Former Treasury Secretary Robert Rubin discusses the economic conditions of the French elections and the necessity that François Hollande be true to his campaign and support a German austerity policy. (May 10, 2012)
In the eighty. Aftermath of the French election results. Alone at certain sort of that corner economic commentary in the United States. Took a lot Pletcher and said. Gates is a vote for stimulants vs austerity in the great global economic debate. Is that true and will we see a shift in US economic policy thinking. The BB two comments. Right I don't think these I didn't read it different maybe I'm wrong I didn't read French elections. Vote stimulus. I had written that was vocalist austerity. To -- distinction. And I think that vote for the beginning of this thing. That you've got to find the right balance. And you don't have enough depth approach will -- -- -- enough depth as a reduction to get market confidence about -- -- market confidence I think if you can establish. Sent this agreement that tremendous effect. On business confidence and I think right now you'll deal with companies all the time. I've -- ligament. Very good that bank. And I -- I -- different people and companies that tremendous uncertainty about what future policies and so. Bob what Paul Krugman calls the confidence theory actually does exist -- I think a little bit respectable Krugman Nobel Prize winning economist. -- -- -- -- -- -- -- And I think it's a very factor and virtually no studio that I see who doesn't say that your machine being. Affected. And very often significantly. By the enormous uncertainty about future policy will be like Peter and I condition been like because we have tremendous physical problem that sooner or later and do it. I don't think the French vote for stimulus I think it was for why the government to -- -- economic analysis of but he really -- was kind metric thinking every household that I guess not but I think what they weren't voting about the vote was. Those that did what was cut economic conditions and so forth and so I think you need a more they -- program. That that -- I think. He's had a very quickly glided over this notion that -- -- -- from a and we were talking about that earlier someone who we both respect and admire was talking about how the reason the market hadn't released sold off. Is because they have hope. So can you explain a little bit more that you and what you think of it. Yeah I think the real problem the curricula and one real problem French elections what is -- domestic policy going to be I don't think that's the biggest problem. I think the biggest problem French elections. Is that France and Germany the court if you will between France and Germany may have had moments nevertheless. It -- part of your -- politics around crisis response. And if they're not going to abandon it if -- does but he said he was gonna do it in the campaign. About people doing within the duplicate. But if he -- -- who now wonder significantly revised the agreement the concorde the fiscal compact which haven't been ratified like country anyway. And it is no longer to support. The German austerity policy. But or or maybe only supported me very substantially amended fashion maybe politically possible and in Germany you are discussing. Thank you left with -- low trying to impose its will in Europe. And I it seems to me that is extremely difficult tests which are being do. Especially since -- tried it twice the twenty century what -- successful popular venture. So. And he didn't always had -- need for the French German court ordered -- able Germany which if -- only country with the resources. -- and Luxembourg but with the resources to make this work. And now you let them extremely difficult positions to coordinate and work so. Willie B Lula will be run on one platform. And then governed from the at least and macro economic -- Lou govern from the govern from the middle and that's what the market seemed to think for about on except he's certainly that the country everything from the campaign. We have. An unsustainable fiscal trajectory. We have dangerous fiscal trajectory. It has multiple risks.