Bref, dès qu’il s’agit de réduire – ou plus exactement de tenter de réduire – les dépenses de l’Etat, des collectivités locales ou de l’Etat-providence, ce n’est jamais ni le bon moment, ni la bonne méthode, ni la bonne politique. Toujours moins, implorent les uns ; toujours plus, réclament les autres.Le Monde, in short, is playing the role aptly dubbed by Paul Krugman that of The Very Serious Person (VSP). In the blogosphere, this tactic is known as "concern trolling." We are deeply concerned, intones the newspaper of record, that those who are screaming cris d'orfraie at the latest turn of the austerity screw, do not realize what an unconscionable burden they would have us leave to generations still unborn from now until eternity.
Duly noted. Nevertheless, je persiste et signe: this is a stupid policy, it demonstrates both lack of economic understanding and lack of fortitude, it plays into the hands of the political extremes, it further disconcerts and disorients the left electorate, and it fails to address the real difficulties of the French economy.
On TV last night, Valls angrily responded to a question about pressure from the European Commission by saying "France is a sovereign nation." Like Hollande, he avoids exploring or explaining his actual economic analysis by treating "debt" as a moral rather than an economic category. He does not explain why a debt of 97% of GDP is an intolerable burden for future generations while a debt of 80% of GDP is not. He avoids detail about the precise timing of the various receipts and outlays he proposes to tamper with. He discusses. legitimately enough, the need for reform of the state but fails to say a word about the need for reform in the private sector and how the state might encourage it--and this is the crux of the matter.
France has been slower than some of its European partners to react to changes in the global marketplace and shifting factor supplies and prices. The challenge for the government is to lead a transformation that it cannot control in detail: dirigisme's day is over, but the government still has a role to play in guiding the restructuring of the private sector. A true leader would be able to articulate a vision of the "social market economy" of the future rather than simply invoke it as a slogan. Valls appears to think that he can get by by putting a tough face on a continuation of the status quo. It won't work.