The presidential victory of socialist Francois Hollande in France is being presented everywhere as a vote for “growth” over stagnation:
[Irish Foreign Minister] Eamon Gilmore last night said the election of Francois Hollande will “accelerate” a growth agenda in Europe.
And:
Mr. Hollande has said that he intends to give “a new direction to Europe,” demanding that a European Union treaty limiting debt be expanded to include measures to produce economic growth.
What a brilliant act of branding. Implication: Those who believe in reining in government debt and spending are “anti-growth.” Those who believe that the private economy and the free market are the only true sources of economic growth are “anti-growth.”
The pro-big government stimulus spenders have managed to turn a disagreement over means into a division over ends. Obviously, there is a lot more work to be done in explaining how an economy works. The fact that Germany’s is practically the only non-moribund economy in Europe should in theory help make the case for government discipline, but the false promise of the big government Ponzi scheme is apparently too seductive.
It is indeed interesting that they are using the language of growth and fiscal responsibility.
I guess that means, “we” won the debate.
The fact that they are dedicating themselves to enacting policies that will almost certainly achieve the opposite is just an annoying little technicality.
Couldn’t one argue that using Germany as an example of fiscal discipline confuses cause and effect?
That is to say, Germany has less debt than other countries precisely because it never had a sharp recession that reduced government revenue. Thus, the success of the German economy shows NOT that fiscal austerity works but that avoiding a speculative bubble/bust means they never had a real recession in the first place, thus making destructive austerity measures unnecessary.
The Dow’s down 162 as I write. The CAC, FTSE, and DAX are also down big. The French and the Greeks have said “no” to austerity. Expect Obama to make another speech shortly.