Tuesday, January 31, 2012

"Refonder l'économie"

The heterodox economist André Orléan has published a new book, "L'Empire de la valeur: refonder l'économie." He talks about it here, and the book is discussed here.

The Euro Crisis Drags On

President Sarkozy was all smiles after yesterday's EU summit in Brussels, though it's hard to say why. Angela Merkel's victory was complete, and virtually nothing remained of France's at best inaudible peep concerning the need for measures to support growth. Meanwhile, major European banks are preparing to borrow close to 1 trillion euros more from the ECB under its LTRO program. Euroland's leaders' promise to sin no more has done nothing to alleviate the burden of outstanding debt, private as well as public. As predicted by nearly everyone except the political leaders making the decisions, growth has slowed in lockstep with austerity.

Monday, January 30, 2012

The French Style of Governance

How many other heads of state anywhere have the luxury that Nicolas Sarkozy has, of going on television to announce major policy changes on a Sunday afternoon and fully expecting those changes to be enacted into law by a rubber-stamp legislature within a week or two:

Après les mesures annoncées dimanche 29 janvier par Nicolas Sarkozy, comment celles-ci vont-elles trouver une traduction législative ? Le dispositif parlementaire devait être arrêté lundi après-midi à Matignon.
Ces deux textes doivent d'abord être transmis au Conseil d'Etat avant d'être présentés au conseil des ministres. Même en observant des délais d'examen rapides, cela reporte la présentation au conseil du mercredi 8 février.
This legislative docility is all the more remarkable to behold given the fact that the president seems about to lead his party straight into a wall. In the resulting carambolage, many deputies will lose their seats. In such circumstances in, say, the US, one might expect a fairly substantial party rebellion at the announcement of a last-minute tax hike and major changes in economic policy. But in France ... at most murmurs in the backbenches of the majority.

"There is no more industry in the UK" and other Sarkoerrors ...

... catalogued here.

“Il n’y a plus d’industrie au Royaume-Uni”

Agacé qu’on lui oppose, concernant la TVA sociale, l’échec de la mesure en Grande-Bretagne, Nicolas Sarkozy a répondu par cette formule lapidaire, pour dire que la baisse des cotisations patronales n’avait pas fonctionné outre-Manche faute d’emplois industriels en nombre suffisant.
Un raccourci qu’il avait déjà fait voici quelques années, et qui s’avère totalement faux.Comme l’avait déjà expliqué Le Monde en 2009, la Grande-Bretagne est en fait plus industrialisée que la France. En 2007, son industrie représentait 16,7% du PIB contre 14,1% pour la France. Une statistique qui n’a pas changé en 2011.
Selon l’Insee, la production de l’industrie manufacturière reste plus élevée en Grande-Bretagne qu’en France : l’indice de la production industrielle, qui était de 102,3 en 2007 outre-Manche contre 102,6 en France, est passé en 2011 à 93,4 au Royaume-Uni contre 89,1 en France. Le déclin industriel est donc plus fort dans notre pays.

Sunday, January 29, 2012

The Sarkothon

Nicolas Sarkozy gave a bravura performance tonight on all the TV networks, but, as J.-L. Mélenchon sardonically observed, it was a performance in which he seemed to be running for the German chancellorship rather than the French presidency. He raised the VAT to 21.2%, and he relieved employers of the obligation to pay social security taxes on their lowest-paid employees. Most significant of all, he decreed that henceforth negotiations over wages and hours would take place at the firm level, not at the branch or national level. When asked if this meant the end of the 35-hour week, he said that this was long overdue. When asked if he didn't expect opposition on this measure, which sharply reduces the bargaining power of workers, he said that it was his role as president to do the unpopular thing, for who else would?

And the justification of all this was supposedly to restore competitiveness to French industry following the German model. Yet the president ignored key features of the German model: the statutory role of the unions, the legal injunction requiring employers to open their books, the greater importance of exports in the German economy, and the centralization of wage bargaining, as opposed to the dispersion he will now impose on the French.

There was much talk of "courage" in this hour of confrontation with the press, and it seems clear that this will be the centerpiece of Sarkozy's campaign. There is perhaps a recklessness that vanity might mistake for courage in announcing a substantial tax increase and a frontal attack on the working class on the eve of a presidential election. The calculation is evidently that if one takes such drastic steps at the end of one's term, people will assume that the situation is truly dire and admire the "lucidity" of the decision-maker--"lucidity" being another word that Sarkozy favored in this interview.

The décor, I must say, was impressive: what a grand room, lit to perfection to show off the gilt moldings and regal drapery. Sarkozy articulated his unpleasant news with verve and was aided, for once, by journalists with a certain répondant -- excepting, of course, Claire Chazal, who was a lamentable, smirking, incoherent caricature of herself.

