Sometimes It’s Better To Be Lucky Than Good, Populist Edition - John Rubino (30/1/2017)

January 30, 2017

In 2015 there was no way the UK would vote to leave the European Union, so Prime Minister David Cameron promised to call a “Brexit” referendum as a cost-free sop to his party’s right wing in the upcoming election. The Conservatives won big, and Cameron kept his promise to run the meaningless referendum. But against all odds and contrary to nearly every election-day poll, Brexit won, flushing Cameron out of politics, pulling the UK out of the EU, and handing a huge victory to a populist coalition led by the UK Independence Pary’s Nigel Farage.

In 2016 comedians and mainstream Democrats encouraged Donald Trump to run for president, convinced he would generate lots of good jokes and possibly damage the field of “legitimate” Republican presidential candidates. He did both, but to a far greater extent than his early boosters anticipated, placing the world’s most important government in the hands of a brand-new populist movement.

Also in 2016, Italian Prime Minister Matteo Renzi convinced the legislature to shift some of its powers to the executive branch. But because he wanted a popular mandate for what might otherwise be perceived as executive overreach, Renzi called a referendum to ratify the changes and promised to quit if it failed. The referendum went down in flames, Renzi did indeed quit, and the populist Five Star Movement now has a real shot at taking power within the year.

These three events all have one thing in common: Catastrophically-overconfident establishments making (in retrospect) suicidal mistakes which opened the door for populist movements that would not otherwise have taken over their respective countries – at least not yet. Their self-inflicted wounds have changed the world.

Now we come to France’s Marine Le Pen, the anti-euro, anti-EU leader of the far-right National Front party. She’s popular, polling first among all presidential candidates heading into upcoming elections. But she’s been given no chance of actually winning the run-off that pits the top two candidates against each other in May. The expectation was that the entire rest of the right-left spectrum would cooperate to elect a mainstream candidate.

That candidate was expected to be François Fillon, a “Thatcherite” conservative who would impose a little free market vigor on the sclerotic French economy without otherwise upsetting the mainstream internationalist applecart.

Then this happened:

François Fillon faces fresh allegations over misuse of public funds

(Guardian) – The rightwing French presidential candidate François Fillon is facing fresh questions over alleged misuse of public funds, in the wake of claims that his wife was paid €500,000 over eight years for a fake job as a parliamentary assistant. The French investigative website Mediapart and the Journal du Dimanche claimed that between 2005 and 2007 Fillon had pocketed money from a kitty of funds earmarked for paying assistants in the French senate.

Mediapart claimed he had “siphoned off” about €25,000 (£21,000) from funds earmarked for assistants in the French upper house.

Last week, state financial prosecutors opened a preliminary investigation into possible misuse of public funds to determine whether Fillon’s wife, Penelope, was paid a very generous salary from public funds for a job she allegedly didn’t carry out. Prosecutors are also investigating whether a high salary paid to her from a magazine owned by a billionaire friend of Fillon amounted to “misuse of company assets”.

The issue is potentially so damaging because Fillon’s austerity plan for France hangs on his own carefully crafted reputation for righteousness. It will be much harder for Fillon to convince a cash-strapped electorate of his controversial plans to slash 500,000 public-sector jobs and make state workers put in more hours for less pay if questions persist about his family’s privileged access to jobs paid for by their taxes.

Now the French election is up for grabs, with the real possibility of a runoff between Le Pen and a leftist who, well, here you go:

Meet the robot-taxing, marijuana-legalizing, Jeremy Corbyn of the French left

(Politico) – French left-wingers are fed up with being in power. That appeared to be the message that 600,000 of them were sending Sunday when they made a little known former education minister the favorite to win the left’s presidential nomination.

Benoît Hamon, who spent the past two years as a Socialist backbencher fighting his own government, has little to no chance of winning the presidency in May. Then again, neither does the runner-up in Sunday’s vote, former Prime Minister Manuel Valls, according to the latest Ipsos poll.

Valls campaigned on a scrupulously realistic, some would say boring, platform of incremental change, always touting the possibility of a left-wing victory in May. By contrast, Hamon never suggested victory and drew accusations that he was deliberately campaigning not to win by pitching far-out ideas like taxing robots, legalizing marijuana and paying all French people a €750 living wage.

The upshot: Le Pen suddenly has a serious chance of running France in 2017 and beyond. The prospect of a Trump/Putin/Le Pen/Farage axis remaking the world is, um, intriguing. And it couldn’t have happened without the Establishment’s wholehearted if unwitting cooperation.

John Rubino runs the popular financial website DollarCollapse.com. He is co-author, with GoldMoney’s James Turk, of The Money Bubble (DollarCollapse Press, 2014) and The Collapse of the Dollar and How to Profit From It (Doubleday, 2007), and author of Clean Money: Picking Winners in the Green-Tech Boom (Wiley, 2008), How to Profit from the Coming Real Estate Bust (Rodale, 2003) and Main Street, Not Wall Street(Morrow, 1998). After earning a Finance MBA from New York University, he spent the 1980s on Wall Street, as a Eurodollar trader, equity analyst and junk bond analyst. During the 1990s he was a featured columnist with TheStreet.com and a frequent contributor to Individual Investor, Online Investor, and Consumers Digest, among many other publications. He currently writes for CFA Magazine.

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