Matt Yglesias

After the Wall

Fred Kaplan explains the forgotten history of Berlin crises during the Cold War and ends on a familiar note:

Remains of the Berlin Wall (my photo, available under cc license)

The wall was built to bottle up an incipient revolt—a mass emigration that threatened to expose the Soviet system as inferior to the West, as an oppressive dungeon that its most educated young people yearned to escape. The wall not only blocked those yearnings; it also made clear to the brighter young Soviet and Eastern European leaders that the system itself—the ideological basis of their rule—was suspect, that it could not be sustained, much less compete with the West, without the internal imposition of force.

It’s interesting to reflect that it’s very much still the case that millions of people living in Ukraine and Russia and for that matter Mexico and Mozambique would love to engage in mass emigration to the West and expose the systems under which they live as corrupt and uncompetitive. Indeed, according to Gallup 700 million people would like to migrate permanently to a new country:

But of course the voters of the United States and Canada have no intention of letting as many people show up as might like to come, and the voters of Western Europe have even less desire for this, and those of Japan even less.

What if they Gave a “War” …

German Defense Minister Franz Josef Jung

If American defense analysts want to make fun of German politicians for refusing to proclaim their engagement in Afghanistan to be a “war” that’s their right. But people should understand that they’re basically asking Germany to withdraw its 4,000+ troops from Afghanistan. The German government, for reasons that shouldn’t be too hard to understand, is absolutely committed to not fighting a “war” unless Germany is attacked by a foreign adversary. People should be familiar with this basic attitude from the case of Japan.

Nowadays, of course, both Germany and Japan are valuable American allies and the tendency is for American policymakers to want to coax both of them to play a bigger role in the world—to lighten the burden on us. But it’s a politically dicey process. In Germany, which has gone further than Japan in terms of being willing to send troops abroad, part of the process is that they’ll contribute forces to a UN-sponsored stabilization mission in Afghanistan but not to a “war.” The deployment, meanwhile, is quite unpopular in Germany but supported by a broad consensus of all the major political parties except for the marginalized Linke. But push on them far enough and this political consensus will break and they’ll go home.

I know a lot of American soldiers, and especially COIN enthusiasts, have a low opinion of the Bundeswehr’s effectiveness so maybe they don’t care. And if so, that’s fine. But just as a counterinsurgent needs to understand the local culture in Afghanistan he also has to understand the domestic politics of his allies. German hostility to aggressive military action is not a joke.

Race in America and Europe

Pat Buchanan says, of white people, “America was once their country. They sense they are losing it. And they are right.” I affiliate myself with what Adam Serwer has to say about this, but it also seems like a good jumping-off point for something I’ve been meaning to write about since I came home from Europe.

There’s often a kind of conventional idea on the left that the United States is an unusually racist society. And I think there’s also often a kind of image of Europe as a place where more of the progressive agenda has been achieved than in the USA. But I think that you’ll find if you look at Europe through the eyes of the liberal agenda that while the German left has certainly been more successful than the American left at securing universal health care, it’s been much less successful at promoting a tolerant, integrated, multicultural society. And allowing for the errors implicit in making any kind of sweeping generalization, I’d say that’s pretty generally the case across Europe. This Swiss People’s Party campaign poster would, I think, make Jesse Helms blush. And I’m not even sure which of the Northern League posters from Italy is the most egregious.

In the US, in other words, racial problems have been more salient for a long time since we’ve been a racially diverse society for a long time. But by the same token, for all the problems we have with us today, we’ve made enormous progress over the years. Racial and ethnic tensions are a common problem in the world, and the United States manages diversity pretty well in comparison with other places (not just in Europe) even if we fall short in some absolute terms. Just look at Barack Obama. I think we’ll be waiting a while yet before someone of non-European ancestry is elected head of government in a European country. Denmark has some great public policy ideas, but it’s also kind of made itself into the gated community of nations in a way I don’t find particularly appealing.

At any rate, in some sense it’s probably true that white America has “lost” “its” country, but that’s a good thing. It’s everyone’s country!