Friday, January 27, 2012

Hollande vs. Juppé

I didn't see it, but Thierry Desjardins, anti-Sarkozyste de droite, gives Hollande a TKO against a Juppé "vieux et usé," to borrow a phrase. Please post your opinions in comments.

Thursday, January 26, 2012

Germany Looks at Hollande

The subhead in Die Zeit reads: "Einst wurde er Langweiler verspottet, nun soll der Sozialist Hollande Frankreichs neuer Präsident werden" (Once mocked as a bore, the Socialist Hollande is now supposed to become France's new president."

Sarkozy au Petit Écran--à tous les petits écrans

Nicolas Sarkozy will appear simultaneously on 6 French TV networks this Sunday. And maybe the Sunday after that he can do the halftime show at the Superbowl for an encore ...

Hollande Quotes (the Wrong) Shakespeare

When a French presidential candidate reaches for the high rhetorical register, he usually goes for la langue de Racine rather than la langue de Shakespeare. But François Hollande decided to go with Shakespeare. It seems, however, that the Shakespeare he chose was not William but Nicholas, novelist and book reviewer for The Telegraph. Worse, as Sarah Crown reports,
The quote is lifted from his 1989 novel The Vision of Elena Silves, in which it's spoken by a member of a guerrilla group which operates under the motto "Marxism–Leninism will open the shining path to revolution". While Hollande is standing as the Socialist party candidate, odds are his advisers wouldn't recommend him positioning himself as far left as that.
The quote in question was: "They failed because they did not start with a dream."

Ah, well. Perhaps next time Hollande will stick to Molière: "Le chemin est long du projet à la chose" (Tartuffe). Will this be Hollande's bravitude moment? On verra. As Molière also wrote, "Contre la médisance il n'est point de rempart." (h/t KirkMc)

The Cautious Candidate

François Hollande is the frontrunner, and conventional wisdom has it that frontrunners play it safe. François Hollande is playing it safe. The UMP wants to portray him as a profligate spender, so he will minutely calibrate every proposal. To finance the return to a legal retirement age of 60 for those who begin work early enough to have accumulated the necessary number of quarters by then, he will raise the CSG by 0.1 percentage points in each year of his quinquennat. He has baked in a growth estimate of only 0.5% in the first year. He will inscribe laïcité in the Constitution, but only within the terms of the existing 1905 law and without altering the existing exceptions of Alsace and Lorraine.

It's a program to make an accountant smile, but it isn't going to get anyone's pulse racing. And that's just the way Hollande wants it. Pulses are already racing, he figures, at the prospect of dumping Sarkozy, and that will be all it takes. He may be right, but such a program will make for the dullest of campaigns, and it will be hard to pivot to anything more exciting should his poll numbers begin to fall. But the pressure of a campaign strips candidates to their innate character, and caution seems to be the essence of François Hollande. There are worse qualities for a president, I suppose, at least in many historical circumstances. I wonder about the present circumstances, though, and I wonder about Hollande.

Wednesday, January 25, 2012

Who Is Unemployed?:

Workers over 50 have been particularly hard-hit.

The Campaign Without a Center

Julien Vaulpré, who was Sarkozy's polling expert in 2007, says that this year's campaign has no center because, in contrast to 1995, 2002, and 2007, the crisis is too multifarious to be encapsulated in a single, memorable campaign theme.
Quelle est, selon vous, la controverse principale de la campagne actuelle ?
Eh bien, c'est justement tout le problème, selon moi. A ce stade, on a le sentiment qu'il n'y en a pas.
Certes, il y a une question majeure, qui plane au-dessus de l'élection : la crise. Mais elle est tellement écrasante, tellement générale, et tellement difficile à appréhender qu'elle n'a pas véritablement été problématisée à travers une offre politique réussissant à la fois à poser une analyse et une solution. Par ailleurs, c'est la première fois que plane à ce point, sur une campagne présidentielle, un événement qui est en cours, dont l'issue est inconnue.

Tuesday, January 24, 2012

Roger Cohen, Unrepentant Sarkozist

Arun Kapil dismisses Cohen's latest paean to the French president. Kapil is right that Cohen's column is fatuous. I'm not so sure that the election is a foregone conclusion, however. This race will tighten, in my view, and mistakes and surprises are always possible. Just ask Mitt Romney.

