Friday, May 31, 2013

French Documentary Film Denounced as Anti-Semitic

The American Jewish group JCALL is relaying the following French critique of a film by Béatrice Pignède:
Aucun de ces médias n’est complotiste ou d'extrême droite. Pourtant, tous assurent depuis la semaine dernière la promotion sur leurs sites du dernier film de Béatrice Pignède : «L’Oligarchie et le Sionisme».

Brisons immédiatement le suspense : ce documentaire prétendument «indépendant» (il est distribué par la même officine iranienne qui a produit l’année dernière le film de Dieudonné, «L’Antisémite») ne donne pas dans la subtilité. Infiltrés dans tous les pays occidentaux, les «réseaux sionistes» actionneraient partout les leviers de pouvoir pour imposer leur loi et mettre en œuvre leur plan de domination, le «Nouvel Ordre Mondial». Le «Sionisme», idéologie mortifère par laquelle l’«Oligarchie» étendrait son règne sur le monde, s’emploierait en effet à exploiter les événements de la Seconde Guerre mondiale à des fins politiques en jouant cyniquement sur la mauvaise conscience des Européens et en interdisant toute discussion libre sur la réalité de la Shoah. Avant-poste de cet impérialisme prédateur, l’Etat d’Israël menacerait à lui seul l’équilibre de la planète.
Has anyone seen this film? Are the allegations correct?

Record Unemployment in the Eurozone

And if Berlin has changed course (see previous post), the reason is not far to seek: unemployment in the Eurozone has reached a record high of 12.2%. Frau Merkel herself cites high youth unemployment in the southern tier as a reason to fear losing an entire generation, whose attitude toward the EU is being shaped by the botched response to the crisis. Is it too late to salvage anything from the wreckage? Perhaps not, and a shift in political rhetoric from punitive recrimination to empathetic comprehension would be a good start.

Has Berlin Changed Course?

Gavyn Davies thinks so:
Fiscal austerity, a concept which German Chancellor Merkel says meant nothing to her before the crisis, may have passed its heyday in the eurozone. This week, theEuropean Commission has published its country-specific recommendations, containing fiscal plans for member states that are subject to excessive deficit procedures. These plans, which will form the basis for political discussion at the next Summit on 27-28 June, allow for greater flexibility in reaching budget targets for several countries, including France, Spain, the Netherlands and Portugal.
Furthermore, there have been rumblings in the German press suggesting that Berlin is beginning to recognise that fiscal consolidation without economic growth could prove to be a Pyrrhic victory. If true, this could mark the beginning of a new approach in the eurozone, helping the weakest region in the global economy to recover from a recession that has already dragged on far too long. So how real is the prospect of change?
Here's more:
But a new way of thinking has recently taken hold in the German capital. In light of record new unemployment figures among young people, even the intransigent Germans now realize that action is needed. "If we don't act now, we risk losing an entire generation in Southern Europe," say people close to Schäuble.
Berlin is making an about-face, even though it aims to stick to its current austerity policy. The German government has stressed budget consolidation and structural reform since 2010, when Greece was on the verge of bankruptcy. Berlin has been arguing that this is the only way to instill confidence among investors in the battered debt-ridden countries and help their ailing economies recover.

Thursday, May 30, 2013

What's Wrong With the Agrégation?


A stinging critique by Fabrice Bouthillon of the agrégation system and the way it inhibits intellectual freedom in French universities
Je pose la question : existe-t-il au monde un
seul autre système universitaire qui confère à
quelques enseignants un pouvoir aussi démesuré
sur l’emploi du temps de leurs collègues,
une influence aussi indue sur la direction de
leur esprit, que ceux qu’exercent en France les
jurys d’agrégation ? Car les heures de travail
exigées par l’investissement dans la préparation
aboutissent à la négation de toute autonomie
des universités, et dans ce qu’elle a de
plus vital : à quoi bon en effet qu’elle soit
statutaire ou financière, si le coeur même de
la vie de l’Université, le travail intellectuel,
reste gouverné dans les faits par une instance
parisienne nommée par un ministre ? De
toutes les formes de centralisation intellectuelle,
la pire est celle qui ne tient que par
pression administrative.

Wednesday, May 29, 2013

French Manufacturing

The Current Moment, a blog run by two young scholars on which I have posted in the past, has an interesting argument on French industry in response to an FT article. The bottom line:
There has been much debate about how France can regain some of its competitiveness. Some suggest a strategic reorientation away from traditional manufacturing towards more hi-tech activities. What seems obvious is that lowering wages is still the strategy overwhelmingly favoured by businesses. Given how unlikely it is that this occurs via internal adjustment in France, the most probable outcome is that French companies continue to exploit outsourcing opportunities.
I don't agree with my colleagues at The Current Moment. If the wage bill were all that mattered, or what matters "overwhelmingly," all manufacturing would have moved to Bangladesh years ago, and Germany, even with the advantage it derives from outsourcing to Eastern Europe to lower labor costs, would not be the export powerhouse that it is, because whatever competitive advantage in labor cost it enjoys over France, it does not enjoy over China, Greece, or Spain. So clearly there are many other factors at work. Technology is certainly one of them, and France is right to try to take advantage of its relatively well-educated labor force by shifting investment to industries where scarce skills, organizational capacity, and slowly-acquired engineering knowhow are important inputs. Nor is there any necessary reason to disdain outsourcing of labor-intensive parts of the production process to lower-wage countries. This can benefit both partners in the exchange, as Economics 101 teaches. This is indeed "exploiting outsourcing opportunities," but, if everyone benefits, without the negative (perhaps Marxist?) connotation attached to "exploit."

To be sure, there is a numbers game to be played here. Can the shift of investment to new sectors which employ relatively fewer workers per unit  of output really ensure employment for all those who lose their jobs in more labor-intensive sectors? There are reasons for doubt as well as reasons for hope. But it is not helpful to portray the global economy as a cutthroat race to the bottom. It is not that and never has been.

Monday, May 27, 2013

An Appalling Portrait of French Universities Today

Le Monde does not mince words. The university of Perpignan, the subject of its portrait, is said to be rife with "students" whose only interest is meeting the minimum requirements for holding on to the scholarship money (470 euros per month for 10 months) that allows them, in conjunction with permitted work elsewhere, to "survive the economic crisis." They turn in empty exam books, because one must take the exam to hold on to the scholarship. They turn up in class only as necessary to qualify to take the exam and do nothing while they are there.

