Tuesday, July 10, 2012

Fake Tocqueville Quotes Never Die

Here is one of the more persistent ones. As a translator of Tocqueville, I frequently receive queries about this or that remark that Tocqueville is alleged to have made. By now I can recognize the common forgeries, which are frequently found posted on conservative Web sites, because they enlist Tocqueville's authority on the conservative side in some contemporary policy controversy. Tocqueville, don't you know, opposed Obamacare, tax increases on the wealthy, regulation of financial markets, what have you. Except he didn't. The forgeries usually contrive to dress up the reactionary wisdom of the moment in some sonorous verbiage intended to make the reader think that some supposedly imminent danger to the Republic was long ago foreseen by the French sage.

It's more difficult when I'm asked about a passage that I don't immediately recognize as one of the standard forgeries. Although I've translated a lot of Tocqueville, more than 3,000 pages altogether, I haven't translated let alone read or memorized all twenty-some volumes of his collected works. And it's hard to prove a negative. Tocqueville held many views on many subjects and sometimes contradicted himself, so it's perfectly possible that he said some things that may appeal to this or that contemporary political observer even if they aren't consistent with the main thrust of his thought, because he wasn't always consistent with himself. But be forewarned: if you see a Tocqueville quote which does not come with a specific reference to chapter and verse, don't count on its reliability.

Le socialisme gestionnaire

Out of power, the Socialists pretended that France's competitiveness problems could be solved by "innovation." Creativity, after all, costs nothing, while the idea of nurturing it can justify the hiring of 60,000 additional schoolteachers. In power, however, the need to compete now, not ten years from now, has seemed more urgent and compelling. So, heeding calls from the Medef and left-leaning former EADS CEO Louis Gallois, among others, François Hollande has signaled his readiness to reduce employer contributions to social security and shift the burden to the CSG, which will broaden the tax base (including to income from capital) while presumably--presumably--allowing companies to reduce prices. Of course the additional burden on taxpayers may reduce demand as well (but, since every cloud has a silver lining, a reduction in demand for imports would in fact be welcome). Apparently, an increase in the VAT has been ruled out, for reasons that are unclear (to me, at least).

Whatever the merits of the move, this is the kind of reversal of direction that makes many people despair of politics. The ease with which firm principles and convictions are shed as a party moves from opposition to government easily leaves the impression that most political debate is Kabuki theater. Alas.

UPDATE: And right on cure, the UMP shows that it, too, can play this mug's game. Although only yesterday it was ready to approve a social VAT, today the idea of a "tax increase on those who work" is anathema:

"Une augmentation de la CSG, pour moi, c'est criminel", a déclaré mardi 10 juillet l'ancien ministre UMP Laurent Wauquiez sur France 2, en commentant la conférence sociale qui se déroule depuis lundi à Paris."La réalité, a-t-il poursuivi, c'est qu'on s'apprête à nous habiller sous des grandes phrases une hausse brutale d'impôt, et à augmenter la CSG mais surtout sur ceux qui travaillent".

The Spanish Spending Spree

The Spanish central government was exemplary in its budget discipline before the crisis, but the same cannot be said of regional governments, which availed themselves of cheap funding from northern Europe to go on a spree based on grand illusions. (h/t Glyn Morgan)


The European Disunion

It's no wonder France, Germany, and the Netherlands can borrow at negative interest rates. The situation with respect to Spain and Italy is so confused that investors can hardly do anything but flee those countries. Not only can the Europeans not agree about what to do, they can't even agree about what they've agreed to. The Eurogroup finance ministers issued a statement meant to clarify things. There would indeed be direct subsidies to banks without sovereign guarantees: Then, there will be no sovereign guarantee required,” Thomas Weiser said at the press conference.
But… hang on now. Even when the eurozone-wide banking supervisor is all agreed and ready to go, will the recaps made after that point really not add to sovereign risk? German finance minister Wolfgang Schauble doesn’t think so. He also made a statement in the early hours of this morning. From the WSJ:

“We expect that the final liability of the state will remain” even once the banking supervisor is up and running, he told journalists. He added that what mattered was that the bank support wouldn’t add to a country’s debt—something that he said would be possible even under a scenario where the government retained liability for potential losses.
If you were trying to sabotage the agreement, if there was an agreement, you couldn't do it more effectively. So what exactly did the Germans agree to at the summit? Did they go the full Monti, as Monti claims, or did they leave sovereigns on the hook for any bailout aid to their banks? We may never know, since this "agreement" is likely to be rendered inoperative and supplanted by another even before the "comprehensive supervisory authority for banks" on which the bailout recaps are conditional is up and running.