French voters went to the polls today to winnow a ten-candidate presidential field down to the “right-of-center” incumbent (Nicolas Sarkozy) and his socialist challenger (Francois Hollande).
The two will face each other in a runoff election on May 6. A Sarkozy loss would be the first of an incumbent French president in thirty years. It would threaten the German-French sponsored European Union rescue package. It is no surprise that Germany’s Angela Merkel openly supported Sarkozy’s candidacy.
The French election previews the U.S. November election contest between incumbent Barack Obamaand challenger Mitt Romney in the following four ways:
1). Both Obama and Hollande offer almost identical leftist platforms (details on this below).
2) The bland challengers (Hollande and Romney) ignite electoral passions less than their more colorful opponents (playboy Sarkozy with his celebrity wife and Obama, the first black president).
3) The sorry state of the economy gives both challengers a hefty leg-up.
4) The French and American elections are foreshadowed by electoral disasters for the incumbent party in off-year races in 2010 and 2011. In both, the incumbent party lost long-held majorities in one house of Congress or parliament.
Whereas the outcome of the U.S. election is currently too close to call, opinion polls show the French socialist candidate poised to win in the run off. As the odds tip increasingly in favor of a Hollande victory, the risk premium on French bonds will rise. It is no secret that the investment community views a Hollande victory a threat to France’s solvency. It is too early to count Sarkozy out. The unexpected strong showing of the far right candidate give him reason to hope, for he should attract her voters.
A victory of France’s socialist candidate Hollande will not translate into electoral success for his American soul mate, Obama, for three reasons:
First, Hollande’s socialist platform will not be the factor that pushes him across the winner’s line. Rather Sarkozy bears the intolerable burden of a disastrous economy. In the U.S., incumbent Obama is similarly saddled with blame for the miserable economic performance of the last three years.
Second, the difference in French and American electorates works to Obama’s disadvantage. Whereas Hollande’s socialism appeals to France’s significant left-wing constituency, Obama’s leftist program will turn off American voters, who dislike socialism, no matter how well it is disguised or attention diverted from it by peripheral issues.
Third, Hollande and Obama both appeal to disaffected voters, ethnic minorities, welfare recipients, union members, public employees, and low skilled workers. In France, there may be enough of them. In America, there are probably not enough for an electoral victory.
In a side-by-side comparison, it is difficult to differentiate Obama’s from Hollande’s electoral platform. Specifically, they both favor:
1) Sacrificing debt reduction in favor of stimulus to promote economic recovery.
2) Dealing with deficits through tax increases rather than spending cuts. Both believe the “rich” are under-taxed. Hollande’s tax increases on the rich are higher than Obama’s. Hollande wants a 75 percent rate on those earning over 1 million Euros (about $1.3 million) and 45 percent on those earning over 150,000 Euros ($200,000). Notably, both define the “rich” at similar levels of income ($200,000 -$250,000). Obama might like to “soak the rich” more but knows that Hollande-like rates cannot fly politically in the United States.
3) Eliminating lower tax rates on investment income like capital gains and dividends. Both view lower tax rates for investment and risk taking, not as pro-growth measures, but as allowing the rich to escape paying their “fair share.”
4) Hiring more public workers. Hollande calls for hiring 60,000 more educators, one thousand more police every year, and creating 150,000 state-aided jobs. Obama’s campaign warns against cuts in public service jobs, forced by Republican cutting-to-the-bone budgets.
5) Protecting the welfare state. Hollande proposes to keep the French retirement age at sixty and otherwise make no changes in France’s generous entitlement programs. Obama opposes Republican proposals to rationalize Medicare by turning it into insurance grants. Both fail to explain how they plan to pay for current entitlements other than to suggest taxing the rich.
6) Creating a public infrastructure bank to finance new infrastructure projects from state funds. They both would like to use infrastructure spending as a politically-saleable stimulus program, irrespective of the budget deficits it causes.
7) Fighting discrimination on the basis of sexual orientation, gender, or race. In France’s case, the race to be protected is Muslim minorities, who are French citizens or legal residents. In the US, it is Hispanics, who have entered the country illegally.
8) Cutting taxes on small businesses and provide preferences for businesses that return jobs to the home country. For both, small businesses are good, big businesses are bad.
9) Reducing the use of out-of-favor sources of energy. In France it is nuclear energy; in the US it is coal or, more broadly, carbon-based energy.
10) Campaigning against big finance. In the U.S., it is Wall Street. In France, it is big banks.
11) Cutting executive pay of the greedy captains of industry and finance. Hollande proposes to limit executive pay to twenty times the average wage, which would equal about $400,000 per year. Hollande’s figure is close to the $500,000 executive pay cap that Obama proposed for companies receiving federal assistance.
A Google search confirms that the U.S. media has largely ignored the striking overlap between Democrat Obama’s and Socialist Hollande’s electoral platforms. Today’s New York Times indirectly lets the cat out of the bag.
In its In France, Using Lessons from Obama’s Election Campaign, the Times reveals that Obama loyalists have been working behind the scenes to teach French socialists community-organizer techniques from Obama’s 2008 campaign. They are showing their French socialist counterparts how to turn out left-leaning voters, who are usually disinclined to vote. Actions speak louder than words. Obama’s community organizers understand that the French socialists are their ideological soul mates.
The news blackout on the overlaps between Obama’s and Hollande’s platforms is no mystery. Sixty percent of Americans react negatively to the term “socialism.” The Obama campaign must conceal that it is offering the same electoral program as Europe’s weightiest left-wing party. This insight would raise the uncomfortable issue of Is President Obama Truly a Socialist? Democrat strategists must find diversions, such as the Republican war on women or the personal wealth of Romney, to keep this question out of electoral discourse.
Both Obama and Hollande are socialists of the European reform Marxist variety. In France, the socialist label has a long and proud tradition among intellectuals, union members, and beneficiaries of the welfare state. If Romney succeeds in pinning the socialist label on Obama, Obama’s chances of re-election would be slim.
Paul Roderick Gregory’s latest book, ”Politics, Murder, and Love in Stalin’s Kremlin: The Story of Nikolai Bukharin and Anna Larina, ” can be found at amazon.com.
Paul R. Gregory is a Research Fellow, Hoover Institution Cullen Professor of Economics, University of Houston. Gregory has a regular blog http://blogs.forbes.com/paulroderickgregory/at Forbes.com