The university president is livid:
"Ces faux étudiants existent depuis toujours mais nous notons une accélération depuis deux-trois ans, en lien avec le chômage des jeunes et l'absence de dispositif de soutien financier pour cette période de transition entre lycée et activité", indique Fabrice Lorente. ...Le président de l'université s'agace : tout cela affecte ses statistiques de réussite en première année. "On nous en fait le reproche. Mais ces étudiants ne veulent pas travailler ! Et le système de répartition des moyens tient compte des taux de réussite en première année..." Taux de 15 % en AES, de 29 % en sociologie, mais de 44 % toutes filières confondues, une fois dilué le problème des faux étudiants. Ce qui place tout de même Perpignan à une très honorable 9e place des universités.
Meanwhile, the professors cope as best they can:
Les étudiants sont censés demeurer dans l'amphithéâtre un tiers du temps de l'épreuve, afin de permettre aux retardataires d'arriver. Mais les enseignants peinent à canaliser ces jeunes venus sans stylo qui trépignent, s'interpellent, sortent les téléphones portables, en attendant de s'échapper."Cette fois-ci, la salle était tellement bruyante que j'ai menacé de les exclure de l'examen et de les compter absents", témoigne Aude Harlé. Dissuasif. Cette absence vaut suppression de bourse. La sociologue organise désormais l'amphithéâtre de façon à épargner les étudiants qui entendent composer, incitant "ceux qui souhaitent partir vite" à se regrouper du côté droit qu'elle évacuera ensuite, rangée par rangée.
And the students?
La sortante suivante, pressée, court sur talons compensés. "J'ai rendez-vous chez le coiffeur, au Leclerc de je sais plus où." Puis viennent deux blondes qui préparent le concours d'infirmière. "La prépa coûte cher..."Assises en rang d'oignon, Sarah, Fara, Sabrina, Samia et quelques autres, moitié apprêtées comme des starlettes de téléréalité, moitié voilées, n'ont pas davantage passé l'examen. Elles redoublent la première année de sociologie ("C'est pas intéressant, ça mène à rien.") après un bac professionnel secrétariat et une admission refusée en BTS, travaillant de-ci de-là "au KFC" ou dans le ménage. 
And of course there is an ethnic-racial-religious undertone:
D'autant qu'à Perpignan, où les plus défavorisés sont souvent enfants de l'immigration maghrébine, le Front national fait recette... "Dans les examens, on commence à percevoir des regards de classe, de rancoeur, entre les jeunes de milieu très populaire et ceux des classes moyennes ou populaires stabilisées. A l'université, lieu de mixité, on entend désormais des propos porteurs de racisme", s'inquiète Eliane Le Dantec, maître de conférences en sociologie. "Ceux-là, ils sont là pour profiter. Ils ne cherchent même pas de travail", nous ont glissé plus tôt deux jeunes filles, devant la porte ouverte de l'amphithéâtre, en désignant quelques garçons d'origine maghrébine installés sur la droite. 
One might almost suspect such an appalling portrait of being a caricature, a fantastic product of the anti-immigrant imagination. But here it is in Le Monde. I assume there is some truth in the story. Perhaps readers sur place can confirm or deny.

Sunday, May 26, 2013

Extreme Rightists Occupy PS Headquarters

The big anti-gay marriage demo has provided a screen for various extreme-right groups, one of which has invaded and occupied the PS headquarters on rue Solferino. Now the police will have to get them out. The way in which the Taubira law has energized the Right and provided a theater for some of its more extreme groupuscules to stage their antics is a fascinating phenomenon, and one that I wouldn't have predicted. It's also been fascinating to watch J.-F. Copé attempt to exploit the demonstration, which no doubt attracts his ambitious eye because it has mobilized segments of the Right outside the orbit of the Front National and just possibly susceptible to a cleverly crafted message from the governmental Right. Copé hasn't yet hit on that message, but you can sense his desperate search. The Le Penists have been curiously inaudible on this issue, perhaps because MLP is laid up with a broken back, but perhaps because it doesn't really play into their new economic populist positioning.

Inauthenticity in Politics

Alexandre Jardin reflects on the difference between the public and private personas of many politicians:
Le 11 novembre dernier, Laurent Delahousse m’avait invité sur France 2, avec le ministre apparent d’une Education nationale que chacun sait ingouvernable, Vincent Peillon. Dans la salle de maquillage, juste avant de passer sur le plateau, nous avions eu une conversation d’honnêtes hommes. J’avais quelqu’un en face de moi, le vrai Peillon, assez touchant. Puis il passa avant moi sur le plateau et je vis apparaître sur les écrans de contrôle… sa marionnette officielle. Fausse voix. Discours plaqué, glacé. Inaudible. Une fiche derrière des lunettes. Une colère irraisonnée me gagna. Pourquoi cet homme de qualité ne nous faisait-il pas confiance en se montrant dans sa réalité au lieu de se cacher derrière sa fonction ? En le rejoignant sur le plateau, j’ai alors renoncé à la comédie habituelle qui veut qu’entre invités on taise le off : devant les caméras, j’ai dit que Peillon n’était pas du tout raccord avec son personnage réel que j’avais vu un instant plus tôt en coulisses. En direct, j’ai nommé son masque en rappelant qu’il semblait réel cinq minutes avant, et que j’entendais poursuivre la conversation avec le type authentique, pas avec la cassette. Deux heures plus tard, le rédac-chef de Delahousse me rappela pour m’informer que ce passage serait rediffusé le soir-même au 20 heures Le site de France-Télévision s’était embrasé. Les gens voulaient, massivement, que cesse le jeu habituel des rôles.
Unfortunately, Jardin does not suggest a reason for the inauthenticity he no doubt accurately observed. It is telling that the incident he recounts began in the green room of a TV studio, because TV, I think, has a lot to do with the phenomenon. The cost of a momentary slip has risen dramatically, because TV erodes the distance between political actors and spectators. In fostering a false intimacy, it also promotes an unreasonable confidence in spectators that they can judge at a distance the true character of actors they do not know intimately, whom they know only as performers, actors in the stage sense as well as the political sense. An actor who allows his mask to drop risks creating the illusion that the unmasked personality is more real than the masked one. This is not necessarily the case. The recited lines of the script may be the carefully composed, elaborately reasoned, far-sighted judgment of the role's creator, truer perhaps than the spontaneous sally that is mistakenly judged to be more authentic because less scripted. What Jardin is judging here, really, is not authenticity vs. inauthenticity but rather a standard of performance, in which he finds Peillon wanting. He is a poor actor; he cannot carry conviction though playing his own part.

Earlier in the essay, Jardin praises Charles de Gaulle as a more authentic incarnation of power. But de Gaulle was in fact a consummate performer, who never let his character lapse. It would be a mistake to measure his performance in terms of authenticity. It was a calculated act by an actor more skilled at ruse than Vincent Peillon.

Saturday, May 25, 2013

Il ne faut pas désespérer Billancourt

François Hollande has once again riled up the left wing of the PS, such as it is, by praising Germany social democracy in general and Gerhard Schröder in particular. Emmanuel Maurel, VP of the Ile-de-France region and a leader of the party's left wing, remarked that in the Jospin era, the PS saw itself as an alternative to Schröderism.

The PS defense of its president was characteristically inept. Essentially, the party spokesman said, "Pay no mind to what Hollande actually says, because he will say whatever he needs to please the audience he is speaking to at the time." To wit:
Rue de Solférino, on tente d'apaiser les esprits. "Ne nous emballons pas, Hollande fait simplement du Hollande : il s'adapte au terrain. La semaine dernière, à Paris, il dit qu'il est socialiste devant la presse française ; cette semaine, à Leipzig, il dit qu'il est social-démocrate devant le SPD", minimise un membre de la direction.
He might as well have said, "Le président est un faux-cul incorrigible, laisse tomber." What France expects, I think, is a president who defines his policy in terms of a clearly articulated view of France's situation, not as the mirror image of a foreign leader's policy, no matter how successful. Germany and France have long had very different economic strategies. It makes no sense to pretend that recipes can simply be imported from elsewhere without changing the ingredients or proportions.

