Schaeuble & the FDP, or a new Grand Coalition of Merkel & Steinbrueck, a combination that may improve economic policies only moderately, if at all. This is the base case scenario. The Merkel/Steinbrueck combination may even worsen economic policies as Steinbrueck, a staunch Agenda politician and a model cost- and deficit-cutter, may introduce Agenda 2020 with more cuts in wages and pensions in Germany and elsewhere in the eurozone, thus reinforcing the deflationary austerity and leading the eurozone into a depression. This, obviously, is the worst-case scenario. (see my posts "What do recent events mean for the EU and economic policymaking in the eurozone" and "A progressive alternative to Merkel's muddle-through government").

YOU, dear fellow eurozone member, could provide the jolt needed to lead Germany back to the right path, a path of true solidarity with its eurozone partners and economic policies that generate balanced, job-creating economic growth combined with a stable social safety net for the weakest members of society throughout the eurozone. 

How ?

Make yourself heard, by any means possible, and address social equity-loving Germans directly. Make sure they know that their tax money has not been used to help the citizens in Southern Europe but instead to bail out the banks and rich investors by transfering toxic and worthless assets from the private sector to the public sector, in other words: to YOU, the taxpayer. Make sure to let German voters know that this toxic asset transfer, combined with Merkel's austerity policies have INCREASED, not reduced, your country's debt load as the shrinking of your economies and, thus, the tax base also shrank tax revenues and economic growth. As a result, on top of a higher debt burden, your countries now have record unemployment and a lost generation of young people without any perspective to find a job.

Make sure German voters know about the economic and human misery chancellor Merkel's austerity policies has inflicted on your people, as the information about your people's suffering is largely withheld or smoothed over by Germany's mainstream press. Finally, make sure German voters realize that Merkel's social safety net-busting economic policies and their negative effects will NOT stop at Germany's borders but are planned to be extended throughout the eurozone with the help of the new Convergence and Competitiveness Instrument and the planned trans-atlantic trade and investment partnership TTIP.

May be, just may be, this will shake German voters so they'll finally wake up and smell the skunk Merkel's somniferous campaign wants to hide from them. The following videos from our Austrian euro partners may help as well (unfortunately only available in Austrian German, source: ORF):

The sorry state of Germany's election campaign

Compared with past national election campaigns in Germany, the current one seems to be designed to lull people into sleep, a kind of surrealistic sleep that can easily turn into a nightmare: Merkel’s CDU plasters the countryside with “Friede, Freude, Eierkuchen” [peace, pleasure, and pancakes] posters depicting smiling German families cooking together or enjoying the beautiful German country side. 

The main opposition party, SPD, runs a negative campaign against chancellor Merkel, yet shows her on every SPD-poster in a rather favourable light, repeating the statements she made about her government ("best government since unification"). The SPD’s own candidate remains invisible on the posters and nearly invisible on the campaign trail. While Merkel was on vacation, he tried to pick up his attacks against her disastrous economic management of the euro crisis – with little success as Germans do not (yet) feel the crisis.

Meanwhile, the Greens are making a fuss about the introduction of a “veggie day” to lower Germans’ meat consumption which harms animals and damages the environment. While this may be true, the German voter must be shaking her head, thinking “as if we don’t have other things to worry about”, fortifying the voter's perception of the Greens as quixotic Bionade elitists.

Even the left (Die Linke) is conspicuously tame, or so it seems as the party's messages are being completely ignored by the mainstream German press.

Yet, despite Merkel's continuing high popularity among the German people, her political standing could easily be challenged by spelling out the damage she has inflicted on the euro area (including Germany) since the start of the crisis, as I tried to do in my blog --->see the intro and many other posts describing the economic and human suffering Merkel's austerity policies have caused in Greece and other eurozone economies. The economic damage Merkel’s policies have caused will take years, if not decades, to repair.

Also: Merkel's perception as a good guardian of German taxpayers’ money is completely false. In fact, Merkel’s hesitant leadership at the very beginning of the crisis in Greece, combined with the economically idiotic austerity policies she and her finance minister Schäuble imposed on the Southern European periphery, unnecessarily cost German taxpayers a lot of money. And will do so in the future as Southern European economies continue to contract due to austerity, eroding tax bases and increasing (rather than lowering) public debt ratios, thus creating new financing gaps that need to be filled by European taxpayers. 

In addition to the economic damage, there is the political damage: within a short time span of 4 years, Merkel’s misanthropic handling of the euro crisis has eroded the trust and respect of our European neighbors that took Germany more than 60 years to painstakingly rebuilt after the horrors of the second world war. There is no telling yet whether Merkel’s policies have permanently damaged the European project, a project of peace, economic cooperation, and solidarity among European nations and peoples. But the arrogant, boneheaded demeanor of high-level German government officials and the heartless treatment of Germany's Southern European euro zone partners has no doubt negatively affected Germany's image in Europe and beyond. 

All these issues need to be addressed in a national election campaign, and openly discussed in public fora. Instead: silence ! Meanwhile the press contributes to the lulling in of the voter by disseminating the news that the eurozone’s economy has started to grow again, omitting to mention that, on an annual basis, the growth rate is still negative (see "Europe's False Recovery") .... and while 20 million Europeans (12.1%) remain stuck in unemployment, Merkel tells the voters that the euro crisis is nearly over.

