Saturday, May 15, 2010

The Long View

Sam Moyn reviews two books on Enlightnement politics by Jonathan Israel and Dan Edelstein.

Krugman on the IMF Report

Paul Krugman astutely comments on a new IMF report on structural deficits and the evolving economic crisis:

It takes careful reading to discover what’s really going on:
The persistence of deficits reflects permanent revenue losses, primarily from a steep decline in potential GDP during the crisis, but also due to the impact of lower asset prices and financial sector profits.
Aha. Most people who look at the IMF report will, I suspect, read it as telling a tale of government profligacy getting us into a hole. But what the report actually says is quite different: it says that the financial crisis has made us permanently poorer, which among other things reduces revenue, and governments have to tighten their belts to make up for that loss.

Two Centrist Blogs

Given my conviction that the greatest political ferment in France at the moment is in the center of the political spectrum, where various realignments are imaginable, I have been neglecting centrist blogs. Here are two of note (h/t LD-F): the Alliance Centriste and Le Centrisme.

Polanski: Elysée active, new charges

President Sarkozy has spoken with his Swiss counterpart about Roman Polanski's situation, according to the Elysée. And new allegations against the director have been made by a British actress. Curiouser and curiouser.

Cécile Laborde's New Book

Cécile Laborde, whose work on French republicanism I've praised in the past, has a new book on the subject, which is reviewed in Le Monde.

Transeuropean Differences

The importance of tracking economic difference within a region such as the Eurozone, which is unified in terms of money and trade but not legal regimes, has become increasingly important in the wake of the crisis. Here is a note that looks at differences in housing prices in relation to national monetary aggregates as an index of differential performance.

Comment on the Euro Crisis

By Marco Pagano. Trashed here by Paul Krugman. See also Barry Eichengreen.

Retirement System

The always excellent Ecopublix offers two remarkable pieces surveying the French retirement system and various proposals for reform.

The Euro

Reports have it that President Sarkozy threatened to pull France out of the euro if other eurozone countries didn't agree to the big bailout found (h/t Charles Butler). Did he make this threat? Very likely. It fits his style. But was he taken seriously by the Germans? Very likely not. Germany was moved by its own judgment of the increasingly untenable situation. As James Carville once said, he would like to be reincarnated as the bond market, because that's where the power is. The prospect of sovereign default is serious; the prospect of disintegration of the eurozone would be cataclysmic. The Europeans seem to be banking for the moment on the prospect of a successful bluff, but yesterday's rout suggests that the bluff could be called sooner than expected. And then we will see what we will see. The economic crisis seems to be moving rapidly into a dangerous second phase, where national coordination (as in the US) and regional coordination (as in Europe) will no longer be enough. A plan for global rebalancing is needed, and it is not yet clear where such a plan will come from or how it can be implemented politically in national polities that have become increasingly restive and volatile.

Pundit

While in France I did two interviews for France24, one in French, the other in English. It's almost embarrassing to link to them: the lapses of French grammar, the banality of the answers, etc. I'm a blogger, not a pundit. The medium enforces a distressing superficiality. Nevertheless, it was interesting to see the operation from inside.

Rumors

Back from nearly two weeks in France, I return with a store of rumors circulated with more or less confidence by a variety of sources who of course claim to have their information from the highest authority. I see that Charles Bremner has been drawing on the same wells. Indeed, the rumors about DSK are particularly thick on the ground at this time, and the juicy tidbit that Bremner attributes to a new book about DSK--that pictures exist of him leaving a notorious wife-swapping club (but surely not with Anne Sinclair on his arm)--is one that I heard from any number of sources. But of course this sort of low blow is what is to be expected in the case of a candidate like DSK--if he is a candidate--because it strikes at his most vulnerable point and is perhaps the only way at this point for the opposition to cut him down to size (he leads Sarko 61-36 in one poll). Nevertheless, the potency of his candidacy may look less formidable if the European economic crisis worsens as it may well do: the euro at 1.247, and just after I was paid a sum in euros!!

But there is another rumor regarding DSK that Bremner does not report, a scenario that seems almost too good to be true. It is this: Martine Aubry, I am told, does not want to be president (like father, like daughter). She would prefer to be prime minister. And she has struck a deal, the story goes, with DSK and Fabius: she will become PM, DSK will defeat Sarkozy and become president, and Fabius will keep his troops in line and support DSK in exchange for nomination as foreign minister. What about the primaries? I asked. And how can Ségolène be kept from upsetting the applecart? The primaries will be finessed, was the answer. Some pretext will be found to renege on the public promise to hold primaries, and DSK will be nominated by approbation. Americans will be reminded of the "smoke-filled room" in which presidents used to be chosen. And what about the party barons? Not to worry, I was told: Martine has the party firmly in hand.

On va voir. Two years is a long time in politics, and there will no doubt be many more rumors between now and the campaign season. But this is the picture with which I return: the Socialists are persuaded that 2012 will be a do or die election for them: they must win, and to do that they must unite on a candidate. DSK is their most plausible candidate, so a consensus is already developing around him. And Ségolène Royal will simply be swept aside, since the elephants are convinced that she is the one sure way to lose. The potential flaw in this otherwise impeccable machination is, of course, that DSK may prove to be a totally inept candidate, and not just because of his sexual peccadilloes. He really hasn't proven that he has the single-minded devotion and discipline required of a presidential candidate. Il préfère le plaisir au pouvoir, was the way one informant put it. This was more than just a waspish comment on his roving eye; it was a judgment that the man lacks the sheer will to power necessary to conquer all.