Friday, May 24, 2013

Michel Crozier Dies

Michel Crozier, the eminent sociologist best known for The Bureaucratic Phenomenon, died last night at the age of 91. His book The Actor and the System was the first I ever translated.

French sociology also lost Raymond Boudon and Robert Castel earlier this year, which has been a grim season for a discipline that blossomed in the 1970s and 80s.

Lagarde Is Named as a "Témoin assisté"

Ah, French law. How to explain what un témoin assisté is, and why the director of the IMF is one as of today? In the old days, a "person of interest" in a criminal case could either be a "witness" (témoin) or "indicted" (inculpé). In 1987, however, the law was changed: one was no longer indicted but rather "mis en examen," that is, placed under official investigation. Short of that, but somewhere this side of exonerated, was created the new status of témoin assisté, no longer a simple witness but not exactly an accused. Presumably this was meant to preserve the "presumption of innocence," thought to be somewhat compromised by indictment or its more modern counterpart, which suggests at least a preliminary belief in the person's involvement in the commission of some crime.

The témoin assisté has certain rights, including the right to have an attorney examine the case files and appear with the witness, to insist on confrontation with accusers, and so on.

To a simple-minded Anglo-Saxon, it all seems rather a muddle, and for now it probably won't affect Lagarde's IMF position. The Fund has declared its confidence in her and knew about the allegations when it hired her. But it also declared its confidence in DSK before dumping him--not that the cases are in any way comparable.

I suspect that Lagarde, as a veteran litigator in the US, will plead that the use of a panel of private arbitrators to settle a complex lawsuit involving teams of corporate lawyers on both sides was a perfectly reasonable way to proceed and far more likely to be fair and efficient than a jury trial. How was she to know that there would be reason to doubt the neutrality of the arbitrators? Or whatever.

There will be so much smoke blown here and there before this case is over that I doubt anyone will know what happened in the end. And who really cares whether the bankers diddled Tapie or Tapie the bankers? The state should have gotten more out of the deal, but in the grand scheme of things, it's a pittance. Anyone who can say what Justice is in this case has more patience than I have. But resonant words will be spoken, no doubt, and grand claims advanced, and in the end there will be a settlement, and perhaps someone will go to jail. But I doubt it will be Christine Lagarde.

"Culture Is No Longer a State Priority"

One thing we learn from this morning's Le Monde is that "culture is no longer a state priority" in France. Another is that François Hollande does not read novels. A third is that his culture minister, Aurélie Filippetti, has cut the cultural budget by 30 2%. "What would people have said if the Right had done that," mused former right-wing culture minister Renaud Donnedieu de Vabres.

That said, does it matter? I've often been critical of the way the cultural ministry has spent its money over the years. Too much was squandered on pseudo-prestigious eyewash and subsidization of the ephemeral. Still, le patrimoine culturel is immense, and it needs to be tended carefully. Cheese-paring will eventually lead to rot.

But preservation is not the sexy part of the culture minister's mission. "Innovation" is what always gets the attention. Filippetti has shown little interest in this. Yet surely there are projects that an ambitious, left-leaning miner's daughter, even serving a president who eschews literature, would find worthwhile, even in an age of austerity.

The promotion of French scholarship abroad comes to mind. Yet the budget reductions in Paris are all too obvious in the reduced subsidies available on this side of the Atlantic for scholarly travel, conferences, and publishing. In high Parisian precincts it is apparently now believed that the market can be left to its own devices in this regard. Ironically, at the same moment, the "cultural exception" has been asserted in trade negotiations, precisely because, it is averred, the market does not know best.

It is a strange schizophrenia that afflicts France these days. Culture--in its old and venerated sense as a jewel in the crown of the State--is defended these days by the ministry of foreign trade but relegated to an orphanage by the ministry of culture.

Wednesday, May 22, 2013

One Million Page Views

According to Google Analytics, this blog has now received over one million page views since its inception in May of 2007. StatCounter, the other statistical source I use, counts somewhere in the 800,000s, probably because it uses different criteria to determine what counts as a "unique" page view. In any case, the number of views is larger than I ever expected when I started this blog. Thank you all for reading, and please keep coming back.

Lagarde To Be Placed Under Investigation

The head of the IMF may have to receive combat pay in the future. It's a dangerous occupation. Christine Lagarde's predecessor ended up in jail (briefly), and now Le Monde reports that Mme Lagarde herself will soon be placed under official investigation in connection with the Tapie Affair. You may recall that M. Tapie was the beneficiary of a sweetheart deal in settlement of a lawsuit, a deal on which Mme Lagarde was required to sign off in her previous position as French minister of finance. The deal was probably not her idea, nor even to her liking, but would she be IMF chief today if she hadn't signed it? Probably not, given that it was backed by then president Nicolas Sarkozy, whose support was instrumental in getting Lagarde appointed to the IMF. You do what you have to do, but sometimes it comes back to haunt you. How good the evidence of wrongdoing against Lagarde  is remains to be seen, however. It may be a long road to a conviction, and the investigation hasn't even begun, so it would be foolish to lay odds.

Open Markets Help French Agriculture

According to Eric Adam, an advisor to the National Assembly:
En effet, si l’agriculture, est encore tenue à l’écart de la crise économique européenne, c’est grâce à son ouverture sur l’extérieur. Qu’il s’agisse des céréales, des produits laitiers et plus récemment de la viande bovine, tous doivent leur redressement au marché mondial. Pour mémoire, la moitié de la production française de blé est destinée à l’exportation. Du côté de la viande bovine, la consommation française est en baisse constante et les exportations ont progressé en 2011 de 9% et principalement vers les pays tiers. Enfin, l’industrie laitière exporte près de 30 % du lait collecté.
Selon France Agrimer, en 2011, les exportations de produits agroalimentaires ont enregistré une hausse de 15% par rapport à 2010. En comptabilisant les importations, l’excédent commercial de ce secteur est le deuxième plus important derrière celui de l’aéronautique et atteint un record historique de 11,6 milliards d’euros pour l’année 2012. Avec une part de marché mondiale de 6,5% dans l’agroalimentaire, la France se situe au même niveau que le Brésil et devant l’Allemagne.

Tuesday, May 21, 2013

The German Social Democrats: A Model for the Future of the Left?

