Friday, September 30, 2011

Thursday, September 29, 2011

Another Affair

François Pupponi, mayor of Sarcelles, has resigned from the inner circle of Martine Aubry's campaign after being investigated by the police judiciaire for subornation of perjury in a case involving a gang of Corsican criminals. And what did Pupponi do for Aubry? He was in charge of security.

Yglesias on the EU

Matt Yglesias has a nice analogy:

The Eurozone has created a kind of governance version of a collateralized debt obligation. Sovereignty has been pooled, and then tranched, and then re-allocated. Each government has some authority over the economic outcomes in all the different countries, but by the same token has only partial authority over its own economy.

Political Addendum to the Previous Primer

The previous post links to a primer on the economics of the euro crisis; Henry Farrell covers the politics.

A Primer on the Eurozone Crisis

By Kash Mansouri, part 1 and part 2.

Polanski Apologizes, DSK Doesn't

For the former, here; for the latter, here.

The Truth

Daniel Cohn-Bendit likes Arnaud Montebourg but not his project of démondialisation, as he makes clear with characteristic forthrightness:

"Mais démondialiser c'est un peu dire n'importe quoi. Montebourg ne sera pas président, c'est pas grave pour l'instant", a poursuivi M. Cohn-Bendit. "Je l'aime bien, mais s'il était président il en serait de sa démondialisation la même chose que ce qu'a été le programme commun après un an de Mitterrand".
Bernard Girard takes a positive view of the form, if not the substance:

Montebourg a du talent, des idées et la capacité, évidente également chez François Hollande, d'éclairer une position, de l'exposer avec clarté dans un français impeccable.  

Germany Comes Around

The Bundestag approved the bailout deal, so now we move on to the next stage of the crisis.

Wednesday, September 28, 2011

Second Socialist Debate

I didn't see it. I welcome comments from anyone who did. Mediapart has what seems to be a good summary.

Scandals Everywhere

Another scandal: Philippe Courroye, the Nanterre prosecutor who obtained the phone records of a journalist investigating the Bettencourt Affair, will be mis en examen. And Mediapart claims to have established a link between Sarkozy and the financier/arms merchant Takkiedine.

Tuesday, September 27, 2011

Audrey Pulvar

I was going to say something about Audrey Pulvar's new gig on On n'est pas couché. The show runs later on TV5Monde here in the US than in France, so I've just seen the episode in which she faces Martine Aubry. I gather that Ségolène Royal has been on since then. It does seem odd to me that Pulvar, who is Arnaud Montebourg's companion, is allowed to play this role. Not that I thought she was any better or worse than any other chroniqueuse would have been in that spot. It's just that the potential is there. And there was no disclosure of her special relationship to another candidate, in case any viewer was unaware of it. I guess in France it is just assumed that everyone is in the know about everything. In any case, it seems that Pulvar has commented on another blog, defending  herself against criticism of this sort.

"He knows everything about flowers."

Christine Ockrent interviews Carla Bruni-Sarkozy, in English, for the BBC: "I said to myself, I must marry this man, he is the president, and he knows everything about flowers as well ... this is incredible." 


Indeed. Incredible.

Marine Snags an ex-Chevènementiste

A former directeur de cabinet of Jean-Pierre Chevènement has joined Marine Le Pen's party. It's one thing for the left to lose part of its rank-and-file to the populist right, but the desertion of former cadre of the left of the left suggests that Le Pen has succeeded--alas!--in her effort to remove the stigma from her father's party. The article suggests, however, that her success is far from complete.

The PS and the Economists

Mediapart investigates which economists are supporting and/or consulting with which candidates. Unsurprisingly, Hollande is surrounded by more economists than any other candidate (my colleague Philippe Aghion gets around: he is listed as backing Hollande while consulting with Royal). Aubry has essentially one prominent economist in her entourage: Daniel Cohen. Royal has, among others, Jacques Attali, which should disqualify her. Montebourg has an anti-globalization team. And Valls has--nobody.

The Senate and the Golden Rule

The French Senate may not have much power, but the Constitution cannot be amended without it, so one consequence of Sunday's power shift is that there will be no balanced budget amendment: Sarkozy's Golden Rule is dead, and may it rest in peace with a stake through its heart. This was an ill-considered electoral ploy, nothing more. The president may still try to use the threat to maneuver his opponent into a corner, but there's no danger of this nonsense actually becoming law.

Monday, September 26, 2011

A Reader Asks ...

Comment from Brent on previous post:

In contrast to this presumably US-supported intervention via the IMF, I am interested to read Mélenchon's charge that the US is engaged in 'aggressive destabilization' of the Euro:
http://www.jean-luc-melenchon.fr/2011/09/26/de-nerac-aux-lilas/#more-7697
Can someone with more economics training that mine weigh in with some evaluation of this rather vehement accusation?

Oy, where to begin? Mélenchon's analysis ignores the fundamental fact that Europe's crisis is largely a story internal to Europe. Diverging unit labor costs (Germany became more efficient while other countries, including but not limited to Greece, allowed their labor costs to rise) during the era of cheap credit led to large trade imbalances within the EU. These imbalances were financed by lending from rich countries. In essence, German banks lent Greek importers what they needed to pay for German products. So Germany boomed, and Greece became indebted. French and German banks lent to Spain to finance a building boom, which temporarily improved the lot of Spanish workers but ended in an unemployment boom when credit collapsed.

None of this has anything to do with the US money supply. Mélenchon is right to observe that M2 has increased rapidly in the US, but he is totally wrong to say that demand for US Treasury bills and bonds has collapsed. Demand is stronger than ever, as the current 1.97% interest rate on 10-yr bonds shows. It is true that US money market funds have become reluctant to lend to European banks in the repo market, because the health of European banks is in doubt, but this is not some sort of US conspiracy to bring down the euro. It's a panic, like the panic that gripped US and international markets in 2008 with the Bear and Lehmann collapses.

Mélenchon's reasoning is sustained by anti-American bias, a belief in the conspiratorial nature of capitalism, and general ignorance of international economics. To be sure, left-wing economists in the US do not agree on the adequacy of the latest European bailout plan. I got the previous link from Jared Bernstein, a former White House advisor, who thinks the plan has a chance, but Paul Krugman thinks that neither this nor any other plan that focuses solely on stabilizing the banking system can succeed if policymakers remain committed to austerity in fiscal policy. Note that the IMF does not figure in Krugman's argument: the IMF is on the side of the angels here, favoring monetary easing and fiscal stimulus in the short run. It is one of Mélenchon's many blind spots that he cannot see this.

Latest Euro Bailout Plan

This one might have a chance to work. 1.7 trillion euros is real money:

The package is expected to involve a quadrupling - from the current projected level of 440bn euros - in the firepower of Europe's main bailout fund, the European Financial Stability Facility (EFSF).
This would be done by putting in place an arrangement that would allow the European Central Bank (ECB) to lend alongside the fund.
The EFSF would take on the main risk of lending to governments struggling to borrow from normal commercial sources - governments like Italy.
The political fallout remains to be seen, especially in Germany.

Banks and States

Nicolas Véron argues that European banks must sever their ties with individual states and be placed under a transnational European Banking Authority with "supervisory and resolution authority." In other words, the EU should regulate banks, insure deposits, and be empowered to shut down undercapitalized banks and wipe out their shareholders. He argues that it has become clear that one of the routes by which fiscal instability in one country spreads to other parts of the Eurozone is via the "banking channel." (h/t Martha Zuber)

One-Two Punch

One remarkable aspect of the unfolding Takieddine investigation is that it may not only destabilize the current president but also knock a future contender, Jean-François Copé, out of the running. The latest allegation is that both men took expensive vacations paid for by the arms dealer. Until now, one of the marvels of Sarkozy's long political career is that he has avoided any hint of corruption, even though he came up in the rough-and-tumble environment of northwest suburban Paris, where political corruption was a way of life. Somehow he avoided the missteps of Pasqua et cie., but here he is caught up in a scandal of his own, and one of his chief intraparty rivals along with him.

