Monday, December 10, 2018

France President Emmanuel Macron Fails the Leadership Test

The qualities of a great leader are not well defined. Several studies have attempted to assess successful leadership. Factors often include communication, empathy, strength, passion, inspiration, integrity, transparency, focus, trust, calmness. Examples could include Winston Churchill who stiffened the British people during the depths of 1940-41, and Mayor Rudy Giuliani who projected clam immediately after 9/11 even if he could not provide immediate answers. FDR reassured the American people in his 1933 inauguration speech, President Kennedy with the soaring rhetoric in his inauguration speech, and Dr. Martin Luther King, Jr. in many of his speeches. Some speakers project charisma, but many leaders simply project steady calmness in the eye of a storm. Whatever it is, British Prime Minister Teresa May lacks it with Brexit in England. She entered into negotiations in secret without conviction and from a position of weakness. The EU negotiators quickly sized her up. France President Emmanuel Macron has now failed the leadership test. Charisma is not filling the leadership gap. His popularity with the French people has slipped to 23%, half that of President Trump. So much for empathy! The French economy is so riddled with statutes and bureaucratic regulations that it is sclerotic. Economy growth is slow. Inequality if rising. The past two presidents of France, Francois Hollande and Nicolas Sarkozy, failed to reform the economy. The French voters said a plague on both houses, the left and the right, the socialists and the conservatives. The young, charismatic Emmanuel Macron entered the race for France’s presidency like a breath of fresh air in 2017. He won a landslide election with 66.1% of the vote. The once socialist ran as a centrist liberal with a new political party, the En marche. He won a mandate to reform the economy and remove the shackles of the over-taxed, over-regulated economy. France is the most heavily taxed nation in the developed world. The effective tax rate is 46.2% of GDP, close to twice that of United States’ 27.2%. He’s made some steps along the way France had a wealth tax intended redistribute the wealth. It raised only €5 billion, but sent capital out of the country. He limited it to only real estate. He made it easier for employers to hire and fire workers. Taxes on business and capital were cut. Tax breaks were enacted for the lower and middle classes. So far, so good, but then he got diverted by the Paris Accords and climate change. He imposed a substantial increase in the gas tax, he said, to discourage the use of fossil fuels and fund alternative energy. The residents of Paris can rely on mass transit, but rural residents, small business, farmers, truckers, the middle class, lower income citizens, and assorted souls rely on gas and diesel fuel. This tax was the tax increase that finally awoke the French. He had earlier increased the social security tax. The President’s initial response to the complaints was not Marie Antoinette’s “Let Them Eat Cake,” but an updated “Let them Carpool.” His response was poorly received in a country with a history of revolution, street violence, and bloody riots. Other statements in the past include telling a jobless man to just cross the street. He told retirees with small pensions to stop complaining. Leaders can’t be tone deaf. The people have risen in protest over the past four weeks, protests turning to riots and damaging the Arc de Triomphe. One of the restrictions in French law is that French drivers must have florescent yellow vests in their vehicles for safety reasons in case of an emergency. Many of the protestors are wearing their yellow vests, thus giving rise to the “Yellow Vests” Movement. The original protests were spontaneous, generated by social media. Extremists, often violent, have joined, and perhaps corrupted, the movement. Unions are now demanding the repeal of his limited reforms. The French economy is taking a hit; tourism is down; restaurants are hurting. The charismatic President Macron’s tax increases exhibited a failure in leadership. Leaders need to communicate their reasons and enlighten their followers. He said it was to fight climate change; that was the end of the matter. His campaign did not mention (fuel) tax increases. Thus, it was a surprise to the 70% of adults drive to work in France. It seemed like yet another tax increase on the French. Not to those affected by the increases. These are the people who voted for Brexit in the United Kingdom, Donald Trump in the United States, and the new conservative government in Italy. These are Hillary Clinton’s “deplorables.” These are the people ignored and shunted aside in the global economy by the global elites and political classes. His leadership mistake was to stake his government on a global issue at an immediate cost to his citizens. The French people were not told why they would have to sacrifice for climate change. Leaders can lead their people, but not too far ahead and after educating them. The Paris Accords are very weak, and as the New York Times reported Saturday not being met. China and India don’t have to comply for several years. His attitude in office is one of aloofness. He is an elitist who knows what’s best. He had not been seen or heard from in recent days until earlier today. So much for communication! He addressed the French people, but it was a pre-recorded speech. It lacked the power of a live broadcast. It was as if his heart and soul were not in his concessions. He said “I might have hurt people with my words” as he also said “I take my share of responsibility.” Stepping up with a pre-recorded message is not stepping up. He may smooth the waters, but he lost what the Chinese call the “Mandate of Heaven” to govern. He failed the leadership test. He promised to raise the minimum wage by 7% and abolish taxes on overtime. He will also scrape the proposed tax hike on pensioners. The new fuel tax is history – at least for now. He old socialism came through. He asked employers to give their employees an end of year bonus.

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