The German Social Democratic Party, the SPD, is about to celebrate its 150th anniversary. Le Monde devotes an interesting article to the party's history, drawing a certain number of contrasts with the French Socialist Party. This one intrigued me, especially Helmut Schmidt's bon mot:
Entre les Français et les Allemands, ce sont en fait deux conceptions de la politique qui s'opposent. "Les Français croient au primat du politique. Ils aiment penser qu'au lendemain d'une élection, tout peut changer. L'Allemagne est plus proche de la réalité. Helmut Schmidt avait même eu ce mot impensable en France : "Celui qui a des visions doit aller se faire soigner chez le psychiatre"", analyse Klaus-Peter Sick. Un réalisme qui explique sans doute également la proximité du SPD avec le mouvement syndical allemand : une autre caractéristique qui rapproche le SPD du Labour britannique et le distingue du Parti socialiste français. Celui-ci n'a toujours pas eu son "Bad-Godesberg", un congrès au cours duquel le SPD, en 1959, a abandonné la vulgate marxiste et assumé son réformisme.
On the other hand, as Le Monde notes in its next sentence, pragmatism is not without its disadvantages, and it doesn't always help to win elections. A second article ponders the trans-European effort to conceive of a new future for the social-democratic left, which seems to have run out of ideas. It seems that there is a new "Progressive Alliance" within the Socialist International, but this is not necessarily heartening to American Democrats who have witnessed the marginalization of the self-styled "progressive" faction within the Democratic Party over the last 50 years. The Progressive Alliance seems rather cool on the EU, a direction that admits of several interpretations, some hopeful, others less so.  A Dutch scholar, Prof. J. M. De Waele, has this to say:

En réalité, les crises ne sont pas bonnes pour elle [la gauche sociale-démocrate]. Elle est apte à partager les fruits de la croissance, pas les effets de la crise. Et elle est, sauf rares exceptions, incapable d'élaborer une alternative pour les vrais perdants de la mondialisation. Elle doit, par ailleurs, bien admettre que le cadre européen qu'elle défend n'est pas protecteur.
He goes on to say that what the left needs to do is to rethink its approach to globalization. It must admit that it cannot preserve the current hierarchy of labor in Europe and must instead adapt to the new competitive landscape. I have been making this argument for some time, though admittedly it's easier to make in general terms than to translate into specific policies. But there are some things that clearly can be done now: facilitate industrial restructuring, fund job retraining for displaced workers, encourage new investment, provide additional funds for education, government-backed R&D, increase opportunities for young researchers. This is not neo-liberalism, Government must play an active role, but it must not cling to the past in a haze of nostalgia for the achievements of the Trente Glorieuses. For one thing, those years did not seem entirely glorious at the time. For another, they ended in 1975. It's time to move on.

French Historian Shoots Himself Inside Notre-Dame, Invoking Heidegger and Renaud Camus

Dominique Venner, A French historian and extreme-right-wing activist, former member of the OAS, shot himself inside Notre-Dame, apparently to protest what he considers to be the Islamization of Europe. He invoked Heidegger and Renaud Camus in his suicide note:
Dans son dernier post de blog, intitulé "La manif du 26 mai et Heidegger", il affirme que "les manifestants du 26 mai [contre le mariage gay] auront raison de crier leur impatience et leur colère" mais que "leur combat ne peut se limiter au refus du mariage gay".
Selon lui, "le 'grand remplacement' de population de la France et de l'Europe, dénoncé par l'écrivain Renaud Camus, est un péril autrement catastrophique pour l'avenir".

University Reform: After Pécresse, Fioraso

University reform: always a contentious subject in France. The Collectif des Universitaires had no use for Mme Pécresse's LRU and has even less use for Mme Fioraso's reform of the reform, which it claims is a continuation and exacerbation of the LRU in all but name. The rhetoric of its diatribe is so overheated, however, that one's skeptical hackles are raised from the outset.

Nevertheless, a more temperate piece by Le Monde's Nathalie Brafman also makes the point that the proposed Fioraso Law does not represent a break with the spirit of the Pécresse Law:
Le texte que défendra Geneviève Fioraso, la ministre de l'enseignement supérieur, ne revient pas sur l'autonomie des universités entérinée par la loi relative aux libertés et responsabilités des universités de l'ex-ministre Valérie Pécresse, votée en 2007. "Ce n'est pas une loi de rupture", a assumé le rapporteur de la loi, Vincent Feltesse (PS, Gironde).
So it all comes down to what you think autonomy has accomplished. If you believe the Collectif, it has paradoxically made universities more dependent than ever on the ministry of education, shrunk their budgets, prohibited the replacement of retiring professors, and established "petty potentates" at the local level, wreaking havoc with the selection process and enforcing mediocrity.

These charges will likely get little hearing in the forthcoming debate, however, because the question of whether some courses will be taught in English (in order to improve French students' facility with the language) will monopolize the attention of the nation's representatives, even though fewer than 1% of courses are affected. This is one of those initiatives that, though well meant, probably won't accomplish much. Real competence in a foreign language takes more than sitting passively through a course or two taught in that language. But is the harm really so great? Why not try the experiment? Does this initiative really "sign the death warrant" of the language of Racine, as some critics (hysterically) claim? Asked and answered.

Saturday, May 18, 2013

Marine Le Pen Breaks Her Back

Marine Le Pen broke her sacrum (base of the spinal column) when she fell into her  own empty swimming pool. She says it was an accident. ... One awaits further details of this story with some considerable interest.

Book Attacks French Elite

Peter Gumbel, a British writer who teaches in Paris, has launched an all-out assault on France's elite:
In the name of “meritocracy” and “equality”, he says, France has built a system for selecting and formatting its political, administrative and business leaders which makes “Eton and Oxbridge” or the “Ivy League” look like a utopian experiment in social levelling. The “Grandes Écoles” – elite colleges, devised by Napoleon two centuries ago and re-invented after the Second World War – have become a machine for perpetuating a brilliant but blinkered, often arrogant and frequently incompetent ruling freemasonry.
“It’s a system that is able to produce a tiny number of brilliant and charming men and women who constitute the ruling class. Whether they are competent as leaders is another matter,” Gumbel writes . “The entire selection process leaves the vast majority of the population frustrated, de-motivated or feeling discarded.” In a sense, Mr Gumbel is saying nothing new. For decades, the French themselves have grumbled (as only the French can) about the pernicious stranglehold on government and big business of the products of the Grandes Écoles and especially the so-called “énarques”.

Movement on Europe?

Jean Quatremer reports that Angela Merkel is prepared to make significant changes in Europe's governance structures and treaties. François Hollande has given signs of thinking along similar lines. Both leaders are said to have been shocked by the clumsy handling of the Cypriot crisis at the European level.

I would be astonished, however, to see any movement on this front before the German elections, where Merkel now has to deal with unexpected problems, including a scandal in the leadership of the CSU, coalition partner of her CDU. Quatremer is no doubt reporting leaks from technical advisors in both governments. The political challenges to be overcome are enormous, and will remain so even after the German elections. Still, it is reassuring to think that there is movement on the issues of economic governance, banking reform, and treaty revision, all of which are necessary to preserve the euro.

Friday, May 17, 2013

James Galbraith's Plan for Europe

Jamie Galbraith thinks that what Europe needs is not a stimulus plan but a "stabilization plan." Specifically, he thinks that the Eurozone needs an expansive social protection plan, like Social Security in the U.S., providing equal benefits to all member countries' citizens and financed jointly by contributions from each. The word "stimulus," he says, gives the wrong idea of what true Keynesian economics is about, which is smoothing across the business cycle.

