Saturday, June 12, 2010

Jouyet the German

Jean-Pierre Jouyet, formerly Sarko's Mr. Europe (and before that, Jospin's), now the top stock market regulator, is all for Germany's austerity plan and wishes France could follow suit--if only it weren't already "at the limit." But he's willing to make a gesture: he would accept a cut in his own salary. As for increasing the VAT, as the Germans have done, France can't squeeze any more out of the lower brackets and needs to go where the money is. He doesn't mention the tax shield but does speak of an increase in the income tax. As for the risks of contagious contraction, he says simply: "When you clean up your finances, you enhance the value of your assets."

Paul Krugman has been railing in recent days against economists who favor pain for pain's sake and who make recommendations based on no discernible economic model. This rapidly spreading epidemic seems to have spread to France. Perhaps some of those unused vials of flu vaccine ought to be rolled out now to inoculate the political class against the German influenza. Seriously, this is shockingly one-sided advice from such a seasoned official.

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