Friday, January 6, 2012

The Mainstreaming of French Economics

An interesting new paper by Olivier Godechot on the development of the economics profession in France. See also Marion Fourcade's book (link below).


Carla Bruni's Foundation

Frédéric Martel has an exclusive piece on alleged financial irregularities connected with Carla Bruni's charitable foundation.

The Social VAT

The so-called social VAT is back in the news, plumped by the right and opposed by the left. Jacques Le Cacheux offers a dispassionate analysis. Conclusion:

En bref, la TVA « sociale » ne mérite ni excès d’honneur ni indignité. Comme pour toute réforme de la fiscalité, il ne faut certes pas en attendre le remède miracle contre le chômage, ni même un redressement massif de nos comptes extérieurs, même si elle participerait à l’amélioration de notre compétitivité-prix. Mais le rééquilibrage de nos prélèvements obligatoires, pour les faire porter davantage sur la consommation et moins sur le coût du travail doit être un objectif. Taxer la consommation est une bonne manière de procurer des ressources aux finances publiques dans un contexte de mondialisation, et la TVA, invention française adoptée par presque tous les pays, est une modalité commode de le faire, et de pratiquer, sans le dire, un forme de protectionnisme en détaxant les exportations.

The Signature Scandal

On France2 last night, Marine Le Pen told David Pujadas that she was having trouble collecting the 750 official signatures needed to secure a place on the presidential ballot. She maintained her position despite Pujadas' open skepticism.

One doesn't have to believe in a conspiracy mounted by the Élysée to think that Le Pen might have difficulty collecting signatures. Many a mayor might have perfectly conscientious reasons for refusing to further an FN candidacy. But if the result is to exclude MLP from the ballot, the very legitimacy of the election will be at stake, because the FN candidate is expected to receive around 20% of the first-round vote. You can't exclude 20% of the electorate and call an election legitimate.

In a related vein, there is a report from Thierry Desjardins that Dominique de Villepin has thrown the Élysée into a tizzy by registering at 8% in private polling. This would of course ensure Sarkozy's defeat, as Villepin would likely siphon off old Gaullist and Chiraquien elements of the UMP whose support Sarkozy absolutely requires. What to do? Try to prevent him from gathering enough signatures? Desjardins suggests that such a move is underway. De bonne guerre? Not really. In the end, it may be Villepin who hangs Sarko from a butcher's hook rather than the other way around.

Mont de Piété

The Times has an article about the Crédit Municipal in Paris, a venerable state-run pawnshop that has served the famous as well as the obscure for centuries.
Neither buyers nor sellers are inclined to identify themselves. Cameras are prohibited and security guards are omnipresent. One anonymous buyer admitted that good deals are now hard to come by. Watches and jewelry are the most common items to be pawned these days. Electronic goods, rapidly devalued by new technology, are refused.
Back in the old days mattresses were hard currency — a last resort for the desperate, and one of the few possessions bailiffs were not (and are still not today under French law) allowed to confiscate from your home. An inventory taken in 1868 counted 15,000 mattresses. The Crédit Municipal still has a 19th century mattress-delousing machine, a giant cylindrical contraption the pumped high pressure steam to kill any bedbugs.
Famous clients include Victor Hugo, Émile Zola, and the Prince de Joinville, a 19th-century gambler who once covered his debts by pawning a watch, a gift from his mother. When she asked why he wasn’t wearing it, he deftly replied, “It’s at my aunt’s.” This expression has become a French euphemism for a visit to the Crédit Municipal.

But my favorite French (and Spanish and Italian and even English euphemism for pawnbroker remains the title of this post.

France Pays Higher Interest

France auctioned sovereign debt yesterday and yields rose slightly:

The French Treasury sold €4 billion, or $5.1 billion, of 10-year bonds at an average yield of 3.29 percent, up from the 3.18 percent it paid at the last such auction in early December. Investors bid for 1.64 times the amount of the securities on offer.
Not panic but not a good sign either.