Hollande's "Surprise Maneuver"

The German network ARD calls it a "surprise maneuver," but all Hollande did was revive the call of his predecessor--and of all previous French administrations  since Maastricht--for more centralized economic governance of the Eurozone. The surprise may be that this time around, Germany is less hostile to the idea, no doubt because Germany no longer sees it as a French plot to do an end run around the ECB. What the Germans want is tighter control of national budgets in other countries, and a Europresidency may now seem like a reasonable way of getting it.

Or so says the press. Frankly, I think Hollande felt that he needed to show some initiative on Europe, since he has been beaten up over his failure to renegotiate the Sarkozy-Merkel agreement after he was elected, as he promised he would do. This is one of the main sources of the allegation of "weakness" against him, so he had to react, and this was his ploy. But actually getting from here to there requires persuading many countries to give up a little more of their sovereign prerogatives, and all will be reluctant to do so--France more so than most. But Hollande's maneuver will allow everyone to look as though they're doing something while awaiting the German elections, in which far too much hope for change is invested. The elections won't change anything either.

Meanwhile, however, Hollande has at least temporarily changed the conversation. I don't think he had any more ambitious goal. He is, as he keeps reminding us, a realist, after all.

Wednesday, May 15, 2013

Inside the Paris-Brussels Accord

The EU recently granted France a two-year respite in its drive to reduce the budget deficit to 3% of GDP. How did this come about? Le Monde has a very interesting background piece today. It reports that the steady French push for more pro-growth measures since Hollande's election met with backing from, most notably, the IMF, Barack Obama, and even European Commission experts, all of whom argued that a further recession in France (now confirmed by the latest statistics) would be more harmful to European prospects than continued depression in smaller economies. The main opposition came from the staffs of Rehn and Barroso, who argued that such a double standard (lenience for big countries, harsh austerity for smaller ones and even for the large southern neighbors Italy and Spain) would spark political difficulties. It seems that the outbursts against Germany by several Socialist Party figures also helped persuade the EC that something had to give.

EU Turns Off French

According to a recent Pew poll, support for the EU has declined more in France than anywhere else:


Recession Redux, Le Monde Doubles Down

INSEE announced today that France is back in recession, with another quarter of negative growth. Meanwhile, Le Monde has adopted the tone of those whom Paul Krugman calls Very Serious People. In an editorial today, the paper gravely clears its throat and calls for ... structural reform, while warning readers that--surprise--these take time to produce results. France has been talking about structural reform for twenty years. The editors might have aimed to be a little more specific.

But sometimes one has the impression that nothing ever changes in France. Is it so long ago that Sarkozy supposedly took care of the so-called special retirement regimes? Yet last night they were all back in the news, on France2's JT de 20h. Every one of them, including the SNCF's, whose reform was the centerpiece of Sarkozy's effort.

But of course as I wrote at the time, Sarkozy headed off more serious trouble with the unions by buying some (the train drivers) off with side deals, while delaying the effect of reform for others by many years. Austerity means that these arrangements have proved too costly, so Hollande will be forced to undo them. Now we will hear the Right criticizing the Left for redoing what the Right previously did badly under volleys of catcalls from the Left. Is it any wonder that people distrust politicians?

Tuesday, May 14, 2013

Shades of Blum-Byrnes

France, according to Le Monde, is leading a European charge to limit the extent to which American "cultural products" can invade the European market. To put it this way is perhaps misleading, since the basis of the French position, understandably enough, is that "culture" is not a "product" in the sense that other tradeable goods are. It is not "merchandise." Rather, it is "culture," and if you don't know what culture is when you see it, well, then you're a philistine.

The problem with this is that the French are being disingenuous. When they use the word "culture," they would like you think of paintings in the Louvre, the Fauré Requiem, or the novels of Proust, but their trade negotiators are all about limiting the number of American films that can be shown in French movie theaters and the number of American TV dramas and sitcoms that can be shown on the small screen. These things are not the fruit of individual creators but, indeed, the "products" of "the cultural industries" (to borrow from the title of Frédéric Martel's popular Sunday radio show on France Culture). Large sums of money are involved, as are substantial capital investments and desirable jobs.

The French position on this goes back to the post-World War II years and the famous Blum-Byrnes agreement, negotiated by Léon Blum and James Byrnes. The two countries agreed at the time to limit imports of American films, and quotas have waxed and waned ever since. At the time of the original accord, there were some regrettable attacks on American philistinism by such prominent French intellectuals as Étienne Gilson. Since then, however, the French have amply demonstrated that they are as capable of producing cultural schlock as any American philistine, and when there is money to be made, they are just as avid to make it.

Anyone who watches French TV or goes to the movies is aware that whatever "cultural exception" has existed since World War II has not done much to ward off American influences on French popular culture. Whether one deplores or applauds those influences (and I personally think neither deprecation nor applause is warranted), a trade negotiation is not a good place to stop it. In such a venue, money is what counts, not culture.

Perhaps as a cultural mongrel myself, capable of appreciating both high and low, domestic and foreign, I simply don't evaluate the stakes as the self-appointed defenders of European culture do. I say, let people decide what they like. I may often not approve of other people's choices, but I don't think that taste can be improved by imposing quotas, any more that it can be legislated or enforced by curricular edict. I do know that part of my love of France came from watching some fairly low-brow French films. I would have lost something if my government had tried to "protect" me from them. But American governments have never been much interested in that kind of protection (as opposed to prophylactic censorship of supposed sexual immorality). The mask of antiphilistinism is more commonly worn in Europe, but those who wear it are less concerned with the culture of the masses than they are with the profits to be made from them.

The Right Way and the Wrong Way

In an article devoted mainly to Ségolène Royal's wave-making at the Public Investment Bank, we read this:

Mais, en dépit des dénégations, la polémique au sommet de la BPI illustre de vraies divergences sur le bon usage des deniers publics. Des divergences que l'on retrouve au sein de Bercy, entre le ministre des finances, Pierre Moscovici, et le ministre du redressement productif, Arnaud Montebourg. Tandis que le premier veut orienter la BPI vers le soutien aux filières d'avenir, en l'éloignant du rôle de "pompier", le second fait du sauvetage et de la restructuration de filières industrielles emblématiques une priorité.
Moscovici is so right about this, and Montebourg so wrong, that it's easy to imagine why the two are constantly at loggerheads. I've written often about France's need to shift capital from declining sectors with overcapacity into rising sectors where new businesses are starved for startup funds. The role of the BPI (with its strictly limited capital) should be to supply them.

As for Mme Royal's sudden return to the front pages (two days running in Le Monde), she seems to have timed her move carefully. After the contretemps with the president's new companion last year, Royal largely stayed out of the public eye and gave Hollande room to be Hollande. Now she is prodding him from the left, where he needs to be prodded. Her influence is probably negligible, but the press is still interested in what she has to say, so perhaps she can accomplish something. Now that her call for a "restructuring" of Bercy has been echoed by Fabius, perhaps not coincidentally, one sees how a well-placed remark by an outsider can be amplified by an insider. This may not be the best way to conduct an internal policy debate, but anything that furthers such debate within the majority is to be encouraged. Two cheers for Royal.