Germany’s Eerie Confidence

It seemed to me that part of the subtext of Germany’s election was a population that was underestimating the extent of the economic problems it’s facing. I think these new numbers showing consumer confidence rising underscore that point.

The thing about Germany is that even though the country experienced growth last quarter, it’s growth from a terrible base—the collapse in output was one of the largest in the world. The central bank thinks it’ll take five years for per capita GDP to retake its pre-crisis highs. There’s no real reason for consumers to feel confident. But unemployment hasn’t spiked, and people see the crisis as something that happened “in America” and is sparing Germany. Nevertheless, the only reason unemployment hasn’t spiked is because of the government-sponsored kurtzarbeit scheme in which the government basically gives firms a large enough subsidy to make it worth their while to hoard labor during the downturn. Thus instead of laying off half your workforce, everyone just works part time on nearly full salary with the government paying some of the tab.

That, however, isn’t something the German government can afford to keep doing. It was a useful tool to get Angela Merkel through the election, but it’ll have to stop soon and unemployment will probably skyrocket. What’s more, the longer it lasts the more Germany is delaying any real restructuring in its economy. Pre-crisis Germany was very oriented toward exports to the United States and Eastern Europe, but neither of those places can afford to import as much as we used to. If Germany stays export-oriented it will need to export to someplace else and that probably means exporting somewhat different stuff.

Germans and Counterinsurgency

I’d been wondering all week what I should ask the German foreign policy and defense officials I was scheduled to talk to today, so at the suggestion of Spencer Ackerman I asked what they thought about General McChrystal’s counterinsurgency concepts and the general doctrinal shift toward COIN in the United States.

Bundeswehr photo by Martin Stollberg

Unfortunately, nobody in the German government seems to have any interest whatsoever in talking to a room full of American journalists on anything other than off-the-record terms. Nevertheless, a few points emerged:

One is that there’s disagreement about terminology. It was explained to me that one challenge NATO has is that sometimes different national militaries will agree on an idea but have different names for it, or else will be agreeing on some words but actually mean quite different things. German public opinion is very pacifistic and the German military doesn’t like the term “counterinsurgency” which I think it regards as too alarming. They prefer to say that you need a comprehensive approach, rather than just killing the bad guys.

They also seem to sort of resent the idea circulating in the American press and apparently to some extent in the U.S. government that (to exaggerate a bit for effect) COIN doctine was something invented in the U.S. military in 2004-2005 then perfected in 2007-2008 and now General Petraeus has come down from the mountaintop to enlighten the allies. As the Germans see it, these had been familiar ideas in Europe for a while.

There’s also some really evident bitterness about the way the US government handled the Kunduz aistrike situation. I deliberately tried to not ask about this since I figured I’d just get a defensive response, but Germans wanted to drag the conversation about COIN doctrine back to this point. Few people really dispute the basic point about the need to avoid civilian casualties, but I think there’s a feeling that the Bundeswehr was being made into an example by American commanders and publicly humiliated in a way that would never have been done to an American military unit operating in a hostile situation.

German Election Results

Angela Merkel wound up winning a strange kind of election victory, the kind where your party gets less support than it got before. Still, the CDU’s support only went down a little while the Social Democrats’ support collapsed and the liberal (in a European sense) Free Democrats gained a lot. The Greens and the Left Party also picked up support. The result is going to be some controversial free market reforms for Germany (I think the evidence suggests that most Germans actually don’t want the kind of reforms that this election result will lead to) and a real moment of crisis for the SPD that needs to really rethink some things:

I note that following on the European Parliament election results and some other national results, there seems to be a continent-wide crisis of social democracy. In a great many countries, social democrats are really getting squeezed by rising far-left parties and the fact that Europe’s center-right parties tend to be inconveniently non-crazy.

It’s also noteworthy that this will lead to FDP leader Guido Westerwelle taking over as Foreign Minister of Germany. He’s openly gay and a big believer in tax cuts. I don’t think the world has ever had an out gay man in such a senior role in a major country. He’s also really not a foreign policy guy at all. But German tradition dictates that the leader of the number two party in the coalition become Foreign Minister irrespective of his background and experience.

