Germany's Elites Failed The Public

Germany's election on Sept. 18, which left no party with a clear mandate, shows that citizens of Europe's largest economy still aren't ready to jettison the status quo -- even when the status quo includes 11.4% unemployment and growth of less than 1%. It's tempting to be disdainful of das Volk for clinging so tightly to an increasingly unaffordable welfare state. But some of the blame surely lies with the political and economic elite. To listen to the public discourse, you'd think reform is some kind of hellish ordeal, a journey into a world of mass poverty and social Darwinism.

But guess what: The changes Germany needs aren't that wrenching. Center-right candidate Angela Merkel, whose Christian Democrats fell short of the votes needed to form a workable coalition, advocated labor-law fixes that still would have left Germans with far more job protections than the Danes. Last time we looked, Copenhagen was a pretty cheerful, prosperous place.

Indeed, the great failure of Germany's elites -- including the business community -- is that they have allowed the debate to be framed by labor unions and left-leaning reactionaries who regard reform as a kind of economic chemotherapy. In fact, a moderate dose of change would free up the nation's considerable latent strengths, slow the investment shift toward Eastern Europe, and bring greater prosperity for all. Reform is a great opportunity for Germany -- and for global growth, which would be bolstered if Europe's economic leader revved up. But until German political and business leaders learn to communicate the upside to the man on the street, Germany's economic malaise will persist.

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