Monday, November 24, 2008

Krugman Compares UK and US Stimulus Plans

Here's Paul Krugman on the UK plan vs. the US plan. See also Bernard's comments to this previous post. Bear all this in mind if and when a French stimulus plan is unveiled. See also Jim Hamilton on what Plan C should be in the US.

Oh, and don't forget Kazakhstan's stimulus package of $21 billion, or 20% of GDP. Now that's volontarisme, M. Sarkozy!

Miclo Encore

Another brilliant comment on the Socialist imbroglio by François Miclo. It ends with this delicious line about Martine Aubry:

Hier, ses qualités étaient louées par le grand patronat comme celle d’un Strauss-Kahn en jupons ; on la retrouve aujourd’hui dans la peau d’une Arlette Laguillier de rechange.

Mosco Proposes Collective Leadership

Yesterday I proposed Pierre Moscovici as a compromise leader for the PS. Today Mosco himself proposes another solution: a collective leadership. This is a politic solution, but is it a workable one? I think not, given the present state of relations among PS leaders. It may of course be that Moscovici himself recognizes this and is offering his proposal simply as a step toward putting himself forward as the obvious primus inter pares, since, as I noted yesterday, he is the only one among the elephants and calves not to have taken a public stand in the final round of voting. He's also a self-styled non-présidentiable.

But things may already have gone too far for a compromise. Tempers are running high. Still, we haven't heard much from the less mediagenic party bosses: the Collombs, Guérinis, Rebsamens, Frêches, etc. These "good ol' boys" are not going to let a national-level grudge match tear up the well-tended lawns in their cozy fiefs. Without them and their gros bataillons, Ségo has only her 20-euro adherents, Manuel Valls (who has stuck his neck way out by going so quickly to the courts), Vincent Peillon, and her pretorian guard. I suspect that the southern barons are already hard at work behind the scenes on a compromise candidate. Might Collomb himself step forward, or Rebsamen? Might they turn to Delanoë as a front man? Anything is possible, but I would give odds at this point that neither Aubry nor Royal will become party leader.

British Stimulus Package

Gordon Brown has announced a stimulus package of 24 billion euros, including a decrease of the VAT from 17.5 to 15 percent. Since the UK GDP is roughly comparable to the French, this gives an idea of the order of magnitude that France should be looking at if it plans to go the Keynesian route. The 6 billion euros to be injected into the new French sovereign wealth fund falls well short, and Sarkozy, for all his activism, has been very guarded in saying exactly what he intends to do. But time is pressing. The rumors from Washington suggest a US stimulus plan on the order of $500 to $700 billion. Since US GDP is 6 to 7 times as large as the British or French, this is a good deal more ambitious than the Brown plan (which is only 1% of GDP, compared to 3-5% for the US). It's time for Sarkozy and Lagarde to get down to brass tacks.

ADDENDUM: Rumor has it that there will be an announcement of a European stimulus plan of 130 billion euros, or about 1% of EU GDP, on Wednesday.