series is that once a country's debt rises to a certain level, the
country becomes impossible to govern. Voters accustomed to a relatively easy
life based on other people's money won't accept the truth that they're not
actually rich, so each new leader sees his or her popularity plunge almost
immediately and their "reform" program, whatever it happens to be,
quickly discredited and abandoned. Now it's France's turn. From today's
President Hollande struggles to regain popularity
President Francois Hollande has suffered a dramatic
decline in popularity during his first six months as leader of France,
failing to convince much of the country that his Socialist government is
capable of firm leadership to overcome a persistent economic slump.
opinion polls have shown Hollande sinking nearly 20
points in approval ratings, to about 40 percent, with respondents from across
the political spectrum expressing disappointment as unemployment, which is
above 10 percent, continues to rise, factories close
and growth remains elusive.
Hollande's friends and supporters have publicly urged the
president to explain more clearly how his decisions fit into a coherent plan
for restoring France's economic health.
In many ways,
Hollande's fall from post-election grace reflects
the simple fact that he is in charge as Europe's debt crisis forces France
and other countries to raise taxes and cut back on cherished welfare
expenditures. But French analysts say it also stems from Hollande's
tendency to keep his options open as long as possible before making
decisions, creating an impression that his path is unclear, and from
understand the worries of the people and the doubts they may express about
the ability of politicians to meet the challenge," Hollande
said in a news conference Tuesday at the Elysee
he rolled out a series of measures decided since he took office, portraying
them as a cohesive array designed to get the economy moving again and bring
the national debt under control. The effects of these efforts, he added,
should be judged at the end of his five-year mandate, not in the first
choices are consistent with my commitments, with my goals and, most
important, with the interests of France," he said.
Some of the
public's unease comes from the contrast between Hollande
and his predecessor, Nicolas Sarkozy, who was known for making swift and bold
decisions. Sarkozy, who was widely disliked by the end of his term, has
enjoyed a comeback in public opinion since his defeat in May, particularly
among his natural constituency of conservatives.
The latest Hollande measure to raise questions was an attempt to
improve the competitive position of France's small and medium-size industrial
sectors by lightening the heavy load of payroll taxes, which help pay for the
generous welfare system. Prime Minister Jean-Marc Ayrault
announced last week that firms making new hires
would get tax rebates worth $26 billion beginning in 2014 and that
value-added taxes would be raised to pay for it.
before, while running for president, Hollande had
denounced as grossly unfair a similar proposal by Sarkozy. Last week's
announcement was portrayed as a turnaround. The Socialist faithful grumbled
that liberal principles were being compromised by a gift to businesspeople
that would be paid for at the supermarket checkout counter.
a left-wing president who, several months after taking power, engineers a
real cultural revolution, adopts a policy that is completely new for the French
left," Raymond Cayrol, a generally sympathetic
political researcher, told Le Figaro newspaper.
Jean-Luc Melenchon of the Leftist Front, whose followers mostly
voted for Hollande, called the program "a
shame." Jean-Vincent Place, a senator from the Socialist-allied Greens,
wondered aloud whether his party's two ministers should remain in the
right, critics predictably denounced the decision as too little, too late. A
report commissioned by Hollande, they noted, had
recommended $39 billion -- and in payroll tax cuts, not rebates. Moreover,
they said, if the economic situation is serious
enough to require such a step, why should businesses have to wait until 2014?
Francois Bayrou, a centrist leader, called the Hollande
system "a gas machine." He and others said the real hindrance to
competitiveness is a bloated government that accounts for more than half the
economy, despite cutbacks.
day, instead of cold-cocking the country with taxes and fees, a French
statesman will have to slice, dice and cut amid the fat, the gelatin and the
girdles that strangle our economy," wrote Franz-Olivier Giesbert, editor of the newsweekly Le Point.
much of the criticism is the impression that Hollande
and his lieutenants have underestimated the depth of Europe's economic crisis
and its effects in France. Hollande recently
suggested, for instance, that the slowdown is a question of economic cycles
and that growth will soon return. Unemployment will start to drop by the end
of next year, he predicted.
At the same
time, he and his finance minister, Pierre Moscovici,
have insisted that France will respect a commitment to the European Union to
reduce the government's budget deficit to 3 percent of gross domestic product
by next year. Some of Hollande's supporters have
suggested that the goal is not realistic unless growth returns,
a prospect that, according to the International Monetary Fund, the European
Union and the Bank of France, is unlikely anytime soon.
article doesn't explain what Hollande did in his
first few months, so very briefly: after inheriting a heavily indebted
economy with the second highest labor costs in the Eurozone (4 euros an hour
higher than Germany's), he chose from the standard socialist menu, raising
taxes on the rich, promising to increase the government's overall tax take
from 45% of the economy to 47%, and lowering the retirement age for many
workers from 62 years to 60. This of course failed to produce a burst of new
hiring, and now, six months in, he's already changing course and cutting
None of this
will make a difference, though, which is the point: There is no mix of
mainstream policies capable of returning France back to the pre-crisis days
of steady growth and political quietude. Turmoil is the order of the day
until debt falls by half or more.
who was widely disliked by the end of his term, has enjoyed a comeback in
public opinion since his defeat in May..." This kind of instant buyer's remorse is to be
expected. The other guy always looks better than the incumbent who is
actually grappling with the country's problems.
election, which returned pretty much the same people to power, would seem to
discredit the "ungovernable" thesis, but in reality it just
illustrates the near-total cluelessness of the republicans. Space doesn't
permit a full accounting of their dumb (in some cases crazy) choices, but
suffice it to say that they managed to enrage Ron Paul supporters, women, and
Hispanics for no apparent reason, and still would have won had the same
number of republicans shown up to vote as in 2008. So watch the
administration's approval ratings going forward and note the similarities to Hollande's. But again - to avoid an avalanche of right
versus left name calling - this isn't about ideology. Nothing that a majority
of Americans would vote for will work, so we'll remain ungovernable until the
market puts an end to the age of fiat currency.