Comparing Obama's Policies with French Socialist Hollande
Some people get a little testy when someone accuses President Obama of being a socialist. I have no idea whether he is, however, I do know that the president-elect of France, François Hollande, is a socialist, and proud of it. And now that Hollande will be the president of France, it seemed like a worthwhile exercise to compare what both candidates claim they will do if elected (or reelected in Obama’s case).
Reject austerity and embrace “growth.” The first thing Hollande stresses is that he will end the current austerity efforts imposed by outgoing President Nicolas Sarkozy and the European Union. However, as Mercatus Center (George Mason University) economist Veronique de Rugy has pointed out, France hasn’t cut spending — at all. French government spending has grown every year from 2002 (€816 billion) to 2011 (€1.1 trillion). To paraphrase Shakespeare, austerity should be made of sterner stuff.
That’s important because Obama has accused House Budget Committee Chairman Paul Ryan (R-Wis.) and his House-passed budget of “social Darwinism,” apparently meaning it is so austere that it would leave millions of helpless Americans to fend for themselves — or what we used to call taking “personal responsibility.” In fact, government spending under Ryan’s budget grows every year — just not enough for the White House.
Hollande promises not only to end the austerity but to embrace growth. But again, it’s all in the definition. Hollande’s “growth” is Euro-speak (or Obama-speak) for increased government spending and hiring more government employees — what leftists consider “real jobs.” He wants €20 billion in new spending over five years. He also proposes hiring 60,000 new teachers, 1,000 police a year, and addresses youth unemployment by creating 150,000 state-aided jobs.
It’s the kind of proposal that gets a big “amen” from Team Obama. He passed several stimulus packages, though the economy didn’t care, and would goose federal spending again if he could get it through Congress. He claims he saved 400,000 teachers’ jobs, and his campaign website says he wants to put construction workers back to work — though maybe next time he will try harder to find some “shovel ready” projects.
Raise taxes on the rich: Both candidates claim they can make the rich pay for their brand of economic growth. [Note to the non-economists and Paul Krugman: You don’t need government to pay for real economic growth because the private sector does all the spending.]
While Obama has proposed lots of new taxes for families making more than $250,000 a year, he seems to be coalescing around two or three major ideas:
Higher rates — the top two income tax rates of 33 percent and 35 percent would revert to pre-2001 levels of 36 percent and 39.6 percent — and limiting certain itemized deductions.
The “Buffett Rule,” which would require those with incomes of $1 million or more to pay a 30 percent tax on their income.
Hollande also proposes a two-tiered tax bump. He wants to impose a 45 percent tax on incomes over €150,000 — up from 41 percent — and a whopping 75 percent tax on incomes above €1 million.
Raise the dividends tax: In his 2013 budget, Obama proposed raising the dividend tax rate from 15 percent to the highest personal income tax rate, 39.6 percent next year. Add in those phased-out deductions mentioned above and the 3.8 percent investment tax surcharge, and you have a tax rate of nearly 45 percent — right up there with socialist Hollande.
Hollande has also proposed increasing the dividends tax, reversing tax breaks for the rich and introducing new taxes, all of which he thinks will bring in an extra €29 billion.
Crack down on the financial and oil industries: President Obama can hardly give a speech without bashing the oil industry. He keeps misleading — that’s the nicest word I can use here — the public by asserting that the oil industry gets special tax breaks that he wants to eliminate. However, while the oil and gas industry does get some tax breaks, those breaks are available to all companies engaged in certain manufacturing efforts.
Of course, Obama has already pushed through the Dodd-Frank financial reform bill, and made a lot of headlines attacking the “fat cats” on Wall Street.
Hollande has his own version of financial reform in the works. He wants to separate retail and investment banking, and he wants a financial transactions tax.
Promote renewable energy projects: Both Obama and Hollande want to prime the green energy pump with taxpayer dollars. France has been one of the leaders in clean nuclear energy, but Hollande prefers clean energy ideas that don’t work. He wants to reduce nuclear from 75 percent to 50 percent of France’s energy and replace it with other green energy sources.
Of course, Obama has a four-year head start on Hollande that has cost U.S. taxpayers billions of dollars — and the president isn’t done yet. As ABC reports, Citizens Against Government Waste says that there are about 20 green companies with federal grants or loan guarantees that could be in financial trouble. But the president is campaigning on funding even more green jobs. How do you say “Solyndra” in French?
Increase public subsidies to small businesses: President Obama has already tried to buy small business votes by providing a tax credit to offset the cost of health insurance. Only problem is that very few businesses took advantage of the money. Now he wants to pass a tax credit that will offset new hires.
Hollande wants to create a public investment bank to help small companies and home grown industries, funneling money to those companies that are least able to survive on their own — or what economists call subsidizing inefficiency.
There are many more areas of similarity, but you get the point. Obama economic policies are almost identical to those of the French socialist François Hollande. Those policies haven’t worked in Greece or in any other place where they’ve been tried — like the U.S. And they won’t work in France.
Refusing to learn from economic history, Hollande’s policies will fail. Then he can take another queue from Obama — he can just blame his predecessor, Nicolas Sarkozy … or was it George Bush?