The Drift of German Politics

...Bonn T he tallest and most massive office tower in Frankfurt is that of the BFG Bank, one of Germany's largest banks...

...Indeed it would be hard for any candidate to do so, because the Kohl government is doing fine: unemployment is down, GNP is growing, subsidies for housing, education, and babies have been increased, the duration of unemployment insurance payments has been extended, there has been no inflation, and taxes have been lowered...

...At first his engaging looks and likable TV personality seemed full of promise...

...First the labor holding company's chairman refused to answer any questions before a committee of the Bundestag investigating Neue Heimat on the grounds that they intruded into confidential business information...

...The audit report pointed out that the legal purpose of constructing apartments under the legal status of the "common public interest" was to help broad groups of the population, and that the company had acted contrary to that purpose and violated the law to the point of endangering the company's existence...

...but despite questioning numerous presumably knowledgeable people, I still do not understand it...

...On October 1, the first dainty dish was set before the hungry media: the major portion of the unions' real estate holdings were sold for DM 1.00 to an obscure Berlinese bread manufacturer, whose company presumably would not only be saddled with some DM 8 billion of existing liabilities, but would also have to carry continuing losses, there being no likely remedy for stopping them...

...This debacle for the SPD in one of its bastions is generally blamed on the troubles of Neue Heimat...

...The Greens, compared to which the Social Democrats are Midwestern Republicans, increased their votes from 4.6 percent four years ago to 7.5 percent...

...The outcome of the state elections in Hamburg on November 9 confirms this prediction: Unexpectedly the SPD, until then the largest party with an absolute majority in parliament, lost 10 percent of its previous votes, obtaining only 41.8 percent, and ceded its first place to the CDU...

...Der Spiegel devoted its lead articles, 15 pages of them, to Kohl's remark...

...But apart from intellectuals and many of the young, voters simply agree with a CDU election poster which reads: "Keep Going Germany—Stable Prices—Retirement Benefits—Secure Pensions—More Employment—CDU—The Future...

...Yet none of the media and politicians who cried foul over the betrayal of the tenants had suggested any better solution for the company's troubles.' Still, had nothing further occurred before the elections, it is possible that prospects of the SPD would not have been seriously damaged...

...It was human, not criminal, to overestimate the future demand for cheap housing and the future value of unimproved land, bought in anticipation of continuing demand...

...Kohl's reference was apt...

...The moral superiority of the Soviet regime to that of the Third Reich has become dogma.' If the Bavarian defeat of the SPD will be followed by a similar defeat next January—when I expect the SPD to do no better than it did in the national election of June 1983, when it dropped from 43 percent in 1980 to 38 percent of the vote—the party's course will be uncertain...

...One could share the concern of tenants, mostly union members, over the consequences for them of having as a landlord a private baker rather than a corporation owned by Social-Democratic comrades...

...An illustration of the prevalence of illusions about the Soviets was the excitement of the media and politicians of the opposition caused by Chancellor Kohl's offhand remark in an interview with Newsweek that the good public relations of Mr...

...Add to that witches' brew the concepts of "equidistance" from the United States and the Soviet Union, and of "partnership for peace" with the Soviet Union, and only the blindest optimist in Cambridge, Massachusetts can be able to foresee anything other than the end of NATO and, at best, the Finlandization of Europe, if the SPD should return to power after January 25, 1987...

...The voters are not about to shoot Santa Claus...

...the German economy has long been one of the givens for any analysis of Germany's politics, because the labor unions are allied with the Social Democratic Party (SPD), and the labor unions' assets have constituted a gigantic war chest for industrial and political battles...

...Nobody seems to have had the courage to point out that Mr...

...Meanwhile conservative politicians and most of the media berated the arrogance and lawlessness of the unions, while SPD politicians called the dramatic arrest "shameless ham acting...

...The building has been a symbol of the economic power of Germany's labor unions...

...Be that as it may, the Republicans are not organized for waging a national election campaign, and there is not enough time left before the elections to perfect a national organization...

...And there is evidence that numerous industrial workers switched their votes to the conservatives, probably because of disgust with the SPD's new stand for the abolition of nuclear energy, a stand which jeopardizes workers' jobs...