Of course, nothing is yet proven. My French friends, who so often reminded me during the DSK affair that we Americans "don't believe in the presumption of innocence," are now witnessing how irresistible it is to leap from allegation to condemnation, especially when the leaked evidence is so juicy. It may not be justice, but it is one heck of a spectacle.

Sunday, September 25, 2011

The Left Takes the Senate

A first in the history of the Fifth Republic and another sign that Sarkozy's unpopularity has crippled the governmental right: the left has captured the Senate:


La gauche est majoritaire au Sénat pour la première fois

La gauche a remporté, dimanche, au moins 23 sièges aux élections sénatoriales. Elle obtient ainsi la majorité absolue. Le président du Sénat, Gérard Larcher (UMP), annonce qu'il sera tout de même candidat à sa succession. Retrouvez les résultats détaillés et les biographies des sénateurs élus en "une" du Monde.fr.

UPDATE: MYOS asks in a comment to another post how the Senate could have been "designed" to return a safe right-wing majority. The design was sociological: by having mayors elect senators, the constitution ensured that small communes would have disproportionate representation. These were mostly rural at a time when left-wing power was concentrated in and around industrial cities. The rural constituency outweighed the urban in terms of communes but not in terms of population. So this rigged things in favor of the right. But the demographics have changed. clerical and industrial workers, state employees, and other non-farmers have been priced out of many urban areas and now live in less expensive suburbs scattered over the countryside. Hence their representation has increased. Furthermore, the left dominance of regional governments has made even more traditional rural areas more dependent on left-leaning regional councils, etc.

Central Moment

Bernard Girard is right: this is Borloo's moment. But will he seize it? With the Right crumbling under the combined assaults of Marine Le Pen and le juge van Ruymbeke, now is the time. But Borloo has always been the most laid-back of politicians: "fire in the belly" is not his style.

What about other centrists? Bayrou? Morin? The former has been on the stump often enough, but he doesn't seem to be able to close the deal. I don't know why. To be sure, his 16% in the first round of 2007 was swelled by legions of "anybody but Sarkozy" voters, who may have had no special affinity for Bayrou and who may have ceased to care quite so much about finding a non-Socialist alternative to a UMP presidency. By contrast, Morin has gone out of his way to minimize the importance of the unfolding affairs, as if explicitly disavowing any ambition for the presidency.

So, France's next "centrist" president is likely to be François Hollande. Dominique Strauss-Kahn must be regretting his faute morale more than ever. This election would have been his to lose.

Sarkozy at the UN

I neglected to comment on Sarkozy's speech at the UN. Here is the text. I thought he acquitted himself quite well, maintaining his balance while offering a modest proposal to move things forward:

Faut-il pour autant exclure une étape intermédiaire ? Pourquoi ne pas envisager pour la Palestine le statut d’Etat observateur aux Nations Unies ? Ce serait un pas important, nous sortirions après 60 ans de l’immobilisme, l’immobilisme qui fait le lit des extrémistes. Nous redonnerions un espoir aux Palestiniens en marquant des progrès vers le statut final.
To be sure, he wrapped himself in the mantle of the Arab Spring, overstating its achievements in a manner befitting his identification with its latest and most ambiguous episode, regime change in Libya:

Je veux le dire avec une profonde et sincère amitié pour le peuple israélien : Ecoutez ce que criait la jeunesse des printemps arabes. Ils criaient : « Vive la liberté ! ». Ils ne criaient pas : « à bas Israël ». Vous ne pouvez pas rester immobiles alors que ce vent de liberté et de démocratie souffle dans votre région.
This passage conveniently ignored the attack on the Israeli embassy in Egypt, where cries of "à bas Israël" were indeed heard. This Le Monde article tries hard to paint Sarkozy as somehow uniquely fitted for the peacemaking role, playing up his Jewish ancestry, about which we rarely hear in any other context, and his supposed rupture with past French policy, which is unfairly maligned. I see Sarkozy's Middle East policy as evolutionary rather than revolutionary. Operating under tight constraints, Sarkozy maintained his footing and his credibility as a potential broker, not wedded to the American position and sensitive to the desiderata of both sides. This was as much as he could accomplish at the UN, and he was equal to the occasion.

Saturday, September 24, 2011

Was Astérix a Fascist?

The philosopher Michel Serres, reading rather flat-footedly in my view, has launched a polemic.

Michel Serres affirmait sans rire que la potion magique du Gaulois était une forme d'"éloge de la drogue" et que l'écrasement régulier du barde Assurancetourix représentait un"mépris de la culture" et, motif récurrent, une glorification de la "force pure".


A political scientist, Damien Boone, has taken up the challenge of responding to Serres, who has visibly gone off the rails. As for mépris de la culture, Prof. Serres had better be careful: having attacked one of the great icons of French culture, he now has a target on his back. (h/t KB)

The Princess Tells All

I'm not sure what sort of title "princess of Yugoslavia" is, exactly, mais la belle Hélène de Yougoslavie is certainly giving her estranged husband Thierry Gaubert the royal treatment. She is "disgusted," she told Le Monde, at discovering that her ex had opened Swiss bank accounts in her name in which to hide the occult money that was used to finance Balladur's 1995 presidential campaign, so she's spilled all:


Avez-vous subi des pressions ?Oui, beaucoup de pressions, et des menaces, émanant de mon mari. Cela a commencé après que sa maison a été perquisitionnée, au mois de juillet. Il s'attendait à ce que je sois convoquée par la police. Alors il m'a dit : "Si tu parles, tu ne verras plus les enfants. Si je coule, tu coules avec moi, car nous ne sommes pas divorcés. " Il ne fallait absolument pas que je parle des comptes à l'étranger et des remises d'argent.
Que s'est-il passé après votre audition ?Déjà, durant l'audition, il m'inondait de textos ! Et puis, le 14 septembre, il m'appelle et me dit : "J'ai quelque chose à te donner, descends, je suis garé dans la rue. " Une fois dans la voiture, il m'a incendiée, il était furieux. "Qu'est-ce que tu as été raconter aux flics, il paraît que tu m'as balancé ? Tu es complètement folle, tu vas partir à l'asile. " J'ai compris qu'il avait eu des informations très précises sur ma déposition.
More and more this looks to be one of the great scandals of the Fifth Republic.

UPDATE: Mediapart has lots more.

Friday, September 23, 2011

How Sausage Is Made

For a glimpse of the future of the Socialist Party, come what may, have a look at Frédéric Martel's article in L'Express. There you will discover the parallel trajectories of Manuel Valls and Benoît Hamon: both Rocardians at the beginning, both young party activists, one (Valls) maturing at Matignon under Jospin, the other (Hamon) learning the ropes under Aubry. Valls chose to position himself on the right wing of the party, the incarnation of the "second second left," while Hamon claims the mantle of Emmanuelli, the maverick of the left. Yet their opposition, Martel hints, may be no more than tactical, a matter of pure "positioning," since this contest between "old left" and "new" is one of the "structuring" myths of the party--a myth that may no longer have any connection with sociological reality. Interesting piece.

The Affairs

It seems I've been too blasé about the several affairs currently closing in around the president. Here's the latest leak:


Affaire Karachi : des interceptions téléphoniques mettent en cause l'ex-ministre de l'intérieur Brice Hortefeux

Les enquêteurs, dans le volet financier de l'affaire Karachi, disposent d'extraits d'une conversation téléphonique, datée du 14 septembre 2011, entre Thierry Gaubert et Brice Hortefeux. L'ex-ministre de l'intérieur explique à son ami que sa femme, la princesse Hélène de Yougoslavie, "balance beaucoup". ("Le Monde")

And this:

Le contexte devient brûlant pour l'exécutif. "Si Sarko il passe pas en 2012, ils sont tous dans la merde…", affirme ainsi la fille de Thierry Gaubert à son petit ami, dans une conversation téléphonique interceptée par les policiers, le 19 juillet 2011.