Bloomberg's editors are right in saying that "Germans deserve a franker discussion of their situation than the comforting homilies about thrift she [Merkel] delivers on the campaign trail. They need to hear that exporting their savings to the rest of the euro area contributed to the crisis [and] that the bailouts are helping German banks as much as [more than] the recipient countries".... (see "Front-Runner Merkel Owes Both Germany and Europe the Truth" and my post of June 30, 2013, "Economic Rebalancing in Europe requires Germany to reduce Inequality at Home").

Change we can believe in ?

Indeed, Obamaland is changing. Unfortunately, it's not always the change we were looking for.

The general mood in Obamaland seems good - at least in the Washington DC metro area, a relatively rich region whose economy has traditionally been less volatile than other regions thanks to its abundance of government jobs. Despite the automatic spending cuts from budget sequestration, the Washington metro area's $450 billion economy is doing well, the housing market has recovered, and home values are growing again. The Wall Street Journal even claims “Washington Enjoys Boom As Gilded Age Takes Root." George Mason economists expect the area’s annual GDP growth to accelerate to 3.2% by 2017, outpacing the rest of the country’s projected 2.9% annual growth rate.

The new growth engines of the region include many small to medium-sized enterprises started by former government employees or contractors in defense, intelligence and data management. “They’ve propelled the D.C.region as a leader in the cybersecurity and data sectors, as well as in educational products and health-care data management.” (Wall Street Journal, May/June 2013) Federal government spending may have provided the seed money for a strong, globally operating Washington economy, but “thanks to an economy that has steadily broadened beyond the government,”….”the region has shown surprising resilience” to the severe spending cuts. 

D.C. Living Wage Law

The solid economic performance of the DC metro area may explain the confidence of DC lawmakers to pick a fight with Wal-Mart, a globally operating retailer known for its rock-bottom wages with plans to open several stores in the District. On July 10, 2013, a day after Wal-Mart warned city legislators not to jeopardize its plans in the city, DC lawmakers gave final approval to a bill requiring large retailers to pay their employees a 50 % premium over the city’s minimum wage, currently at $8.25 an hour (see the Washington Post, “D.C. Council approves ‘living wage’ bill over Wal-Mart ultimatum”). Commenting on Wal-Mart’s threat to abandon its investment plans in the District, Vincent B. Orange (Democrat) said: “We’re at a point where we don’t need retailers. Retailers need us.” I wish, some of our German/European lawmakers had the same courage 

Under the Large Retailer Accountability Act, any new retail outlet affiliated with a parent company having yearly revenues of $1 billion or more would be subject to the wage requirement, regardless of the size of the store. The D.C. council committee's draft report stated: “The committee finds that large retailers can afford to pay its employees a living wage with decent benefits” (see the Washington Post of May 30, 2013. See also the comments in the German press: “Politikopfer des Tages: Walmart”).

Strike for higher wages at McDonald’s and Wendy’s

Also in July, thousands of fast-food workers mobilized to strike for higher wages in New York City, Chicago, St. Louis, Detroit, Milwaukee, Kansas City and Flint, Michigan, calling for a wage increase to $15 an hour (from the minimum wage of $7.25) and the right to join a union without retaliation. (See this article and this chart, depicting the demographics of the 21 million U.S. workers who earn between the minimum wage and $10 an hour). In contrast to the common perception that low-wage workers include only the unskilled and the young, a significant number of the low-wagers are college-educated people with children !

In Washington, hundreds of low-wage employees working for federal contractors walked out and picketed along Pennsylvania Avenue, demanding President Obama make good on his promise to “deliver on behalf of those people that are still struggling”….by raising the minimum wage, investing in green jobs and focusing on education and training" (speech at Knox college in Galesburg, Illinois in late July 2013).

Of course the Republicans, just as European conservatives, claim that wage increases destroy jobs and discourage employers from creating new ones - the old fairy tale. In fact, those arguments are just ‘catering to the rich’-politics as usual. Common economic sense, my own research and recent studies by H. Shierholz and others suggest the contrary: wage increases paid to low- and middle-income people CREATE JOBS as these income groups tend to spend the additional income, thus boosting aggregate demand and economic growth.

STASI in Obamaland ?

While the economy is improving, freedom, privacy, and US constitutional rights seem to be going down the tube. Rather than protecting whistleblowers as Obama promised to do, the Obama administration threatens to implement trade sanctions against any nation that will grant asylum to Edward Snowden and encourages government employees to snoop and spy on their own colleagues !!!

Shame on you, Mr. Obama ! Next thing we know, the Obama administration will build a wall to prevent US citizens from leaving the country... oh wait, it already exists to keep illegal Mexicans from entering the United States. Might as well prevent movements in the other direction as well, to keep American assholes out of Mexico and other useful purposes....

It’s high time for a woman president in the United States, a woman with the cojones, pardon: the courage to stand firm against the US military, security and bankster lobbies - a woman like Elisabeth Warren, outspoken advocate of consumer protection against Wall Street banksters, or Sheila Bair, author of "Bull by the Horns: Fighting to save Main Street from Wall Street and Wall Street from Itself."