Economic Impact of Possibility of Francois Hollande Becoming Next President of France

With French President Nicholas Sarkozy coming in a close second to socialist candidate Francois Hollande in France’s first round of Presidential elections questions are being raised as to what the effect will be on financial markets.

On Monday April 23rd the CAC 40 index which contains the stocks of the forty largest French corporations was down close to 2%. The Euro was also down a bit as were French bonds.

However, many analysts attributed at least part of these declines to other bad economic news from other parts of Europe as that continent continue to struggle with ongoing economic problems arising from the decline of the failing welfare state economies, a decline which has been accelerating over the past year.

A couple of other factors to consider include the fact that Hollande will not be the first socialist President in France’s Fifth Republic coupled with the fact that Sarkozy, like other West European leaders claiming to be on the political right, has done little during the past five years to put France on a stronger free market footing.

From as far back as King Louis XIV, French leaders of all political stripes have favored a highly centralized government that has exercised strong control over the economy. So a win by Francois Hollande is liable to result in policies not much different than the present welfare state policies of Sarkozy.

While serious free market reforms would be great for the French economy and the stock market, neither candidate appears to be willing or able to offer this.

As for the third place winner, Marine Le Pen and her Front National party, who, despite her capturing nearly 20% of the vote, offers no promise economically. While labeled right wing, the party and its leader, in the words of Tim Stanley in a piece in the April 24, 2012 edition of The Telegraph, is neither right nor left but simply a hate group.

And, despite her capturing 20% of the vote overall, the bulk of her support came from just one Department, Gard, which was the only Department she placed first in. This is hardly a sign of widespread support for Le Pen and her party.

Overall, regardless who wins the final round, France will continue to stagnate economically until the nation’s politicians are ready to institute some serious free market reforms and replace the failing welfare state.

Fifteenth Anniversary of Opening of First McDonald's in St. Petersburg, Russia

An article from Russia in today’s St. Petersburg Times reminds us that Russia’s second largest city, St. Petersburg, formerly known as Leningrad during the Soviet Era, got its first McDonald’s restaurant fifteen years ago this month.

While common in the United States and much of the rest of the world, the opening of a McDonald’s was a big thing in Russia.

In the eyes of their former Soviet masters, McDonald’s was a sign American decadence and excessive consumerism.

However, following the fall of communism in Russia, the newly freed people flocked to places like McDonald’s to spend their rubles.

The first McDonald’s in Russia opened 20 years ago in Russia and served 35,000 customers THE DAY THEY FIRST OPENED THEIR DOORS! Talk about pent up demand, this type of opening is a capitalist’s dream.

2002 Photo of McDonald's Restaurant in St. Petersburg, Russia
Photo Copyright 2002 by Charles Nugent
When I visited Russia in 2002, six years after the first McDonald’s opened in St. Petersburg, not only did I treat my then fiancee to dinner at one of the local McDonald’s but saw numerous entrepreneurs on the streets selling red tee shirts with McDonald’s famous golden arches superimposed over a bust of Vladimir Lenin and under the words McLenin’s.

McLenin's tee shirt
Flicker Photo by Sjors Provoost
Creative Commons Use Rights
Vladimir Lenin once boasted that the supposed greed of capitalists was such that he would be able to sell capitalists the rope to hang them with.

Instead, following the inevitable fall of communism budding capitalists in Russia mad money selling tee shirts mocking Lenin and applauding the new freedom to eat at the local franchise of the American McDonald's chain.