This coming Sunday, April 23rd, the French will vote for the Presidential election. Us Frogs who live in the Americas will vote on Saturday to allow for the time difference.
You might say: “What’s it to me? I ain’t French and I don’t live in France.”
A legitimate point, but wrong. This coming election may have devastating impact on the entire world. Remember Greece? The European Union, the International Monetary Fund and the World Bank have spent the past few years desperately trying to bail Greece out of debt default. Which would have significant consequences on the world economy. Now, Greece’s Gross Domestic Product is – only – 285 billion International Dollars at PPP, Purchasing Power Parity. (“What the heck is that?”) Simple, PPP just takes into account the cost of living in each country. A bowl of rice is cheaper in real Dollar terms in China than in the US, therefore China’s PPP adjusted GDP is higher in purchasing power terms. 10 dollars buy more things in China than in the US.
“So, what’s the cost of rice have to do with Greece or the – bloody – Frogs?”
Well, France’s GDP (PPP) is ten times that of Greece: 2,729 billion International Dollars. A major economic breakdown in France would have ten times the impact of a Greek default. Worse than the last 2008 financial crisis. France still is the world’s ninth economy, see the next graph in billion international Dollars:
See where China is? Number 1 at adjusted purchasing power parity. India is number 3, basically because of its huge population. Indonesia is interesting, at 2,800 billion International Dollars. Remember that Gross Domestic Product is the total sum of what a country produces in a year. The sum of everybody’s work in one particular country.
“Okay. I got it! France?”
This coming week-end, the French will vote for President. Remember Brexit? Remember the orange man who seems to spend more time in Mar-a-lago than on Pennsylvania Avenue? In a world of mounting “folly and ignorance”, the choices for the next French President are near appalling. Allow me to do a very brief review of the 4 main candidates from Far Right to Far Left.
Marine Le Pen, 48. Leader of the National Front – aside from her xenophobic and racist tendencies – proposes once elected, amongst other things, to:
. Exit the European Union and NATO.
. Abandon the Euro and go back to the French Franc (resulting in probable immediate devaluation of 15- 20%).
The French public debt is 96% of GDP. (Source: Tradingeconomics, INSEE) Approximately 2,600 billion Dollars if we use the GDP figure above. French government spending is 57% of GDP. (Source Eurostat) Yes! More than half. In other words, any time 10 bucks are produced in France, 5.70 Dollars go into the government’s pocket. To put things in perspective, if we decided to reimburse our debt in 20 years, at 130 billion dollars a year, that would mean a 9% cut in government spending. Without paying interest. Mrs Le Pen’s plan would be to reimburse the debt in devalued Francs. Not sure our debtors would agree. At the very least, France’s credit rating would drop significantly. Now Marine Le Pen has led the polls for the past 18-24 months. Promise the world for free to electors… (Take people for suckers, it always works)
François Fillon, 63. The conservative candidate is possibly the only candidate with a realistic economic programme, including reduction of government spending (can we keep on living at the world’s expense?), control of public debt, etc. BUT, he is indicted in a sorry affair where he seems to have paid his wife for more than 20 years on public money as a parliamentary assistant – which is legal – doing apparently nothing at a comfortable average monthly salary of 3,500 Euros… For simplicity’s sake, assume 1 Euro = 1 US$. In a country where median monthly salary hovers around 1,783 Euros, and 5 millions are unemployed, Mr Fillon has… shall we say? Lost credibility… Just a tad.
Emmanuel Macron, 39. The youngest of all, Mr Macron has been Secretary of the Economy under Hollande’s Presidency, after a few years as an international banker. He resigned from the government last year to launch an entirely new movement “En marche” (Johny Walker’s “Keep walking”?) Macron’s programme is not quite clear, he seems to aim for a neither left, nor right strategy. Lots of Marketing, but can you please everybody? He speaks English, a good point, not common in France. Seems to be a strong promoter of the European Union – always a sensible thing. He is currently fighting for first place in polls with Marine Le Pen.
Jean-Luc Mélenchon, 65. A former Socialist, supported by the French Communist Party (Yes, France is one of a handful of countries to still have a Communist Party), Mr Mélenchon could be qualified as far left. He supports:
. Leaving the European Union and NATO
. Abolishing free-trade agreements (raising trade and customs barriers which as we all know precipitated the crisis of ’29 into WWII)
. Abandoning the Euro for the Franc, etc.
He also supports massive public investments evaluated by some at 270 billion Euros. 10% of GDP, a trifle, compared to France’s current deficit of 3.5% of GDP. Mr Mélenchon is also a strong admirer of Fidel Castro and Hugo Chavez, and wishes for France to join the Alba, Alianza Bolivariana para América (Bolivarian Alliance for the Americas), which includes Cuba, Nicaragua, Venezuela, Bolivia and Ecuador. As a final note, Mr Mélenchon seems to believe that French public debt can (has to be) renegotiated. As in Argentina? As in default?
