Hollande Channels Pétain and Chooses Economic and Political Suicide

In a prior column I described how the finance ministers of Italy and Serbia committed financial malpractice and betrayed their nations and their heads of state by insisting on bleeding the economy through austerity to make it healthy.  “Two EU Finance Ministers Throw their Bosses and Nations Under the Bus.”

In France, however, Economy Minister Arnaud Montebourg risked his political life to try to prevent President Hollande from throwing France and the Socialist Party under the austerity bus.  Hollande and Prime Minister Valls proved that no good deed goes unpunished by forcing Montebourg out of his position and throwing the Nation and their Party under the bus.  Montebourg proved the truth of the proverb that warns that it is dangerous to be correct when those in power are desperately wrong.

Hollande announced plans to move the government to Vichy.  French technicians are working feverishly to upgrade the old telegraph lines to high speed fiber optics so that Hollande can download more quickly Berlin’s voluminous diktats.  Merkel’s missives must always be complied with sofort!

Montebourg’s explanation that austerity was a self-destructive response to inadequate demand was anathema to Hollande.  Hollande recently made clear his support for austerity.

“Last week, Mr. Hollande acknowledged the problems his government faced, saying in an interview with Le Monde that austerity policies the country had been compelled to follow to meet the eurozone’s budget deficit target had made it near impossible to achieve a recovery after six months of zero growth and more than a year of weak economic activity.”

Oh, sorry, I must have been quoting Montebourg.  Nope, I checked and the article was paraphrasing Hollande only one week ago.  So, Hollande fired Montebourg for agreeing with Hollande that austerity made growth “near impossible” – and urging that France not engage in self-mutilation by inflicting austerity that made growth “near impossible.”

If the insanity of Hollande’s firing a top minister for the high crime of agreeing with Hollande tickles your fancy you’ll love the (unintentionally) hilarious response to Montebourg’s integrity and competence by Rob Wile in Business Insider’s column. Wile claimed that Paul Krugman “deserves some of the blame” for Hollande and Valls’ betrayal of the Nation and their Party.

Wile asserts that Krugman deserves “blame” because he has pointed out in his columns that austerity at a time of deeply inadequate demand is self-destructive.  Krugman deserves this “blame” because Montebourg found Krugman’s analysis of austerity convincing and quoted him.  One searches in vain in Wile’s column for even the weakest effort at explaining why two “rights” (Krugman’s analysis and Montebourg’s accurate citation of that analysis) equal a “wrong” such that Krugman “deserves … blame.”  The fact that Hollande agrees with Krugman and Montebourg’s criticisms of austerity makes Wile’s use of the word “blame” fall down funny.

Montebourg explained that he criticized the troika’s economic illiteracy of responding to the Great Recession with austerity and causing a gratuitous second recession (and a gratuitous third recession in Italy) in order to stop the EU’s “descent into hell.”

The EU troika consists of the International Monetary Fund (IMF), the European Central Bank (ECB), and the European Commission.  The reality is that each is dominated by Germany.  The truly scary thing for anyone who knows the history of the IMF is that is the least economically illiterate member of the troika.  Of course, that makes the IMF more culpable because it knows that what it is forcing on Europe constitutes financial malpractice equivalent to a doctor bleeding a patient.

“Crossing a yellow line”

Valls and Hollande, however, are determined that France and their Party commit economic and political suicide.  From an American perspective, the words Valls chose to explain his demand that Montebourg be fired for the high crime of being right and showing integrity were wondrously (albeit unintentionally) apt.  Valls accused Montebourg of crossing “a yellow line” by explaining that Hollande was correct to blame austerity for France’s economic stagnation.

So true – the “yellow line” that Montebourg crossed was the wide streak of yellow down the backs of Valls and Hollande.  They have proven their moral cowardice by surrendering to policies they know to be self-destructive and refusing to say “Non!” to Merkel.  That “yellow line” of cowardice explains why Hollande has the lowest approval rating in France in a half century and Valls is viewed with near universal contempt.

About William K. Black 25 Articles

Affiliation: University of Missouri, Kansas City

William K. Black, J.D., Ph.D. is Associate Professor of Law and Economics at the University of Missouri-Kansas City.

Professor Black was the Executive Director of the Institute for Fraud Prevention, Litigation Director of the Federal Home Loan Bank Board, General Counsel of the Federal Home Loan Bank of San Francisco, and Senior Deputy Chief Counsel of the Office of Thrift Supervision.

His expertise is in: banking law, fraud detection and prevention, and the regulation and supervision of financial institutions.

Professor Black earned a PhD at University of California at Irvine and a J.D. at University of Michigan Law School.

Visit: UMKC

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