Now, this is no way to run a justice system. These endless leaks are frankly shocking and make the New York Post in the DSK affair look like the soul of probity and decency. Yet if any of this can be believed, it's getting awfully close to Nicolas Sarkozy, to the point where one begins to wonder, as Bernard Girard does, whether a challenger will step forward on the right. It's a remote possibility, I think. But might François Fillon already have made the first move? His proposal yesterday to align French retirement policy with Germany's is radical and, I think, off the reservation: Sarkozy has never made any such proposal, and it could complicate his position in the campaign. For Fillon, however, it makes sense as a declaration of independence, a promise of David Cameron-like austerity on which to base a challenge candidacy from the right.

Thursday, September 22, 2011

Le Mot du Jour

Philippe Meyer, à l'instant sur France Culture : "Un pays qui prend Bernard Tapie pour un entrepreneur, Bernard-Henri Lévy pour un philosophe, Jacques Attali pour un penseur, Claire Chazal pour une journaliste, Alain Minc pour un économiste, etc. ne peut s'étonner d'avoir Nicolas Sarkozy comme président de la République". (h/t LB)

Karachigate

"Magistrates accuse the Élysée of violating le secret de l'instruction," reads the Le Monde headline. Well, why not? one is tempted to respond. Everyone else is violating with abandon. Médiapart has a new revelation every day, court documents on display. People close to the president are mis en examen. "This is the most serious scandals in the history of the Fifth Reublic," says Martine Aubry.

No doubt. So here we are, once again in the thick of occult campaign financing. No doubt I should feel more engaged, but the global economy is collapsing again, and somehow I can't bring myself to think that an affair that dates from 1995, even if it did perhaps result in the death of a busload of innocent French engineers, is going to be more than a footnote to the history that we are witnessing. But this is the way of the world:

About suffering they were never wrong, The Old Masters; how well, they understood Its human position; how it takes place While someone else is eating or opening a window or just walking dully along; How, when the aged are reverently, passionately waiting For the miraculous birth, there always must be Children who did not specially want it to happen, skating On a pond at the edge of the wood: W. H. Auden, The Musée des Beaux-Arts

SVU Does DSK

Apparently, NYPD Special Victims Unit opened its new season with an episode (loosely) based on the DSK affair, but I missed it.

Wednesday, September 21, 2011

Interactive Debt Map

A fun toy to see just how bad shape your bank is in. The politicians are saying everything is fine; the IMF disagrees.

"I pledge allegiance to the flag ..."

Jean-François Copé wants every French man and woman to pledge allegiance to France and declare his or her readiness to die, if need be, in her defense. He is shocked that anyone is upset by this proposal, but even the military is unenthusiastic: one general commented that "ce type de mesure n'est pas dans la tradition française. Elle est de surcroît plus dans la tradition d'une armée de conscription que d'une armée professionnelle." And Bruno Le Maire, in charge of the UMP presidential platform, was silent when asked if this idea would be part of it. But the best reaction came from Marine Le Pen, who knows how to surenchérir on Copé's cocorico nationalism: "Encore un serment, s'est-elle étonnée. L'américanisation, qu'est-ce qu'on aime ça chez Sarkozy. Ils vont bientôt nous sortir la Bible!"

Tuesday, September 20, 2011

The Chirac Trial

With the prosecutors pleading for the innocence of the chief among the accused, the outcome is a foregone conclusion.

The History of "The Pact"

Admirably recounted by Romain Pigenel.

Monday, September 19, 2011

OFCE Blog

The OFCE now has a blog.

The Incarnation

Stéphane Rozès gives his interpretation of Hollande's lead in the polls:

Ce qui fait aujourd’hui la prévalence de François Hollande sur les autres candidats, ce sont pour l’heure des éléments de posture, qui sont décisifs en amont de la présidentielle. Après son départ de la rue de Solférino, il a déjà commencé à donner à voir aux Français au travers d’un travail sur lui, une préparation y compris sur son apparence, qu’il était un homme libre, certes socialiste, mais se préparant à se laisser habiter par le pays et à co-construire un projet avec les Français. Une présidentielle est un rite laïque où il faut donner des signaux aux Français et donc s’insérer dans l’imaginaire français. Il y a en République, en monarchie républicaine dans les périodes inquiètes une attente de verticalité, de lien direct entre le candidat et le pays sans écran, le PS ou la Gauche. Et François Hollande s’est mieux inséré dans cet imaginaire.
I have mixed feelings about this sort of political analysis: Tout commence en mystique, tout finit en politique (dixit ValéryPéguy), and here there is a bit too much mysticism and a bit too little politics. Still, the interview is worth reading in its entirety.

The Ratings Are In

Five million viewers watched the Socialist debate. Thirteen million watched "The Confessions of Dominique Strauss-Kahn." Jus' sayin'...

The Marrakech Pact

The long-rumored Marrakech pact between Aubry and Strauss-Kahn was reluctantly confirmed last night by the latter. So Aubry would have stood aside to allow DSK to run for president head-to-head against Hollande. And then, no doubt, he would have named her prime minister: it's hard to imagine such a bargain without a quid pro quo. Hollande's minions are already using this pact against Aubry. And what about Royal? In some versions of the rumor, she, too, was party to the pact. There's nothing illegitimate about such a deal, but of course one wants to know more. Was DSK afraid of losing the primary? Why did he choose Aubry rather than Hollande? Were there overtures to Hollande, which he rejected?

If Claire Chazal had been doing her job, she might have asked some of these questions. She might also have asked what, since it wasn't un rapport tarifié ou forcé, Ms. Diallo found so irresistible about the naked IMF director. But as Anne Sinclair's friend, Chazal knew what her function was and performed as intended.

Pigenel on Mélenchon

Romain Pigenel, who is backing Hollande, has some harsh but well-chosen words for JLM:

Il jubile, Jean-Luc. Et on le comprend. Lui qui avait quitté, il y a trois ans, le Parti socialiste peu glorieusement, dans la nuit du Congrès de Reims, avec les forces militantes et l’analyse d’un ultra-minoritaire – expliquant alors que la victoire de la motion de Ségolène Royal sonnait la droitisation ultime du parti – il joue aujourd’hui le faiseur de roi à la Fête de l’Huma. Moitié professeur en gauchisme, moitié Saint-Louis sous son chêne, il reçoit les candidats socialistes, leur remettant son petit livre rouge et prenant la pose avec eux devant un logo Front de Gauche.

Il assure, nous dit-on dans les gazettes, ne pas vouloir « se mêler de la primaire ».

Heureusement qu’il le précise. Car, à lire les comptes-rendus, on avait justement l’impression, au contraire, qu’il tend à s’en mêler, et pas qu’un peu. Sur les candidats aux primaires : « D’abord je note ceux qui ne sont pas venus [à la fête de l'Huma] Quand on est de gauche, on marque sur son calepin la date de la Fête de l’Humanité et on ne prévoit rien d’autre ». Sur Montebourg : « Il me souhaite bon vent, je lui souhaite aussi. ». Sur Ségolène, mi-condescendant, mi-dithyrambique : « j’ai trouvé Royal plus consciente du niveau de rupture à opérer que les autres […] Elle commence à parler notre langue ». Sur François Hollande, sans surprise : « l’arrogance comme on a vu jeudi soir avec Hollande qui se voit déjà président ». Quant à Martine Aubry, qui n’a pu s’empêcher de ré-affirmer ce qui reste sa ligne programmatique la plus claire, le Hollande-bashing (« Je pense que quand on est un responsable de gauche on doit être à la Fête de l’Huma, là où est la gauche. »), elle n’a (nous dit-on) fait qu’une photo muette avec le Chavez-like français, peut-être échaudée par lafraicheur de son accueil au grand raout communiste.
For a more positive take on Mélenchon's influence on the PS, see Bernard Girard.