Allow me to skip my fellow Breton Benoît Hamon, the Socialist candidate who is sliding in polls, and whose main proposal was to give out a “universal income” to everyone, working or not… It was experimented in England in the 17th century and failed miserably.
The current situation in France is that we have 4 main candidates, a Far Right and a Far Left candidate with strikingly similar programmes of Frexit with likely massive devaluations at hand and possible default on debt, a discredited conservative candidate and a young, centre-left candidate with a programme that is unclear though possibly more realistic than the far right or far left. Here is the latest poll by Opinionway:
I’ve been in Market research most of my professional life. Pollsters are colleagues and we are governed by the same rules: the likely sample sizes they use give them/us a margin of error of plus or minus 3.1%. In other words, according to the results all candidates are in the same bracket. Any two can win the first round. A word about that, French elections are held in two rounds. There are a dozen candidates in this first round. But only the top two are allowed to run for the second round of elections a fortnight after. This ensures the final winner is elected with 50% plus at least one vote. Absolute majority rule.
So, what will it be? In a Macron-Le Pen second round, polls have Macron a clear winner at 64%. Same goes for a Fillon-Le Pen second round with Fillon winning at about 60%. Now what power would an indicted, discredited President have? In a Macron-Fillon second round, Macron would beat Fillon. But what majority would Macron have in Parliament? His movement is – not yet – a party. I have found no other comparisons for the second round. What happens, for instance if the far right and far left candidates face each other in the second round? Le Pen vs. Mélenchon? God forbid.
In recent events, Brexit, the US election last year, polls were unable to predict the result. Not by technical flaws or “lies” by the pollsters, just because today’s elections are too close to predict, because the results fall within the margin of error. Polls can’t help us much anymore.
There is, however, another methodology I have used in the past several years for consulting purposes on brands. And it has worked pretty well for me – and my clients. (Don’t get me wrong, no self-promotion, just to say the method seems to working.) It is based on Google Trends. A tool developed by Google some years ago: Google measures everything you type in Google, every word you search, in every language, in every country. Google counts the number of times a specific word is entered for a search. It can even help as an epidemic detector: before the flu epidemic in 2009, the search for the word “flu” increased dramatically, weeks before WHO realized there was an epidemic.
So, if we apply Google Trends to the candidate names in the past 30 days in France, we have a measure of how many Internet users have sought information on each candidate. That “variable” is called “interest” by Google. The higher the curve, the higher the “interest” (positive or negative) of the Internet users for a specific candidate. Relative interest is scaled to allow for comparison: if candidate A has an interest score of 100, and candidate B has an interest score of 50, that means that twice as many people have Googled A as compared to B. Let us look at the interest scores of the 4 main candidates in France, past 30 days (source: Google Trends):
See the blue line: That’s François Fillon, the conservative candidate. I’ve wondered many times why he hasn’t stepped down. He is after all indicted for… possible misuse of public funds. But the “interest” for him runs high, with a peak on March 23. Could be a consequence of his indictment on March 14. On April 15, the last data I have available, he still ranks second at 38… Though, remember: “interest” can be positive OR negative.
Le Pen, yellow line, though below her poll scores, is still at 20 on April 15th. Now Le Pen’s voters tend to be elderly (50+) and working class, not necessarily Internet prone. Interest for her may be undervalued.
Macron is at 28. Ranking third. Not leading as in the polls…
The great surprise is Mélenchon, the far left candidate, (red line; I didn’t pick the colours, Excell did), with a spectacular rise in “interest” in the past ten days or so, from an interest of 26 on April 6th after the Presidential debate on April 4th, to a high of 70 on April 9th. Mélenchon currently leads interest at 51.
Will we be facing a second round Mélenchon-Fillon? I don’t know. I will be monitoring the curves closely this week. Now, you may think this is a lot of “technical” stuff? Just allow me to share with you the research I just did on last year’s US Presidential election:
This graph covers the last three months of the campaign last year, from August 7th up to November 11, the eve of Election day. The red line represents “interest” for Trump as measured by the volume of Google search of the word “trump”. The blue line is Clinton. Except for September 12 and October 29, “interest” for Trump has been systematically higher, much higher, than for Clinton. Remember who won?
This research, comments and analysis are my sole responsibility, but feel free to share as you wish. I wondered whether I should write this piece in French. But then 90-95% of my dear readers are English-speakers. My – also dear – French readers speak English too. Voilà.
I am conscious that I may lose some friends with this and subsequent posts. ‘Hope not. But if that were the case, sorry, I stand by my words.
*Fair stood the wind for France is a novel by H. E. Bates. Published in 1944, about a British Bomber pilot who crashes in Nazi-occupied France during the war. The darkest hour of France. He is rescued by a French farmer family and obviously falls in love with Françoise, the farmer’s daughter. Françoise is sometimes shortened into “France” as a first name. A double-entendre in the title. That book stood on my parents’ shelves for years (must be in a box somewhere). It was, I repeat, France’s darkest hour. I wonder how the wind will stand for France next Sunday?
To be continued…
Musée Rodin, Paris, 2016.