Under Land Kann Mehr

Here’s my photo of yesterday’s SPD rally by the Brandenberg Gate:

The crowd seemed rather small and unenthusiastic, which I’m told is typically of rallies from all parties throughout this campaign. The speeches were of course in German, but sources say Frank-Walter Steinmeier mostly focused on the threat of a Black-Yellow coalition and that the efforts to maintain the pretense that he’s running for Chancellor rather than Vice-Chancellor seemed half-hearted. Was interested to see some German members of Avaaz and the One Campaign, two excellent global organizations, on hand giving out some information about their key causes.

Hafencity

One thing I saw in Hamburg that I thought was pretty cool was their massive HafenCity redevelopment project aimed at turning a really large obsolete waterfront district into a mixed-use urban center.

It’s hard to know for sure because a lot of it’s not done yet and obviously the global recession is going to slow things down, but it looks to be really well-executed with a good combination of uses, the creation of new infrastructure including a new metro line, etc.

The story behind the growth is interesting, too. Hamburg has been a port city for a long time, but for a while had come to be a somewhat peripheral player in European shipping, especially since Bremerhaven is the main German car export port. But with the collapse of Communism, Hamburg is suddenly centrally located in the new European map and is the main shipping hub for goods bound for the Czech Republic, Austria, Poland, the Baltic area and to some extent beyond. Hamburg is also better-situated for shifting goods from ship to rail as opposed to from ship to truck, so it benefits from some growing concern about carbon emissions.

Consequently, the port had been having a real boom decade until the crisis and the ensuing collapse of trade hit. And doing such a large central city redevelopment will reduce the extent to which that just makes the city sprawl outward.

The SPD’s Unreal Campaign

The basic contours of Germany’s election campaign are that absolutely everyone expects the Christian Democrats to secure a plurality of seats in the Bundestag. What’s more, everyone knows that the CDU’s first choice is to form a coalition with the libertarianish Free Democrats. So if CDU+FDU holds a majority, that’s what you’ll get. If they don’t hold a majority, then the CDU will form a grand coalition with the Social Democrats. Since there’s a grand coalition in office right now, somewhat paradoxically if you want the status quo to continue what you need to do is vote for the main rival of the currently ruling political party. Alternatively, if you want to do what the Chancellor wants you need to vote for the largest official opposition party in parliament.

What’s a bit odd is that as best I can tell the SPD feels they just can’t make this argument explicitly. Instead of running a pro-status quo campaign against the FDP’s unpopular free market economics, they’re basically trying to maintain a pretense of running a change campaign against Angela Merkel and the CDU. I suppose I understand why they feel they can’t pivot in this direction, but it seems like a bit of a tactical error.

Our Robo-Port Overlords

I don’t know if you remember the scene from Season 2 of the Wire when Frank Sobotka is talking about a video he saw of next-generation port automation technology the horror it struck in him as he contemplated the future of stevedoring. Well, at HHLA’s Altenwerder terminal at the Port of Hamburg yesterday I saw an awful lot of impressive automation:

Among other things, automated cranes take containers off boats and load them onto automated trucks that move themselves into place and then drive off to their destination on their own. Volkswagon’s Transparent Factory in Dresden also has impressive little robot trucks that carry around the boxes full of parts and instruments that the workers need to use.

The part of my brain that’s familiar with economic history and models tells me that this automation is pushing the production frontier outwards and ultimately making a better world possible. But the common sense portion of my brain can’t help but fear the specter of mass inflation. And the part of my brain that watched Terminator: Salvation on the flight from DC to Frankfurt is still concerned about robot rebellion.

That aside, of course we have industrial robots in the United States as well. But I do think it’s somewhat telling that the most advanced sector of our robotics industry relates to the military. And it’s really quite advanced. But while military robots come with a sharply enhanced risk of rebellion and subsequent enslavement, it’s hard to see them as pushing the production frontier outwards. Military robots have led to fewer American deaths in Iraq than we would have seen in the absence of robots, but following a “don’t invade Iraq” would have saved many more lives at less cost.

