The decision of the Germans to deny a mandate to either the Social Democrats or the Christian Democrats ignites in us what is no doubt a pipe dream but a beguiling one at that – namely that President Bush appoints Steve Forbes as envoy in Berlin. Frau Merkel of the Christian Democrats has a lot of the right instincts, after all, about what Germany’s economy needs. We could tell this when we met with her in Berlin two and a half years ago. On Sunday, she should have been a shoo-in. With an unemployment rate near 12%, Germans have lost faith in the ruling Social Democratic Party and its chancellor, Herr Schroeder. Opinion polls throughout the summer showed Frau Merkel’s CDU and allied parties trouncing the aging socialist by double digits.

Yet Frau Merkel lost her nerve. She brought in a well-known professor and flat-tax advocate, Paul Kirchhof, as her economic policy chief. But Frau Merkel never quite brought herself to endorse Herr Kirchhof’s proposal for a flat tax, and when the idea proved controversial she seemed all too eager to undermine him. She did so by trotting out her former rival for leadership of the CDU, Friedrich Merz, who failed to back Professor Kirchhof’s ideas. By subjecting Germans to a cacophony of competing proposals, Frau Merkel left voters confused about where her party stood. That confusion only exacerbated Germans’ natural ambivalence to change.

But in politics, one never wants to quit trying, and if Frau Merkel accedes as chancellor in a grand coalition with the opposing party, she’s going to need all the help she can get. This is where Mr. Forbes comes in. He’s one of the wisest politicians (and newspapermen) in America and has just brought out a book on the flat tax. When one sees him up close, one discovers an extraordinary knowledge of history and economics and, importantly, a sense of humor. One can ask why, if he wasn’t able to convince Americans of the virtues of a flat tax, he should be able to convince the Germans. But when he ran for president, America was coming off a long boom and wasn’t in the desperate straits Germany is in. And his new book is more focused and eloquent than anything we’ve seen on the subject.

And he may yet be able to report back something useful to President Bush. For yesterday’s outcome in Germany can be seen as a warning to American politicians, especially Republicans. In the once and future debate over Social Security, many Americans understand that the current system is in trouble, but they are wary of changing it. Republicans floated a proposal – personal accounts – but appear to be throwing in the towel at the first whiff of buckshot; even before Hurricane Katrina, Mr. Bush seemed to be stepping back from his bold reform. American angst over Social Security mightn’t be as severe as the dismal economy confronting Germany, but Ms. Merkel’s fate, a product of her party’s own lack of courage, adds up to a cautionary tale.

Back in Berlin, Herr Schroeder hadn’t conceded as these columns were being put to bed, and it appears that a good bit of turmoil will obtain for days, perhaps years, as an unwieldy coalition of two vehemently opposed parties tries to govern under Ms. Merkel’s leadership. Aside from the economic issues, our sense of Ms. Merkel from having breakfast with her in early 2003 is that she is far more pro-American, in general, that Mr. Schroeder. She grew up in Communist East Germany and has a visceral understanding of the catastrophe of its command economy, and she doesn’t seem to resent America the way the left does. She is intelligent and actually quite lively in her intellect. An early meeting between her and Mr. Bush could only help in establishing a new friendship in the heart of Europe.