Monday, January 23, 2012

The Times' Take

Steven Erlanger of the NY Times describes Hollande's speech of yesterday thus:
Mr. Hollande tried on Sunday to answer his critics with an impassioned if wandering speech about his conception of the presidency, shouting himself hoarse as he talked about resuscitating “the French dream” of a better life built on equality, justice and secularism.
“The French dream is confidence in the future, in democracy,” he said. He emphasized better education, and said that if he were to be judged on one thing, he would want it to be whether the lives of French youth were better in 2017, at the end of the next presidential term.
I have now watched enough of Hollande's presentation to agree by and large with Erlanger's account:  the speech was a valiant if meandering effort, the candidate shouted himself hoarse, all the Socialist elephants were lined up in support, and the crowd was more than enthusiastic. For a rather different take, self-avowedly "subjective," by an Hollande supporter, see Romain Pigenel's blog:

Un meeting réussi, c’est quand le bruit de la foule – les hourras, les cris, les « François Président », les « tous ensemble », toute cette liturgie de meeting – finit par devenir tellement continu, et tellement fort, qu’il couvre des passages entiers du discours du candidat, et que finalement personne ne s’en plaint, et qu’un sourire béat, un peu bête, illumine tous les visages, saisis par l’émotion magnétique du moment.
The reaction of the French press, meanwhile, seems generally positive, along the lines of Gérard Courtois's column:
Trois défis attendaient M. Hollande au Bourget : séduire, rassembler, convaincre. Autant le dire simplement : il les a relevés. Evidemment, un tel rassemblement militant – 20 000 personnes autour de leur champion – est, presque par définition, enthousiaste et fervent. Donc aisément trompeur.

It is tempting to provide a phenomenological commentary on the self-willed transformation  of what Sartre would have called "the serio-practical inert" into "the group-in-fusion," but I will resist the temptation. I have on occasion been caught up in this kind of collective enthusiasm. It's a heady feeling while it lasts, but it frequently ends in disappointment. In this case disappointment may come either before or after the election, but the apparent elation of yesterday's crowd will soon have to face the reality of campaigning and perhaps governing in a worsening economic climate with few ideas of how to reverse the decline evident among any of the candidates. including Hollande.

Two more positive reactions, from the left and the right. And a negative from the right. And more from the left. And still more. This last post suggests that Hollande appealed successfully to those to the left of him by making his "real enemy" the "world of finance." This sort of rhetoric leaves me cold, but evidently it's not without effect.

Sunday, January 22, 2012

Hollande Relaunches

François Hollande kicked off phase two of his campaign with a vast meeting at Le Bourget. He struck at several of the Right's pet campaign themes, distinguishing, for instance, between l'assistanat and la solidarité and pledging to allow immigrants to vote in local elections. At the same time, he promised to inscribe the 1905 separation law in the Constitution. I'm not sure what this move is supposed to accomplish legally that the law itself doesn't already accomplish, but it gives Hollande some défense de la laïcité cred against Marine Le Pen and Jean-Luc Mélenchon. Does it also dilute the outreach to immigrants in the local right to vote measure? No doubt. But all of this is symbolic posturing at best, and voters will read the symbols as they please, based I suspect on a more general evaluation of the candidate's instincts on these gut issues.

More concrete is the promise to end le cumul des mandats for deputies, which will have a long-run effect on the structure of parties and the relation of local to central government. He will also cut the salaries of the president and ministers by 30%--more eyewash. He says that his "real enemy is the world of finance" and promises to separate investment and credit activities and establish an EU-level public ratings agency and a public investment bank--modest gestures that don't really get to the heart of financial regulation.

On retirement, he emphasizes the 60-yr legal retirement age, but only for those "who began work early"--in sum, not very different from the Sarkozy-Fillon measure, though rhetorically shrouded in "defense of the working-man" verbiage. Nevertheless, state finances will be returned to "equilibrium" by the end of his five-year term--he does not specify how.

There are to be controls on "excessive" rents--a promise with a lot of built-in wiggle room.

The policy of not replacing 1 in 2 retiring civil servants will be suspended.

On crime, "priority security zones" will be created where "delinquency" is high, but he did not say how those zones would be policed.

There was this personal jab at Sarkozy: "Je revendique une simplicité qui n'est pas une retenue mais la marque de l'authentique autorité--mon secret, que j'ai gardé depuis longtemps : j'aime les gens quand d'autres sont fascinés par l'argent." This was coupled with language directed against the "personalization" of the presidency. I suppose that, given widespread dislike of the "bling-bling omnipresident," these tropes were inevitable, but I find them rather cheap.

There will be "a new treaty with Germany" to replace the de Gaulle-Adenauer treaty. It would be nice to know what the candidate thinks can be accomplished in this area.

Those were the high points. I didn't hear the speech, so I can't say how effectively it was delivered, but on paper, to my eye, it seems rather lackluster and predictable.

Saturday, January 21, 2012

Mélenchon, Feisty as Ever

A feisty Jean-Luc Mélenchon offers his views on the election. Among other things, he claims that the working class has deserted the UMP almost entirely and is now making up its mind between him and Marine Le Pen:

Vous avez lancé une charge assez violente contre Marine Le Pen, la qualifiant de "semi-démente". C'est la bonne méthode ?
La gauche que je veux entraîner n'a pas d'avenir si elle ne reprend pas le terrain dans le peuple. En milieu populaire, il y a le FN et nous. La droite a elle-même levé la digue et tout ce qu'elle avait sur le terrain ouvrier est parti au FN. Mais il y a aussi une responsabilité du PS qui a abandonné consciemment le terrain parce qu'il se figurait que les classes moyennes urbaines suffiraient à porter un projet socialiste devenu consensuel et non conflictuel.
Je défie Marine Le Pen et ses névroses xénophobes. Mme Le Pen est un poulet d'élevage du Front national. Elle récite des fiches. Il faut la sortir de sa coquille. Je le fais en provoquant la compétition avec elle.