Super Train, Super Beer

I was initially very excited that the train from Frankfurt to Hamburg featured wifi, but it turned out to be super-unreliable. The real good news about Deutsche Bahn trains is that you can buy Franziskaner beer, my favorite German offering from the Saloon on U Street:

And while Diet Coke may be more expensive in Germany, Franziskaner is definitely cheaper.

Kent Conrad Makes German Health Care Relevant!

Kent Conrad hearts Germany

Ezra Klein offers us Kent Conrad’s thoughts on health care abroad:

Let me just conclude for my progressive friends who believe that the only answer to getting costs under control and having universal coverage is by a government-run program. I urge my colleagues to read the book by T.R. Reid, “The Healing of America.”

I had the chance to read it this weekend. He looks at the health-care systems around the world. And what he found is in many countries they have universal coverage. They contain costs effectively. They have high-quality outcomes, in fact higher than ours. They’re not government-run systems in Germany, in Japan, in Switzerland, in France, in Belgium — all of them contain costs, have universal coverage, have very high quality care and yet are not government-run systems.

It’s true, I suppose, that the system in Germany isn’t “government-run” in some sense. What happens in Germany is that the vast majority of the population is required to buy insurance from one of about 200 non-profit “sickness funds” that are prohibited from discriminating against people with pre-existing conditions. In addition, funds with healthier client pools need to transfer some of their money to funds with higher-cost pools. Fund administrators are paid more money for signing up more customers. There’s an official organization of stakeholders (health providers, sickness funds, employers, labor unions, public officials) that more-or-less sets payment rates and sets them lower than they are in the United States. The poor get subsidies to pay their premiums to the funds.

And, last, about ten percent of the population is rich enough to opt out of the sickness fund pool and sign up for more expensive private health insurance that pays doctors more and thus tends to get priority service for its clients.

It’s true that this meets a technical definition of “not government-run.” But the extent to which the Germany system isn’t government run doesn’t extend to dealing with any of the concerns of private industry. Which is fine by me, but nothing in Conrad’s talk of co-ops and such has suggested that he’s serious trying to put for-profit health insurance out of business, which is exactly what the German model does.

What Makes Big Government So Big?

Chris Edwards posts the following in a post asking “How Big is American Government?”

I think the more you think about it the less sense it makes to make the overall level of taxation such a signpost of big government or lack thereof. When you think about it, one of the biggest government interventions into the American economy is the absence of a tax in the form of the home mortgage interest deduction. That has a substantial impact on the flow of huge sums of money. And as we’ve been saying, an individual mandate to buy health insurance (or, indeed, an employer mandate to buy insurance for employees) wouldn’t really be a tax but it would certainly be an important government intervention into the economy. Or if you think about Germany, the restrictions on layoffs are probably a more noteworthy form of “big government” than the tax rate.

Bike Lanes in Saxony

Dresden and Freiberg had some bicycling infrastructure that a DC bike commuter can’t help but be jealous of. From the looks of it, Frankfurt is also quite bike-friendly but I haven’t really been outside much. Here’s a very convenient separated lane:

And here’s some nice red striping that extends through the intersection and improves visibility:

And here we have a lane separated out from the sidewalk:

For whatever reason in Northern Europe bicycles seems to be the predominant alternative to cars whereas in Southern Europe you see more scooters and mopeds and such. I’d sort of like to come up with a theory as to why that it (it’s flatter in the north?) but no obvious one is coming to mind. I note that relative to the United States, you see cyclists in Germany (like in the Netherlands) from more walks of life—more older people, more people with carseat attachments for kids and such.

The Long Road Back From Reunification

Had some conversations early today with a minister in the government of Saxony that touched on some of the economic difficulties inherent in the transition from being a province of East Germany to being part of the united Germany state. Viewed from one direction, the transition has been quite successful. The West Germans ponied up a huge amount of money to help do adjustments, and the Saxony government quite smartly spent the bulk of it on infrastructure investments—and you can really see very high-quality roads, transit, etc. in the parts of the province I’ve seen. Everything looks quite spic-and-span, even moreso in many ways than in richer parts of the country. And as a consequence, average incomes in Saxony are now around 70 percent of what’s found in the West compared to less than 40 percent at unification. And an unemployment rate of 16 percent (compared to 12 in the West) is way lower than the 25 percent or so that immediately followed reunification.