The New Conventional Wisdom

Jacques Sapir, an ecoonomist and anti-globalization activist, has this to say in a Le Monde interview:
Jacques Sapir : La réaction de Jacques Delors est juste, mais bien tardive. Comment pouvons-nous prendre au sérieux un homme qui a conçu un système dont l'aboutissement logique est la crise actuelle, et qui vient maintenant déplorercelle-ci ? Il faut rappeler le rôle extrêmement néfaste qu'ont eu un certain nombre d'hommes politiques français, ainsi que des hauts fonctionnaires, qu'il s'agisse de Jacques Delors, de Pascal Lamy ou d'autres, dans la déréglementation financière généralisée que nous avons connue en Europe à partir de 1985-1986. Sur le fond, on a voulu faire avancer la solution d'une Europe fédérale sans le dire aux populations.
Delors, Lamy, and others, responsible for globalization and hence for the current crisis: the refrain is familiar, perhaps because we also heard it as recently as last week in a Le Monde op-ed from another, more surprising source: Aquilino Morelle, a former aide to Lionel Jospin, now backing Arnaud Montebourg. In short, an old fight has erupted on the Left, a fight that harks back to divisions in the Mitterrand administration in the period 1981-83. Delors and Lamy, with Fabius, were among those who led the fight for a "more modern" left, one that sought to manage rather than topple capitalism, in particular by lifting restrictions on capital flows.

The story is well-told in a book cited by Rawi Abdelal, Capital Rules, cited by Morelle, and which I am in the midst of reading. I think it's short-sighted, however, to portray this history as one of division within the left and a "betrayal" by a "free-market faction." This interpretation ignores the structural factors that militated in favor of an internationalization of capital. And it's wrong to interpret the current crisis as an inevitable consequence of one bad decision--an original sin, as it were. The initial decision wasn't bad, although as Abdelal points out, the evidence of greater efficiency and growth from a deregulation of capital was at best mixed. But marking Delors and Lamy as fall guys is just wrong, and the cause in which this very partial interpretation is currently being mobilized--the cause of isolationism and protectionism, what was derisively branded "the Albanian solution" in 1982 by those who favored greater openness--calls for the closest critical scrutiny.

A Comment on Moral Error

Dominique Strauss-Kahn, in his interview with Claire Chazal on TF1 yesterday, said the following:
"Ce qui s'est passé ne comprend ni violence ni contrainte ni agression ni aucun acte délictueux, c'est le procureur qui l'a dit", a-t-il assuré.
This is false. The prosecutor said that there was no evidence of violence or force and that he could not prove that a crime had occurred on the basis of testimony from a woman whose credibility he had reason to doubt. What did happen in the Sofitel remains unexplained. Since I have no evidence by which to judge, it's best to remain silent. Strauss-Kahn's confession of "moral error" is a first step toward making amends, but it leaves a good many questions unanswered.

UPDATE: Le Monde compares DSK's statements to the report. And Philippe Bilger here: "Le service calamiteux à rendre à une personnalité intelligente confrontée médiatiquement à un exercice difficile est précisément de lui offrir toutes les facilités et de lui laisser croire qu'elle pourra se dispenser de l'efficacité de la sincérité et de la spontanéité."

Sunday, September 18, 2011

Une faute morale

Petitions and Professions of Faith

Changes afoot in Europe and in French universities with talk of a European superstate and of ill-adapted quantitative evaluation of French professors in the social sciences..

Priorities

Berlusconi knows what his are:

Berlusconi, who boasted to one TV showgirl that he was only "prime minister in my spare time", told Tarantini in September 2008 that he needed to reduce the flow of women since he had a "terrible week" ahead seeing Pope Benedict, Nicolas Sarkozy, Angela Merkel and Gordon Brown. Berlusconi has long insisted that his private parties are informal but elegant affairs, that extend only as far as joke telling and songs, but is revealed on the tapes as putting pressure on Tarantini and his associates to conjure up beautiful female guests.

Has the DSK Affair Changed French Mores?

It would be pretty to think so:

Du monde de la finance à celui de l'industrie, les femmes se sont mises àraconter leurs histoires. Ce qui leur était arrivé dans l'ascenseur ou dans un bureau avec un supérieur. L'affaire DSK a fait sauter un verrou. "Elle a libéré la parole des femmes", atteste Patricia Barbizet, directrice générale d'Artemis, la holding financière du groupe Pinault.

Saturday, September 17, 2011

Ségo Courts Mélenchon

In 2007 it was Bayrou, in the center; this year it's Mélenchon, on the left. Ségolène Royal, running well back in the polls and with time running out, has apparently decided to try a Hail Mary pass, and JLM, way out on the left flank, is headed downfield with arms outstretched hoping to make the play. Right about now I'm sure the folks at the NPA are patting themselves on the back for not falling in with Mélenchon. And the Communists may be wondering if they haven't been snookered into another Programme Commun, out of which they'll get a couple of portfolios in the Ministries of Transporation and Sports.

How all of this might be playing in Peoria, or, rather, Poitiers, remains to be seen. Our own tireless commentator from la France profonde, MYOS, reports that Royal has made a solid connection with the "red base" in her (his--male or female, MYOS?) part of rural France. If so, the polls haven't registered it yet. I wouldn't be entirely surprised. But how would an alliance with the Front de Gauche affect this part of the electorate? In any case, I think back to Ségolène's visit to Harvard, where she described her ambition as uniting the entire anti-Sarkozy opposition "from Besancenot to Bayrou." Now I guess it's "Mélenchon to Morin." At dinner I asked her how she planned to do this. She was of course evasive: by being more convincing than the others, or words to that effect. But her new strategy is clear: by attacking the banks. Mélenchon welcomes this rhetoric.

Friday, September 16, 2011

The Socialist Debate

Mediapart thinks Aubry won the debate. I'm not in a good position to deny this, since my video feed failed during much of Aubry's presentation. I thought her opening statement was weak, her closing stronger. I wasn't terribly persuaded by her attacks on Hollande or Hollande's on her: this was just trivial point-scoring by candidates whose declared differences on the important issues are probably irrelevant to what they will actually do if elected, constrained as these future decisions will be by unknowable contingencies. On atmospherics, Hollande seemed to be trying to strike an angry, forceful pose, somewhat reminiscent of Sarkozy, while Aubry seemed to be aiming for firm but ratcheted down a peg or two.

Royal was the surprise of the evening: confused, nervous, hesitant. She read her opening statement, which none of the others did. Empathy is her trump card, but she seems tired of playing it, and telling people that "I feel as you do" may in any case not be the right formula for a time when people are confused and frightened and want someone to tell them what to think rather than claim to share their confusion and anxiety.

Montebourg might appear to be the party's jeune espoir if I agreed with anything he said, but I don't. Still, he says it well.  Valls, the other jeune espoir from the opposite end of the spectrum, flew the banner of désendettement, which is but austerity by another name and hardly likely to get anyone's pulse racing. "Deleveraging" may indeed be essential to recovery, but it's a politician's job to wrap the idea in a more attractive package. Valls would like to be accepted as the new DSK (or even Pierre Mendès-France, whose name he invoked once) but failed to clothe his "virtuous scold" persona in the splendid robes of supposed economic competence.

And Baylet: what can I say? Two cheers for the legalization of marijuana, which I was astonished to find becoming a major issue in the race for the Socialist nomination. His accent is entertaining, though. As for other atmospherics, Hollande's upper-lip flop sweat made him look like Richard Nixon in 1960; Montebourg would make an excellent choice to portray a politician in a film about politics; Royal is five years older than she was in 2006; Baylet needs a new sartorial advisor; and whoever designs sets for France2 ought to be fired--the giant TV screen in the middle of the table, the lecterns out of a TV quiz show with time scores displayed in front of each candidate, the Lenin-sized portraits projected on the back wall, the seating of a woman with distracting cleavage directly behind Mme Fressoz ... what were they thinking? The journalists' questions were decent, better than American journalists in this role. I particularly liked Namias, who followed up aggressively on evasive answers.