And whatever else you can say about JLM, his language is farther from la langue de bois than any other candidate:
Pour moi, la référence reste le "oui" et le "non" lors du référendum sur le traité constitutionnel européen [en mai 2005]. Toute la question de l'austérité, c'est le retour du débat du oui et du non. Il y a les trois partisans du oui. Ils disent la même chose différemment : "Il faudra payer la dette."Et puis, il y a une quatrième, Marine Le Pen, qui dit : "Si vous ne voulez pas du système, votez pour moi." Mme Le Pen prône un non qui est auto-disqualifié. Personne ne peut avoir envie d'en faire l'expérience. Ce n'est pas un match à quatre, c'est un garrot. C'est une camisole de force, ces quatre-là.

Friday, January 20, 2012

The NY Prosecutor and DSK

Le Monde has a long article about the decisions made by the New York prosecution team in the DSK affair. Apparently there were dissensions within the team about how to proceed--not surprising in such a high-profile case. Marion Van Renterghem also relays insinuations from DSK's lawyers and publicists that a "highly placed" French authority intervened in the case by informing the NYC prosecutor of previous misbehavior by DSK, "perhaps" the Banon or Carlton affairs. None of this adds to our understanding of what happened at the Sofitel, though it does suggest that, had the prosecution been handled differently, the case might have taken a different course.

France Suspends Action in Afghanistan, May Withdraw Early

Nicolas Sarkozy has announced a suspension of training and combat operations by French troops in Afghanistan and is considering an early withdrawal. This decision comes after the deaths of four French troops last week, and also after criticism of François Hollande for saying that he would withdraw French troops if elected. The war is very unpopular in France, but this is the first sign that Sarkozy is wavering in his commitment, and I must say, it has a look of desperation about it. On the other hand, if you read the report below, it seems possible that Sarkozy is simply drawing the conclusion that foreign forces have no further business in Afghanistan and can do no good by staying.

Background here.

“Lethal altercations are clearly not rare or isolated; they reflect a rapidly growing systemic homicide threat (a magnitude of which may be unprecedented between ‘allies’ in modern military history),” it said. Official NATO pronouncements to the contrary “seem disingenuous, if not profoundly intellectually dishonest,” said the report, and it played down the role of Taliban infiltrators in the killings.

Afghanistan : Nicolas Sarkozy envisage la possibilité d'un retour anticipé des troupes françaises

Après l'annonce vendredi de la mort de quatre soldats français, le président de la République estime que la question d'un retour anticipé des troupes françaises est posée. Les opérations de formation et d'aide au combat de l'armée française sont d'ores et déjà suspendues. (AFP.)

Thursday, January 19, 2012

Critique of French Higher Education Policy

Christophe Charle and Charles Soulié offer a blistering critique of the reform of French higher education carried out by the right over the past ten years. Rather too blistering, I think, since it omits the defects of the old system and exaggerates those of the new. Still, there are many good points, such as:
La seconde menace tient aux évolutions contrastées entre les filières et les disciplines. Le déclin des disciplines anciennes ou les plus académiques au profit des nouveaux domaines ou de filières à vocation professionnelle ou axées sur des emplois supposés d'avenir s'est déjà manifesté depuis quelques années. Là encore, les écarts se creusent entre établissements. Les universités dominées par les sciences humaines et sociales, certaines universités scientifiques les moins bien situées dans les hiérarchies académiques sont très affectées par ces baisses et les changements d'option des nouvelles générations étudiantes.


Jusqu'ici, le gouvernement a mis en place surtout un processus darwinien de sélection des plus forts à travers les diverses compétitions lancées ces deux dernières années autour des trophées du grand emprunt : plan Campus, EquipEx, LabEx, IdEx, etc. Dans un deuxième temps, il pourra utiliser les procédures d'évaluation mises en place pour répartir inégalement les sacrifices entre les établissements les plus fragiles au nom d'une rigueur qui ne doit pas pénaliser ceux qui réussissent, concurrence internationale oblige.