Another way of looking at it, of course, is that West Germany invested a ton of money, East Germany was fortunate to be integrated into a big capital-rich country with access to all the markets of the EU, and 20 years later there’s still much higher unemployment and much lower incomes.

What this makes me think of most of all is the dilemmas that will be facing the government of South Korea if the DPRK ever collapses. The DPRK is much poorer and more backwards than the GDR ever was. They’ve been separated for longer. South Korea is smaller relative to North Korea than West Germany was to East Germany. And South Korea is also poorer than West Germany. All told, I think there’s ample reason to believe that the South couldn’t really manage a reunification process. Which is something their government seems to realize without quite admitting—their official policy is reunification, but in practice they fear a DPRK collapse. And they’re right to fear it. But political debates about North Korea policy aside, the fact of the matter is that that horrible regime can’t last forever. And I think it would make sense for a broader international community to start thinking about what we can do to support a transition process that’s going to be too big a task for South Korea to shoulder on its own.

Modern Roundabout!

Modern Roundabout, Freiberg, Germany

I’ve written before of my love for “modern roundabouts”—the thinking man’s alternative to the dread traffic circle—but this was largely a theoretical proposition since we don’t have very many in the United States. So I was very excited when our bus drove around one in Freiberg.

The basic underlying idea is that instead of trying to use signals to create a false sense of security in an inherently dangerous situation, you need to design the road so as to psychologically demonstrate to everyone the need to drive in a calm, careful, and relatively slow manner. With everyone moving a bit slower, traffic as a whole can still proceed at a reasonable speed and you sharply reduce the kind of accidents that both kill people and produce severe congestion.

Small Cities

Sarcasm aside, the point I would make about Frieberg in Saxony (pictured below) is that it’s really a kind of place we barely have any of in the United States:

Freiberg, Germany (my photo, available under cc license)

It’s a town with only 42,000 inhabitants, no particularly giant buildings, and not really all that dense in the scheme of things. But it does have a built-up core with narrow streets, four- or five floor buildings, and a general lack of giant parking structures that together make for a pleasant dense walkable community. At the same time it offers this “urban” lifestyle, however, it has a lot of small towny features including being quiet and fairly traditional. I assume a healthy proportion of the population actually lives on the outskirts rather than in this part of town, but they can still drop in for a visit and with things being both small in general and bike- and pedestrian-oriented in the center, there don’t appear to be giant traffic jams or any huge problem driving if you’re making that kind of trip.

Obviously, path dependence is playing a role here. Freiberg involved hundreds of years worth of fixed investment before anyone had a car, so naturally it results in a nice community that’s not car dependent. But I really do think it’s a nice community that has a lot to offer that would appeal to people who don’t necessarily want to live in a “big city.” The closest analogue I can think of in the U.S. is certain college towns (or maybe places rich people go on vacation like Aspen or Bar Harbor) that people generally seem to deem pleasant.

Germany’s Weird Election

Germany is in the midst of an election campaign, but it’s a bit of an odd campaign since there’s no real doubt that the incumbent Christian Democratic Union is going to win. Nor is there any doubt that the Christian Democrats won’t secure a majority. Nor is there any doubt that the Social Democrats will come in second. Instead, the drama is around the question of whether the libertarianish Free Democrats will secure enough seats to form a right-of-center coalition with the CDU or whether the CDU will be forced into another “grand coalition” with the SPD as its partner. Chancellor Angela Merkel has made it very clear that she prefers to work with the Free Democrats, but the polling indicates that the people somewhat obstinately want to return her to office, but want to return her to office without her preferred coalition partner.

Meanwhile, it seems to me that the longer the SDP serves as junior partner in a coalition led by a center-right party, the more voters looking for progressive change are going to drift to the party co-founded by ex-Communists and left-wing SDP members called Die Linke (”the left”). But that’s common sense, not real election analysis.