...Fortunately, there is no prospect of this coming to pass...

...The SPD, which had reached a high of 36 percent in 1968, did even worse than four years ago and sank to an all-time low of 27.5 percent...

...Goebbels's good public relations were...

...If in addition to extrapolating the results of the Bavarian elections one factors in two further developments, a victory of the conservative coalition next January seems certain...

...In those elections Franz Josef Strauss's conservative CSU (the Bavarian sister party and governmental coalition partner of the Christian Democratic Union [CDU]) once again obtained the absolute majority it has maintained since 1970, with almost 56 percent of the total vote...

...The BFG Bank, as well as groups of large insurance companies, a savings bank, and Neue Heimat, a group of real estate and construction companies, are owned by the major labor unions, which have run this financial empire through a single holding company, BGAG—that is, a Holding Company for Enterprises of a Public Interest...

...The provision of the code of criminal procedure relied on for the arrest had never before been applied to a refusal to answer in a parliamentary as opposed to a court proceeding, and the legality of the arrest will be in doubt until the Supreme Court has decided the issue...

...Many of the properties sold were apartment houses built for people who could pay only modest rentals in the first postwar years when housing for them was simply not available, and would not have been built by private entrepreneurs or without special governmental benefits...

...By taking impermissible risks, manipulating of financial statements, paying illegal dividends, granting improper advantages to third parties and to affiliated companies, as well as by participating in risky enterprises unrelated to the proper purposes of Neue Heimat, the management has given a spectacle of almost routine illegal transactions...

...Even the sternest critics of the unions concede that their determination to put roofs over people's heads was a historic achievement...

...By Tuesday afternoon the chairman was out of jail again, but neither out from under the threat of jail nor out of the media...

...During October those assets turned into political liabilities...

...The contest was unequal...

...One of these factors is the impact of the latest media excitement over the business affairs of the labor unions that is bound to reduce Social Democratic votes.2 Another is the increasing evidence,clearly perceived by people in all walks of life, of the vacuity of the Social Democrats' candidate for the chancellorship, Johannes Rau...

...THE AMERICAN SPECTATOR JANUARY 1987 17 It would be enjoyable to report that loyalty to NATO, a realistic appraisal of the Soviet threat, and an intellectual commitment to a liberal market economy will determine the outcome of the next election...

...Such a business benefits from certain governmental subsidies and tax exemptions...

...16 THE AMERICAN SPECTATOR JANUARY 1987 which he was dispatched to jail...

...His article, "The Paradoxes of French Politics," appeared in the October 1986 American Spectator...

...This bastion of the labor unions in Franz M Oppenheimer, a frequent contributor, is a Washington lawyer...

...The committee reacted by having him arrested on a Sunday evening during the opening session of the convention of the Metal Workers Union, the largest of the German labor unions, in Hamburg...

...Finally, the indications that most of the SPD's losses were due to lower voter participation-70 percent as against 78 percent four years ago—should dampen any undue euphoria about the health of conservative conviction in Germany's conservative heartland...

...Now Rau is trying to engender enthusiasm in the manner of Gary Hart: he calls for new approaches in creating jobs, increasing investment, greater justice in taxation—but he seems unable to say how and why those approaches, to the extent he defines them at all, would do better than those used by the government of Chancellor Kohl...

...The "G" in BFG stands for Gemeinwirtschaft, a term denoting a business conducted not for profit but for the common public interest...

...The Republicans obtained 3 percent—enough to make conservative party managers consider whether they should not shift more to the right, thus echoing the views of a number of people that there is a perceptible revival of nationalist, right-wing feeling, views for which I can find no basis in any observable facts...

...27 percent believe in Gorbachev's honest intentions, as against 24 percent who believe the same of Reagan's...

...Such an outcome would weaken the stability of a country that for the last thirty years was built on the presence of two large and essentially middle-of-the-road parties embodying a national consensus on all material issues of defense and foreign policy...

...I have tried hard to understand why an investment gone wrong and its saleconstitute a scandal...

...Rumors about financial distress had been rife for at least a year—promoted primarily by the newsweekly Der Spiegel...