Bayrou Worries Hollande

François Hollande can read the polls as well as we do, and Bayrou's rise has him worried. So he has ordered his troops not to go easy on the centrist:
Il n'a pas échappé aux socialistes que depuis deux mois, les intentions de vote en faveur du président du MoDem sont en hausse dans les enquêtes d'opinion. Quand 6 % à 7 % des sondés se disaient prêts à voter pour le centriste au premier tour en novembre dernier, ils sont aujourd'hui de 11 % à 15 %. Depuis son entrée en campagne le 7 décembre, sa progression l'a même fait atteindre un niveau d'intentions de vote légèrement supérieur à celui qu'il avait en 2007.
Si ceux qui se déclarent prêts à voter pour lui se disent encore peu sûrs de leur choix, le président du MoDem a reconquis, en un peu plus d'un mois, une partie de ses électeurs de 2007. Or, ceux-ci l'avaient principalement quitté au profit de François Hollande, a notamment montré le dernier baromètre Ipsos-Logica Business Consulting pour Le Monde, France Télévisions et Radio France, réalisé le 13 et 14 janvier.
Indeed, the whole scenario is reminiscent of 2007. And this is not good news for Hollande, who has yet to "establish his brand" with swing voters. The manifest disorganization of the Socialist campaign organization is one factor. But even more important, I think, is Hollande's frustrating cautiousness. He has yet to define a clear program. He has given signs of following Sarkozy's line of reducing the size of government and accepting austerity as a solution to Europe's crisis. He has failed to challenge the parameters of the deal with Germany in any concrete way but has only said that if he is elected, he will ask for a "renotiation." Worse still, L'Express has reported (perhaps inaccurately) that in a private meeting with CEOs, Hollande allegedly indicated that he would carry austerity even farther than Sarkozy has done, cutting back on occupational training and housing assistance--both of which would be huge errors.

Wednesday, January 18, 2012

As for the other side ...

Lest my comments on the, shall we say, confused campaign of the PS mislead anyone into thinking that I am developing a tenderness for the other side, I hasten to post this link to Gérard Longuet's stupidly offensive comparison of Hollande to the captain of the Costa Concordia. For some eloquently righteous indignation, see Bernard Girard, who apprises me of something I did not know: that Longuet is married to the sister of Vincent Bolloré, the purveyor of the yacht on which Sarkozy meditated upon his weighty responsibilities before assuming the presidency.

More Signs of PS Chaos

On the cultural front:
"C'est encore un peu le bordel", explique un insider. "Il y a beaucoup de tensions entre beaucoup de conseillers, les rapports de force ne sont pas encore tout à fait établis", commente un bon connaisseur de la "machine Ségur" (la direction de la campagne Hollande est installée au 59 avenue de Ségur à Paris). (h/t F. Martel)

Le PS, Encore le PS, Toujours le PS

Pierre Moscovici may be convinced that the Socialists cannot lose this election, but the party is doing its best to repeat the tactical errors of the 2007 campaign. The confusion around the promise to hire 60,000 new teachers is a good example. After the promise was ridiculed for its expense and, given the shortage of teachers in training, impossibility, a definitive statement was issued:
L’affaire est simple. Lundi soir sur France 2, le député Jérôme Cahuzac, chargé des finances au sein de l'équipe de François Hollande, avait affirmé qu'« il n'y (aurait) pas de postes supplémentaires créés dans la fonction publique d'Etat, pour une raison assez simple, c'est que la France n'en a tout simplement pas les moyens ». Dont acte. Le "monsieur finances" avait parlé.
So there would be no new teachers. Or would there?
Le candidat socialiste à la présidentielle, François Hollande, a précisé au Monde,mercredi 18 janvier au matin, qu’il y avait chaque année « 60 000 départs à la retraite dans la fonction publique d’état. 30 000 ne sont pas remplacés aujourd’hui. C’est sur cette enveloppe que nous prendrons les 12 000 postes ».
So, there would be 12,000 new teachers per year in each of the 5 years of the quinquennat, and they would be paid for by the money saved in canning public-sector workers in other areas--hospitals, police, etc.--which presumably can get on just fine with fewer employees. The left wing of the party was not happy with this "interpretation" of the party's promise, however:
Offensive à la gauche du PS. Mardi midi, le trio Benoit Hamon, Henri Emmanuelli et Marie-Noëlle lieneman se déclaraient dans un communiqué « surpris de l’interprétation faite par Jérôme Cahuzac, de la proposition ambitieuse de François Hollande de créer 60 000 postes d’enseignants dans l’Education nationale ». Et d’ajouter : « Si les 60 000 créations de postes annoncées par François Hollande ne devaient l’être que par redéploiement, cela reviendrait à réduire le service public de la santé ou de l’emploi pour consolider les moyens de l’Education Nationale. Cela n’aurait aucun sens. » Evidemment, le trouble était jeté. La question de la faisabilité de la mesure revenait dans le débat politique.
Interesting. And these were the folks who laughed up their sleeves at Ségolène Royal for her "incoherent" campaign. Encore un effort, les camarades. Peuvent faire mieux.

