Take your grandson's passport. Why is the youth in Germany voting for Ukraine's enemies?
The Impact of Economy on Political Preferences
In Ukraine, when older individuals voted for communists or other parties reminiscent of the "back to the USSR" ideology, the younger, progressive, and outraged generation argued for an age limit on voting rights.
The irony is that in the recent elections in Germany, communists gained popularity among the youth, with the far-right coming in second. The CDU and SPD, which will likely form a coalition, predominantly received votes from the 60+ age group. This older generation largely supports military and financial aid for Ukraine, while the younger generation predominantly opposes it.
One of the main reasons for this polarization, in my view, is the economy.
When Covid began, a significant amount of money was "printed" to navigate the crisis. The graph illustrates how much the supply of US dollars has increased globally.
Overall, this reflects classic neo-Keynesian policy. Keynes emphasized fiscal stimulus and budget deficits, but it was later decided that fiscal (tax) methods were too slow, so a shift to monetary approaches occurred. Our "Big Construction" initiative from those years is part of the same Keynesian strategy. As with any treatment for an illness, there are "side effects" that emerge over time. During the fiscal stimulus period in 2020-2021, global consumer inflation was relatively low (averaging 3.3% in 2020 and 4.7% in 2021 according to IMF data), but there was a dramatic rise in asset prices worldwide. Over these two years, the S&P-500 index increased by nearly 50%, indicating that while the economy stagnated, stock prices soared "vertically," as there was a need to hold "excess money." From 2018 to 2022, housing prices in the US rose by more than 50% (house price index), and in Germany, by over 40% (German National House Price Index). Interestingly, dollar prices for housing in Kyiv also increased by almost 40% from 2018 to 2021. This means that, despite moderate consumer inflation, this monetary mass created asset inflation.
Next, let’s mentally divide the world into two categories—those who own assets and those who do not but desire to. A hypothetical German student sees that a 70-square-meter apartment in Munich costs between 700,000 and a million euros. In Berlin, it’s cheaper, but in a decent area, it starts at half a million. He notices that in 2022, consumer inflation surged (8.7% annually), and then in 2023-2024, the economy is projected to be in recession for the first time since World War II—contracting by -0.3% in 2023 and -0.2% in 2024. Meanwhile, the government is spending over 12 billion euros annually on aid for refugees and migrants (in 2023, over 45% of this amount is allocated to migrants from Ukraine, with Syrians in second place).
I decided to calculate how much a person looking to purchase the desired 70-square-meter apartment for 700,000 euros in Munich would have to pay monthly under a 30-year loan at a 3% annual interest rate (annuity payments). The result came to about 3,000 euros per month. However, jobs are scarce due to the stagnant economy, and one would need to set aside 3,000 euros monthly just for loan repayments. Consequently, those who already possess assets in the form of real estate and savings—typically stored in pension funds that invest in securities—and those who have neither assets nor savings, represent two very different groups. For the second group, transitioning to the first is significantly more challenging than it was 10-20 years ago, as the entry threshold has skyrocketed.
And they genuinely vote for communists and far-right parties that offer their own "quick radical solutions."
The author expresses a personal opinion that may not align with the editorial stance. The responsibility for the published content in the "Opinions" section rests with the author.