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Germany's National Election 2005


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The professor under fire

Germany goes to the polls this Sunday.

Initially the right looked it was going to sweep to power after the leader's debate, but the left has been surging in the last few days. Who is going to win is anyone's guess but if the Germans have any sense they will keep those right wingers as far away from those levers of power as possible. As if the world needs is another Bush or Chirac.

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The flat-tax you know, similiar to the flat earth society, but better known as the THE RICH PAY LESS TAX ventured into Germany's elections with disasterous results for the Right wing party.

Popular flat-tax movement hits brick wall in Germany

Angela Merkel, the conservative candidate whose Christian Democratic Union had been favoured to win the tightly fought national elections on Sunday, has suddenly plummeted in the polls -- and most observers blame the flat tax.

While Germans, battered by a weak economy and unemployment rates well above 10 per cent, at first seemed to welcome her economic-reform proposals, their enchantment ended abruptly. As soon as a 25-per-cent flat tax was mentioned last week by Ms. Merkel's outspoken economic-policy adviser and candidate for finance minister, professor Paul Kirchhof, the seemingly unassailable Christian Democrats began falling in the polls.

Yesterday, polls for the first time showed Social Democratic Chancellor Gerhard Schroeder and his left-leaning allies in a dead heat with her conservative coalition. Her colleagues turned on her yesterday, telling reporters that Mr. Kirchhof's economic ideas have poisoned the campaign.

Mr. Schroeder yesterday used his famous street-fighting skills to attack Ms. Merkel for the concept, calling it a "tax for millionaires" and "the Merkel minus" because it will eliminate middle-class tax benefits for education, child care and housing, and dramatically cut the top tax rate.

So dramatic has been Ms. Merkel's fall from grace that tax experts are now saying that, if she loses the election on Sunday night, the flat-tax concept will effectively be dead in the Western world.

"The flat-tax concept has been discussed seriously by more governments in the past year than it ever has before -- but a lot of it will depend on what happens in Germany this weekend," Stuart Adam, a senior research economist with the Institute for Fiscal Studies, said in an interview yesterday. "A negative vote will probably prevent any other wealthy nation from bringing up the idea any time in the foreseeable future." 

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The flat-tax you know, similiar to the flat earth society, but better known as the THE RICH PAY LESS TAX ventured into Germany's elections with disasterous results for the Right wing party.

One of the reasons why this is being proposed is because Germany is losing jobs left and right to Eastern Europe, and a few Eastern European countries have adopted a flat tax, though my memory fails me at this moment as I cannot remember exactly which ones.

There are over 4 million unemployed in Germany, and the unemployment rate is over 12%. The economy isn't growing and companies are increasingly moving investment out of Germany. Germany is sick, and the country must embrace market reforms if it wants to grow. If it doesn't want to grow and maintain the status quo, so be it. But ain't nothing going to improve until they make changes.

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So making the rich richer is the key to success?

The US is a successful society after what we saw about conditions that people live in, and the way they were treated in New Orleans? Really!

What percentage of the US lives like that?

I think a society is only as successful as how its least fortunate citizens are treated.

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Actually, I think mirror is responding to my comment about having to change the German economy. He makes an interesting point, its a valid point and it is a criticism you hear in Europe - change the model and you become more like the Americans. Its one I strongly disagree with because Germany is not creating jobs with unemployment over 12%, and it must alter its economy if anything is going to get better. One can go on all they want about how humane such a model is, but I think that a society that has so many unemployed in the name of humanity is not humane.

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So making the rich richer is the key to success?

No, making as many people as possible richer is the key.

The US is a successful society after what we saw about conditions that people live in, and the way they were treated in New Orleans?  Really!

What percentage of the US lives like that? 

No society is perfect. However, the Left in Canada likes to paint America as this society as one between the haves and the have nots. In reality, both societies are ones of the middle-class, with fewer wealthy but fewer poor in Canada. But American society is a bit more dynamic, and the middle-class lives a little better in America than Canada.

I think a society is only as successful as how its least fortunate citizens are treated.

