Wednesday, July 24, 2013

Uneven Job Loss Across France

Le Monde today has an interesting map of the level of job loss in the various metropolitan statistical areas (to use US jargon) that make up the French economy. The striking fact is that job loss across the country is very uneven, with the north, east, and center faring particularly badly while the south and west do quite a bit better. It would be interesting to pursue the analysis to a finer level of detail, to try to understand what is going on.

Monday, July 22, 2013

"Trappes Is a Powderkeg"

The citizens of Trappes in the Yvelines are not Trappists. Most, in fact, are Muslims, and one, a Martiniquaise converted to Islam, was wearing a niqab on Friday when she was stopped by police for an identity check, (presumably) under the law banning burqas, niqabs, and other face-veiling headgear in public places. An altercation ensued between the police and her companion, a man of "Russo-Maghrebi" extraction. (French ethnic identities are becoming quite complicated these days.) There were arrests, followed by protests and violence that has persisted in the city for several days.

One can cite any number of reasons for this fairly banal incident. It has been hot. Trappes is a city plagued with crime and violence. There are new buildings, according to one observer of the city, but nothing new in the way of social programs, job opportunities, or educational enticements. The police may have been a little too zealous in enforcing the law, or the alleged instigators may have been a little oversensitive to the unwanted attentions of the police. Police-community relations seem in general not to be very good.

So Trappes is a symptom. But it's a symptom that's hard to interpret. Is residential segregation in France getting worse? Is it really true that nothing has been done for minorities? Are tensions rising because of the lingering crisis? Or was this just one of those random eruptions that occur from time to time in multicultural societies?

Sunday, July 21, 2013

Du rififi chez l'UMP

Le Monde has an "insider" perspective on the UMP that is unusually candid. Copé tried to form a "club" of ex-Chiraquiens around him. Included were Bruno Le Maire, Valérie Pécresse, François Baroin, Luc Châtel, and of course Copé's Sancho Panza, Christian Jacob. But the group fell apart as ambitions clashed: Baroin and Le Maire over the nomination to replace Christine Lagarde as finance minister, Baroin and Copé over Copé's hiring of the extreme-righist Buisson as an advisor, Copé and Pécresse over Copé's increasingly naked presidential ambitions and her desertion to the Fillon camp, etc. etc. Some of the petites phrases are truly murderous, e.g. Pécresse on Copé:
"Je pense qu'il y a deux catégories de personnes pour Jean-François : celles qui comptent, qu'il faut affaiblir ; et celles qui ne comptent pas, qu'il faut câliner. A un certain moment, en politique, soit on s'essuie les pieds sur vous, soit vous existez. Au moins, maintenant, il se souvient de mon prénom."

Yet for all this maneuvering, the fact remains that a substantial majority of the UMP wants to see Sarkozy run again in 2017, so the ambitions of this whole lot of potential rivals hang on the decisions of various judges and courts in the numerous scandals in which Sarkozy has been caught up of late. Stay tuned.

Thursday, July 18, 2013

Saving the Euro: A Modest Proposal by 3 Economists

Yanis Varoufakis, Stuart Holland, and James Galbraith have a plan for saving the euro that makes a lot of sense and does not require treaty modifications or debt guarantees. Read it here.

Wednesday, July 17, 2013

It's Still Summer, and the Times Is Still Writing About France

Today's Times once again has two pieces about France, indeed two op-eds (although one is actually a blog, not in the print edition). Maureen Dowd continues to string clichés together mindlessly as she writes, altogether characteristically, about cattiness in high places, a subject about which she knows absolutely everything. But Ross Douthat, a conservative columnist whose op-ed pieces I often skip, today has a not unintelligent essay about the potential perverse incentives of pro-family social policies. He relies on the clever device of quoting two articles by the same expat writer, Claire Lundberg, a woman who upon first arriving in France marvels about the family-friendly French but begins to question the way in which pronatal policies (may) cause employers to view women as riskier hires than men:

I don’t want being a mother to change the way employers see me, but of course, it does. I’m in my 30s. It’s true that I’ll likely get pregnant again. It’s true I will sometimes want to have dinner with my family. And it’s true that any company that hires me is making a long-term investment—it’s much more difficult to fire people in France than in the United States. This causes employers to think about the future when hiring, including how a woman’s eventual or actual children might affect her job performance. It’s also not illegal in France to ask about a person’s age and marital status in an interview. It is illegal to discriminate based on the answers, but this kind of discrimination can be very hard to prove.

