Tuesday, January 27, 2009

"Entre les Murs" Extra Muros

Just as the film "Entre les Murs" opens in the US (under the title "The Class") with an Oscar nomination for publicity, Maîtresse* skewers François Bégaudeau, the film's screenwriter and star: "If there is a brighter example of the pompous Frenchman than Bégaudeau, I would like to see it."

* Maîtresse is the pseudo of Lauren Elkin, an American expat who covers the Parisian literary and cultural scene with gusto and verve and a judicious soupçon of New York-style attitude.

Dog Bites Man

"Dog bites man" is not supposed to be news, but when the ex-president of France is bitten by his "depressed" dog Sumo, the tabloids make an exception. The news even made it into the NY Times, albeit in an erroneous note in Gail Collins' column to the effect that Sarko had been bitten by a "clinically depressed Maltese." Right breed and diagnosis, wrong president. Today the paper issued a retraction.

Immortality Isn't What It Used to Be

Who best embodies the Nord/Pas de Calais? The latest poll suggests that immortality isn't what it used to be:

A la question "qui incarne le mieux la région", 71% des sondés répondent Dany Boon, devant De Gaulle (42%) - né à Lille -, puis l'actrice Line Renaud (32%) et le footballeur boulonnais Franck Ribéry (23%), placé juste devant Pierre Mauroy (22%). Le succès du film "Bienvenue chez les Ch'tis" n'y est certainement pas pour rien puisqu'un sondage réalisé en 2003 plaçait à l'époque Charles De Gaulle (45%) devant Dany Boon (35%), Pierre Mauroy (29%) et Line Renaud (28%).

French Bank Recapitalization

Elie Cohen asks whether there is a credit crunch in France and concludes, despite contradictory evidence, that the answer is yes. Bankers, who have been accepting money from the state, claim that they are using these supplements to their capital to increase lending, but many businesses and consumers claim that they can't get loans. Cohen points out that the banks are under contradictory mandates: on the one hand, to shore up their capital positions to meet the market's post-collapse expectation of higher capital ratios than in the past; on the other hand, to lend to a credit-starved economy to get the machine moving again. There is evidence of increased lending, Cohen says, but mostly in the form of draw-downs of previously existing lines of credit; new loans are scarce.

Should the banks be nationalized? Should they be forced to lend? Nationalization would presumably enforce greater transparency. One could see what was going on. It would also permit a revamping of incentive structures, so that the banks' interests and the public interest could, with luck, be brought into line. Cohen: "A perverse incentive structure, which has proved how damaging it could be, should be more on people's minds." Indeed. In the wake of yesterday's announcement of large losses by BNP-Paribas, the taboo against discussion of nationalization in France may have ended. Curiously, in a reversal of roles, nationalization is being actively debated in the US. To be sure, US banks are in worse shape than French banks--or so we have been led to believe. We don't really know, do we? because so much about the banking system remains veiled. Even if nationalization is ultimately rejected as a solution, there is a need for more discussion of how to achieve greater transparency when huge sums of public money are being invested in the banks.

Technical Barriers to Trade in the EU

Is the EU really a "common market?" Does the usual measure of trade openness--the trade-to-output ratio--accurately measure what it purports to? Natalie Chen and Dennis Novy develop a new measure of openness and apply it to 11 EU countries. Their finding:

We find that trade integration is indeed lower in countries and industries where technical barriers to trade are high. We also show that trade integration tends to be high for industries characterised by low transportation costs (captured by bilateral distance but also by the weight-to-value ratio of exports and the ratio between “cost, insurance, freight” and “free on board” trade values) and a high degree of transparency in public procurement. From a dynamic perspective, average trade integration has improved for most countries over the period 1999-2003, as well as individually for a large number of industries in our sample.