Monday, May 13, 2013

MEDEF Wants to Tighten Pension Requirements

The MEDEF, representing large French businesses, is calling for an increase in the minimum duration of pension contributions to 43 years for full benefits. The organization also wants to increase the legal age of retirement to 65. The increase would come incrementally over an extended period.

The retirement reform dossier seems to be perennial. Each successive reform simply anticipates the next.

Ségolène Speaks Out

Ségolène Royal is rather complimentary toward the President in some ways. She speaks of him as a man of "courage." On the other hand, she observers, almost blandly, that the "relation to power" has not changed since his election. This is not the most perspicuous of criticisms, but it seems to come down to the fact that nothing has been done about reforming the cumul des mandats. She also calls for a "restructuring" of the finance ministry, because nothing that Hollande has done so far has reversed the decline of the principal economic indicators or the increase in unemployment. She thinks that the Public Investment Bank, of which she is vice-president, ought to be given a larger role, and that the president ought to do more to "instill confidence." Good luck with that. She hints that she does not expect to enter the government, and her expectation is no doubt realistic.

Wednesday, May 8, 2013

To Shake Up or Not to Shake Up

"Sicklied o'er with the pale cast of thought," François Hollande announced a cabinet shakeup. Or did he? Actually, he announced that a cabinet shakeup would come in due course.Why? For what purpose? Who was not doing his or her job? He didn't say. He did praise Manuel Valls, who polls highest among his ministers for his law-and-order--some would Sarkozy-bis--approach to the interior ministry. And he renewed his confidence in Jean-Marc Ayrault, whom most outside observers regard, rightly or wrongly, as a sort of milksop. As unpopular as Hollande himself, Ayrault at least will not put him in the shade.

So once again, true to the governing style that I described the other day, President Hollande has made a headline by doing nothing, only promising that something might happen someday. If he took this step on the counsel of advisors, he should fire them. If he slipped the comment into the interview with Match on his own, he should slap himself for repeating the impulsive error of announcing the 75% marginal tax rate on high earners, which has plagued him since his election. This simulacrum of action, this pretense of a carefully worked-out strategy, every step of which has been planned in advance ("le remaniement viendra en son temps"), is wearing very thin indeed.

Hollande criticized Sarkozy, in his time, for being a president who governed by "coup d'éclat permanent." It was a clever play on words. Hollande, alas, seems to want to govern by coup de plat permanent. 

Le Monde suggests that ministers might be motivated by the fear of losing their jobs. Heavens, if they haven't always feared losing their jobs, then the president hasn't been doing his.

Tuesday, May 7, 2013

Patrick Weil Critiques the Socialists in Power

Mediapart has published an interview with historian Patrick Weil, who critiques the Socialists' use of the power they won in 2012. His first point is that the PS arrived in power unprepared to wield it and therefore allowed the bureaucracy to generate its own plans, contrary to what happened in 1981 and 1997:
Le caractère commun de ces trois postures, c’est qu’elles permettent de ne pas travailler puisqu’elles donnent réponse à tout. Du coup, ce nouveau pouvoir politique impréparé s’est soumis à l’administration, contrairement à ce qui s’est passé lorsque la gauche est arrivée au pouvoir en 1981 ou en 1997.
He attributes this unpreparedness to the existence of three types of Socialists: the hard-core, for whom reform is simply a matter of will; the double-minded, who consider themselves generally on the Left but concede that the Right has a point on some issues; and the temporizers, who don't take a position until the dust settles and the winner is clear. This is an interesting characterization of the party's supporters, but I don't think it explains the lack of preparation to wield power, which in my view has more to do with Hollande's compromise-at-all-cost, minimum consensus style of leadership, as I explained yesterday.

Weil touches on this in his second point, where he accuses Hollande of "talking socialist" in order to win votes while privately nursing a different view of what ailed France. His example is the now infamous 75% marginal income tax rate on high earners. This, as Weil points out, was a poor substitute for comprehensive tax reform (such as the version that Thomas Piketty urged on Hollande before the election) and in any case it has now been struck down by the Constitutional Court.

By contrast, he singles out Christiane Taubira for special praise:

Elle sait faire de la politique. Elle a donné de l’énergie et un sens à ce projet : celui d’un mouvement vers l’égalité des droits, démarré pendant la révolution française. Ce projet a créé des clivages, une opposition forte, mais Taubira a aussi créé une mobilisation forte, une fierté.
... Le mariage gay est donc un exemple, rare, de réussite d’un cap gouvernemental finalement tenu, et appuyé sur une vision politique qui mobilise les parlementaires de gauche, ce qui me semble être la clé des quatre prochaines années à venir.
Weil is also critical of the government's approach to innovation:
Est-il possible que le gouvernement puisse faire confiance à ceux qui, souvent très jeunes, sont déjà ou sont en train de devenir des as de ces secteurs d’avenir, si seulement ils pouvaient rencontrer d’autres personnes ? Est-ce que vous croyez qu’aux États-Unis, Apple aurait pu naître ainsi avec une commission et un concours ?

Cette approche est typique d’une pensée des hauts fonctionnaires des années 1950 qui ont fondé le plan. Que l’État stratège s’organise, c’est bien. Mais l’État ne peut plus tout organiser et planifier. Il doit en revanche faire en sorte que les « garages »qui ont permis à Steve Jobs et d'autres de créer leurs start upsoient ouverts, que les jeunes puissent s’y réunir.
There is much more in this interview, including a stinging critique of Manuel Valls. Definitely worth reading.

Monday, May 6, 2013

The French Are Pessimists

Right, so what else is new:
Ce constat rend d'autant plus étonnant l'extrême pessimisme des Français. En moyenne, 92 % des Européens ont un sentiment négatif sur l'avenir de leur pays ou sur le sort de leurs concitoyens. Dans l'Hexagone, 97 % des ménages voient les choses en noir. Davantage que les Espagnols (94 %) ou les Italiens (91 %). Surtout, 85 % des Français pensent que les choses ne feront que s'aggraver dans l'année à venir, contre 75 % des Européens.
Of course, what's striking here is how pessimistic all of Europe is. The French, as is their wont, are overdoing it a bit, but there aren't many hopeful economic signs in Europe, so these results are hardly surprising.

A Ten-Year Plan

No doubt the echo of Soviet practice is unintentional, but François Hollande has announced a "ten-year plan" for public investment. The chosen targets are the correct ones: Hollande is calling for more investment in digital technology, green energy, health, infrastructure, and "broadly speaking, new technologies." This is exactly the right focus. Instead of futilely defending declining industries with global overcapacity such as automobiles, steel, shipbuilding, and textiles (as Arnaud Montebourg has been doing with all too much fanfare), Hollande is recognizing where France's future opportunities lie. This is all to the good.

The method, however, leaves something to be desired. It is characteristic of Hollande's style of governing. No doubt he wants to underscore that under him, the prime minister is no mere "collaborator" but in fact the prime mover in the development of policy positions. He is trying to restore the old equilibrium between PM and president under the Fifth Republic. But his way of doing this is repeatedly to announce that, in a few weeks, the PM will be telling you what the policy of this government actually is.

