The American Interest
Analysis by Walter Russell Mead & Staff
Bastille Falls; World Stock Markets Next?

Photo via @aynolor.

This photo of a fleet of Ferraris purportedly fleeing to the Swiss border captures the feeling of many rich French people today. The socialist candidate François Hollande has defeated incumbent Nicolas Sarkozy — the first time a socialist has been elected President of France the Mitterand years.

This is a good night to keep tabs on financial markets in Asia and then Europe; as investors digest the news we will see whether a panic breaks out. Hopefully, they won’t. The markets have had a few weeks to accustom themselves to an election outcome that was widely predicted in advance.

Hollande now has a delicate few weeks. French legislative elections are scheduled in June, and Hollande must steer between twin dangers. On the one hand, if it turns out that all his talk about reform and growth was just so much election verbiage and once he’s in office he plans to continue French policy more or less as before, then disillusioned voters could turn on him next month. On the other hand, if he pushes against Germany and the financial markets too forcefully, a crisis of confidence in France and in Europe could develop in the markets. That, also, would not be good for his prospects in the legislature.

Those Ferrari owners may know something; pushing for much higher taxes on high income French people offers Hollande the best chance to throw red meat to his base without spooking international markets.

Published on May 6, 2012 4:00 pm
  • Mark Mazer

    Your picture shows Ferraris.

  • Soul

    They are fine Italian autos – as is often said nicer styling than German cars, yet much less dependable on public road.

  • Hammered at Tosca

    Very sad day for all of us partisans of Carla Bruni…

  • Jacksonian Libertarian

    “Those Ferrari owners may know something; pushing for much higher taxes on high income French people offers Hollande the best chance to throw red meat to his base without spooking international markets.”

    This will not work, the markets know that there isn’t any money there, as this money is as mobile as the Ferrari’s. If Hollande drives the Capital away, then the French economy will lack the funding for growth and its ability to pay off it’s debt comes into doubt. The price of Capital will therefore rise exacerbating all of France’s problems.

    Perhaps Hollande will do for the French what Obama has done for America, and create a fiscally conservative opposition like the TEA Party. LOL, never mind, were talking about the French. LOL

    LOL, French culture spawning a TEA Party, LOL did I have a brain fart or what?

  • AD-RtR/OS!

    “First they came for the Ferraris….”

  • DriveBy

    Heh!

  • Kenny

    Jacksonian Libertarian,

    It is cruel to mock the French.

    They were more or less a decent bunch until WWI. But then, anyone decent in the country was chewed up on the Front so all that was left to repopulate the country was the dregs, whose offspring you see today.

    France can only diminish over time. The only question is at what rate.

  • Cosmacelf

    Do a picture search for that pic and you’ll find it has been around the web for over a year. The tweet is obviously in jest or trying to pull a fast one. The first hint was that all the cars were red!

  • WigWag

    There is something terribly sad that is happening to Europe and the idea of European unity. May 7th is the 188th anniversary of the first performance of what has become Europe’s anthem; Beethoven’s Ninth Symphony.

    It premiered in Vienna on May 7th, 1824 to thunderous reviews with the totally deaf composer attempting to conduct the orchestra. Beethoven conceived the whole symphony, which may be the single greatest musical work ever written, as an homage to Schiller’s controversial poem “An die Freude” which he had read as a teenager.

    I will never forget watching Leonard Bernstein perform the Symphony in Berlin to celebrate the falling of the Berlin Wall. In Bernstein’s rendition, the word “freiheit” (freedom) replaced the word “freude” (joy).

    Europe, after generations of conflict and bloodshed seemed poised for a new beginning.

    Whatever one’s political views, it is just sad to see so little to be joyful about in Europe today.

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  • Rich K

    You could use that photo as the California/Nevada I-10 border as well assuming they are heading east toward Texas.

  • SukieTawdry

    Hollande’s already talking out of both sides of his mouth. He tells the French that his first act will be to call for renegotiation of the EU budget-trimming treaty to allow for government-funded stimulus programs. But he assures the Germans he will not return to Keynesian policies and that his economic reforms will be supply-side. One of his first moves will be to dismantle tax breaks and increase tax rates for the wealthy. What a muddle.

  • Walter Sobchak

    Sunday 10 pm EST. Monday 10 am Tokyo time:

    Nikkei -2.46%
    TOPIX -2.40%
    Hang Seng -2.32%

  • Chris

    There is a Tea Party-like movement in France in the form of the Alternative Liberale party. One notable member is Sabine Herold who campaigned for civil service reforms several years ago. I don’t think she or her party have gained much traction with voters. The French seem hopelessly enamored with big government and bureaucracy.

  • Kathy Carlson

    France I cheer on your idiotic choice to show us all how dehumaning, infantilizing, and crushing of the human spirit socialism is so we can learn from your mistakes. Your choice of serfdom will provide us the evidence to prove that Progressives are nothing more than wannabe masters of government plantations.

  • thibaud

    I would love to be on the opposite side of the trade from most of the posters on this thread.

  • Ann

    “This will not work, the markets know that there isn’t any money there, as this money is as mobile as the Ferrari’s. If Hollande drives the Capital away, then the French economy will lack the funding for growth and its ability to pay off it’s debt comes into doubt. The price of Capital will therefore rise exacerbating all of France’s problems.”

    At least you can leave France. Try leaving the USA with assets over $600,000

  • EvilBuzzard

    So austerity tasted too much like undercooked brocoli? I wish Louis XV all the best? Appre moi le deluge!