An American observer comments on French politics.
Sorry these are pathetic results made worse by the ongoing rise in youth unemployment. The figures have been massaged by failing EU politicos desperately trying to boost consumer confidence. Meanwhile the EU Commission is preparing for an EU wide banking collapse and bail-in of all deposit holders -- that is the real news.
Well, someone asked me whether I agreed with what you call François Hollande's Micawberish right after he talked and my answer was three folds. 1. I have not been following in sufficient details the numbers recently and thus cannot judge scientifically whereas a few years ago I would have had a precise forecast. 2. I have been in this forecasting business for decades and know that such things as recoveries do happen including when despair seems at its greatest. 3. Anyone taking Hollande for a fool is a fool himself: for Hollande to say something as committed as what he said, he certainly had a definite set of facts leading his top economists to be quite comfortable with the statement. Well today, the facts are out. Now 0.5% in French stat speak is 2.2% in US stat speak, so it is something. Obviously, this needs confirmation in coming quarters, but when I saw the composition of demand growth, it looked good to me as this looked like a classic French recovery story with the consumer in the driving seat. So let us hope for coming quarters to be positive too and then, 6 to 9 months from now, we will witness a decrease of unemployment, surely not fast enough to be wholly satisfying, but still a progress and something to shut up sceptics on the the right who have made it their profession to hope for unemployment to keep expanding as they prosper from catastrophe.
Voila! Krugman responds: http://tinyurl.com/moznh2u
Sorry but john weeks' argument is typical sophistry. He doesn't like quarterly numbers, so tells us we should shift to year on year. Perhaps in his kindness to the working class he should argue as well that governments should wait until a downturn is sufficiently pronounced with year on year numbers turning negative to start thinking about supporting measures for the economy? And then perhaps get to implementing them another year later due to the leads and lag of policy reaction? This is the statistical argument of someone who has never been involved in actual policy-making: there is a reason why we need high frequency data and that is not simply to give new news to financial markets: the machinery of government is already slow enough, we don't really need additional lags. Further, sure, the accepted definition of recession is arbitrary, like all definitions such as that of what a meter is, so what? But we need definitions to argue about precise stuff rather than fuzzy bull.As for the link with expansionary austerity, it may have some merit with the EU commission which is a right-wing commission named at a time when most EU MS governments were right-wing, but I have not heard this argument in the French debate recently and, by the way, the German fiscal stance at the moment is not contractionary as far as I know - the way to look at the fiscal stance is through changes in structural deficits.Now Krugman argues rightly that we should hold off celebrations until the accumulated shortfall in output has been corrected. But that is beside the point. Indeed, when you are in a contraction, you do and should consider a halt in the contraction as a progress. I don't think anyone reasonable would claim that a turn up in the direction of GDP is a cause for shouting "job done", but neither should one argue that it is not a step in the right direction even if many more steps are needed. Similar to saying that extending medical insurance in the US, even if incomplete, was not a step in the right direction thanks to the Obama administration.
By the way, Art, what is the definition of Micawberishm? My culture is lacking on this one.
Mr. Micawber is a character in Dickens' David Copperfield whose perpetual optimism is captured in the phrase "Something will turn up."http://en.wikipedia.org/wiki/Wilkins_Micawber
thanks for this, Art. I guess I haven't re-read that one for decades...
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