UPDATE: Hollande scolds his troops for the gaffes:
"François Hollande a fait une sévère mise au point en disant qu'il fallait savoir si on voulait gagner", a affirmé un participant. Selon un autre participant au conseil politique, le candidat du Parti socialiste a déclaré : "On a tout pour gagner. Si on ne gagne pas, on ne le devra qu'à nous-mêmes, vous n'êtes pas obligés de vouscommenter les uns et les autres et de m'obliger à corriger les uns et les autres."

Tuesday, January 17, 2012

Still More Europessimism: Elmbrant Sees a "European Tea Party"

This uncertainty indicates that Europe today is barely political. What we are seeing is not the formation of a European super state, as the eurosceptics warned of not long ago, but an increasingly unsteady and weak union. "The atmosphere in Europe is one of total demoralization", according to José Ignacio Torreblanca of the European Council on Foreign Relations. The euro crisis makes this obvious: a steady stream of new solutions, retracted after a few days and replaced by new, billion-euro improvisations that contravene treaties, regulations and previous announcements.
That is why I believe that the euro system will collapse, as a consequence of a popular revolt by a European kind of Tea Party movement consisting of well-off Germans, Dutch and Finns unwilling to pay for the countries in debt. But also by the fact that Greeks, Irish and Portuguese won't accept being forced into a straightjacket of poverty by their patronizing guardians in the north. Unfortunately this might be a long and painful process, since a great deal of political prestige has been invested the monetary union. But the tensions between North and South, elite and popular currents, are too strong to just go back to business as usual.

"Club of May 6" Proposals for the Presidential Campaign

The Club of May 6, headed by historian Patrick Weil, has published a list of 80 propositions for the presidential campaign. You can read Patrick's commentary here and the whole list here.

The Technocrat Strikes Back

My current read on the euro crisis has been scattered over a number of posts, so let me sum it up here: the ECB's LTRO (a promise to accept longer-dated troubled sovereign debt as collateral in 3-yr repurchase agreements) has calmed the bond markets for the time being and created the appearance that the PIIGS might muddle through. But the ECB's condition for this arrangement--drastic and binding budgetary restrictions across Europe--holds the potential for triggering political unrest, as even conservative Martin Feldstein warned yesterday in a post linked to below.

Now, Mario Monti, the technocrat who replaced Berlusconi in Italy, has also issued a plea to Berlin based on the same fear--that the political center cannot hold. There will be "a powerful backlash" in the European periphery, he warns. He calls upon Germany to recognize its own "enlightened self-interest" and argues that Germany "has reaped huge benefits ... perhaps more than others" from the euro.

This is about as blunt as it gets in central banker-speak. Although Berlin shows no signs of receiving the message, I think that in fact there is quiet panic both there and in Frankfurt. My hunch is that the current consensus is highly unstable and will come apart at the first sign of trouble, which could come soon, either in the wake of an outright Greek default, which is imminent, or with signs of political tension in Italy or Spain. And then the question will be how the ECB manages its capitulation. The problem is that as long as the consensus holds, pressure to reform European institutions toward a more sustainable solution diminishes. So nothing is happening on that front, although the French downgrade led Die Zeit to say yesterday that the "end of Merkozy" had arrived. Sarkozy and Merkel used to look each other in the eye, the paper wrote, but now the Frenchman's stature has been diminished by S&P (though, truth to be told, I think he was always looking up to Merkel, figuratively as well as literally). And in May, Sarko will either be re-elected or not, at which point French policy will probably shift toward a more aggressive line on EU institutional reform.

Monday, January 16, 2012

"No Backbone"

Frédéric Martel interviews Emmanuelle Mignon, President Sarkozy's erstwhile "idea person," who fed him ideas for the 2007 campaign. He comes up with a scoop:
Il ne faut pas compter sur elle pour trahir, ni pour dire du mal. J’ai l’impression qu’elle garde pour Nicolas Sarkozy une grande affection et du respect.
Plus tard, en 2011, lors de plusieurs rendez-vous et déjeuners en tête à tête avec elle près d’EuropaCorp, le studio de cinéma qu’elle a rejoint, elle me fera un jour une confidence, une seule. Sachant qu’elle trahit un secret d’État bien gardé, elle parlera de ses difficultés à travailler avec un homme imprévisible qui n’a pas « la suite dans les idées », et qui, sans consistante idéologique, est souvent velléitaire et versatile : « Sarkozy n’a pas de colonne vertébrale. Si je suis partie, c’est pour ça. Il n’a aucune colonne vertébrale. »

