Tuesday, February 14, 2012

Running against Goldman Sachs

Not long ago in the xxxxth version of "if voting actually changed anything, it would be illegal" Chris Hedges noted that it is actually impossible in USA to cast a ballot against Goldman Sachs on the national level.  In fact, it could be argued that Mr. "Hope and Change" Obama has more GS alums in his administration than any other in history.

So it is highly interesting to speculate on what might happen if a politician in a big economy actually decides to take on the banksters.  First of all, we can assume that such a pol will be wildly popular and will likely be elected.  But we can also assume that the threats by the banksters against such a pol will keep escalating to the point where the promised changes will be mostly cosmetic by the time that person is actually in office.  Yes, there have been politicians who have stood up to the banksters but outside of Latin America, I cannot think of an example.

So now we see that the Socialist candidate for prime minister of France has suggested the budgetary deficits can best be addressed by raising the taxes on the rich.  This is a LONG way from suggesting that the banksters be sent to jail or that compound interest might be be a hazard to the planet.  But to read the folks at the Guardian, François Hollande is a revolutionary getting his troops ready to storm the bankster Bastille and the folks at Le Figaro compare him to Saint-Just, Robespierre's Karl Rove.  A more rational assessment by the conservative opposition was provided by Dominique de Villepin, the former prime minister who is running on the right against Sarkozy "The Socialist programme is not sustainable," he told reporters. "I would expect that within months it will be corrected by the very same markets that he has denounced."

As much as I love the French, I am afraid that de Villepin is probably right.  Rhetorically beating up on the banksters will probably get Hollande a landslide victory but the possibility of him actually changing much is damn slim.  The banksters have been running France for a long time now.  Her elite schools churn out folks well equipped to get senior jobs at places like IMF.  And Hollande is a LONG way from being either as intellectually innovative or courageous as Nestor Kirchner.  But we ARE talking about France here.  This is the country that invented dirigisme, after all.  Let's not get ahead of ourselves, but if European Socialism is ever to recover from being anything other than utterly useless, why not in France?

France's Socialist hopeful promises to storm the financial Bastille
The leftwing candidate in April's presidential elections, has built up a commanding lead in the polls by attacking big finance

Julian Coman in Paris
guardian.co.uk, Saturday 11 February 2012

On a bitterly cold morning in Dijon railway station last week, a diminutive Frenchman exited his train to the kind of fuss and fanfare that has escaped him for most of a 30-year political career. Sweeping down the frosty platform with the unmistakable air of a man in possession of his mojo, François Hollande was greeted by a flurry of victory signs from grinning passengers waiting for the 9.34am to Lausanne to leave. Surrounding him was an impressively large media scrum.

"The man of the moment!" said one bystander, as the Socialist candidate for the French presidency paused for another impromptu interview.

Welcome to the new world of the man once derided by opponents as Monsieur Flamby ("Mr Pudding") – a reference both to Hollande's weight and a perceived flabbiness in his political opinions. That nickname seems out of date now, after a campaign-defining speech last month in the tough Paris suburb of Le Bourget. Giving an impassioned and polished attack on the speculation and profiteering that led to the economic crisis that has engulfed Europe, Hollande told the 20,000-strong crowd: "My enemy is the world of finance." Belatedly, French company directors, investment bankers and market movers are waking up to the growing popularity of a presidential candidate who promises to raise taxes on rich individuals and big business in order to boost growth.

With the first round of the French elections barely two months away, the polls suggest that Hollande is choosing the right adversaries. On the day he visited Dijon one survey suggested he would win a straight contest with President Nicolas Sarkozy, gaining as much as 60% of the vote.

For a politician habitually described as slightly bland, the transformation into a fêted "tribune of the people" must come as something of a shock. Up until this election campaign Hollande, 57, was known for his love of a joke, his portly mastery of the backroom politics of the Socialist party (PS), and his failed marriage to the former siren of French socialism, Ségolène Royale, who lost the presidential election of 2007.

But as he has surged ahead of Sarkozy in the polls, Hollande has slimmed down, sharpened his suits and replaced humour with radical indignation. A commentator in the conservative Le Figaro wryly compared his egalitarian zeal to that of Saint-Just, Robespierre's uncompromising right-hand man in the French revolution.

Hollande is no revolutionary. But according to Geoffroy Clavel, political editor at the French Huffington Post, he is hitting the right notes as the French economy languishes, austerity bites and youth unemployment reaches 25%. "The Le Bourget speech was a huge success," said Clavel. "The economic crisis has changed politics and people were ready to hear a message of social justice and equity. They're ready to hear that everyone, including those at the top, is going to pay what they should pay."

France is having a far feistier version of the Stephen Hester and Fred Goodwin debate that has dominated headlines in Britain. A few days after Le Bourget, Hollande unveiled a 60-point programme for government. In recognition of the parlous state of French finances, there is a commitment to reduce the budget deficit to 3% (from well above 5%) by 2013. The list of austerity measures includes a freeze on public sector recruitment. But the route to sound accounts is principally by way of tax rises rather than cuts, and most of them are directed at the upper tiers of French society.

Pledges include raising the top rate of income tax to 45%, capping tax breaks for wealthy individuals at €10,000 (£8,375) and significantly hiking capital gains tax. The biggest companies in France will also be taxed at a higher rate, while smaller companies will pay less.

"Those who have benefited from crazy pay levels will have to make an effort," said Hollande at the document's launch. The revenue generated, says the PS, will be used to promote growth as well as cut the deficit. Hollande promises state-funded apprenticeships for the young, thousands of new teachers, a new public investment bank and new research and innovation programmes. Without growth, his aides insist, deficits will never be brought under control, as governments across Europe are discovering to their dismay.

Is social democracy in one country possible? Since the global banking crisis struck in 2008, centre-left governments in Britain, Spain and Greece have paid the price. The large majority of the 27 governments of the EU are now of the right and all have focused their energies on cutting spending and shrinking the state. Austerity has become the watchword of a continent. But not for the first time, the French may be about to go against the grain.

The language inside the modest Hollande campaign headquarters, five minutes' walk from the Eiffel Tower, has not been heard in a British election campaign for 30 years or more. Benoît Hamon, the PS spokesman, believes that Europe's social democratic parties "gave up too early" on the idea that governments should play a central role in regulating markets, finding people jobs and driving economic growth. "For years there has been this anomaly that in the globalised market it is the markets that govern in place of elected governments. Basta! Enough!

"We're being up front, saying: 'If you're a rich individual or a rich company, yes, you're going to pay more.' We're saying the same to the banks and we're telling them they won't pass the charges on to their clients."

Karine Berger, one of Hollande's most senior economic advisers and a parliamentary candidate for a rural seat in the Alps, rejects the idea that the wealth of the very top earners in France corresponds to benefits they bring to the wider society. "We believe that there are some people who play a more important role than others," she says, "But they are not the people earning stratospheric wages. They are the engineers, the scientists, the people building companies, not necessarily the top executives or the big traders."

What if the executives and traders threaten to up sticks and go elsewhere? Her reply is unequivocal.

"Look, we want to say to France: 'We want everyone on board, especially those people inventing the future.' And our government will be committed to sound finance and getting public debt under control. We are very serious about that. But for those people holding society to ransom, let them leave." She doesn't think they will.

The challenge to high finance has already been dismissed by some on the right. On the day of Hollande's visit to Dijon, Dominique de Villepin, the former prime minister who is running as a rightwing rival to Sarkozy, was campaigning in the same city. "The Socialist programme is not sustainable," he told reporters. "I would expect that within months it will be corrected by the very same markets that he has denounced." more

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