Thank you all for your comments on the previous debate thread post. I stand by my previous assertion that televised presidential debates are an invention of the devil, guaranteed to force candidates to fall back on pre-tested answers rather than grapple in a thoughtful way with issues on which the pros and cons are rarely as clear-cut as one has to make them when sharing the stage with five other braying contenders.

Banning Beggars

President Sarkozy, continuing Claude Guéant's push to blame most Paris crime on "Romanians," has banned begging on the Champs-Élysées from 10 AM to 10 PM. The begging--particularly the "gang begging" that has become common of late, in which a hapless tourist is surrounded and besieged by a group of young people with their hands out, if not actually in the mark's pockets--has indeed become a major nuisance, so this measure will be popular, though undoubtedly effective mainly as an excuse for police to check more identity papers and expel more Romanians. As a victim myself of a theft at an ATM machine by two young people who bystanders assured me were Romanians, though I'm not sure how they could tell, I suppose I should be more enthusiastic about this latest get-tough tactic, but to my eyes it seems rather pathetic, more an admission of helplessness than a genuine response, especially when policemen have been complaining (see Mediapart) about pressure from their hierarchy to faire du chiffre rather than attack the real roots of crime.

Thursday, September 15, 2011

Socialist Debate Thread

I'm watching the Socialist debate but would rather hear your comments than offer my own, so feel free to use the comment button below. My chief reaction, at the midway point, is that I'm glad the primary is only a month away. I'm not sure the country can take much of this. I must say, Hollande, for a front runner, came off as an awfully angry man, while Royal, the seasoned candidate, seemed (characteristically?) ill-prepared. Montebourg's opening statement was very polished indeed, but I'm rather allergic to his main formulas, démondialisation et protectionnisme. And now the feed is getting flaky. I hope it's back for Aubry.

The televised political debate has to be one of the least intellectually satisfying forms of political discourse ever invented. Surely there's a better way.

Socialist Divide

Hollande continues to lead Aubry by a considerable margin, at least in the polls. The latest, from BVA, has some interesting demographics:
A noter : le profil de leur électorat respectif commence à se distinguer nettement. Hollande séduit d'abord les plus de 50 ans, les cadres et les employés. Aubry attire plus les jeunes (moins de 34 ans), les femmes, les professions intermédiaires et autant les salariés du service public. 
Les électeurs potentiels certains de participer se recrutent logiquement à gauche (73%), d'abord chez les sympathisants du PS (52%), les écologistes (10%), du Parti de gauche (7%), du PCF et de Lutte ouvrière (2%). On en trouve cependant aussi à droite : 7% disent voter UMP, 8% au FN et 1% MoDem et Nouveau Centre. Et 10% se disent sans proximité partisane.
In other words, Hollande's electorate looks like Sarkozy's: older voters, managers, white-collar private sector workers, whereas Aubry's is more classically "socialist": public-sector workers and youths.

In tonight's debate, it will be interesting to see if the candidates try to reach out to each other's electorate or instead seek to consolidate support among the voters they have already won over. With the usual caveat: assuming the polls are accurate, which is a big "if."

China on Our Minds

US and European attitudes toward China differ sharply:

In contrast, the Europeans see China as an economic opportunity rather than a threat. Majorities in The Netherlands, Sweden, Britain and Germany said they considered China an economic opportunity. This was the reverse of the United States, where 63 percent of respondents felt that China was an economic threat and 31 percent saw it as an opportunity.

Wednesday, September 14, 2011

Political Cookery

From Elaine Sciolino:
“It is our national responsibility to cook and to eat well,” Ms. Branget, a deputy from the center-right party of President Nicolas Sarkozy, said as she washed sand from fat, spongy morels at her kitchen sink. “There are no political parties around the dinner table. By creating this book, male and female deputies are defending their regions and carrying out their political mandate.” 
One could hardly imagine an American member of Congress making such a proclamation. But food is so much a part of France’s identity that the government led a successful campaign last year to win United Nations recognition of the French meal as a national treasure. Elected deputies can rise and fall on the extent to which they protect the terrains of their grape growers, the subsidies of their milk producers, the clean water of their oyster cultivators and the rights of their recreational hunters.
...
Seventy-two of the 111 female deputies (who make up about 18 percent of the Assembly) chose not to participate in the cookbook project, including two who hope to win the Socialist Party nomination for next year’s presidential election: Martine Aubry, the head of the party; and Ségolène Royal, the party nominee who lost to Mr. Sarkozy in 2007.
The presidential hopeful François Hollande from Corrèze, Ms. Royal’s former partner and the father of their four children, by contrast, related with gusto and a long explanation a recipe for “farcidure grillée du pays d’Egletons,” a potato-based dish with many versions that looks like a latke crossed with a Spanish omelet. He also defined it as women’s work, which may not help him with the women’s vote. “Voilà how for so many years on end women fed their families with almost nothing” except this “farcidure,” he wrote.

French banks downgraded

As expected, Moody's has downgraded Crédit Agricole to Aa2 and SocGen to Aa3. BNP Paribas remains unchanged on negative watch status.

Slings and Arrows

The atmosphere is turning nasty on the Socialist side of the spectrum as well. Jean-Pierre Jouyet, who is now advising Hollande after having been in charge of European affairs under Sarkozy (and under Jospin before him), has accused economist Daniel Cohen, who advises Aubry but is also a consultant to Lazard Frères, which advises the Greek government, of advocating for Greece at the expense of the French taxpayer. The issue is the issuance of eurobonds by a eurobank, which some see as the solution to the debt crisis. But Jouyet, wearing his politician's hat, is attacking Cohen for conflict of interest.

Sigh. There is a genuine debate to be had about eurobonds. There are moral hazard issues, in that fiscally undisciplined states will be rewarded with lower borrowing costs than they would otherwise enjoy, while better-managed states will have to pay higher costs. And without an enforcement mechanism of some kind, the formula is a recipe for a future disaster. But the issues will never be reached if two men who know each other well as colleagues at Cepremap and undoubtedly respect each other's expertise descend to this level of mudslinging.

For my part, I am glad to hear that Cohen is talking to the Greeks, and I would hope that Jouyet would be talking to them as well. They need all the advice they can get.

Free at last!

Dominique de Villepin's acquittal in the Clearstream affair has been upheld on appeal, just in time for Villepin to fend off allegations by Robert Bourgi that he received suitcases of cash from African dictators while serving Jacques Chirac. Although Bourgi claims to have been motivated by a desire to clear his conscience after a long career as political bagman, one suspects a darker motive. Perhaps President Sarkozy's "friend of 28 years" was assigned to send a warning shot across Villepin's bow, just in case Villepin is thinking of some coup de théâtre, such as revealing what he knows about the financing of Édouard Balladur's 1995 presidential bid, of which Nicolas Sarkozy was treasurer.

It's all rather unseemly and frankly a bit old-fashioned in the age of electronic capital transfers. These suitcases full of cash are downright vieux jeu. But there has always been something rather earthy about Villepin, who reportedly swears like a guardsman and likes to mingle with shady characters such as Jean-Louis Gergorin. Despite his matinee idol looks, he sees himself as one of Napoleon's generals when he isn't writing poetry and may be spoiling for a fight now that he has returned, like Col. Chabert, from a long exile. I doubt that Bourgi will be enough to silence him. So the little guéguerre on the right might quickly heat up, further alienating the ordinary Frenchman from the political class, if such a thing is possible.

Tuesday, September 13, 2011

French Banks

French Banks are now in the eye of the financial storm. The government has contingency plans to supply fresh capital or even to nationalize the three top banks: SocGen, Crédit Agricole, and BNP Paribas.

When I began this blog in 2007, this is not what I thought I would be writing in 2011.

Monday, September 12, 2011

Institutional Redesign

Dani Rodrik sees a need for institutional redesign to save the Eurozone and the EU.