I can say that the campaign posters I’ve seen on the roads of Saxony are extraordinarily dull and mostly lacking in content. The far-right Nationaldemokratische Partei Deutschlands is the exception offering posters that drive home clear anti-immigration themes

Blame Germany?

(German government photo)

Joshua Foust makes the case that the weakest link in the NATO mission in Afghanistan is the poor performance of the Germany military:

The incident in Baghlan, and Germany’s inability to manage its aftermath, is part of a years-long pattern of mismanagement and confusing command decisions by the German Army in Northern Afghanistan. Responsible for nine provinces, the German Army has faced growing criticism of its refusal to participate in combat over the last few years, and its latest action—calling in an air strike in Kunduz that is reported to have killed dozens or more civilians siphoning fuel from a hijacked truck—has drawn sharp condemnation from the international community.

This isn’t really a corner of the issue that I’m extremely well-informed about and I don’t really know the proverbial “other side of the story.” But Foust makes a strong case, click the link and read the whole thing.

The Recession in Germany

Germany exited recession quicker than the United States, but only after an even worse first quarter:

Krugman comments:

Yes, Germany grew in the second quarter — but this was after suffering a much deeper slump than the US, despite the fact that Germany didn’t have a housing bubble.

So you don’t want to jump to the conclusion that Germany responded well to the crisis.

That sounds right; the correct criteria isn’t “number of recessionary quarters” but “depth of contraction” and we’re doing better than they are. But what’s interesting about this is that the Germany path—harder fall, faster turnaround—seems to me to be what we would expect from the more flexible American business model. In continental Europe, it’s generally harder to fire workers, which ought to protect the economy during recessions at the expense of slowing down recovery since firms are more cautious to expand their workforce. In general, a big part of the point of the more expansive routine state involvement in the economy is supposed to be to moderate the business cycle. Germany seems to be doing the reverse.

How The Berlin Wall Fell

Berlin Wall, 1986 (Wikimedia)

My former boss Mike Tomasky will have written this article before the Iranian political crisis broke out, but that only makes the relevance all the more clear:

On June 27, 11 days after Nagy’s rehabilitation, Foreign Minister Gyula Horn met his Austrian counterpart, Alois Mock, at the border. Each official held large clipping shears and made ceremonial cuts in the barbed-wire border fence. Soon thereafter, an annual ritual, by which East and West German families divided by the Iron Curtain reunited for a short vacation in Hungary, started again. But this year, for some reason, Hungarian border guards began letting some East Germans slip through to the West. By summer’s end, there was a full-fledged refugee crisis at the border. It’s a shame that the date September 11 now carries the solemn historical weight attached to it, because it was on that date in 1989–after a brave decision by Horn to abrogate a treaty with East Germany forbidding Hungary from permitting East Germans to cross into the West–that East Germans started streaming by the thousands through Hungary into Austria.

The tumult spread quickly to Leipzig and eventually Berlin. George H.W. Bush and James Baker chose, correctly, to do and say little. Mikhail Gorbachev, more importantly and impressively, chose not to roll tanks into Budapest or Berlin. On November 9, with pressure mounting, East German official Gunter Schabowski announced–hastily and incorrectly, in fact, but, since the announcement was aired live across much of the world, irrevocably–that all rules for travel abroad would be lifted “immediately.” East Germans rushed to the Wall and overwhelmed the guards. They danced atop it and chipped away souvenirs.

In a way, these were important events in American history. Certainly, they proved to have important—and positive—consequences for American foreign policy. But ultimately the events were made by people in the Communist bloc. The heroes were a mix of brave dissidents who dared the powers that be to suppress them brutally, and holders of power who ultimately flinched away from doing so. Inserting the strategic priorities of the West directly into the situation in a heavy-handed way would not, ultimately, have helped improve the outcome in any clear way.

Down and Out in Europe and the USA

Nice WSJ piece on the transatlantic divide in treatment of the unemployed:

In Germany, losing his factory job didn’t stop Alfred Butt from taking a Mediterranean vacation this winter. Thanks to generous jobless benefits, being out of work “hasn’t changed my life that much,” Mr. Butt says.