The result of this division of labor is to leave the president looking like a vague and vaporous usine à gaz. And by the time the details of the proposal dribble out, the public has lost interest, or forgets to credit the president for actually backing the initiative. The proper way to manage this sort of balance is for the government to elaborate the details of its policy and then for the president to make the announcement when the plans are finally mature. He should appear with the PM and other relevant ministers at his side. He should make it clear that he is leading the process and driving reform. But he should not be speaking in a void. At least that's how I see it.

The Party Leader Prefigured the President

The thought has occurred to many: François Hollande as president is in many ways similar to François Hollande as party leader. His authority is doubted, his ability to enunciate a clear line through a thicket of incompatible positions is questioned, his dexterity is admired yet his rivals believe that, when the moment comes, they can easily sweep him aside, and while he presides over a constantly bickering yet never quite disintegrating coalition, the party drifts and never develops a distinctive response to Sarkozy's neoliberalism. Médiapart has now elaborated this analysis in a new article, which contains this paragraphe assassin:
À la tête du parti, Hollande est apprécié par les militants, mais surtout pour ses blagues, rarement pour des discours marquants. Il est en revanche constamment contesté, voire méprisé, par le reste des cadres et hiérarques du parti. Frontalement par l’aile gauche, puis par les fabiusiens. Plus secrètement par les strauss-kahniens. Parmi les responsables socialistes, son autorité ne lui aura jamais été reconnue. Mais il aura profité de son art de la synthèse (qu’il magnifiera lors du congrès du Mans, en 2005, rassemblant de façon factice un parti fracturé par le référendum européen).
The article is worth reading in full. It crystallizes the increasingly insistent murmurs on the left that the Hollande presidency is going to end in disaster. Of course, it's wise to keep in mind that no situation is ever hopeless, especially in politics, where the weather changes daily. But insofar as leadership style is deeply embedded in the leader's character, it seems unlikely that Hollande is going to find the wherewithal to rescue himself.

Characteristically, he is waiting for events to turn his way. No doubt his greatest hope is that the German elections will break the European logjam, although it is not easy to see how that will happen, even if Mrs. Merkel is forced into a grand coalition with the SDP. The problem is that the German Social Democrats do not see eye-to-eye with their French counterparts. They are constrained by their electoral base, which remains as fiercely opposed to useful measures such as mutualization of the European debt and effective banking regulation as their conservative opponents.

Still, the Germans may feel, after the immediate threat of rejection at the polls is removed, that the European situation requires them to make further accommodation, however unpopular, as the least bad among the alternatives. If that is Hollande's hope and calculation, it is unlikely to alter the image he has projected as a weak leader, even if he turns out to be correct. And the best to be hoped for if everything goes just right is a weak recovery from a prolonged period of low-level depression (psychological as well as economic), which is unlikely to propel the Socialists toward victory in 2017.

Sunday, May 5, 2013

Straight Talk on the French Economy from Daniel Cohen

Here. He pretty much agrees with what I've been saying in numerous recent posts.

Mélenchon Meets His Match

Jean-Luc Mélenchon was outshouted by a woman from Malpassé:
Il fait beau ce jour-là et la conversation ronronne gentiment dans le coquet jardin de la permanence. Soudain, une dame d'une quarantaine d'années s'approche de l'ancien candidat à la présidentielle. Elle est furieuse. Elle vient du quartier Malpassé et elle aurait aimé qu'il se déplace là-bas, dans sa cité. "Bon sang, quand est-ce que vous vous bougerez, vous les politiciens ? Vous avez peur de venir nous voir ?", lui lance-t-elle. "Vous avez peur de quoi ? De salir vos chaussures ?" Et de raconter sa détresse quotidienne, le chômage dans les zones sensibles, les petits qui grandissent "avec la haine".

Son ton monte jusqu'à imposer le silence. Mélenchon est tétanisé. Il n'ose l'interrompre, attend que l'orage passe. "Moi, je viens et vous m'engueulez", tente-t-il enfin. Mal à l'aise. La grande gueule a trouvé son maître. L'orateur virulent, qui défouraille à tout-va sur les plateaux de télévision et sur les estrades, ne fait pas le malin lorsqu'il croise plus énervé que lui. Ce n'est pas la seule contradiction de Jean-Luc Mélenchon, personnalité complexe aux multiples facettes.
Live by the sword, die by the sword.

Saturday, May 4, 2013

Catholic Revival?

I think I may have been underestimating the extent of the "Catholic" element in the anti-gay marriage demonstrations. A commenter on a previous post (h/t FrédéricLN) directed my attention to this very interesting piece in Le Nouvel Obs. Among other things, it notes a revival of "Catholic" activism at Sciences Po:
Au 42, rue de Grenelle, le Centre Saint-Guillaume (CSG) abrite l'aumônerie catholique de Sciences-Po, situé à deux pas. Elle accueille près de 200 étudiants, qui viennent déjeuner, travailler ou prier ensemble. C'est la plus ancienne association de l'Institut d'Etudes politiques et, comme la plupart des aumôneries étudiantes, elle est en pleine renaissance.
"L'aumônerie s'est réveillée à l'occasion du débat sur le mariage. Elle s'est radicalisée et est sortie de sa réserve, constate Hugo Lucchino, secrétaire de la section PS de l'école. Cela a même donné lieu à des passes d'armes assez violentes entre ses membres et les forces progressistes, notamment avec les Garçes, l'association féministe de Sciences-Po, qui défend les droits des homos. Ils distribuaient des tracts de la Manif pour tous que le diocèse de Paris avait mis à leur disposition et qu'ils avaient tamponnés "CSG", puisque selon le règlement un tract ne peut être diffusé que s'il mentionne le nom d'une association reconnue à l'institut. Les cathos de Saint-Guillaume se posent en victimes des gauchistes intolérants, mais eux, malgré leurs allures très policées, sont carrément sectaires."
The key to this revival seems to be not religion but identity. Indeed, in nearby St-Germain-des-Prés, this is formulated explicitly by a younger group:
"Tout le monde revendique son identité aujourd'hui, pourquoi pas nous ?" disent de conserve Maxence, Solène, Marine, Eléonore, Bertrand et le Lyonnais Michel, âgés de 18 et 19 ans, si excités de brandir leurs drapeaux roses et bleus lors des manifestations du 13 janvier et du 21 avril.
The gay marriage bill seems to have provided an organizing opportunity for young rightists in search of a differentiating feature other than race or ethnicity. These young demonstrators would probably be horrified to be thought of as racists, but they are keen to set themselves apart from what they see as a "civilizational" challenge to their inherited identity:
Pour Pierre Jovanovic, le clivage qu'on a vu se forger au sujet du mariage pour tous porte moins sur l'homosexualité que sur une vision de l'homme et de la société, "entre ceux qui pensent qu'hommes et femmes sont interchangeables et ceux qui veulent bâtir la société sur des bases immuables, la différence des sexes consacrée par le mariage". Pour le président Jovanovic, on ne discute pas la ligne de l'Eglise, vaillamment défendue par Mgr André Vingt-Trois : "Reconnaître l'autorité des évêques est le premier devoir des chrétiens."
The new right youth movement thus lays claim to nothing less than "a vision of man and society" founded on affirming that "the first duty of Christians is to recognize the authority of bishops." Of bishops, notice, not even the Pope. This signals a throwback to the 19th-c. Catholic reaction, which rejected centralized authority in all its forms, papal as well as statist, and insisted on a rigid hierarchy and strict sexual norms in the name of "defense of the family." It is rather astonishing to see a resurgence of this ideology in the 21st-c., but it seems to have some basis in reality. Needless to say, such a "Christian" society, obedient to its bishops, has no place for accommodating "outsiders." The racial angle does not need to be articulated; it's implicit in the definition of the group, which at this stage has and needs no explicit acknowledgment that the actual society in which it is embedded is a multiethnic, multiracial, multireligious one.

