France Flirts with Recession as it Incomprehensibly Embraces Austerity

Dean Baker and Paul Krugman are just two of the economists who have noted recently that French President François Hollande has lost his mind. As Krugman notes, Hollande has quite literally invoked the discredited doctrine known as Say's Law, when Hollande said “supply actually creates demand.”

In other words, Hollande has fallen victim to austerity fever, despite its lack of success in other Eurozone countries such as Ireland. Baker points us to an ABC News report that is more specific about Hollande's plans: Despite 11% unemployment, he wants to cut government spending by about 4% in 2015-2017, a total of 50 billion euros (approximately $68 billion).

Take a look at the following chart: Does this look like an economy that can adopt austerity successfully?

From 0% growth in 2012 Q1 to -0.1% growth in 2013 Q3, five of the last seven quarters have seen zero or negative growth in gross domestic product. It is already a prime candidate for another recession. But Hollande seems determined to go over the austerity cliff.

Are these the policies that Hollande and his Socialist Party campaigned on in 2012? Do I really have to tell you?