Sarkozy on Bourgi

President Sarkozy awarded Robert Bourgi the Legion of Honor, although he knew at the time, by the admission of both Bourgi and Claude Guéant, that Bourgi, his friend of 24 years, had allgedly been involved in passing illegal funds to President Chirac:


Je sais, cher Robert, pouvoir continuer à compter sur ta participation à la politique étrangère de la France, avec efficacité et discrétion. Je sais que, sur ce terrain de l'efficacité et de la discrétion, tu as eu le meilleur des professeurs et que tu n'es pas homme à oublier les conseils de celui qui te conseillais jadis, de “rester à l'ombre, pour ne pas attraper de coup de soleil”. Sous le chaud soleil africain, ce n'est pas une vaine précaution ? Jacques Foccart avait bien raison.

Enfin, permettez-moi d'avoir un propos plus personnel. Ce qui nous unit Robert et moi, c'est une amitié de 24 ans, depuis que nous nous sommes rencontrés au RPR en 1983. Gaullistes, nous l'étions tous les deux passionnément. Toi, tu étais un grand connaisseur de l'âme africaine et tu portais déjà cette affection pour l'Afrique qui t'anime toujours. Moi, je n'étais alors que le très jeune responsable des jeunes RPR.

Explosion at French nuclear plant


Une explosion sur le site nucléaire de Marcoule pourrait entraîner des fuites radioactives

Un four a explosé lundi 12 septembre sur le site nucléaire de Marcoule (Gard), faisant un mort et plusieurs blessés. L'accident pourrait entraîner un risque de fuite radioactive, ont indiqué les pompiers et la préfecture. (AFP)

"That egomaniac"

Jacqueline Kennedy on the General:

Charles DeGaulle, the French president, is “that egomaniac.” 

Perhaps this was revenge for de Gaulle's reported quip at their first meeting. Seated next to le grand Charles at a state dinner, Jackie, née Bouvier, is supposed to have said, in her best schoolgirl French, "Mes ancêtres étaient français, mon général." To which de Gaulle allegedly replied: "Les miens aussi."

May I add that I met Mrs. Onassis in 1990, when I won a prize for translating a book about the French Revolution. She was among the guests at the prize dinner. She was working at the time as a book editor in Manhattan, and we talked about her latest project, a book about orthodox religious icons in the Slavic countries. She was charming and intelligent, or so it seemed to my awestruck self during our two-minute conversation. I remember as a child being quite enamored of her.

And despite all that, she preferred Malraux to me:

She calls André Malraux, the French novelist, “the most fascinating man I’ve ever talked to.”

Corruption Past, Present, and Future

So, Robert Bourgi has accused Chirac and Villepin of receiving suitcases full of cash from African potentates, and Chirac and Villepin have accused Bourgi of defamation. Bernard Girard speculates that a fratricidal war of corruption revelations may have broken out within the UMP. And that the recent revelations about Takkiedine, a Sarkozy financier, may have come from Qaddafi, making good on his threat to expose his corrupt financing of Sarkozy's campaign. Who knows? Bourgi's motivation is quite puzzling. We may never get to the bottom of it. But the clouds hanging over the right--with the Chirac trial under way, a decision in the Clearstream case expected on Wednesday, Mediapart's series on Takkiedine, and the lingering Woerth-Bettencourt affair--are thicker than the DSK cloud hanging over the PS.

Unfortunately, all of this scandalousness only reinforces the cry from the extremes: tous pourris. If French banks are now downgraded, as Moody's is threatening to do, and the euro crisis deepens, the atmosphere could quickly turn from threatening to calamitous.

Sunday, September 11, 2011

Moody's Downgrade for French Banks

BNP Paribas and Crédit Agricole are expected to be downgraded one notch and SocGen two notches owing to Greek debt exposure and decline in share value.

Saturday, September 10, 2011

Eichengreen Is Also Pessimistic

Here:

European leaders have responded with a cacophony of proposals for restoring confidence. Jean-Claude Trichet, the president of the European Central Bank, has called for stricter budgetary rules. Mario Draghi, head of the Bank of Italy and Trichet’s anointed successor at the ECB, has called for binding limits not on just budgets but also on a host of other national economic policies. Guy Verhofstadt, leader of the Alliance of Liberals and Democrats for Europe in the European Parliament, is only one in a growing chorus of voices calling for the creation of Eurobonds. Germany’s finance minister, Wolfgang Schäuble, has suggested that Europe needs to move to full fiscal union.
If these proposals have one thing in common, it is that they all fail to address the eurozone’s immediate problems. Some, like stronger fiscal rules and closer surveillance of policies affecting competitiveness, might help to head off some future crisis, but they will do nothing to resolve this one.
...
But Europe doesn’t have months, much less years, to resolve its crisis. At this point, it has only days to avert the worst. It is critical that leaders distinguish what must be done now from what can be left for later.

Bad Business

It's an ancestral fear. Something deep inside me gets very nervous when a secret policeman declares his allegiance to a party of the extreme right. Yves Bertrand, former head of the Renseignements généraux, hasn't gone quite that far. After several meetings with Marine Le Pen, arranged by a "common friend," he has merely called for an end to the supposed "demonization" of the FN. But the handwriting is on the wall.

Endgame for the Euro?

Paul Krugman hopes not, but he thinks that Jürgen Stark's departure from the ECB may trigger a self-fulfilling doom:
By resigning from the ECB, Juergen Stark has conveyed, deliberately or not, the message that there will be no such lender of last resort, that there isn’t enough political cohesion in the eurozone to stand behind countries under market attack. And this translates directly into soaring spreads for Spain and Italy; the self-fulfilling crisis is on.

Help from China

The Chinese haven't said no but remain cautious:
China already has apparently poured tens of billions of dollars worth of foreign reserves into euro-denominated investments this year. But Chinese officials are still cautious about taking big risks with the country’s $3.2 trillion nest egg. When considered in the context of China’s 1.3 billion people, that nest egg is not necessarily an infinite treasure.

“China is a poor country with only $4,000 per capita income,” Yu Yongding, a Chinese top economist and former member of the central bank’s monetary policy committee said in an interview in China. “To talk and think about China to rescue countries with $40,000 per capita incomes is ridiculous.”

China is ready to help, Mr. Yu said, “but European countries first should show that they have a clear road map and convincing policies to preserve the euro and solve their problems as well as the political will to make necessary sacrifices.”

Friday, September 9, 2011

Corruption in the Balladur Government

According to Mediapart:

Un document inédit obtenu par Mediapart évoque, pour la première fois, l'implication de François Léotard, ministre de la défense signataire de ces marchés, dans l'un des dossiers instruits par les juges Renaud Van Ruymbeke et Roger Le Loire, le volet financier de l'affaire Karachi. Selon un courrier rédigé par un avocat suisse lié à M. Takieddine (voir en bas de la page), l'Etat français prétendait ainsi disposer d'éléments susceptibles de mettre en cause directement l'ancien ministre de la défense. 


Mediapart has been running a series of articles linking Takieddine to the current government and other UMP officials such as J.-F. Copé.

French Banks Fudge Losses on Greek Debt

The French are not the only offenders but apparently are the worst:

Broadly speaking, there seems to be a consensus within countries. British banks were most willing to swallow bad medicine and admit the bonds were worth far less than par value. Some German banks were equally forthcoming, but others were less so. Italian banks seem to have done as little as they could, but did take write-downs. French banks went the farthest to find ways to act as if Greek bonds were just fine.
...

It is the French securities regulator, the Autorité des Marchés Financiers, whose reaction will matter most. If it forces French banks to change their accounting, it risks incurring the wrath of both the French government and French bank regulators. If it looks the other way and other European securities regulators do nothing, the essential weakness of international standards — a lack of consistent enforcement — will be clear to all.
...
Or it may not. Although they use similar names in various countries, the auditing firms are organized as national partnerships. There are efforts within the firms to assure consistency across borders, but in the end it is the French partnership — which is no doubt quite aware of what the French government wants — that decides what it will allow French companies to do.

