Tuesday, May 18, 2010

The 2012 Campaign in a Nutshell

Latest bulletin from the PS:

Martine Aubry, première secrétaire du PS, a annoncé, mardi 18 mai, que les socialistes s'opposeraient de "toutes leurs forces" à un report de l'âge légal de départ à la retraite. Pour combler le déficit, elle a proposé une surtaxe de 15 % de l'impôt sur les sociétés pour les banques et plusieurs mesures de taxation des revenus du capital.

So, there we have in a nutshell the 2012 presidential campaign, which starts today. Sarkozy is committed to raising the legal age of retirement. The PS is strenuously opposed. The issue skirts the real problems with the retirement system, but it's a clear enough criterion for a nice political spat. The PS gets to look like it's on the left, and Sarko gets to portray himself as the "reponsible" steward of the social safety net. Meanwhile, what actually happens to the retirement system will be negotiated in the back room by the serious folks among the "social partners": technocrats working for the unions, the employers' associations, and the ministries. In short, business as usual.

The Reception of John Stuart Mill in France

Discussed here.

Various Papers

I've posted the text of my talk at the Tocqueville Society colloquium in Nice here. This is about "Individualism, Populism, and Technocracy." The text of my Collège de France talk is on the Web site of the Collège as well as here. Both of these papers will appear in La Revue Tocqueville, of which I have just become a member of the editorial board. And my keynote address to the Society for French Historical Studies can be found here.

Dany the Horsetrader

Daniel Cohn-Bendit, as pungent as ever, has no patience with those who have criticized the government for trading a spy and an assassin for Clotilde Reiss:

Le leader d'Europe-Ecologie, Daniel Cohn-Bendit, a, pour sa part, été encore plus sévère dans ses critiques à l'égard de Benoît Hamon. "Clotilde Reiss a été libérée, c'est bien, et si le gouvernement a fait tout ce qu'il a pu pour la libérer, eh bien c'est comme ça", a déclaré le député européen sur Canal+. "On ne peut pas être content de la libération et en même temps tiquer parce que le gouvernement a fait ce que devait faire un gouvernement... Moi je trouve cette manière d'opposition absolument ridicule (...) Est-ce que vous croyez que c'est sur la place publique qu'on va négocier?", a demandé Daniel Cohn-Bendit.

"Ils ont fait libérer deux personnes pour échanger, c'est ce qu'on fait dans ces cas-là. Jouer aux vierges comme ça c'est quand même ridicule", a-t-il lancé.

Retirement Reform

Retirement reform is to be the centerpiece of Sarkozy's domestic agenda in the runup to 2012. He seems to be taking a cautious approach, reluctant to renege on any promises yet eager to mollify various constituencies. Since he promised the bouclier fiscal, he won't modify that, except that he will: there will be a "solidarity contribution" from the rich to defray retirement outlays, and this won't be counted under the tax shield. The great debate seems to be about whether this exception constitutes une brèche in the bouclier or une entaille, the latter being the word Copé prefers. Sarko also refuses to cut retirement benefits, so the largely irrelevant legal age of retirement will be raised, and years of contribution required for full benefits will be increased, albeit with many exceptions for pénibilité, etc. Finally, the changes will be phased in very gradually, and equilibrium will not be achieved until Sarko is long out of office, so it will be somebody else's problem. In short, this is retirement reform of the sort we are used to, piecemeal, complicated, and difficult to assess. Reform by obfuscation and complication, but enough to provide a campaign theme and a modest defense against the charge that the government's policies since 2007 have favored the rich and hurt the working stiff.

Will the Euro Survive?

It was only a year ago that I appeared at a conference in Montreal in which Lionel Jospin took part. Jospin's presentation was a robust defense of the creation of the euro, in which he played a fundamental role. At the time, Europe seemed to be holding its own in the financial crisis, indeed doing a bit better than the US, and the dollar was depreciating. Some reputable economists predicted it would reach $1.60 or 1.70 against the euro. But times have changed; the creation of the euro now looks to some like folly; skeptics, vindicated, are trying to restrain their Schadenfreude; and the future of the euro looks increasingly uncertain.

I confess to having been in favor of the euro, although I recognized the power of the arguments of the skeptical economists. I favored tighter European integration, and I thought that the euro was a step in that direction. But the skeptics were right about the danger of putting the cart before the horse: integration is needed in any currency union in a time of crisis. The Lord works in mysterious ways, however, and it may be that the result of this crisis is the tighter integration necessary to hold the euro together. Although that is the optimistic scenario, and I generally prefer to err on the side of pessimism, le coeur a ses raisons que la raison ne connaît pas.

What Is the ECB Up To?

No good, according to some: buying Greek debt but selling other debt to keep the money supply constant and putting pressure on short-term lending in the process. A sure way to drive up unemployment.