Just Not Today

In 2002, after returning from a trip to Germany, I prescribed a strong dose of leadership and vision to cure the country's ailments:

Schroeder's win means that Germany will continue to struggle economically without any prospect of the sort of long term changes taking place that are needed to right the ship. Of course, a Stoiber win would likely have meant the same. What Germany needs is a strong leader with a clear and uncompromising view of what needs to change and how to get it done. (A strong democratic leader of course.) In the early '80s both the United States and Britain had such leaders emerge and pull their countries out of the economic and psychological doldrums that they had become bogged down in. In the United States, the answer to Jimmy Carter's "malaise" was Ronald Reagan. The answer to years of socialization of industry and bloated unions in Britain was Margaret Thatcher.

Today, Germany needs its own Reagan or Thatcher to bring about the reforms required to free up the enormous potential of the German economic machine and once again make it the envy of the world. Unfortunately, during this last election, the choice for Germans was more like one between a Bill Clinton and a Bob Dole. Perhaps the apathy is understandable after all.

When Angela Merkel emerged on the German political scene, there was hope that she could become the German version of Margaret Thatcher, a new "Iron Chancellor" if you will. Today's Wall Street Journal reports that those hopes are quickly being dashed (subscription required):

Six months ago, Angela Merkel failed to win the German election outright and wondered aloud whether she'd have to resign as Germany's conservative leader. She managed to survive and grab the country's top job only through an awkward coalition with her bitter political opponents.

Now she's one of the most popular leaders of any Western country. The secret of her success: She has all but abandoned the economic overhaul that she campaigned to bring to the world's third-biggest economy.

The story of Ms. Merkel, who is meeting with President Bush in Washington this evening, reflects Europe's economic quagmire. Challenged by low-cost labor abroad, Western Europe desperately needs to become more competitive to escape from a trap of low economic growth and high unemployment. Most business leaders and economists agree that strong moves are needed to overhaul inflexible labor codes and trim the costly social safety net. What's missing are strong leaders to carry them out.

The sad truth of the matter is that leaders in Germany, France, and Italy (to start with) know they are on an economic road to nowhere and that without reform they will fall further and further behind the rest of the world and imperil the very future of their peoples. But with electorates closely divided, strong interest groups increasingly resistant to any changes to the status quo, their parties splintered and weak, and their own interest in retaining power at almost any cost, they lack the political will required to push ahead with meaningful reform. They are paralyzed and unable to act. Meanwhile, the longer they wait, the more painful the reform process will be when it eventually does begin (assuming it ever does).

Taken together with President Bush's doomed attempt to reform Social Security, you wonder if it's even possible in our current political age for a modern democratic nation to willingly make tough decisions, which may prove painful in the short term, in order to secure the country's long term well-being. Looking at the situation in places such as Germany today, it's difficult to be optimistic.