During the 1970’s, Germans went overboard, confusing capitalism with self-service shops. They began to expand their welfare state, pushing the government’s share in GDP from 39% to 49% and welcoming union-proposed double-digit wage increases. The signs of the fading miracle became visible when Japanese competitors and other Asian Tigers succeeded in wiping out substantial parts of Germany’s labor-intensive textile, optical products, and precision engineering industries. Nevertheless, the public still believed in perpetual growth.

Only after the Iron Curtain’s fall and the establishment of market economies in ex-communist countries did the lack of competitiveness of German workers become apparent. The country with the highest labor costs in the world was confronted with low-wage competitors next door. Wage costs in the ten new EU member countries are still only one-seventh their level in western Germany; wage costs in Rumania and Bulgaria are one-tenth. Chinese wages are even lower, at just 4% of the western German average. Now unemployment is Germany’s biggest problem, standing at a postwar record.

It appears, then, that the wages of socialism for Germany are high unemployment brought and a slow, painful decline in economic vitality. There are, of course, exceptions to this trend and notable ones at that, especially for a fortunate few like Gerhard Schroeder, former Chancellor from the Social Democratic Party(SDP). Gerhard found himself a new job only a few short weeks after handing power over the Angela Merkel. And what, pray tell, is that new position? It;s as the head of a consortium that's building a gas pipeline between Russia and Germany. According to BusinessWeek:

As chancellor, Schroeder enjoyed a close personal and professional relationship with Russian President Vladimir Putin. But now critics question the ethics of him standing to gain personally from a major financial deal that he supported in his role as chancellor.

"It stinks," said Reinhard Buetikofer, co-chairman of Germany's Greens, which had been the junior party in a coalition with Schroeder's Social Democrats until September. The Social Democrats continue to govern along with the conservative Christian Democrats in a so-called grand coalition, while the Greens are in the opposition.

It stinks alright. More importantly, however, is the fact Schroeder's self-enriching behavior neither sets a good example for how former politicians ought to behave after leaving office - remember how Michael Moore's Fahrenheit 911 excoriated Bush-41 for his post-presidential deals with the Saudis? - nor provides an example that can inspire the millions of ordinary, unemployed German's.

Playing handmaiden to an increasingly autocratic leader of an anemic and struggling post-communist economy may be economically optimal for Gerhard, now a private citizen, but it would prove disastrous if German government saw currying favor with Russia as a solution to its unemployment and economic problems. Germany's potential contributions are too great and too valuable to be squandered in such a manner. Fortunately, the new leadership would appear to understand this, particularly Merkel, who grew up in East Germany and who presumably knows full well just how foreign is the concept of "Anglo-Saxon capitalism" to almost everyone east of East Berlin.

Linked at Point Five and 10ft2ft and MacStansbury and Robinik.