Feldstein Warns Europe

A blunt warning from a conservative economist that Europe is headed for disaster with its belief in "expansionary austerity":
The most frightening recent development is a formal complaint by the European Central Bank that the proposed rules are not tough enough. Jorg Asmussen, a key member of the ECB’s executive board, wrote to the negotiators that countries should be allowed to exceed the 0.5%-of-GDP limit for deficits only in times of “natural catastrophes and serious emergency situations” outside the control of governments.
If this language were adopted, it would eliminate automatic cyclical fiscal adjustments, which could easily lead to a downward spiral of demand and a serious depression. If, for example, conditions in the rest of the world caused a decline in demand for French exports, output and employment in France would fall. That would reduce tax revenue and increase transfer payments, easily pushing the fiscal deficit over 0.5% of GDP.
If France must remove that cyclical deficit, it would have to raise taxes and cut spending. That would reduce demand even more, causing a further fall in revenue and a further increase in transfers – and thus a bigger fiscal deficit and calls for further fiscal tightening. It is not clear what would end this downward spiral of fiscal tightening and falling activity.
If implemented, this proposal could produce very high unemployment rates and no route to recovery – in short, a depression. In practice, the policy might be violated, just as the old Stability and Growth Pact was abandoned when France and Germany defied its rules and faced no penalties.
It would be much smarter to focus on the difference between cyclical and structural deficits, and to allow deficits that result from automatic stabilizers. The ECB should be the arbiter of that distinction, publishing estimates of cyclical and structural deficits. That analysis should also recognize the distinction between real (inflation-adjusted) deficits and the nominal deficit increase that would result if higher inflation caused sovereign borrowing costs to rise.
Italy, Spain, and France all have deficits that exceed 3% of GDP. But these are not structural deficits, and financial markets would be better informed and reassured if the ECB indicated the size of the real structural deficits and showed that they are now declining. For investors, that is the essential feature of fiscal solvency.


A few moments ago, a French friend posted on Facebook this query in English: "So, how does it feel to be a degraded country?" And I pointed out that it is unfortunate that the French translation of "downgraded" is "dégradé," which takes us from the language of bond traders to that of honor, as though France had been derelict in its duty and had its sword broken over its commander's knee.

This amusing anecdote unfortunately illustrates a larger truth: the tendency to moralize economic matters and to think in terms of dereliction and sin rather than better and worse choices among competing economic alternatives. The economic problem is difficult enough. Let's not compound it with an unnecessary overlay of virtue and vice.

As for France's "degradation," bond traders don't find it particularly humiliating. The price of French 10-yr bonds has barely flickered since the downgrading.

Camille Landais on the Proposed Reform of "le Quotient Familial"

The reform proposed by the PS is reasonable, Landais argues, and the reaction of the UMP has obfuscated the issue:
Ce qui mine la progressivité de l'impôt sur le revenu, c'est surtout qu'on a sorti du barème quasiment tous les revenus du capital. Et le fait qu'un tas de revenus du capital échappent littéralement à l'administration fiscale.
Le quotient familial, en revanche, fait partie des choses qui minent le consentement à l'impôt. Car personne ne sait exactement comment il marche et quels sont ses effets sur la redistribution. Ce que vous recevez pour un enfant dépend à la fois de votre revenu (plus il est haut, plus le gain est fort) et du rang de cet enfant dans sa fratrie... Les gens perdent de vue que le quotient familial profite bien plus aux gens aisés qu'aux autres.
Landais also has interesting comments on the social VAT and the Tobin tax.

Sunday, January 15, 2012

Disunion for the Mediterranean

President Sarkozy's long-forgotten Union for the Mediterranean was intended to serve several purposes: to establish French primacy in Europe's relations with the states of the Mediterranean rim; to insert France and its hoped-for partners into Middle East peace negotiations in a central role; to secure French gas and oil supplies in North Africa; and, equally important, to draw Turkey into an association that would substitute for full EU membership.

The effort failed, in part because Turkey wanted no substitute for EU membership. Now it may have decided that the desire for EU membership was a mistake anyway. But it is looking to the same region to which France looked in conceiving the UM, North Africa, where Turkey and France find themselves once again in competition, as in the days when Ottomans vied with hussars.

As the Times op-ed reminds us, both Sarkozy and Erdogan attempted to woo Qaddafi as a partner in their designs for the region. Now, with Turkey's economy still growing rapidly and France likely in recession, the economic competition between the two Mediterranean powers will not abate. This puts the recent dust-up between the countries over the issue of Armenian genocide in a somewhat different light. Perhaps there was method in Sarkozy's apparent madness. Rather than merely to curry favor with a small slice of the French electorate, voters of Armenian descent, at the risk of antagonizing Turkey, he may have wished to remind other states in the region that, if France has a colonial past, so has Turkey. A common religion did not make the Ottomans benign masters, any more than the French. The impressive fortresses that dot promontories along the Mediterranean coast stand as stark reminders of this.