Of course this is familiar neoconservative territory. But Douthat, to his credit, goes on to note the strains on family life imposed by the less family-friendly neoliberal orientation of the American state and actually quotes a French conservative, Pascal-Emmanuel Gobry, who recognizes the virtues of the "nanny state":

I often like to say that I’d rather have a welfare state that does a few things well than one that does many things poorly. And it seems obvious to me that in a world of declining birthrates, endemic family instability and increasing returns to human capital, supporting families should be one of those few things to do well. The French don’t often get the how right, but they have the what right, and they’ve had it right for well over a century. Americans on the Left would do well to pay attention to the problems with the how, but those on the Right should really pay attention to the what.
Of course, if you read Gobry's article, you find that it's actually quite critical of French practices, but the criticism is factual, not ideological, and therefore legitimate. So we have here a genuine tension between good intentions and perverse incentives, honorable government initiatives and practical and financial obstacles to realizing laudable goals. Hence an honest political debate, and one worth having. This is rare enough in American journalistic considerations of France that it warrants notice.

But then, of course, there's also this: advice from Carla Bruni about skin creams and the importance of staying hyrdrated.

Friday, July 12, 2013

Moscovici Wants to Modify the Financial Transactions Tax

Back in the depths of the financial crisis, it was impossible to say anything too harsh about banks and bankers. The old idea of a "Tobin tax" on financial transactions--long a favorite of the Altermondialistes--was revived, and it seemed that everyone supported it, except of course the bankers. President Sarkozy certainly did. After tough negotiations and a public funk by David Cameron, which resulted in Britain's exclusion from the plan, France agreed with Germany, Italy, Spain, Austria, Portugal, Belgium, Estonia, Greece, Slovakia, and Slovenia on the parameters of the new tax.

But now the minister of finance, Pierre Moscovici, who serves at the pleasure of a president famous for saying "I hate the rich," has expressed concern, echoing the concern of associations of French industrialists, bankers, insurers, and brokers, that the new tax will "destroy a significant part of French financial activity."

I haven't seen the details of the tax, so I will reserve judgment as to the substance. Among other things, the proposal may be amended to exclude transactions involving sovereign bonds, in order not to add to state borrowing costs--not necessarily a bad idea. But does this regulation also cover derivatives based on sovereign debt? After all, one of the purposes of the financial transactions tax (FTT) was to curb the overly creative use of derivatives that seemed to propagate risk invisibly, thus contributing to the financial debacle.

As to the politics, however, Moscovici's approach seems totally wrong-headed. Why wait until the deal is almost done to express concern? Perhaps an FTT is not the best way to enhance the transparency of risk, but if that is Moscovici's worry, he ought to say so. The tax almost certainly will not prevent "sudden stops" in international capital flows, which surely did lead to the collapse of some European banks and widen the crisis. On the other hand, the revenue generated will compensate governments for the support they gave their banks in a moment of dire need.

What is needed from Moscovici is a clear statement of the principles on which a left-wing government intends to base its decision in a matter like this. These principles must be more than merely technical. They must include a statement that the privatization of financial profits is incompatible with the socialization of losses. If we are in this together, then the duties on both sides need to be clearly enunciated in terms other than market efficiency. By appearing to back the private sector's arguments, which are based solely on a refusal to bear the costs of damage done by private banks, Moscovici risks confirming the fears of those who believe that the government he represents is a captive of interests other than the public interest.

For comparison's sake, see Paul Starr's article on the failures of US banking reform efforts.

