The French elections (update 2)

Yesterday, I made a brash observation that the French elections were (at some level) all about neoliberalism and that François Hollande probably won because he had come out against neoliberalism during the campaign.

Well...  This inspired some comments that deserve a serious and thoughtful response.

Antoine Gaillard Apr 23, 2012 02:59 AM
As a frenchy I can tell you that Hollande has nothing to do with socialism, he is as much neoliberal as Sarkozy.  

I am not so sure that this is actually true.  Sarkozy strikes me as a true believer.  He is a neoliberal from his bone marrow on out.  Hollande strikes me as someone who knows that there is something vaguely wrong with neoliberalism but could be easily terrorized into accepting a neoliberal agenda.  In fact, I bet he has already voted for some of their programmes in the past.

Antoine Gaillard  Apr 23, 2012 03:19 AM
Yes he said to the people he wanted to go on war with the "finance" but he also said in the city in London, that he wasn't "dangerous" and underlined the fact that the so-called socialists in France have helped to pass laws in favour of neoliberalism. In my opinion it makes it pretty clear that those are just words, i think we can see this campaign as a marketing plan. Both candidates defend the same model but they aim different segments so they take different postures.

The big walkback.  I was not actually aware that this big meeting in the City had happened but I can easily believe it did.  And Hollande is clearly not lying when he claims that the Socialists have participated fully in the neoliberal experiment in Europe.

When I was growing up, the politics of rural American were basically organized around the idea that without significant regulation of the moneychangers, something as basic to the social order as growing food was nearly impossible.  Because farmers were sitting ducks as a target for exploitation, the main function of good government was to protect them from Predatory lending (and other forms of predation).  Bankers could be socially useful, but this was not their natural state so they needed extensive social supervision.

When I got to college, I started to meet self-styled-and-educated Socialists / Marxists.  I was pretty shocked to find that they usually knew very little about financial regulations and were not terribly interested in learning.  Marx may have occasionally written something about the role of moneylending but for him, it was just another detail—NOT the core belief around which every other thing was explained (like the worldview I grew up with.)  So not only do I have absolutely NO problem believing that there are Socialist neoliberals (DSK anyone?), I have no problem believing that any of them had any problem justifying this political position.  In fact, the rare bird would be the Socialist who isn't a neoliberal at heart when it comes to finance.

Antoine Gaillard  Apr 23, 2012 12:03 PM
Here is an interesting document written in English if you want to understand what banksters plan to do with Hollande. 

Oh Gaillard.  Thank you for this.  It is reassuring to know that French intellectuals are just as clueless and shallow as anything we have over here. Produced for the client Cheuvereux of the Credit Agricole Group, this document just drips with the arrogant attitude of "don't worry bankers, we know how to deal with insignificant worms like a Socialist President of France—who will soon discover that the market will destroy his feeble plans.  This sort of wandering off the reservation has happened before with François Mitterrand and it took less than two years to destroy his absurd political ramblings and bring him back to the fold.  What we did to Mitterrand, we can certainly do to Hollande."

Of course, this would be right except for a couple of BIG differences between now and 1981-83.  Importantly, bankers are now mostly wards of the state who need massive financial support to open their doors in the morning.  And then there is the "tiny" issue that in 1981, neoliberalism was sort of a new concept and so intellectual opposition to it was muted and easily marginalized.  In 2012, this is no longer true.  Now neoliberalism has exhausted itself as an ideology and anyone who adheres to the core beliefs is probably politically doomed.  This realization has obviously not managed to seep into the halls of academe or the think tanks so they will be last to know that people are angry enough with their bullshit to bring back the guillotine—or at least Glass-Steagall.

An excerpt.

Back to the future: France's reform Big Bang will be forced by the market (Doisy)

The indispensable structural Big Bang needed by France should be politically less problematic than in the 1980s. When elected on 6 May, as is most likely, Socialist François Hollande will have to clarify his stance on two pressing issues: fiscal austerity and labour-market reform. Indeed, he has remained pretty silent and/or evasive about his intentions on both counts for purely but sensible electoral reasons: he does not want to jeopardise the support he enjoys from popular voters and thus risk losing the election for being too transparent.

This ambiguous stance makes sense until the presidential and general elections areover, as clarification now would only spook popular voters to the extremes. Indeed, as shown by Chart 1, swing voters tend to move from François Hollande (moderate left) to Marine Le Pen (extreme right) on the assumption that these two candidates do not intend to reform the labour market and submit public finances to the new Treaty.

Nicolas Sarkozy is somewhat bolder and more transparent on the fiscal and labourmarket issues, but is also widely seen as losing the presidential ballot. Back in 2007, he was elected on a supply-side platform, but did not deliver on it. Logically, he is not getting much credit among centrist voters for this more open stance today. In addition, the economic crisis makes his platform unpalatable for the popular voters he is fishing for.

While shrewd from an electoral point of view, Hollande's strategy is sure to backfire once elected: either popular voters or financial markets will be disappointed. Just like in 1981-83 for François Mitterrand, the previous socialist President (see Box 1), François Hollande will have to displease either financial markets or voters right after the end of the 2012 electoral cycle, as he is sure to be unable to reconcile both.