Growth beats austerity. “Austerity isn’t inevitable. My mission now is to give European construction a growth dimension,” Mr. Hollandesaid on election night. As other commentators have observed, the definition of austerity in Europe has become somewhat muddled. It has been taken to mean everything from an increase in the income tax rate to 50% (the not-so-genius idea of Britain’s Conservative Party prime minister, David Cameron) to genuinely needed trims in benefits for public employees and welfare beneficiaries. But the lesson for American politicians is nonetheless clear. Voters need to be able to hear a message about economic growth, not only about pain and burden-sharing and budget-cutting and entitlement reform.
You can’t tax and spend and divide your way to growth. Monday’s slump in French stock prices, rise in French bond yields, and drop in the Euro as measured against the dollar are all signs that the market has no confidence in either Mr. Hollande’s proposals or his tone. The proposals — hire 60,000 more government-employed teachers, raise taxes to 75% on anyone earning more than 1 million Euros a year, or about $1.3 million — amount to taxing and spending. They stem from an ideology that, for all the hopeful chatter in the press about Mr. Hollande’s supposed moderation, is a career politician’s hostility to private sector success. Frédéric Filloux wrote, “the new president claimed ‘[he] doesn’t like rich people’ (a few years ago, he assigned a threshold of wealth to the equivalent of $60,000 a year).” Good luck constructing a “growth dimension” with that attitude.
Voters punish conservatives who don’t deliver. As the Wall Street Journal put it in an editorial, “Mr. Sarkozy and his government responded by raising sales and capital-gains taxes, demonizing successful French businessmen, complaining that Germans work too hard, urging an international financial-transactions tax and trying to pin much of the blame for economic troubles on immigrants.” Bloomberg Businessweek reports on a survey it said “showed that 73 percent of Hollande voters supported him because they wanted to punish Sarkozy. Only 44 percent said they agreed with the Socialist candidate’s ideas.” George H.W. Bush must be hoping that Sarkozy replaces him as every conservative columnist’s go-to example of a tax-raising, election-losing, supposedly right-of-center politician.
America’s influence is diminished. There was a moment, not all that long ago, when a Europe facing a financial crisis would look to America for leadership, or even a rescue. For better or worse, those days are past, as America’s own resources are sufficiently stretched or depleted that any serious effort by America to assist — not to bail out, but to assist — Europe would face formidable practical and political hurdles.
Europe affects us. Any American celebrating Europe’s woes on the grounds that it makes it less likely that that continent would emerge as a global rival to America is misguided. A Europe mired in socialism is likely to be a less healthy market for American exports, and a weak Europe drags down everything from America’s tourist economy to America’s retirement savings accounts. It’s an interconnected global economy we are part of, not a zero-sum competition. A lot of Americans are now employed by European companies, or by American companies that sell things to European consumers.
Culture and nationhood matter. For all the talk of how interconnected the global economy is and how the world is “flat,” France is still France, not some generic “Europe” or the West. For all the talk from Mitt Romney about how President Obama wants to turn America into a European-style social welfare state, America would never elect a self-proclaimed socialist who wants to increase taxes on the “rich” to 75% and who left the mother of his four children to go live with a twice-divorced journalist ten years his junior.