Tag Archives: liberalization

France

How Le Pen might win a runoff against Macron

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Marine Le Pen (right) has worked to detoxify the brand of the Front national, but will it be enough to form a majoritarian coalition in France? (Facebook)

Emmanuel Macron should not be such a difficult candidate to defeat in the French presidential election.

Set aside the weird personality cult that gushes over Macron’s youthful good looks, or the popular movement, En Marche! that shares the candidate’s initials (E.M.) and that translates to ‘Forward!’ — a schlocky political trick for an electorate that prides itself on sophistication.

Set aside that the 39-year-old rising star has never technically won an election to anything in his life.

Set aside the gaffes — going to Algeria and calling French colonization a ‘crime against humanity’ or criticizing the same-sex marriage law that he said ‘humiliated’ traditional Catholic voters.

Set aside the nasty rumors about his personal life or the wife 24 years his senior (and yes, they are out there).

Why Macron is far weaker than polls currently show

Though Macron is in a commanding position with a month to go until voters first go to the polls, he is the product of two of the most elite educational institutions, Sciences Po and the École nationale d’administration, and before entering politics, he was an investment banker at Rothschild. He represents a strain of neoliberal economic policy that commands lower support today than ever — the Atlantic right is moving toward economic nationalism and the Atlantic left is moving to more aggressive taxation and deeper social welfare programs.

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RELATED: After presidency, Macron would face
uphill battle for National Assembly

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Macron, for all intents and purposes, is the avatar of the French political elite, amid a global climate where voters are rejecting elites. That’s even compared to a former prime minister, François Fillon, the center-right candidate of Les Républicains, or to a former education minister Benoît Hamon, the social democratic candidate of the Parti socialiste (PS, Socialist Party).

To steal a phrase from Tyler Cowen, Macron is the ‘complacent class‘ candidate of France’s 2017 election. Continue reading How Le Pen might win a runoff against Macron →

China

China’s stock market crash is a political, not economic, crisis

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shanghai composite

In January 2014, the Shanghai Composite Index was hovering at around 2,000. China Flag Icon

Today, it’s ‘down’ to just above 3,600 and everyone from Beijing to London is gnashing teeth and wrenching hands over the great Chinese stock market crash of 2015.

However, in the light of the massive gains of the past two years, the current bear market seems more like a correction than a crash. You wouldn’t know it, though, from the response of China’s one-party state, which has intervened in just about every way imaginable to prop up the equities market.

Part of the anxiety, both in China and abroad, is due to the country’s role in the global economy — as the era of double-digit annual growth slows to ‘just’ 6% or 7% growth, global demand from the world’s largest economy will invariably slow. That will have a global impact. But no one expected China to grow at spectacularly outsized rates for decades without end, and that alone isn’t necessarily enough to torpedo the US or European economies. The ups and downs of China’s wild stock markets, moreover, aren’t necessarily correlated with long-term economic growth. That doesn’t obviate some of the real harms suffered by largely unsophisticated retail investors who dumped their savings into Chinese stocks during the rally of the past year and a half.

This underlines that the real crisis is political, not economic. Under pressure to ‘do something,’ the Chinese Communist Party (中国共产党) is doing a little of everything — devaluing the yuan, halting new IPOs, prohibiting trading in some of the hardest-hit stocks, buying stock in an attempt to keep prices artificially high, cutting interest rates. Certain institutional investors will not be permitted to trade (i.e. sell) stocks for up to six months.

It’s a panicky response that only further perpetuates the ‘crash’ narrative and further sell-offs. But it’s also the response of a governing regime that knows — and knows that the Chinese people know — there’s no competing political party to blame. Chinese leaders often argue that the one-party system incentivizes long-term policy planning because there’s no short-term gains to be had from elections every two years. But the acute knowledge that the Communist Party owns every policy (and every policy misstep) cuts both ways. The current stock market turbulence shows that Chinese Communists, just like American Republicans or Democrats, aren’t above taking hasty steps to end short-term political pain.  Continue reading China’s stock market crash is a political, not economic, crisis →