But not if the policies to level the playing field actually lowers or stagnates the playing field. You can make the least fortunate better relatively by lowering the standards of everyone else. In Europe, societies have instituted polices that no longer allow the middle class to grow, or grow very slowly. Yet the middle class is not willing to sacrifice enough to create conditions to allow those on social assistance to find employment even though they are taxed heavily.

Societies do not have to change, and Germany may not. But its better to have working poor, as in America, than to have unemployed poor, as in Europe.

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Actually, I think mirror is responding to my comment about having to change the German economy.  He makes an interesting point, its a valid point and it is a criticism you hear in Europe - change the model and you become more like the Americans.  Its one I strongly disagree with because Germany is not creating jobs with unemployment over 12%, and it must alter its economy if anything is going to get better.  One can go on all they want about how humane such a model is, but I think that a society that has so many unemployed in the name of humanity is not humane.

Greg's biases are showing but that's OK, as we all have them.

Toro

I think we (everyone, of course) should have a civilized debate, without extreme viewpoints, perhaps not here, about how we are best going to make our governments work.

Cheers

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Germany's new Left Party has momentum going into Sunday's vote

Helmut Geppe is the kind of guy embattled Chancellor Gerhard Schröder and front-running conservative challenger Angela Merkel should be clamoring to please before Sunday's general election.

The father of two lost his job as a machinist in east Berlin two years ago when his company folded because of cheaper competition from Eastern Europe. He has tried - unsuccessfully - to get a new job, even taking classes to qualify himself for other positions.

"People are scared about the future," says Mr. Geppe. "Politicians are telling us 'It will get harder and harder.' But they don't have any answers anymore."

So Geppe has decided to look for answers elsewhere. The search led him to a lively gathering held in August by the four-month-old Left Party, a curious mix of former East German socialists and disgruntled West German unionists that has shocked Germany's political establishment by rising to third place in the polls behind Mr. Schröder's Social Democratic Party (SPD) and Ms. Merkel's conservative Christian Democratic Union (CDU). Geppe liked what he saw, and the shifting loyalties of voters like him have put the major parties on notice.

Part populist, part socialist, the Left Party currently commands between 7 and 9 percent of the vote, ahead of the conservatives' possible coalition partner, the pro-business Free Democratic Party (FDP) and Schröder's junior coalition partner, the Green Party. Should they retain their lead, they could force the CDU and the SPD into a "grand coalition," with Merkel as chancellor and Schröder's party as her junior partner - a prospect experts predict would halt the CDU's planned pro-market reforms because of political infighting.

Nothing would please the Left more.

Fundamentally, the Left Party is offering a radically different answer to the question of how Germany should reform its lethargic economy to remain competitive and grow jobs. Until now, the major parties have been telling Germans that cuts to the country's bloated social welfare system, tax reform, and a more flexible labor market are crucial to reviving the "sick man of Europe."

The Left Party, on the other hand, invokes terms like "social economic justice" to comfort voters like Geppe by suggesting alternatives to liberal reform.

"There need to be fundamental changes in the system," says Bernd Ihme, a Left Party official. "We don't want big business to think that it's not responsible for the well-being of the people

It seems the trend in a lot of countries including Canada is to have a variety of political parties because a lot of these old time political parties that have had power for a long time, are not really representing the average working or non-working Jane and Joe.

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No, making as many people as possible richer is the key. 

So why endorse a policy that has almost universally had a shrinking effect on the middle class?

Which is what exactly?

At market exchange rates, the German economy has shrunk, on average, 1.0% per year for the past 8 years.

http://www.mapleleafweb.com/forums/index.php?showtopic=3710

That's a shrinking middle class. Everyone is shrinking together.

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I am wondering what happened to a post of mine on this thread in reply to Toro. It dealt with the difference in philosophy about employment goals and benefits to the une,ployed. I had also intended to take that further to show the increasing trend in GDP in Germany but did not have the time then.

Where is it?

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The German stock market is up 20% since May when Schroeder called the election, in part because the market thinks Schroeder will lose and Merkel can get the economy growing again. But she's been blowing it.

