Friday, October 24, 2008

Populism as problem solving, cont.

This will be an open-ended string of posts. Again, expect all countries to re-trench and revisit old populist and mercantilist arguments to placate a populace faced with the decrease of wealth in nominal and real terms.

The French Version:

By James G. Neuger

Oct. 24 (Bloomberg) -- Since the era of Charles de Gaulle, France has rebelled against the American-style capitalism that put a ``Made in U.S.A.'' stamp on the world economy.

Now, as convulsions on Wall Street shake the global financial system, French President Nicolas Sarkozy is seizing the opportunity to remake the free-enterprise model along more state-managed Gaullist lines.

Emboldened by the U.S. pursuit of a European-style bailout, Sarkozy has packed his wish list for an upcoming international summit with calls for everything from stiffer bank supervision and limits on executive pay to state aid for hand-picked industries. While the moment is in his favor, history is working against him: throughout the postwar era, French attempts to subdue globalization and come up with an exportable economic model have misfired.

``There will be so much opposition against this grand idea of putting in more state control,'' says Paul de Grauwe, a professor at the Catholic University of Leuven in Belgium. Sarkozy is chasing ``a kind of French favorite dream that others do not perceive to be really necessary.''

As the financial crisis spiraled in early October, Sarkozy made a pilgrimage to De Gaulle's onetime country hideaway in eastern France, dedicating a memorial in the shadow of a double- barred Cross of Lorraine honoring the Free French in World War II. A prickly ally during the war, De Gaulle made a postwar reputation for defying the U.S.

`Mysterious Force'

``Gaullism is the spirit of rupture,'' Sarkozy said at the Oct. 11 ceremony attended by German Chancellor Angela Merkel. The general's legacy is a ``mysterious force,'' he said. It breaks with ``habits, routines, conventions,'' demanding ``exertion by all so that France may regain its rank among nations.''

The nominally pro-American Sarkozy, who ran as a pro- business candidate last year against Socialist Segolene Royal, is taking his crusade for a ``re-founding of global capitalism'' to Beijing today, when European leaders meet with the heads of 16 Asian countries including China, India and Japan. His next chance comes at the first in a series of global summits addressing financial markets slated for Nov. 15 in the Washington area.

``Nothing in the global economy will be the same as before,'' Sarkozy said yesterday in Annecy, France, as he announced plans to create a sovereign wealth fund to invest in French companies, protecting them from foreign ``predators'' after the global stock-market rout.

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