Thursday, September 8, 2011

A Forthright Socialist

At last, a Socialist with the courage to say that la règle d'or is nonsense. Unfortunately, he's not running:


Intellectual Property Issues in the EU and France

Joe Karaganis, vice-president of the American Assembly, considers Europe's approach to intellectual property:

Over the past two decades, the EC has been a very active proponent of higher IP standards and stronger enforcement, from the ACTA agreement, to the upcoming revision to the Enforcement Directive, to the imminent extension of copyright on recordings (see Part Un). Let’s ask the obvious question: why?
...
The EC clearly speaks for the European audiovisual industries on these issues, who stand, in theory, to gain from stronger IP enforcement (or maybe not!). But who speaks for the massive and very real consumer surplus? No one. I’m aware of only one study that makes any effort to model it: the Dutch government funded “Ups and Downs: Economic and Cultural Effects of File Sharing on Music, Film and Games,” which estimated the annual welfare benefit from music filesharing in the Netherlands at around 100 million euros. Multiply by 30 for a very crude extrapolation of this benefit across the EU.
...
But there’s a catch: so far, the European market (and beyond that, the global market) has had little to do with expressions of cultural specificity or auteur-driven visions. It has to do, above all, with making films in English that minimize those particularities. It means producing a Europe built around historical epics (Ironclad), sci-fi/fantasy (Inception, Harry Potter) or, often quite literally, the perspective of the universal (American) tourist, like last year’s The Tourist (Johnny Depp in Venice) or Unknown (Liam Neeson in Berlin). All of the above were joint US/EU productions on our July download list. And it means a European film industry reorganized further into an investment vehicle for Hollywood movies, like Vendome Pictures, the now defunct publicly-funded Medienfonds in Germany (Battlefield Earth,Terminator 3), or Luc Besson’s massive, soon-to-be opened Cite du Cinema north of Paris.

There's a lot more in this long but very rich article.

Wednesday, September 7, 2011

The Front National and the "Popular Classes"

Why does the FN appeal to les classes populaires? A Fondation Jean-Jaurès study tries to answer this question:

Sur 85 pages, ils livrent les ressorts de cette progression: il ne s'agit pas «d'un effet des discours populistes», mais plutôt d'un «basculement» dans l'opinion entre fin 2010 et début 2011, et de «représentations structuré(es) par un sentiment général d’"insécurisation"». Les auteurs mettent en évidence la corrélation d'un cocktail explosif: «insécurité économique» et «sentiment d'insécurité physique».
This is reminiscent of the US Tea Party phenomenon:

Deux épisodes ont déterminé cette vision. D'une part, le fait que les Etats ont «sauvé» les banques, mais que, une fois redressées, elles«n'ont pas joué le jeu et l'Etat s'est fait berner». D'autre part, la question grecque. «Pour les milieux populaires, l'austérité imposée aux Grecs n'est pas le fait d'une décision politique, nationale ou européenne, mais d'une décision des marchés financiers», décryptent Fourquet et Mergier. 

Sex obligatory in marriage, French court rules

A French court has awarded a woman damages because her husband wouldn't have sex with her.

Architecture and Oppression

A very nice piece by Scott Sayare on changing architectural theories of housing for the poor (in this case in La Courneuve):
Erected in the 1960s, the 4000 was meant as a utopia, an experiment in social engineering that would rationalize the lives of the immigrant workers it would house.

The theory of the day, drawing on the architectural philosophy of Le Corbusier, held that residential areas ought to remain separate from roads and the workplace, and so the cluster was built as a sort of island; residents trudged across a muddy field to reach the adjacent train station. Each airy apartment was equipped with a bathroom, a relative rarity in Paris at the time. The complex was deemed revolutionary.

A model of the 4000 was exhibited at the Grand Palais in 1961.
...
And yet, while the particular philosophy underlying the 4000 has been disavowed, few French officials have jettisoned a belief in the primacy of architecture in shaping social outcomes, said Marie-Christine Vatov, the editor in chief at Innovapresse, a media group specializing in architecture and urban planning.
 “Mixing” and “openness” have replaced “separation” and “uniformity” as the watchwords of the day. But the central lesson of the past decades, Ms. Vatov said, has been the error of such faith in the power of architecture.

Rumors Swirl Around European Banks

Here.
European policy makers, determined to avoid such a catastrophe, are prepared to use hundreds of billions of euros of bailout money to prevent any major bank from failing.
But questions continue to mount about the ability of Europe’s banks to ride out the crisis, as some are having a harder time securing loans needed for daily operations.
American financial institutions, seeking to inoculate themselves from the growing risks, are increasingly wary of making new short-term loans in some cases and are pulling back from doing business with their European counterparts — moves that could exacerbate the funding problems of European banks.

Tuesday, September 6, 2011

Obama et Sarkozy, même combat?

Read John Vinocur:
Both presidents’ overall approval ratings are in negative territory.

But making a comparison between two men with pretty much the same problems (while trying to take into account the trajectory of changing moods in their countries) is much more complex than a slew of poll results. Coming back to France after close to four weeks of unscientific watching and listening on the other side of the Atlantic provides an interesting contrast.

In the United States, the impact of markedly bad unemployment figures of 9.1 percent — the net job change of zero in August was the first of its kind since 1945 — has immense shock value in a country used to jobless rates regularly half those of Western Europe. People are truly taken aback.
...
If there is a mood shift in France, too (although only traces show up in the poll scores), it is in Mr. Sarkozy’s favor.

The cover story of the news magazine Le Point this week doesn’t show the usual Sam the Eagle scowling president, a kind of “Muppet Show” Mr. Gloom, but a relaxed-looking, very blue-eyed man with the headline “And if it were him again?”

Over the weekend, the TNS Sofres poll that reported the president’s ongoing unpopularity (about 70 percent) added this analysis: “Certain indicators are flashing green for Sarkozy and change the givens.” It said he had picked up 13 points from the far-right National Front party.

UPDATE: On the French side:
Au premier tour, Nicolas Sarkozy oscille entre 20 et 24 % et, au second tour, il est systématiquement donné perdant dans des proportions certes peu réalistes par leur ampleur (près de 58 %), mais révélatrices du rejet. Cette crise de confiance est avant tout une crise du résultat, tant l'espérance suscitée par la campagne de 2006-2007 a été grande. Elle s'est ensuite doublée d'une crispation à l'égard de la personne et de son exercice de la fonction présidentielle.
The same comment holds true of Obama: high expectations, disappointing achievement.

Monday, September 5, 2011

Le capitalisme à papa

France is not like other capitalist countries:
En 1988, 90 des plus grandes fortunes sur 150 s'étaient constituées depuis moins de quarante ans. En 2008, sur les 200 plus grandes entreprises françaises, 76 étaient sous contrôle familial , contre 62 vingt ans plus tôt.

L'histoire économique de la France reste marquée par l'empreinte d'un capitalisme familial dont l'activité s'est étendue à l'international.

Autre spécificité hexagonale, la concentration des pouvoirs. "Une petite centaine de personnes possède 43 % des droits de vote des sociétés du CAC 40." Une consanguinité qu profite aux technocrates passés par la haute fonction publique, parfois issus des "grandes familles" qui ont envoyé leurs héritiers dans les"bonnes écoles".

Villepin: Tous pourris (ou presque)

One expects Marine Le Pen and Jean-Luc Mélenchon to attack the corruption of the political elite in toto. That is their stock in trade. It's less expected when it comes from Dominique de Villepin.

Clerk Contradicts Judge

The clerk of juge d'instruction Isabelle Prévost-Desprez, the person who is supposed to have heard the off-the-record remark implicating Sarkozy in the Bettencourt affair, denies the judge's assertion. Under oath. This whole business becomes more unsavory by the day.