NY Times Vacations in France

It must be summer when the New York Times starts running articles on France every day of the week. The paper's reporters and columnists know how to enjoy themselves by writing about French malaise, starting with Maureen Dowd, who invented a quote from Camus to bolster her case. Today finds not one but two pieces, one on sullen consumers avoiding the Clignancourt flea market, the other a column by the inevitable and ineffable Roger Cohen in which he cites another column he wrote 16 years ago, which also found the French to be morose, hence, he concludes, French moroseness is a "myth," but a useful one, always available to be illustrated by profiling an in-law's gruff uncle.

The kernel of the "sullen France" story is always that the French are ingrates. Blessed with natural and created beauty, glücklich wie Gott im Frankreich, they nevertheless insist, so we are told, on stewing in an existential funk. Why is it that none of these junketing journalists ever reports on the theater festival in Avignon, the opera in Orange, the skateboarders at Trocadero, or the sunbathers on Paris Plage? Frankly, I'd rather be morose in France than forced to watch the George Zimmerman trial nonstop on CNN.

Wednesday, July 10, 2013

Andrew Watt Blasts French Investment Plan

Second, the program is laughably small. Details are vague, but it appears the program is to be spread over “a decade”. Makes 1.2 bn euro a year. That is less than 0.06% of annual GDP. S’il vous plait. Soyons serieux!
Third, and perhaps most dammingly as far as the evaluation of EU economic governance is concerned, the program is not to start until 2016. This is because of the government’s commitment under EU rules to reduce the budget deficit below 3% by 2015. As Prime Minister Ayrault phrases it “Investment and budget responsibility go together”. This is Orwellian in its linguistic reversal of fact and logic and monumental in its economic stupidity. France’s economy is in recession. Unemployment at record levels. Interest-rates are at historic lows. Monetary policy is constrained. The situation is crying out for government to borrow to invest. Instead the French government’s commitment to European fiscal rules, which do not properly distinguish between current and capital spending, are forcing it to delay the program until 2016, when the deficit will be smaller.

Montebourg for Fracking

It's an interesting political sequence. First, Delphine Batho is ousted as environment minister for calling the government's budget "bad." Batho claims she has been done in by pro-fracking interests. Ayrault denies this and points to the anti-fracking law. But then Arnaud Montebourg goes before the Economic Affairs Committee and testifies that France needs to explore for shale gas and proposes a public entity to do it. For once, I'm with Arnaud. Note that it was announced yesterday that French electricity prices will rise, making the development of new energy sources even more urgent.

Oh, and in case you had any doubts about Montebourg's ambitions, see the egregious column by the unspeakable Maureen Dowd, who is milking her vacation in France for a couple of columns, each as uninformed as the next. Here she profiles Montebourg and predictably swoons for his good looks:
I am sitting across from Arnaud Montebourg, a free-market villain and romantic hero, the pol selected by Frenchwomen in a new French Elle magazine poll as a top candidate for having “a vacation love affair.”
Right. Count on MoDo to flirt with her profilees.

Europe is the Sick Man of the World

According to IMF growth forecasts:


Tuesday, July 9, 2013

Old but Happy

89% of French people over 70 are happy, according to Le Monde. This is remarkable, because people under 70 are far less blissed out. As if to compensate for this inequality, the government is contemplating requiring a greater "effort" from the retired, in the form of a higher CSG payment and a "disindexation" of retirement benefits for a few years. But the PS thinks there are limits to how tightly the government can squeeze this group of potential voters, and it is also worried about a proposed increase of the required years of pension contributions to 43, along with other possible pension reforms.

Saturday, July 6, 2013

Sarkozy's Comeback

The Conseil Constitutionnel seems to have granted Nicolas Sarkozy the opportunity he was waiting for. By rejecting his campaign accounts, the CC gave him an excuse to resign and inject himself back into the political fray. What's more, it gave his party an excuse to welcome him. Not that the rank-and-file didn't want him. He remains very popular among ordinary UMP voters. But the leadership? Fillon has attacked him in the past, and Copé surely has no use for an even more powerful rival for the next presidential candidacy. Yet the party is Sarko's for the taking--if only the judges and the courts would leave him alone. Alas, he is involved in so many scandals, that he is unlikely to have a tranquil time ahead. But his return to center stage is likely to be fracassant.

