populism vs. marine le pen

Saturday, April 22nd, 2017

the allure of populist rhetoric is that populists offer simple solutions to complex problems. it is this type of rhetoric that seperated donald trump from the pack of 16 presidential candidates during the marathon debates that lead up to the US GOP presidential primaries in 2015 and 2016.

populism works well when ideas are asserted with a bit of a wink and a double meaning. then one’s audience member can walk away feeling as if he (and it’s usually a he) knows what the populist really meant. with marine le pen, these sort of double entendres are absent.

le pen and the far right national front party’s support for a frexit is based on le pen’s assertion that “they” (whomever they are) said that brexit would destroy the EU and the UK economy. there are those in the UK that asserted that this could happen and given that the pound is trading at about 1 pound to 1.28 USD and had been hovering around 1 pound to 1.80 USD since probably the late 1990s, it’s  great for exports but not for imports and brits who like to travel. and there has been a tick up in inflation in the UK. and given that the UK is mostly a service-oriented industry and has a slim manufacturing base, it’s not totally clear who a weak pound is really helping in great britain. there’s the famous story of david cameron traveling to china and trying to figure out what the UK actually made that china needed. because china doesn’t really need the UK’s financial services.

getting back to marine le pen. there is no parallel argument between frexit (france leaving the EU) and brexit (the UK leaving the EU) . for one thing, france was a founding member of the EU in 1957, having collaborated (dare we say collaborated) with the germans, luxembourgians, dutch, italians and the belgians to create what was initially called a lot of things, including the common market (prior to being called the european union). france also shares the same currency, the euro, with 19 out of the current 28 EU members, while countries such as the UK, denmark and sweden, do not. the UK joined the EU in the early 1970s prior to margaret thatcher becoming prime minister.

therefore an unraveling of france from the EU would not only be messy, it would throw the entire world into chaos, if not a depression. although joseph stiglitz wrote a nice little screed in 2016 about how to de-couple the euro. he even admited that how messy it might be is a big unknown. but his argument is that it would be better to do this sooner than later otherwise the eurozone countries have doomed themselves to endless decades of slow growth.

but given that emmanuel macron, the centrist candidate from the party en marche! (who, unlike jeb bush is making successful use of an exclamation point) is polling at 25% (up from 22.5% from the beginning of the week) and from the last poll numbers we’ve seen marine le pen is at 21%. we think that jean-luc mélenchon(the eurosceptic and far left candidate) will land in second place. mélenchon has managed to peel some of the national front’s voters away by appealing to youth and workers who support le pen with nonsense like free stuff and wealth redistribution. but we we predict that emmanuel macron and mélenchon will secure a second place slot in the run off. which will create a type of chaos for the CAC, french bonds and the world for the following 2 weeks, if not the next 5 years.

the french presidential election takes place in 2 rounds. in round 1 the french people send the political class and the elites a message. which is why when cnn and hala gorani run around paris trying to determine why there are so many undecided voters, it is because the journalists at cnn (fake news?) don’t understand france’s political system. it’s tough to drop a non-french speaker in the middle of france and sort out its political culture in a weekend. but in the end, the reason why almost 33% of french voters are undecided is because they have not determined which message they would like to send to the political elites. it could be that le pen’s number is too small and that these 33% could decide to thrown their votes behind le pen. that would really be the only way that le pen, like trump, could become the accidential french president.

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