Both Paris and Buenos Aires boast magnificent boulevards, beloved of tourists who enjoy looking at nations whose best days are (sadly) long since past. Watching any nation in long-term decline is always a painful experience. During the 20th century, Argentina blazed a trail from emerging market to become the world’s 10th-largest economy before the Great Depression began a process to send Argentina back to the emerging market leagues. The ‘Argentine Paradox’ remains a tale of hubris and poor government leading to the current tragicomic Evita President Cristina Kirchner, who now presides over (mis)managed decline of lost opportunity. Kirchner’s role has merely been as a footnote to the ongoing 75-year economic malaise. Across the Atlantic, the breathtakingly incapable President Hollande is similarly a bit part player. His failure to modernize France is only the latest chapter in 40 years of consistent budget deficits as Paris has become less relevant to business. The 5th Republic has barely begun to fall but the trajectory appears tragically defined. Unemployment is stubbornly high, above 10 percent. with Hollande delivering record increases as his misguided socialist policies have backfired spectacularly. True it remains below the eurozone’s disgraceful 12 percent average, but France is double the rate of Germany. Paris must now pay for decades expounding the Shangri-La journey of ‘third way’ economics. That path involved taxing with gusto, if not venom, and spending with even greater largesse. The end result has left French mired in stagnation, unable to grow post-recession.
Posted on: Thu, 10 Jul 2014 12:45:53 +0000