How to Pay for the Non-Free Lunch

A Fiscal Union for the Euro: Some Lessons from History
by Michael D. Bordo, Agnieszka Markiewicz, Lars Jonung  -  #17380 (DAE ME)

Abstract:

The recent financial crisis 2007-2009 was the longest and the deepest
recession since the Great Depression of 1930.  The crisis that
originated in subprime mortgage markets was spread and amplified
through globalised financial markets and resulted in severe debt
crises in several European countries in 2010 and 2011.  Events
revealed that the European Union had insufficient means to halt the
spiral of European debt crisis.  In particular, no pan-European
fiscal mechanism to face a global crisis is available at present.
The aim of this study is to identify the characteristics of a robust
common fiscal policy framework that could have alleviated the
consequences of the recent crisis.  This is done by using the
political and fiscal history of five federal states; Argentina,
Brazil, Canada, Germany and the United States.

http://papers.nber.org/papers/W17380

No Free Lunch

A new paper by Maurice Obstfeld:


Abstract:

This paper argues that if policymakers seek to enhance global
liquidity, then the international community must provide a higher and
better coordinated level of fiscal support than it has in the past.
Loans to troubled sovereigns or financial institutions imply a credit
risk that ultimately must be lodged somewhere.  Expanded
international lending facilities, including an expanded IMF, cannot
remain unconditionally solvent absent an expanded level of fiscal
backup.  The same point obviously applies to the European framework
for managing internal sovereign debt problems, including proposals
for a jointly guaranteed eurozone sovereign bond.  Even attainment of
a significant role for the Special Drawing Right depends upon
enhanced fiscal resources and burden sharing at the international
level.

http://papers.nber.org/papers/W17379

Sunday, September 4, 2011

Calling a Spade a Heart

I find myself increasingly disenchanted with my own political camps both at home and abroad. Why can't they call a spade a spade? The règle d'or is a foolish idea, a meaningless gesture that will impose no real constraint on what the government does in the future, as I argued the other day. Yet here we have Hollande and Royal hemming and hawing about the proposal, which after all comes from the right, as if they were afraid that frankly criticizing the idea will make them vulnerable to charges of profligacy and irresponsibility. But of course they will be charged with these things anyway. Why not simply say what they think? Perhaps they really do thing that a balanced-budget amendment is a good idea. If so, let them explain why. It would be more interesting to know their reasoning than to be told that they really can't make up their minds.

Education Polices of the Various Candidates

A rundown here.

"La vieillesse est un naufrage"

So, Jacques Chirac is afflicted with anosognosie, which, if my scientific Latin serves, means that he doesn't know what he's afflicted with. It's a sad end to an impressive career and one that will no doubt deprive us of the final spectacle of a former president having to defend a corrupt system in court. Whatever one thought of Chirac's politics, one had to admire the political animal, and Chirac's animal instincts in the political jungle were unrivaled. Although Mitterrand earned the epithet "le Florentin," it might equally well have applied to his perennial rival and sometime confederate.

I never met Chirac, but I know many people who have and who assure me that he was far more impressive in private than in public. He never quite mastered the television cameras, before which he always struck me as a bit artificial, cabotin, uncertain of his power to persuade. But persuasion is not really the métier of the pure politician, whose element is power, not reason, and Chirac knew the manifold arts of power as well as anyone. He could neutralize a superior force by playing it off against another, almost equal--and to himself equally hostile--force: witness his use of Mitterrand against Giscard.

This pure politics isn't, of course, the politics that armchair intellectuals like myself usually gravitate toward, but, perhaps chastened by disappointment with Obama's inability to outmaneuver his enemies, we sometimes feel a sneaking admiration for wizened old warriors, even--or perhaps especially--those whose cunning defeated our side more than once.

The trial will probably go on, but what will we learn that we don't already know? That among the ways of power that Chirac mastered was of course the way of money, and that one of the ways of securing the loyalty of henchmen and even potential enemies is to fund them through sinecures hidden in the recesses of this or that governmental budget. So Chirac allegedly created fictitious jobs for which the city of Paris paid when he was mayor. His henchmen have already taken the fall for some of these offenses, and Juppé, after his years in the desert, is even back in power and glory comme si de rien n'était. In short, the law may sanction the ways of power, but nobody really cares about what everyone knew was a system governed by the rules of a now bygone era. The rules have changed, but corruption remains, and the only corruption that truly shocks is that which goes beyond the unwritten rules of each political epoch. How far did Chirac stray? We'll probably never know, although reporters like Franz-Olivier Giesbert like to embellish their books with stories of suitcases full of cash disbursed from safes hidden behind pictures in the office of the mayor of Paris, and no one bats an eyelash. This is just accepted as the folklore of French government. No proof or corroboration is necessary to print such items.

For a lucid and thoughtful appreciation of Chirac's career, see the forthcoming review of his memoirs by my friend and colleague George Ross, who was actually once a student of Chirac's at Sciences Po. It will appear in French Politics, Culture, & Society.

Hollande, Social Liberal?

Laurent Mauduit has an interesting analysis of François Hollande's positioning in Mediapart. It's a long article, whose richness I will diminish by summing it up brutally as a complaint that Hollande is in the process of "Strauss-Kahnizing" himself. That is, he is taking increasingly "social liberal" (and Mauduit sometimes uses the terms "conservative" and "reactionary," not to mention "third way," as if these were all synonymous with "social liberal") positions on key economic issues such as taxation, deficit reduction, the wisdom of a balanced budget, and the role of the state. Indeed, Hollande's use of the mantra "l'État ne peut pas tout" leads Mauduit to compare him to the Jospin of 2002 and to conclude that Holland is making the same error as Jospin: running in the second round of the presidential election before securing solid support from his left in the first.

I have noted some of these points of Hollande's program in previous blog posts, and one in particular, the idea of enshrining decentralized wage negotiations in a constitutional amendment, led me to wonder if Hollande wasn't attempting the very strategy that Mauduit lays out. Bernard Girard alludes to this point in his post today on Mauduit's article.

That said, I share many of Bernard's questions about Mauduit's analysis. I have already noted the amalgame of "social liberal," "conservative," and "reactionary." Being something of a social liberal myself, I recognize genuine political differences on matters such as the proper role of the state and the advice of economists, whose influence on Hollande is, I think, more difficult to evaluate than Mauduit allows. Nor am I sure that his method of inferring their politics is the right one. He notes, for example, that Jean-Paul Fitoussi has advised Sarkozy and that therefore his presence at Hollande's side connotes une droitisation of the candidate. But Fitoussi's advice to Sarkozy has generally been on the side of more stimulus, opposition to the ECB, etc. I think it's unfair to characterize him as "a reactionary."

Still, in spite of all of my real differences of opinion with Mauduit, the core of his analysis remains: Hollande is trying to occupy the space left vacant by DSK's fall; he has increasingly emphasized the need for "rigor" in his economic discourse; and he is neglecting to appeal to "the people of the left" and instead tilting his campaign rhetoric in the direction of a more centrist electorate.

Now, I believe that the presidential election will ultimately be won in the center, as I have said a number of times, but I'm not at all sure that that is where the Socialist primary will be won. The polls seem to contradict me, since Hollande currently enjoys a comfortable lead. And perhaps the voters to whom his new positioning will appeal are precisely the ones who will turn out to vote in the primary. But maybe not. There may be an October surprise in store only slightly less stunning than the surprise of 2002, and traceable to similar roots: the isolation of the political class from its base, and a consequent tendency to organize a candidate's message around policy positions that may seem coherent and correct to advisors yet remain unappealing to the party's traditional base of support.

Saturday, September 3, 2011

Rawls and van Parijs on EU

An account of a very interesting debate between John Rawls and Philippe van Parijs about the EU and, more generally, the nature of capitalism and globalization.

Sarko Surrenders ... to Raffarin

It seems that party unity is essential, more essential than saving face. In the great clash over the "theme park tax" between the president and the former prime minister Jean-Pierre Raffarin, Raffarin has emerged victorious. The Disney tax will not be raised, and lovers of Mickey can continue to be fleeced at the old rate. There wasn't enough in it for state coffers for Sarkozy to risk alienating the Raffarin faction, or shopkeepers' UMP.