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The mainstream media will attempt to spin French President Nicholas Sarkozy's loss today to Socialist challenger François Hollande as a rejection of "austerity" policies--and to urge American voters to reject the deficit-cutting politics of the Tea Party when we go to the polls in November. In fact, there are important lessons from France--and they are the precise opposite of what the media is telling us.
First, to call Sarkozy's policies "austerity" is to insult both austerity and socialism. The French government--like other European governments--sought to close its budget gap primarily by raising taxes, not by cutting the size and cost of government. Neither Sarkozy nor Hollande had the courage to confront the basic, failed structure of France's welfare-state economy, which is the fundamental cause of its budget problems.
Insofar as French politicians have relied on tax increases as the key to deficit reduction, that is far closer to the policy of U.S. President Barack Obama and his Democrats than to the approach of the Tea Party and the Republicans. Even so, American media commentators like Joan Walsh and Paul Krugman are blaming Congress and "austerity" for slow economic growth--though federal spending keeps growing.
Sarkozy lost because, like nearly a dozen other European leaders, he lacked the courage to make the harsh but necessary reforms to set France right. The lesson for both Democrats and Republicans in the U.S. is that political cowardice is no longer an option.
Originally posted by silent thunder
The correct road forward is neither more austerity nor socialism. It's certainly not tax increases. I suppose bloated government payrolls could take some trimming but to my mind that's almost a side issue.
The real road forward through this mess is Iceland-style nationalism, i.e., telling the bankers to take a leap off a bridge.
Too bad that option doesn't seem to be on the table anywhere but, well, Iceland.