Emmanuel Macron offers false hope to France, and to the financial markets, that he can lead France into a better future. He cannot.
Share markets love Emmanuel Macron
Over the last 2 days, share markets around the world have risen by between 1% and 2%, which pundits attribute to the narrow margin that Emmanuel Macron achieved over Marine Le Pen in the first round of voting. More accurately this “positive sentiment” is supported by the move by both the French Socialist and the Republican leaders to endorse Emmanuel Macron, in a effort to ensure that the radical agenda of Marine Le Pen does not gain the central ground.
It is a false hope
Sure, if Emmanuel Macron gains the presidency, global capital will superficially be the winner, so the response of the world’s share markets is quite rational. However, it will actually be counter productive.
A robust national economy needs to work for everyone, not just for the winners. Unfortunately, Emmanuel Macron’s agenda is a program for winners, not for everyone. He wants to remove the state from the protection of workers’ pay. In other words he wants to make it easier to compete in a world where global capital can move work from one country to another, chasing the lowest wage cost commensurate with the skills required. This will increase global corporate profits in the short term, but it will also reduce the size of the French market for global corporations’ output.
Emmanuel Macron’s macro-economics is a dud approach
The loss of general prosperity, which will continue under Emmanuel Macron’s policy “prescriptions” is something that macro-economists, like Emmanuel Macron, cannot understand. Something more than macro-thinking is required.
- Global corporations mostly produce goods that the top 25% of the world’s population want, not what the poorer 75% want. The latter’s needs are still focused on food, clothing and shelter. They do not need luxury cars, such as are produced in France, or expensive food, or haute couture clothing. (It is possible that some global food companies might convince poor Africans that powdered milk is better for their children than mothers’ breast milk, but I will leave that to one side for the moment.)
- Taking jobs away from the French will reduce the prosperity of the “bottom” 50% of the population of France. They will stop buying their goods, because they can no longer afford them. In addition, the small businesses of France will be impoverished because of a loss of sales to ordinary French consumers. In turn, they will no longer be able to afford to buy more up-market motor vehicles.
For those who cannot understand the positive dynamics of the circular flow of wealth from the richer to the poorer (NOT via welfare or a universal minimum wage), I suggest they read George Cooper’s Money, Blood and Revolution, introduced on this site.
Emmanuel Macron doesn’t care about ordinary workers
There is no doubt that Emmanuel Macron is on a path to dud ordinary voters and workers. I will let his policy agenda speak for itself.
- He proposes to convince Berlin in the next six months to adopt an active investment policy and move towards greater solidarity in Europe.
- He has promised to lower the corporate tax rate from 33 percent to 25 percent.
- He wants to keep the legal work week at 35 hours but leave negotiation of real work hours to companies.
- He also argued that low-wage earners not receive certain welfare benefits.
These are all reasonable policies to address the economic malaise of France, but will have zero impact on the loss of jobs and wages for adult workers, and will not fix youth unemployment. They may fix the problems that he can see, but not those actually afflicting the nation.
Instead a real fix can be built around a move to increase the work done by French people, even increasing their hours of work. This cannot be done if France remains disadvantageously linked to the Germany economy via the Euro. It is also will be very difficult to achieve if France continues to have no control over the numbers of new potential workers entering their country.
Emmanuel Macron’s solution is a dud – it is not even a “solution.” It is just a means of putting off the evil day of reckoning. His election will make a bad situation worse, and will hasten-on an even more radical solution. French voters will not tolerate the ineffective policies of the intellectual elite for much longer.
French President, Emmanuel Macron said in a divisive speech at an occasion intended to remember the massive loss of life in World War I, “Patriotism is the exact opposite of nationalism, “Nationalism is a betrayal of patriotism by saying: ‘Our interest first. Who cares about the others?’” Yet Macron is effectively also saying, “Let us look after the winners in France, and let the ordinary workers look after themselves.”
Recalling the forces that led to World War I, Mr. Macron warned that “the old demons” have been resurfacing and declared that “giving into the fascination for withdrawal, isolationism, violence and domination would be a grave error that future generations would very rightly make us responsible for.”
Mr. Trump, who recently declared himself “a nationalist,” appeared grim as he listened to the speech through an earpiece and clapped only tepidly afterward. Certainly, Macron was targetting Trump in this speech, but Trump has is at least trying to advance the cause for sustainable peace with North Korea and Russia, with appropriately measured interventions.
The ceremony led by Mr. Macron encapsulated the tensions in the international arena as Mr. Trump seeks to rewrite the rules that have governed the world in recent decades. He has abandoned international agreements on trade, nuclear proliferation and climate change, and disparaged alliances like NATO and the European Union.
On the campaign trail this fall, Mr. Trump railed against what he called the “rule of corrupt, power-hungry globalists,” as he put it at a rally in Houston. “You know what a globalist is, right? You know what a globalist is? A globalist is a person that wants the globe to do well, frankly, not caring about our country so much. And you know what? We can’t have that.” At the same time he could have phrased this as “globalists don’t care about ordinary workers.”
“I do defend my country,” Mr. Macron said. “I do believe that we have a strong identity. But I’m a strong believer in cooperation between the different peoples, and I’m a strong believer of the fact that this cooperation is good for everybody, where the nationalists are sometimes much more based on a unilateral approach and the law of the strongest, which is not my case.” That’s right, Macron puts the interests of the EU as whole over that of ordinary French people.
Macron is still offering false hope – he has now added to it “fake rhetoric.”