Thursday, July 4, 2013

Sarkozy's Campaign Accounts Rejected by Conseil Constitutionnel

Sarkozy's books don't add up, the Conseil Constitutionnel has confirmed. With this rejection, the UMP now faces bankruptcy. Sarkozy has resigned from the CC in order to reclaim his "freedom of speech."

I recall that the FN almost went bankrupt after the election of 2007, and look where they are now. Perhaps this is the beginning of the comeback.

Batho Gives Her Version

Delphine Batho, no longer a minister, exhibits all the naïveté that one might expect of the political novice she remains. "Economic forces" wanted her ouster, she says, and got it. In particular, she accuses Vallourec, a company involved in fracking, for having her fired. This wouldn't have happened, she insists, if "government solidarity" had been maintained. If anyone is guilty of breaking solidarity, it is not the former minister of ecology, she insists, but her bosses Ayrault and Hollande. And anyway, the government has adopted a policy of austerity without being willing to speak its name.

Can she really be that clueless? Does she actually believe that "solidarity" means that the government must agree to whatever position a minister holds most dear? Can she not imagine that there might be legitimate reasons for policy disagreement, in which case the decision lies not with her, but with the prime minister and the president? Daniel Cohn-Bendit could be withering about the political ineptitude of his comrades among the Greens. Batho seems intent on proving rhat "Green Socialists" can be just as clueless.

France Is Shocked, Shocked to Learn That Everybody's a Sinner

I heard from my fellow blogger Arun Kapil that one of our mutual readers was disappointed that I hadn't discussed Edward Snowden's revelations about NSA monitoring of electronic communications. It seemed to me more a matter of American than of French politics, and in any case Snowden's revelations were not among my highest priority concerns. But two recent reports have made the topic relevant to French politics.

First, France, presumably under American pressure, refused overflight permission to an aircraft carrying Bolivia's president, apparently in the belief that Snowden might be aboard. Given François Hollande's hectoring of the US for spying on French citizens, this was a bit much. Jean-Luc Mélenchon had called for France to welcome Snowden as a hero and political refugee--also a bit much--and now Hollande, who had gone out of his way to criticize the NSA, was  apparently truckling under to American pressure. A real profile in courage.

And today Le Monde tells us what of course we already suspected. France is no babe in the woods in the matter of electronic espionage. Indeed, it seems that the DGSE is collecting "the totality" of the electronic communications of French citizens, and, what is more, the information is not used solely for external security purposes but shared with other agencies:
Le Monde est en mesure de révéler que la Direction générale de la sécurité extérieure (DGSE, les services spéciaux) collecte systématiquement les signaux électromagnétiques émis par les ordinateurs ou les téléphones en France, tout comme les flux entre les Français et l'étranger : la totalité de nos communications sont espionnées. L'ensemble des mails, des SMS, des relevés d'appels téléphoniques, des accès à Facebook, Twitter, sont ensuite stockés pendant des années.

Indeed,
Les gendarmes ont aussi fait appel à cet outil dans des affaires de pédophilie. La police judiciaire peut, enfin, solliciter les moyens de la DGSE via la Direction centrale du renseignement intérieur, la DCRI. Les données, obtenues en dehors de toute légalité, entrent alors souvent dans la procédure judiciaire sous la forme de renseignements anonymes.
Let him who is without sin cast the first stone. The NSA at least maintains the pretense of legality with the fig leaf of the FISA court. The French intelligence services seem to be under no such restraint, although, to be sure, the FISA court hasn't proved to be much of one. This seems to be a case of "what can be done will be done." Frankly, I'm resigned to it.

