Monday, September 28, 2009

Democratic Socialism versus Growth

Germany now has a center-right government. The pro-business Free Democratic Party headed by Guido Westerwelle gained real power; it won big in yesterday’s election and is Chancellor Angela Merkel’s coalition partner-to-be [click to enlarge Westerwelle-Merkel photo and tell us, “Why is this woman laughing?”].

The Socialists (SPD) drop to a historic low after leading or being in Germany’s ruling government for the past 11 years. Last year, Socialists lost in Italy, and two years ago, France’s Sarkozy defeated lionized Socialist candidate Ségolène Royal for president, thereby prolonging conservative rule over that country. Under David Cameron, Britain is expected to go Conservative next year, which will mean Socialists out of power in every major European social democracy. What’s happened?

It’s not as if we’ve reached, as Malte Lehming, an editor at Berlin’s Tagespiegel, suggests, “the end of socialism in Europe.” Western Europe is heavily invested in the welfare state—state supported industries, state housing, heavily subsidized public transit, nationalized health, generous unemployment benefits, nanny state restrictions—and none of Europe’s new governments will take these government blessings away. But Europe’s voters do long for economies that grow faster, and generate jobs. A very large public sector means high taxes, high unemployment, and low growth. Europe wants better.

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