France's Déjà Vu: We've Seen This Economic Disaster Before

Why the unemployment, racist rhetoric, and disenchanted public Hollande currently faces is reminiscent of 1938.

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France's President Francois Hollande studies his notes before appearing on France 2 television prime time news broadcast for an interview at their studios in Paris, on March 28, 2013. (Reuters)

Ten months ago, the Socialist government of François Hollande swept into office on the promise "Le changement, c'est maintenant" (Change is now). Given this week's opinion polls, however, the only change French voters now wish to see is Hollande and Co. swept back out of office. According to the weekly magazine Le Nouvel Observateur, just 27 percent of respondents are "satisfied" with the president's performance. Never has public confidence in the president of the French Fifth Republic fallen so far, so fast. For even the most blasé of observers, it is shocking that Hollande beats the political figure the French love to hate, Nicolas Sarkozy, in this race to the bottom: the former president hovered at a 40 percent approval rating at the same point in his term of office.

Hollande's reputation, along with his government's, is unraveling on the 75th anniversary of an earlier great Socialist unraveling in France, the Popular Front. What's more, the political, economic and social contexts between early 1938, when this first Socialist exercise in power collapsed, and now are remarkably similar. So similar that one can imagine Hollande in the role of Bill Murray in "Groundhog Day," waking up to find that today is yesterday. The question is whether he will manage to shift both his government and country into tomorrow.

The Popular Front, a coalition of the Socialist, Communist and liberal Radical parties under the leadership of Léon Blum, was heaved into office in June 1936 on a vast swell of hope that they would pull France from its dire economic situation. According to official sources, the unemployment rate in 1936 was 10.8 percent. Given the French government's narrow definition of "unemployment," however, the reality was far grimmer: as many as one out of five workers were, in fact, out of work. Moreover, French heavy industry was increasingly falling behind its competitors -- in particular, Nazi Germany. France's GDP trailed other west European countries and were it not for tourism, its balance of trade would have spun out of control. Yet, at the same time, Blum's government shunned the very idea of deficit spending. Instead, they reduced the workweek from 48 to 40 hours and raised workers' wages -- all long overdue, but catastrophically timed reforms.

From the Great Depression, France now finds itself mired in the Great Recession. This week the French government acknowledged that more than three million men and women are now out of work -- a number that all parties agree is heavy with symbolism. Should the trend continue -- unemployment has hemorrhaged without stop for 22 straight months -- France will soon break the record of 10.8 percent. (Here, too, the reality is much darker: unemployment among those between 18-25 is two to three times greater, while long-term unemployment grows wider and deeper.) One of the few sectors where jobs are being created is Pôle Emploi, the government agency tasked with supporting and advising the unemployed.

Last year's wave of optimism was slowed by the sand bars of unemployment, and then shattered against the great seawall of EU fiscal austerity. As Germany looked on sternly, Hollande's government scrambled madly at year's end to make good its vow to reduce the national deficit to 3 percent of the GDP. Sans succès. With a stalled economy -- zero growth is predicted for 2013 -- the government lost both the tax revenues of its earlier projections, but also the financial oil to prime the domestic pump. It hardly helped the government's effort to justify its austerity measures when the budget minister, Jérôme Cahuzac, resigned last week after being formally charged with keeping an illegal bank account in Switzerland.

All of this is the perennial grist for the maws of populism. The Popular Front was born under the shadow of extreme right movements bent on overthrowing the Republic. Like the Croix de feu (Fiery Cross), which claimed nearly a million members in 1938, these movements trumpeted nationalist and authoritarian solutions to France's predicament. Xenophobic and anti-Semitic elements to their worldview were especially prominent. The Jew, irredeemably cosmopolitan and rootless, not only directed the forces of communism, but also controlled the vaults of capitalism.

Two republics later, the extreme right, now represented by the Front National, still threatens, but not because it is massing in the streets. Instead, it is mobilizing a growing base of voters. Having won nearly 20 percent of the vote in last year's presidential election, Marine Le Pen is fulfilling her goal to create a kinder and gentler Front National. Her father and founder of the FN, Jean Marie Le Pen, relished what the French call "dérapages" -- verbal "skids" -- most often aimed at French Jews. While Marine Le Pen has repudiated her father's anti-Semitism, she has proven equally adept at controlled dérapages -- though the victims are now French Muslims rather than French Jews. When she is not fingering this Muslim "invasion" as the source of France's ills, Le Pen is haranguing the institutions of the European Union for sapping the nation's identity and paralyzing her economy.

Her jeremiads are finding a growing audience. According to one recent poll, more than two thirds of the French believe "there are too many immigrants in France" -- the same number, not surprisingly, who believe that "Islam is not compatible with republican values." It is less that Le Pen's discourse is kinder and gentler than her father's than that the national discourse has grown harsher and harder. At a moment when both major parties are enveloped in corruption scandals--the Socialists have Cahuzac, while Nicolas Sarkozy, the former president and leader of the opposition UMP, has been charged with accepting illegal campaign funds allegedly forked over (in thick envelopes) by the world's wealthiest woman, Lilliane Bettencourt -- Le Pen's recent declaration that the FN is now "the center of gravity" in French politics is, unhappily, less a "dérapage" than it once would have been.

But the anti-Semitic skids have not disappeared: many observers believe they have become the work of the extreme left. This week France has been confused by a remark made by Jean-Luc Mélenchon, the fiery leader of the Parti de gauche. When the European Union finance ministers imposed their draconian remedy for Cyprus' banking crisis, Mélenchon declared that French finance minister, Pierre Moscovici "ne pense pas français" but instead thinks "as an international financier. "Not to think French" has a toxic historical lineage -- it was a stock phrase of interwar anti-Semites on the left as well as the right, as was their claim that Jews manipulated the world's banks. Mélenchon has since denied that he knew Moscovici is Jewish (the latter lost part of his family in the Final Solution), but for someone who was once a philosophy professor, reflection on how the phrase's symbolism somehow escaped him seems called for.

The squabbling among the parties on the left -- the Greens, who unlike the Parti de gauche, are represented in Hollande's government, are equally unhappy with his leadership -- is all too reminiscent of the ideological fractures in the Popular Front. Though more elusive, no less palpable is the sense, one that imbued France on the eve of WWII, of a general disenchantment with the state of politics, and perhaps the Republic itself. In January, an IPSOS poll revealed that a vast majority of the French believes their nation is locked into "irreversible decline": a "real leader," they insist, is needed to "reestablish order."

Hollande won the presidency last year in part because he was not Nicolas Sarkozy. Exhausted by their former president's scatter-shot brash and hyperactive ways, the French seemed glad to turn to a "normal" candidate whose intelligence and acumen seemed beyond question. These traits remain intact, but they no longer seem enough. One critic famously (and unfairly) said of Léon Blum that he had too much intelligence, too little character to succeed as a national leader. As France now confronts a series of crises as grave as those it faced in 1938, will history say the same about Hollande?