...man political life...

...Almost all areas of law protecting the public are involved...

...Yet compared to the significance of that repudiation, the parochial concerns over the business ventures of the labor unions are frivolous...

...Two police officials accompanied the chairman before a magistrate, after 'As we go to press, the unions, under pressure from the banks, have suffered the final humiliation of having to agree to buy back Neue Heimat...

...and his victory in the state elections of Rheinland-Westfalia in May 1985 was often but probably falsely attributed to these personal charms...

...If, on the other hand, defeat will prompt the party to repudiate its evil genius, Willy Brandt, and to return to the principles of its grand old guard—Helmut Schmidt at his zenith, Karl Schiller, Hans Apel, and Walter Hesselbach, the creator of labor's economic empire and the former chief of the labor unions' holding company—the party can look forward to a comeback, and the Atlantic Alliance to a less uncertain future...

...Inspired, no doubt, by the nuclear free zone of Afghanistan, the agreement contemplates a nuclearfree corridor of 150 km on each side of the barbed wire that separates free and Soviet Germany...

...In one significant place they did spectacularly better: in the Munich section of Schwabing, the home of artists and intellectuals, they reached 20 percent...

...And by the end of the week the Dusseldorf regional office of the German IRS published an audit report on the regional building construction group of the Neue Heimat, which, for the first time, seemed to give substance to the accusations of scandal: Neue Heimat, Nordrhein Westfalen, has drawn a wide circle of illegal actions...

...In Nuremberg, and since then, the SPD advocated phasing out in ten years nuclear plants, partly built under its government, abolishing nuclear weapons, i.e., the Pershing missiles installed at the request of the SPD government under Helmut Schmidt in Eastern and Western Europe, thus repudiating NATO defense strategy, and cancelling the German-American agreement on SDI...

...Keep Going Germany—Stable Prices—Retirement Benefits—Secure Pensions—More Employment—CDU—The Future...

...An illustration of the general apathy about issues of foreign policy can be found in the absence of public outrage over a bizarre agreement negotiated by the SPD with East Germany's official party, the SED...

...Its second defeat in four years may embitter the activists and drive the party even further to the radical left and to the margin of Ger'So, according to a poll published by Der Spiegel in November, is the moral superiority of Gorbachev to President Reagan...

...Ninety percent of German citizens, "their minds boggled" by their chancellor's aberration, said the Spiegel, believe that Kohl's remark was wrong...

...In the election district of Schwandorf, where a controversial nuclear reprocessing plant is to be built, the SPD gained the absolute majority, increasing its votes from 40.8 percent to 50.9 percent...

...But in the last week of October new and damaging stories about the labor unions made the opening of the television news and the front page of the newspapers every day...

...the real estate empire came to a fall—in the midst of what the media called a scandal...

...The news from Bavaria, however, was not all good...

...Hence," the report concluded, ". . . the cancellation of the qualification as an enterprise for the common public interest is required...

...W hen the SPD announced its new party program at the party's convention in Nuremberg last September, it did not expect that the voters would be talking about the union's real estate instead of the party's new program—which constitutes a repudiation of the principles that had given it its past victories...

...Gorbachev are not necessarily evidence of good intentions, no more than Dr...

...Thus in Munich the SPD lost 10 percent as compared with 5 percent statewide, and in other large cities its losses were also disproportionally high...

...In fact his victory was due to something else: Rau may be a lightweight, but most observers believe that his then CDU opponent was a featherweight...

...Such is the conelusion to be drawn from the elections for the state parliament of Bavaria on October 12, that is, after the Nuremberg party convention and after the sale of the unions' real estate empire but before the latest sensations about the labor unions' business transactions...

...A curious footnote to the Bavarianstate elections is the worry of the conservative party leadership over the unexpected showing of a new "Republican" party founded by a TV personality, Franz SchOnhuber (a name that could come out of a Bavarian comedy), who broke with the CSU, primarily because of Franz Josef Strauss's new softness on East Germany (he was instrumental in getting them a major credit) and disgust with the influx of Asian immigrants (now stopped) into Germany through East Berlin...