Wednesday, July 3, 2013

"Green Growth" Is Not Hollande's Cup of Tea

The firing of Delphine Batho confirms what the 7% reduction in her ministry's budget already made clear: François Hollande does not believe that "green growth" or "durable development" is the way out of the crisis. The ecology planks in his platform were mere window dressing. He needed Green votes to get elected, but the priority now is to reduce unemployment. Le Monde even evinces a certain Sarko-nostalgia, forgetting that the "superministry" created first for Juppé and then Borloo was also little more than window-dressing:

Nicolas Sarkozy avait taillé un "super portefeuille" à Jean-Louis Borloo élevé au rang de ministre d'Etat et avait auprès de lui une Chantal Jouanno capable de peser face aux autres conseillers de la présidence.
Rien de tel aujourd'hui. Les seules voix susceptibles d'alerter l'opinion sur le changement climatique et l'érosion des ressources de la planète ont été habilement neutralisées. En échange de leurs tickets d'entrée au gouvernement, EELV avale les couleuvres, l'une après l'autre – des tergiversations sur la fermeture de la centrale de Fessenheim à la gestion musclée du projet d'aéroport à Notre-Dame-des-Landes défendu sans concession par Jean-Marc Ayrault.

Tuesday, July 2, 2013

Delphine Batho Fired

François Hollande abruptly fired his minister for ecology, Delphine Batho, after she called the budget, which cut her ministry's credits sharply, a "bad" decision. The Greens are meeting in Cécile Duflot's office to decide whether to remain in the government. Batho will be replaced by Philippe Martin.

The Restive Left

As one might expect with presidential popularity at an all-time low, the parliamentary wing of the Socialist Party is increasingly restive. Several groups of left-wing deputies, representing more than 1/3 of the Socialist group in the Assembly, have banded together to call for tax reform in the direction of greater "social justice." Specifically, they want to see a reduction of the CSG for lower-income groups and a corresponding increase for higher-income groups--a "revenue-neutral" reform in US parlance.

This is hardly a radical proposal. Compared with some of the more comprehensive tax reforms being discussed during the campaign (as in the debate between Hollande and economist Thomas Piketty organized by Mediapart), it's hardly a reform at all. But that may be its virtue: it's simple and quickly doable, and Hollande needs something to redorer son blason before the next round of elections. So it might just happen. If it did, it would have the added virtue of suggesting that the Assembly is not completely passive or useless. One of the banes of the Fifth Republic has been the demotion of the Assembly to a limp appendage of the presidency when the president's party also controls the legislature. It's good to see the stirring of some initiative on the part of legislators at a time when the government seems to be caught up in its various schemes for welfare-state retrenchment (pension reductions, labor-market reforms, etc.).

Monday, July 1, 2013

Villeneuve-sur-Lot Analyzed

IFOP has analyzed le report des voix in the second round of the Villeneuve-sur-Lot by-election. The results:

Selon cette estimation, qui ne constitue pas un sondage mais un calcul statistique de report des votes, 62 % des électeurs de gauche auraient préféré s'abstenir ou voter blanc, 15 % auraient voté FN et 23 % pour le candidat de l'UMP Jean-Louis Costes, élu député à la place de Jérôme Cahuzac, démissionnaire.
There is a little in here for everybody's theory. To be sure, left-wing voters did not react en masse as they did in 2002 to ensure the election of Jacques Chirac against Jean-Marie Le Pen. Some interpret this as the collapse of le front républicain. This strikes me as excessive. The same left voters showed no enthusiasm at all for the candidates of the Right. The vast majority simply stayed home, no doubt surmising, correctly, that the Republic would stand even if a 23-yr-old Frontiste were elected to the Assembly to replace a corrupt Socialist minister. Of those who did vote,  60% voted for the "republican" candidate. So there was hardly a massive defection to the FN. The IFOP analysis also shows that there was a "substitution effect" in the second round: many voters who had not voted in the first round voted in the second, and a slight majority of these voted for the FN candidate. This may have been a sign of latent support for the FN, or, just as likely, a "pox on both your houses" message to the "republican" parties that la France profonde hasn't much use for either of them.

Once again, attempting to read the mood of the nation from the results of a by-election in a rural district are not likely to yield much of value.