Monday, May 8, 2017

The five biggest promises: Macron's presidency

  • Committed to Europe
  • Reduce Payroll taxes
  • Liberate the economy
  • Better Education
  • Securing Europe's borders 

Committed European: I am not certain these are Macron's biggest promises but they do represent substantial "challenges". On the bright side, the first one is the easiest because Macron doesn't have to do anything.  LePen's cue was that her party was anti-Europe, mainly to stop the flow of immigrants -- (et tu Theresa May?).  But again this one means that France, its institutions, remain committed to the ideal of Europe.

Reduce Payroll Taxes:  The issue of taxation is a serious one in France, but also Germany where marginal tax rates are high, much higher than anywhere in North America -- but not only are taxes high, the government deficit is also very high.  While reducing payroll taxes will make employing additional workers, I suggest that changing work rules (such as 35 hour work week) and other shift (very very difficult) are necessary.  Maybe Macron will have more luck, but the French system is in need of major overhaul!  This is very difficult to accomplish when there is a perception that you've been lied to about the benefits of globalization for your entire life!  So reducing payroll taxes is simple -- my guess is an executive decree, but reforming the entire is a different story.  However, its important to note that the relation between level of taxation and economic growth is tenuous at best (yeah a know -- its sounds counter intuitive, but the causal relation between taxation level and economic drive is simply not there -- despite what American Republicans preach)

Liberate the Economy:  That's the big one.  On one side there is a lot to be said for the 35 hours work week, especially if that comes with additional working flexibility -- but in fact this was not the case!  However, the problem is not French, its European, and has been for a long time.  A few weeks ago a study showed that Mexican worked an average of 2,200 per annum (6 days a week) and that France, at 1,400 was the second lowest, the lowest?  Germany at 1,300, and yet Germany doesn't have a 35 hour work week -- how is this?   Germans work less than French, and yet are more productive -- there can only one answer -- productivity, more capital is being used per worker, and those workers are better able to adapt to changes...this makes "Liberating" France's economy a massive challenge.

Education Reform:  I've not followed that issue at all in France, and I have zero idea how good/bad French education is in reality, I seem to remember that France's PISA scores are acceptable -- above the OECD average -- lower than Germany but still close overall.  However, the issue here is attacking one of France's most powerful lobby/union.

However, the elephant in the room here is legislative success.  A year ago, Macron's party didn't exist.  There are rumors that he's the re-invention of the socialist party (maybe , but lots of his proposed changes are more center right), but it remains that without allies in the chamber of deputy Macron's agenda will stall.

Legislative success:  Macron's first challenge is that he has, effectively, no political party!  He is a one man show, and in fact LePen only has one deputy, and I don't think she has a single Senator (their election is complex -- an not via universal suffrage).  How do you govern if you have no troops that can be corralled into implementing your legislative projects.

  1. build a party and getting deputies elected:  In June 2017, the "legislative elections" take place, and it will be Macron's chance to start getting things done.  The right and the left are sure to battle to retain power -- the left for the "acquis" and the right to change the system so that it has a chance to work.
  2. Built a real cabinet of powerful secretaries with both clear mandate and a real drive to affect change.  You may not agree with Trump's agenda -- but the secretaries he nominated believe in their reform agenda...
  3. Create a real political platform that has can convert a successful presidential run with potential legislative success. 
The delay between the legislative elections and the start of Macron's presidential term are not a real problem, his first task, building a strong cabinet -- will be supported by strong ideals -- converting his electoral platform into a governing agenda.  


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