REASON DOESN'T AGE WELL (via Lisa Fleischman):

The people of Europe have voted for paralysis – and perhaps obliteration (Anatole Kaletsky, 10/13/05, Times of London)

AFTER THIS WEEK’S creation of a German government in which Angela Merkel will not even control the Finance and Foreign ministries, all three of the great European nations that have dominated the Continent’s history for 2,000 years — Germany, France and Italy — are effectively leaderless. They will almost certainly remain politically paralysed at least until the French presidential election of 2007. The power vacuum now covering the whole of continental Europe is almost unprecedented, at least since the disastrous period between the two world wars.

But is the inability of German, French and Italian voters to choose effective political leaders and then to decide on clear programmes of social and economic reform — or more precisely the unwillingness to do so — a cause for worry? Or should we instead regard it as a natural product of the prosperous and comfortable societies that Europeans have created and simply want to preserve? [...]

[T]he main theme of the German election, as of the French referendum campaign before it, was public rejection of an economic reform agenda that was demanded by the business and political elites. The market reforms that would supposedly make Europe the “most competitive economy in the world” had been unanimously endorsed by Europe’s political leaders in their now-notorious Lisbon Declaration. But while the business and political elites across Europe became more and more obsessed with Lisbon’s promises of open markets, competition and globalisation, voters couldn’t help noticing that all these reforms, instead of improving their living standards or working conditions, were making them poorer and more insecure.

In this sense the German election, as much as the French referendum, was a grand gesture of defiance by voters against their political elites, a message perceptively summarised by Wolfgang Münchau, a German commentator in the Financial Times: “The German electorate has launched a new era in European economic policy — the post-reform era. After ten years of economic reforms, the Germans decided they had had enough.”

To judge by opinion polls, the French electorate is sending a similar message, with the conciliatory immobilisme of Dominique de Villepin steadily gaining ground against the radical promises of a “dynamic” government from Nicolas Sarkozy. A similar pattern seems to be developing in Italy, where the Berlusconi Government has long since abandoned all significant economic reform plans and now looks like being replaced by a Centre Left even more committed to preserving the status quo. [...]

At the European level, the unity of the German and French electorates in rejecting liberal reforms ends Tony Blair’s hopes of leading a pro-market consensus in Europe. On the contrary, the new coalition Government in Germany will find common cause with an ultra-cautious Chirac Government to re-create a powerful Franco-German axis, whose primary purpose will be to oppose liberal reforms. This, indeed, is already the situation reported from Brussels: the present European Commission is probably the most liberal ever, but its liberal ambitions, whether in trade policy, competition or deregulation, are frequently blocked by the veto-wielding combination of Germany and France.

But does the impending paralysis over reform in Europe really matter? This depends on one’s point of view. For Europeans who are elderly or who “own” their secure unionised jobs, especially in the public sector, the lack of economic dynamism is unimportant, compared to the generosity of pensions and protection of employment rights. High unemployment, which mainly afflicts the young and non-unionised, is a small price to pay for such security. [...]

As a democrat one has to acknowledge that the ageing electorates of Germany, France and Italy are entitled to vote for political paralysis, economic decline and global irrelevance. But the inevitable eclipse of European civilisation by a brash, materialistic American or Chinese culture will be a tragedy of epic proportions.

What European civilization? Their decline has occurred because they became secular, forsaking the civilization that had once made them great. Who cares if their secular non-civilization dies off? Their death is, indeed, the only Rational choice.

MORE:
Merkel Cure for Germany? (Jeremy Slater, 10/11/2005, tech Central Station)

[T]he biggest gainers in last month's election were the new Left party, made up of SPD dissenters and remnants of the former East Germany's communist party. Its main campaign platform was to vigorously defend a decaying social model that makes growth in Germany nearly impossible. That result had a spillover effect in France, where various factions welcomed the success of Germany's hard left. Indeed, failure of the CDU to win a mandate for economic reform has boosted the standing of all Europeans who did not want to push through similar policies. It makes the task for economic reformers throughout the European Union much harder.

British Prime Minister Tony Blair, who currently holds the rotating EU presidency, hoped that a strong Merkel administration with a sizeable majority could push through unpopular reforms in the Budestag and Bundesrat. Likewise, European Commission President Jose Manuel Barroso, who has staked his reputation on reinvigorating the European economy over the next four years, looks increasingly forlorn when announcing new initiatives. He too must have fervently been wishing for a decisive Merkel victory.

One sign of the re-invigoration of the opponents of economic growth came when Commissioner Günter Verheugen, who is in charge of industrial policy, proposed ridding the EU books of a significant number of anti-business laws. He was immediately blocked by the European Parliament. MEPs argued that it was up to them to withdraw proposals and not the Commission. Just as under the Louis XIV of France and the last Chinese emperors, a bureaucrat class is in place that more than anything is interested in preserving its privileges.

The Pension Generation (Joshua Livestro, 10/13/2005, Tech Central Station)

A European pensions expert was once asked whether he thought Europeans would ever be willing to transform their expensive tax-funded systems into more sustainable fully funded systems. His answer: "Not until the young take up arms against the old."

In The Netherlands, that is exactly what is happening right now. In July of this year, a group of young civil servants took the dramatic step of publicly declaring their opposition to a deal safeguarding the early retirement rights of older workers. Since then, the Dutch airwaves and op-ed pages have been filled with bitter intergenerational recriminations. The main Dutch trade union, the FNV, accused the authors of "corroding the cement of society by only showing solidarity when it's convenient to them." The young pension refuseniks in turn accused the unions of "hiding behind a mask of altruism while blatantly serving the narrow interests of its own, ageing membership." Where, they asked, is the solidarity in a deal that sees younger workers pay twice, once for their own retirement, and once for the early retirement of older workers, while older workers aren't expected to make any sacrifices at all?

There is no solidarity--Europe's ambitious young will have to come to America

Posted by Orrin Judd at October 13, 2005 11:55 AM