In the U.S., Dylan DeRoberts lost similar work — but there’s no seaside getaway for him. Instead, he’s giving up life’s little pleasures, like riding his snowmobile, because he lost his insurance, too. “I’ve learned to live at a new level,” Mr. DeRoberts says.

The great absurdity of the American system is that we tend to treat unemployment as a symptom of laziness as if someone who gets laid off could always just go move west and start up a Homestead Act farm. We know, however, that the nature of the modern business cycle is that events set in motion in 2008 have essentially guaranteed that a much larger proportion of the population will be jobless in 2009 than was jobless in 2007. For any given unemployed person, there will be a story you can tell about why he’s unemployed rather than someone else, but the existence of the unemployment as such has nothing to do with individuals’ failings.

The health insurance aspect is especially egregious. Not only will you lose your insurance, but if you have a “pre-existing condition”—or develop one while you’re unemployed—you can find yourself permanently locked out of affordable care for your ailment. I think the Germans probably go too far in terms of generous unemployment benefits, since too much spending in this regard can make labor market recoveries slower, but we could definitely stand to do more.

German Politics

There’s an easy story you can tell about deficits in American politics. Basically, the way it goes is that tax cuts produce a positive short-term response from those who get them. And spending hikes also produce a positive short-term response from those who get the spending directly or the services provided indirectly. Deficits, meanwhile, have their impact over the medium term and don’t directly target anyone’s interests. Hence the tendency is for deficits to drift up and up until you’re on the verge of collapse in the bond market, at which point “avoid short-term collapse” becomes an important constraint on politicians. And if you look at, say, Italy you’ll see that a similar story seems to be in effect. And these appear to be pretty simple facts of political life grounded in basic elements of human nature. But consider the case of Germany, which has provided a pretty large fiscal stimulus by continental European standards, but which most American observers want to do more. Look at the political incentives facing Angela Merkel:

Unlike Mr. Sarkozy, who has three more years to his term, Mrs. Merkel finds herself in a difficult position, facing elections in September with voters leery of fiscal profligacy. Her Christian Democrats have been sinking in the polls, with the pro-business Free Democrats eating away at their support.

I keep hearing this. In part, Merkel is constrained by policy considerations that she deems compelling. But in part she’s constrained by a German political logic in which the voters would, apparently, prefer to see unemployment skyrocket as economic problems abroad cause Germany’s export-oriented economy to collapse than to see large budget deficits. She is, I’m reliably told, actually paying a political price for having done as much stimulusing as she has. But no matter how many times I read that, I find it difficult to imagine a political culture that operates that way.

In principle, my understanding is that Germany’s heavily regulated retail sector means you could actually find ways to stimulate domestic consumption and demand without necessarily spending more money. But changing those policies has been a hardy perennial of “things non-Germans think Germany should do” and the German people themselves don’t seem very enthusiastic about the idea.

The EU and the Crisis: Beginning of the End, or End of the Beginning

Adam Blickstein comments on tensions within the European Union over how to grapple with the economic crisis:

On the one hand I want to say the financial crisis is the first major test of the post-enlargement, modern EU and will help determine how Europe will grow institutionally in the future. But on the other hand worry that European integration may have moved too fast too quickly without a truly robust structure so that when real hard times like now hit, it threatens the stability of the entire system. In other words, while this test will tell us a great deal about the present and future of the EU, it might not only merely be a test of pan-European harmony but also reveal a destructively discordant note in the basic structure of the European project.

Whereas even up to two years ago, fuller integration was seen as mutually beneficial to both the”net givers” (Britain, France, Germany) and “net takers” (Poland, Bulgaria, Spain), that ideal has clearly been disintegrated in the current financial climate. The growing divisions in Europe and the across the board economic suffering of countries from west to east may be exposing the mutually destructive nature emanating from the lack of protective economic compartmentalization in the basic political and financial foundation of the EU. It will be interesting to see if Britain’s greater economic autonomy allows it to weather the economic storm more adroitly than their continental counterparts, despite of course ostensibly a more dire economic reality.

