Monday, May 07, 2007

Sock it to 'em Sarkozy

Nicolas Sarkozy won a bruising battle over his socialist rival Segolene Royal for the Presidency of France with 53% of the vote to 47%. This was as the polls and the betting parlors were predicting. I will limit my comments on the elections because I have written two previous pieces on the importance of the French elections to the global economy, but I would like to comment on the commentators. The main stream media in the US and abroad is essentially saying that Sarkozy's election does not mean much because the French are the French, and they have it pretty good. Nothing could be farther from the truth. France is bleeding from both ends of the financial spectrum and they know it. There is virtually no hope of landing a meaningful job for young immigrants in the country. They have become a permanent non-working class, and increasingly violent. Yet, their existence is subsidized by the wealthy, where taxes can reach as high as 72% of income. In recent years, the wealthy have been voting with their feet and moving to lower-tax countries. Sarkozy is very direct and he believes he has a mandate to get people off the dole and put them back to work. This will not likely be an easy job in a country that has large segments of the population that are anti-capitalist and rally under the banners of communists, socialists, and, yes, even anarchists. France is a colorful nation in every way, even in it politics. I am more optimistic than many and my reason is this. If the French are anything, they are proud. Indeed, they are the originators of the products that epitomize fine living: perfume, wine, design, architecture, cooking, etc,. Increasingly, these products and services are beyond the budget of the average French citizen, and there is a growing recognition that the bon vivant lifestyle that the French brought to the world is now slipping from their grasp. Sarkozy will have a very difficult time in putting France back to work, but he is said to be a very tough minded person, and I believe he will bring increasingly seen by the French as a man who can help them reclaim their glory. Recently, we bought our first French company, Axa, one of the world's largest insurance companies. We see two or three other French companies that we like, and if we can get them at our price, we will add them as well. Blessings,