The Verdicts
By John Kornblum

If you ask the wrong questions you usually get the wrong answers.

Many of those seeking to understand the outcome of Germany's September 18 elections seem to be falling into this trap. Chances for success of the new "Grand Coalition," the Christian Democratic Union's Angela Merkel announced Monday, will be much reduced unless the right questions are asked.

So far, many of Germany's political leaders appear confused about what really happened. They are blaming voters rather than themselves. Even the center-right CDU and their sister party, the Christian Social Union are now questioning Germany's readiness to reform. Many of them are calling for a return to the old Gemütlichkeit (coziness) of the Kohl era.

We should be careful in assigning too much blame to the voters for the September surprise. To do so would be a classic case of getting the wrong answers from the wrong questions. Just as when French and Dutch voters were blamed for rejecting the unwieldy European Union constitution earlier this year. Was it really three incompetent populations in a row? Perhaps we should better try to understand what the voters were trying to tell us.

They seem to be saying that their vision is quite different from that of their political leaders. European elites are still arguing how best to fiddle with the complex bureaucracies set up after World War II. Their voters are not sure what kind of future they want. But they are clear about one fact: There is a growing rejection of the distant bureaucracies which seem increasingly to run their lives.

This applies particularly to Germany. While politicians still debate how best to fix the status quo, the people have already moved far ahead towards a new way of doing business. Evidence abounds of fundamental changes in German economic life. German firms are improving their international competitiveness at an impressive rate. Despite ponderous regulations, the labor market is being fundamentally restructured. Change is occurring in Germany at a fast pace, but it is happening through market forces rather than through government reforms.

What is still stagnating in Germany is domestic consumer confidence and consumer demand. Voters feel they are losing control of their future. It has not been made clear to them how loosening the weave in their social net will lead to better times ahead. In fact, the body language of their leaders communicates exactly the opposite message. Voters are told repeatedly that reforms will hurt; thus, they save even more to hedge against the risk of harder times rather than spend for a brighter future.

Instead of having rejected change, is it maybe possible that German voters acted in the spirit of their French and Dutch compatriots? By withholding a clear mandate from any political grouping, voters demanded that politicians chart credible new directions, rather than stick to the technocratic consensus of a bygone era.

Giving German voters a clear sense of direction is more important than in most other countries. After the catastrophes of the twentieth century, what they fear most is uncertainty and a feeling of losing control. Post 1945, German leaders skillfully crafted an unwritten but clear bargain between government, business and voters: let's create a flexible, modern society - but always on the basis of an understandable road map which leads Germany away from its terrible past. Eras of change, such as Willy Brandt's Ostpolitik or Helmut Kohl's drive for Germany's unification were successful only because they were accompanied by a sense of optimism and direction.

Rhineland capitalism and social-market economy were two sides of the same coin. So was the desire to be enmeshed in both a unified Europe and an American-led NATO. Fueled by post-war reconstruction, this mix led to one of the most prosperous and optimistic periods in German history.

Ironically, it was the last Grand Coalition which initiated the downfall of this unique German mix. Stunned by the rise in neo-Nazi support during the mild recession at the end of the 1960s, the coalition between the CDU/CSU and Social Democrats of the time began two decades of massive social spending. The pragmatic balance of the early post-war years was gradually replaced by a defensive reliance on social welfare to buttress post-war stability.

As a result, Germany has steadily lost the sense of optimism which helped it prosper after World War II.

In recent weeks, the example of Weimar has been (over)used to describe the current state of affairs in Germany. I think a better analogy than Weimar is probably 1970s America. A once strong and prosperous U.S. had lost its way. Vietnam, Watergate and the oil shock were topped off by the Iran hostage taking. The economy was sagging, America's overseas position was weak and serious people suggested that the U.S. would soon be overtaken by Japan as the world strongest economic power.

Germany suffers from the same inertia that hit the U.S. in the 1970s. Substitute unification, welfare mentality and out-sourcing for Vietnam, Watergate and the oil price shock and you've got the picture.

Now that the treasury has been depleted, German politicians have not figured out how to motivate voters to work hard to fill it up again. Confused by deafening discord over Germany's future, what the voters essentially asked for in last month's election was a little peace and quiet to sort things out.

But politicians were so preoccupied with designing new fixes to a broken system that they forgot the "vision thing" as George Bush Sr. ruefully admitted about himself after his 1992 loss to Bill Clinton.

To understand the confusion following the German elections, it is useful to recall the shock which echoed through the corridors of American political power in November 1980 after the victory of Ronald Reagan. He so upset the conventional wisdom of American electoral politics that it was months before the reality of a new political era began to sink in. It was years before his new style politics began to show results.

The same gradual awakening is already well underway in Germany and in other parts of Europe. Germany is not America and success is not guaranteed. But most important at the moment is to understand what is going on. If we ask the wrong questions, we are likely to get the wrong answers.

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John Kornblum, the U.S. ambassador to Germany from 1997 to 2001, is Chairman of Lazard Freres in Germany and an AICGS Board Member.

This essay originally appeared in the October 12, 2005 Wall Street Journal - Europe Edition, as well as in the October 20, 2005 AICGS Advisor.