Hope she wins.

And eureka, unemployment in Germany is nearly 12% according to German statistics.

Actually, if you standardize unemployment calculations, its substantially lower. Its 9.3% compared to 5.0% in the US and 6.8% in Canada. Unemployment has been rising in Germany over the past 2 years. It was 8.2% in 2002.

http://www.oecd.org/dataoecd/41/13/18595359.pdf

When you do those GDP figures, make sure you do it in constant currency. Germany has been growing a bit over the past 18 months, but slowly. However, what you need to see is a long-term trend. The German economy has moved in fits and starts over the past decade, seeing some growth before losing steam.

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A good part of the German problem relates to the problem of absorbing East Germany. The unemployment rate in the East is double that of the West and any calculation of German unemployment is unfair when compared to others who do not have the problem.

That applies to growth rates, too. GDP growth this year is on the rise and in something I read not long ago, the forecast is for a continuing improvement. The American unemployment rate does not give an accurate picture. A I said, earlier, millions are not captured in the calculation. Many millions more are in the part time, temporary, no benefits,minimum wage category that is not so larhe a part of the European culture.

I suspect that the North American picture is not really much better when real employment is the criterion. Europe may have gone a little too far to the Left, if you wil, but it is not necessarily on the wrong track. We have a long way to go in giving fairness to all.

The real American unemployment and under employment is a larhe part of many social ills including violent crime. There are social costs that do not enter into GDP and employment calculations.

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  • Forum Admin
For a few posters here, their entire existence on MLW is to bash Canadian domestic policy. Nary a peep about them, though.

I have not problem with people criticizing the policies of Canada or any foreign country for that matter. However, please do it in the proper forum and don't attribute every single political event in the world to those ill-placed criticisms.

I fail to see the connection between Germany elections and Bush's response to the disaster in New Orleans. Because, as was the case with most of Mirrors postings, there was no connection. He was using his anti-bush rhetoric to disrupt an otherwise interesting topic.

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I fail to see the connection between Germany elections and Bush's response to the disaster in New Orleans.  Because, as was the case with most of Mirrors postings, there was no connection.  He was using his anti-bush rhetoric to disrupt an otherwise interesting topic.

Mirror pointed out the end result of the sort of policies Toro was endorsing was the sort of inequity that became brutally evident in the aftermath of Katrina. I fail to see how that is not relevant.

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A good part of the German problem relates to the problem of absorbing East Germany. The unemployment rate in the East is double that of the West and any calculation of German unemployment is unfair when compared to others who do not have the problem.

That applies to growth rates, too. GDP growth this year is on the rise and in something I read not long ago, the forecast is for a continuing improvement. The American unemployment rate does not give an accurate picture. A I said, earlier, millions are not captured in the calculation. Many millions more are in the part time, temporary, no benefits,minimum wage category that is not so larhe a part of the European culture.

I suspect that the North American picture is not really much better when real employment is the criterion. Europe may have gone a little too far to the Left, if you wil, but it is not necessarily on the wrong track. We have a long way to go in giving fairness to all.

The real American unemployment and under employment is a larhe part of many social ills including violent crime. There are social costs that do not enter into GDP and employment calculations.

There is some truth to the statement that unemployment in Germany is at least in part due to unification of the East, which is running somewhere around 18%. Having said that, German companies are re-locating plants to Poland, Slovakia and Hungary, not eastern Germany, because when the east was re-incorporated, it adopted the same labour rigidity as the west.

The problem, however, of attributing the lack of growth and employment to unification ignores the fact the same problems are evident in many other European economies with similar models as well. Jobs and growth will continue to migrate out of western Europe into eastern Europe and elsewhere until Europe reforms itself.

The situation in North America is clearly much better. Trying to differentiate between "real" and "unreal" jobs is a red herring, and a fall-back for the failures of the European model. If one is to differentiate between real jobs and unreal jobs, take a look at government jobs in the public sector, and link that to productivity growth in the economy.

In the name of "fairness", the Left is squeezing the lifeblood out of the system, hastening its continuing slide.

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