John Fund on the German Election

John Fund at WSJ is one of the more astute observers of politicial campaigns and he weighs in on the mess that is the German election:

The muddled result, with neither major party able to form a stable parliamentary majority, means that Germany will not be taking decisive action anytime soon to reform its unwieldy welfare state, which has helped bring it 11% unemployment and zero economic growth That will not be good for the world. Germany, the third-largest economy in the world, represents 30% of the output of the European Union. The "sick man of Europe" is likely to remain bedridden for a while longer.

Fund blames the Germans in the east, a lousy campaign and a fear of change for the disastorous result. He closes with lessons for Americans:

The late economist Mancur Olson argued that the downfall of democracy would be its tendency to calcify into special-interest gridlock. Germany's extensive welfare state has created millions of voters who fear the loss of any benefits. Combine that with voters in eastern Germany who cling to outmoded notions of state support and you have an formidable challenge to bring about real reform.

"The lesson for America is do not go down the road as far as Germany has," says Horst Schakat, a German who created a series of successful businesses in California for 30 years but retired to his native land in 2001. "You may find yourself unable to go down a different but correct path once too many people have become dependent on the state."

I've always meant to but I've never actually gotten around to reading anything Mancur Olson but Jonathan Rauch's Government's End: Why Washington Stopped Working (originally published as Demosclerosis) explored the themes discussed by Olson and cites his work.