This "identitarian reaction" seems to have been brewing for some time prior to the eruption of opposition to the Taubira law. It would be interesting to learn more about its evolution.

Mélenchon's Mouth

Sixty-six percent of the French believe that Jean-Luc Mélenchon has too big a mouth. On Sunday JLM will stage a major rally, and his speech will be widely watched. A substantial majority of the French may think his words are "too aggressive," but they love to listen to him anyway. It's good theater, and cheap.

Blanchard and Leigh on What to Do about the Economy

IMF economists Olivier Blanchard and Daniel Leigh take a middle-of-the-road view on the question of stimulus vs. austerity and multipliers vs debt/gdp ratios. They are cogent, if a bit tepid, recommending stimulus, or at any rate "slower consolidation," now and adjustment later. I can't help thinking of Polonius's advice to his son: "Neither a borrower nor a lender be." Easy for a comfortable old miser to say to an impetuous youth.

Meanwhile, the Blanchard-Leigh position seems to have become the default policy position of the European Commission as well. Olli Rehn announced yesterday that austerity pressures on several countries would be reduced. France, which the Commission expects to contract by 0.1% of GDP next year (vs. a French gov't forecast of 0.1% growth) was given a reprieve in its mandate to reduce the budget deficit to under 3% of GDP, It now has two years to accomplish this trick, and in the first year the EC actually expects France's debt ratio to rise to 4.2% from the present 3.9. Unemployment will also continue to rise, contrary to François Hollande's promise to "bend the curve."

Friday, May 3, 2013

Bibow on the Euro Crisis

Jörg Bibow analyzes the different positions of France and Germany on the common currency:

The German model has plunged the European Union into existential crisis. A model the workability of which depends on others behaving differently from Germany cannot be made to work by forcing everyone to behave just like Germany. Germany first got sick under the euro as a result, but then underbid its partners to cure itself. It is high time for France to challenge the German mantra that stability causes growth. Because unless you actually find a willing sponsor of your perpetual export surpluses, it just doesn’t. It may be left to France to either convince its euro axis partner to finally accept this simple truth, or else to call an end to the euro folly that has brought needless catastrophic hardship to millions of Europeans.

Thursday, May 2, 2013

Guéant Caught in Web of Denials

Claude Guéant, who launched a major media offensive to defend himself against allegations of corruption, giving seven interviews in one day, seems to have rushed a bit too quickly into the breach, without covering his bases. He claimed to have earned €500,000 from the sale of two paintings to a foreign buyer, but he never obtained an export permit, as required when paintings valued above €150,000 are shipped out of France. Unless the buyer, who paid him with a transfer from a foreign bank account, actually lives in France, in which case the authorities will want to know the source of the funds in the offshore account. In addition, Le Monde has gathered new testimony denying the existence of the cash bonuses in the Ministry of the Interior from which Guéant claims to have paid some of his bills.

Habermas Speaks Out on EU

Jürgen Habermas envisions the future of the EU in a speech at Leuven University:

Habermas emphasises that solidarity is a political act and is in no way a form of moral selflessness. It is an attractive concept because it pays off in the long term. Habermas likens the concept to one’s ethical obligation to family: If a distant relative calls to ask for a favour, you will agree to help only if you can count on that relative to do the same for you in a similar situation. In other words, solidarity works according to the principle of “predictable reciprocity”. This, according to Habermas, can be extended to political communities bound by shared goals.

‪Habermas concludes that the monetary union can only be saved through solidarity: “‪Providing loans to over-indebted states is not enough. What is needed is a cooperative effort from a shared political perspective to promote growth and competitiveness in the euro zone as a whole." Such an effort would require Germany and several other countries to accept short- and medium-term losses, confident in the conviction that solidarity is in their – and our – long-term interest.

ECB Cuts Rate

The ECB, as widely expected, has cut its main interest rate by 25 basis points to 0.5 percent. This is a reaction to the austerity-induced recession that is currently afflicting Europe. It will not accomplish much. Read it as a gesture: "We care," or, rather, "We're not entirely oblivious to your suffering, but we still believe in our nostrums, our mandate limits what we can legally do, and in any case it's not up to us to bail out feckless politicians and the clueless citizens who elect them." Translated from CentralBankerspeak.

Wednesday, May 1, 2013

Exit Cahuzac, Enter Guéant

Yes, just what the Republic needed. Another juicy scandal. Investigators looking into Claude Guéant's financial records have found a transfer of €500,000 from a foreign account. "I sold some paintings," Guéant explains. He has all the paperwork. Never mind that no painting by the painter allegedly in question ever sold for as much as 200,000. The purchaser undoubtedly had a real hankering for an authentic van Eertvelest. Van who? You had better brush up on your minor Flemish masters. Money laundering? "I have no expertise in the area," says Guéant. How could he possibly be guilty?

As if that were not enough, it seems that he was also receiving bonuses in cash from some sort of government slush fund. You thought Jospin put an end to all that in 2002? Well, no, Guéant explains, the Ministry of the Interior had its own "special funds" until 2006, when Sarkozy put things right. Le Monde, having looked into the matter, finds that there were indeed cash "merit awards" to deserving police officials, cash on the barrelhead and no need to declare to the tax authorities, but these ended at an earlier date, presumably too early to cover the payments to Guéant, who was in any case a dircab, not a policeman being rewarded for a nice collar.

In any case, Guéant's explanations remind us that "transparency" is a remarkably rare good in the French government, and that no matter how many times "reform" is attempted, the practice of transferring cash in manila envelopes indefatigably returns. "Ordinary" Frenchmen are no doubt wondering how it is that a functionary comes to be dabbling in the international art market, but no doubt they are deceived by Guéant's appearance. He may have the air of a punctilious accountant whose heart beats only to the sight of a spreadsheet filled with numbers, but in fact he is a rare aesthete with the flair to purchase a couple of Flemish canvases at a price low enough to be within his pay grade. Is it his fault if the market for van Eertvelests suddenly went wild in the year before his boss's presidential run? Who but Le Canard enchaîné would be so mean-spirited, so philistine, as to draw a connection between the two? In any case, I look forward to learning much more about the enthusiasm of international investors for stormy skies rendered in oil. No doubt this gloomy turn of taste was a harbinger of the financial crisis to come. No wonder Guéant came out so well.