Nobody is talking about it, but you could definitely sketch a scenario in which the crisis leads to the breakup of the euro and a substantial collapse of the European Union and the entire European “project.” On the other hand, you can also sketch a scenario in which the reverse happens. Public opinion in most European countries has been hostile to deepening European political integration but also unwilling to try to undue European economic integration. That’s created the current scenario in which Europe needs more policy coordination than the formal institutional structure in Brussels permits. That could be a recipe for disaster. But it could also be a recipe for statecraft and the creation of a stronger, more consolidated Europe.

A big part of the history of the past 100 years has to do with the fact that the logic of the situation in Europe points to some kind of large, integrated, German-dominated political and economic unit on the continent. But other countries haven’t liked that idea, and some—primarily England and France—have been in a position to do something about it. We’re now reaching a point, however, where the bulk of the European “periphery” would probably welcome their new German overlords, insofar as the Germans are willing to do some bailing out. Similarly, I’m sure the British, would be perfectly happy to see such a thing happen with them just sitting on the sidelines. It sort of becomes a question, at this point, of whether or not the Germans really want to play leader.

Since the movie’s coming out Friday, I’ve got Watchmen on the brain and this seems to be the choice facing the Germans:

[A]ll the whores and politicians will look up and shout “Save us!” —and I’ll look down and whisper “No.” They hade a choice, all of them. They could have followed in the footsteps of good men like my father or President Truman. Decent men who believed in a day’s work for a day’s pay. Instead they followed the droppings of lechers and communists and didn’t realize that the trail led over a precipice until it was too late. Don’t tell me they didn’t have a choice. Now the whole world stands on the brink, staring down into bloody hell, all those liberals and intellectuals and smooth-talkers—and all of a sudden nobody can think of anything to say.

Well, okay, Angel Merkel almost certainly won’t start referring to her Spanish and Irish counterparts as whores or lechers. But you could see her adopting this basic attitude.

The Real German Resistance to Hitler: The Social Democrats

In the course of an interesting article denouncing Valkyrie and The Reader, Ron Rosenbaum says:

And then there was Cruise’s character, Claus von Stauffenberg, very brave, it’s true, in 1944. But back during the brutal war crime that was the 1939 invasion of Poland (the British magazine History Today reminds us), he was describing the Polish civilians his army was slaughtering as “an unbelievable rabble” made up of “Jews and mongrels.” With friends like these …

Moral: Don’t go looking for heroes in the largely mythical “German resistance” to Hitler. The German resistance was not much more real or effectual than the French Resistance—its legend outgrew its deeds after the war.

I think this is too quick. There was very real German resistance to Hitler. It just didn’t come from the army or other elements of the German conservative establishment. And it wasn’t able to stop anything in 1939 or 1944 because it had already been crushed. The opposition came primarily from the German Social Democratic Party. Rosenbaum knows this because it wrote about it in his book, but for the purpose of this article he’s glossed over it. But emphasis on Germany complicity in Nazi atrocities shouldn’t obscure the fact that a large swathe of the German public tried—very hard—to prevent Hitler from coming to power throughout the late 1920s and early 1930s. The problem was that they were undercut by a non-trivial Communist Party that absurdly alleged that there was no difference between social democracy and fascism (they used the term “social fascists”) and by the fact that when the chips were down, both the Catholic political movement and the traditional Protestant conservatives didn’t like Hitler but preferred him socialism.

In Prussia, for example, Otto Braun’s SDP coalition was happily in power through democratic means until July of 1932 when the federal Chancellor Franz von Papen decided to abrogated constitutional government, kick Braun out of power, and start running the state himself. Papen also re-legalized the previously banned Nazi SA paramilitary organization in an effort to lure them into supporting his coalition, and then eventually agreed to serve as Vice Chancellor in a Hitler-led cabinet. After the reichstag fire, the conservative and centrist parties voted for the Enabling Act that gave Hitler dictatorial powers, but the SDP voted no, even though they knew they were doomed to lose the vote. At this point their leaders either went into exile (like Braun) or were generally sent to concentration camps. This, unlike the von Stauffenberg plot, was legitimate ahead-of-the-curve resistance to the Nazis.