Letter from the Editor

Emmanuel Macron's election as president of France comes at a critical time for the European Union It may be the beginning of a comeback for Europe. Macron's win in the French election is all the more remarkable because of the abstentions in the vote from the far left supporters of Melenchon, and the turnout of about 75%, less than previous elections. By winning about 66% of the vote at a time of high unemployment, with unemployment at 25% for people under 25, terrorist incidents in Nice and Paris giving rise to xenophobia and nationalist support for Le Pen's National Front, Macron has shown that sticking to one's own gut feel and vision early and persevering through all kinds of weather works if you sincerely believe. It is not mere luck as some analysts are saying. Previous French elections were marked by Sarkozy responding to the far right, and this time by Fillon doing this for the centre right Republican Party. Macron quietly stuck to his vision of reviving the European Union. See the Macron interview with Der Spiegel on the TGV fast train from Bordeaux to Paris. He was comfortable in simple unusual settings. Some of his last encounters with the public were at a plant with layoffs where he did not shy away from what he believed and yet sought to talk to union representatives, and at his home town in the mountains on the French-Spanish border. Rarely has a candidate in a French election been received with so much anticipation and hope in the European Union. Gerald Seib in the Wall Street Journal points out that the first 100 days of the Trump administration should be looked at not fromhow much was accomplished, but from how much was learned, and the capacity for changing views. Trump changed views on a number of issues after listening to advisers and experts in including on NAFTA and trade with Mexico,on trade with China and Germany, and in foreign policy on NATO. On the health care bill hastily passed in Congress Trump appear to have followed his instincts, and the feeling in the Republican Party that Obamacare has to be repealed as soon as possible that has existed since 2009. The hasty move is widely viewed as leading to a different version in the Senate because parts of the bill adversely affects older Americans, and the limits it places on covering previously existing conditions. It also affects perception among older Americans who supported the Trump campaign. Another move in which Trump has followed his instincts and acted is the firing of FBI Director Comey. It has caused an uproar because it comes in the middle of a major investigation on the connections between the Trump campaign and Russia. The risks for Republicans is that this issue could overshadow other initiatives such as the ones on tax reform and infrastructure. Tax reform by lowering the corporate tax rates to 15% is designed to bring U.S. tax rates closer to other countries that have lower corporate tax rates to stimulate business growth. As Hilsenrath in the Wall Street Journal points out however, higher growth rates of about 3% that would help pay for the tax cuts and keep the deficit under control cannot be assumed. The experience of Britain and other countries is that it does not lead to higher growth. The appointment as Special Counsel of former FBI Director Mueller to conduct an independent investigation into Russian interference in the U.S. presidential election of 2016 adds an element of uncertainty to the Trump presidency. The media coverage of the connections between Flynn, the Trump campaign, and Russia, overshadows other parts of the Republican agenda. Because of the nature of the 2016 election with interference in the election through hacking by foreign powers, and the undermining of values important for the democratic process in the U.S.- unprecedented in U.S. history- this is likely to continue. The situation in Latin America, in Brazil with corruption scandals and in Venezuela with the economic collapse of a country rich in oil resources shows the frail foundations of democracy built on populist foundations. In Brazil with the weakening of public finances and in Venezuela with the collapse of the rule of law. Fisher and Taub in the New York Times May 15, 2017, provide an exceptional insight into how the rule of law has collapsed in Venezuela- useful insight into the dangers of populist policy in undermining foundations of democracy rooted in the rule of law. Falling commodity prices showed the vulnerable foundations of government under populist parties. The events of the last six months show how important it is to respond constructively to the changes brought on by globalization, to preserve the gains from increasing trade links between countries even as economies of countries adapt and grow. The political and economic advantages of increasing trade links was one of the lessons learned after World War II, technological changes accelerated the process to create the global economy. Like all change it is necessary to adapt and grow by learning from these changes so that the gains can be preserved. Withdrawal is not the answer. Brexit that takes a form that hurts the British economy, changes in the U.S.-Mexico relationship that hurt business and people on both sides of the border, uncertainties for the EU that undermine the economic future of Europe, and any undermining of respect for the rule of law, will only have negative consequences.