The French, in their ‘collective’ wisdom, have elected a Socialist President who wants the wealthy taxed at 75%; one must assume this is the French version of President Obama’s ‘fair share’. His enemy is not political parties says he, his enemy is the ‘world of finance’; hmmm, that sounds familiar as well.
Not to worry Monsieur, the ‘world of finance’ will give up in short order and you can declare victory. Wealthy French and French investors have been burning up bandwidth for a month as they faced the likelihood of President Francois Hollande. They are looking for shelter from the onset of the Socialist storm according to the ‘world of finance’ in Britain as high priced assets get loving French attention. One would expect that the monetary outflow from France will be significant and light on its feet. Along with capital flight, jobs and liquidity will also queue up on the financial runway out of France. Hey, is that Euro thing still looking good?
France can forget rational ‘austerity’ or putting their financial house in order; viva La Socialist Internationale. Everyone gets to keep their goodies………………for now.
Germany must be thrilled; having hung themselves out there to stabilize the European financial situation the French President Elect wants more…………more, more, more. Germany has issued their answer; nein! The ideas that underly the financial success of Germany, growth and job creation appear incapable of crossing the Maginot Line. The new French Presidents believes in……..wait for it……..tax and spend.
France despite its long history apparently does not possess an equivalent scope of memory. Prior to Prime Minster Thatcher, Britain had a top tax rate of 90% and was in a severe and long suffered hard recession. That tax rate was why America was filled with British Millionaire Rock Stars. The significant reduction in tax rates was a key factor in fueling British economic recovery, as it was here under Presidents Kennedy, Reagan and Bush.
This could be good for us, an object lesson in living color. We get to watch what happens when Socialist principles prevail. We get to watch as France avoids inevitable decisions. We get to see where the money goes. We may, as well, see how quickly the E.U. begins to come apart as the financial version of the Maginot Line!