Tuesday, November 6, 2012
Piketty on the Gallois Report and Government Reaction
Here. I see here, clearly articulated, one line of emerging critique of the government's plan: it is intellectually incoherent, Piketty argues, "illegible," unclear, etc. Bernard Girard echoes the thought here. Given the total irrationality of fiscal debates in the US, I think "illegibility" is a rather mild criticism, though one can understand the disappointment of intellectuals who had hoped for a complete overhaul of the tax system. A fine idea in principle, but such ambition requires a more resounding mandate than Hollande received (for a program quite different from the one he has enacted, moreover) and a party more united than the PS about where it wants to take the country. Given the political constraints, I'm rather pleased that Hollande has moved, with some dispatch, toward a policy that holds out some promise of mild improvement. Of course the cost-shifting is merely a short-term response to a deteriorating competitive situation; the long-term response will be the real test, and it may be that a government forced to pinch its pennies ever tighter will be tempted to skimp on the investments in R&D, infrastructure, and education that are ultimately more important than the "legibility" of social-security financing.