Friday, June 12, 2009

Debate on Constitutional Reform

Bastien François responds to a review of his book by Sébastien Bénétullière.

Kahn's Paradox

Jean-François Kahn, erstwhile editor turned centrist politician, sees a cruel paradox in Sunday's election results. The combined parties of the right scored only 40 percent, yet Sarkozy emerges stronger than ever because his two principal rivals, the Socialists and le cavalier seul Bayrou, were weakened if not destroyed. Yet he sees hope in the idea that "the old cleavages" have been transcended and, with the PS now accounting for less than a third of the "opposition" vote, there is room for a new coalition to emerge.

Room, yes, but coalitions don't emerge without leadership, and where that might come from remains a mystery.

Tax and Spend

Willem Buiter writes:

These figures should not come as a surprise. Obama’s plans for public expenditure are conventional, middle-of-the road social democratic spending plans. You cannot have social democratic spending ambitions if you are not able to impose social democratic tax burdens.

My fears about the sustainability of the US public finances is based on my belief that the US public believes there is a Santa Claus: that you can have the higher benefit levels and higher-quality provision of public goods and services without paying the price in the form of higher taxes or user charges.

The admonition holds in reverse for France. The French enjoy a high level of public provision (though to hear the complaints, they don't seem to enjoy it as much as they should). Sarkozy was elected on a Santa Claus platform: taxes would be cut, but the social-democratic benefits would be maintained (to be paid for easily, as always in campaign platforms, by "cutting out the fat").