Saturday, January 14, 2012

Krugman: Even S&P Recognizes the Folly of Austerity

In my previous post, I noted that Europe might muddle through with a policy predicated on austerity, which is not first-best or even second-best. Apparently S&P recognizes this, as Paul Krugman points out:

We (S&P) also believe that the agreement [the latest euro rescue plan] is predicated on only a partial recognition of the source of the crisis: that the current financial turmoil stems primarily from fiscal profligacy at the periphery of the eurozone. In our view, however, the financial problems facing the eurozone are as much a consequence of rising external imbalances and divergences in competitiveness between the EMU’s core and the so-called “periphery”. As such, we believe that a reform process based on a pillar of fiscal austerity alone risks becoming self-defeating, as domestic demand falls in line with consumers’ rising concerns about job security and disposable incomes, eroding national tax revenues.


A day before S&P downgraded France, Spain, and Italy, I said that the euro crisis was easing. Did I make a fool of myself? I don't think so. The relatively successful Spanish and Italian bond auctions were encouraging (although Trisha Craig isn't so sure about the Italian case). French bonds have been trading at a premium for months, so the markets had already priced the downgrade in (mostly: French 10-yrs rose 10 basis points, from 3 to 3.1%, on the news). "Bad news but not a catastrophe," as François Baroin said in his characteristically subdued and mellifluous tone. (Is he as bored with the role of finance minister as he often appears to be? Or perhaps on tranquillizers? But I digress.)

Meanwhile, the Greek situation has worsened, and default seems almost inevitable. But Greece has been in de facto default for more than a year.

The big question now is how deep a recession will result from the austerity imposed by the ECB as the condition of its three-year repo promise--call it a bailout, quantitative easing, emergency rescue, whatever: the result is the same, namely, investors are now willing to hold the debt of troubled countries like Italy, Spain ... and, to an even greater extent, France, since there is an implicit ECB guarantee. This means that Europe might be able to muddle through, but only if the politics of austerity don't blow up in one of these countries, leading to a rejection of the euro deal or perhaps the EU altogether. It will be a close-run thing.

Does this mean that I've abandoned Paul Krugman in his tireless campaign against the Very Serious People who insist that the imposition of pain is the only way out of any crisis? No. I think we are far from adopting a first-best policy in Europe, but first-best seems out of the question, and second-best as well, barring a massive change of hearts and minds in Germany primarily but elsewhere as well. So let us hope that third-best will be good enough. As Mrs. Thatcher used to say, "There is no alternative."

Additional comment here.

Mélenchon-Joly: A New Axis?

It seems that Eva Joly and Jean-Luc Mélenchon have been hanging out together quite a lot. Does it mean anything? Maybe. Joly has proven to be more of an anti-Establishment candidate than many Greens had bargained on, which makes her a natural companion to Mélenchon.Both delight in pointing out the contradictions and evasions in the positions of the leading candidates. Both stand on principle, to the point, at times, of rigidity. Their electorates are very different, but in both there are many voters who bitterly reject "the system" and envision progress mainly in terms of replacing it with something different.

What that something might be is no doubt different for the two parties and the two candidates, but there is a certain affinity born of what I am tempted to call not utopianism but rejectionism. Mélenchon said it best: "Qu'ils s'en aillent tous!" He wants "them all" out of office; Joly, the former judge, still sounds as though she hopes to put "them all" behind bars. But on the principle that France would best be rid of the all lot, they agree. That's something.

Investigation Into Bruni's Philanthropy Continues

First Frédéric Martel for Marianne, then Médiapart: the investigation into Carla Bruni's philanthropic activities continues.

Friday, January 13, 2012

S&P Downgrades France

Well, now the government can stop worrying about being downgraded and get on with the business of actually reviving the economy.

Analysis of Attitudes Toward FN

Bernard Girard digs into the poll results reported yesterday by Le Monde indicating a sharp increase in sympathy with the ideas of the Front National. As I suggested yesterday, these results, in contradiction with the declining support for FN candidate Marine Le Pen, cried out for further scrutiny, which Bernard provides. His conclusion: there is less there than meets the eye.

Grunstein Assesses Sarkozy's Foreign Policy Record

Judah Grunstein, editor-in-chief of World Politics Review:

Elsewhere, Sarkozy’s record is little better. His courtship of India, conducted with great pomp and circumstance, has resulted in few concrete gains. In Brazil, his heavy-handed interference torpedoed what had seemed like a done deal for the first foreign sale of the French-built Rafale fighter jet. Relations with China have been prickly, and his global summitry has often highlighted the limits of France’s influence rather than its power.
If there is any consolation for Sarkozy, it is that the hapless Hollande is unconvincing in the guise of a global leader. Hollande emerged from the Socialist Party’s primary with impressive poll numbers, but saddled with a saggy image and a party campaign platform that lacks credibility. His first foreign policy declaration was to promise to withdraw French troops from Afghanistan by the end of 2012, despite a consensus among France’s coalition partners to remain through 2014. His second was to promise, in the immediate aftermath of the EU’s last-chance summit in late-December, to renegotiate the resulting “fiscal union” deal that, though flawed, came at a time when many wondered whether the euro would survive the holidays. Both declarations, though defensible on the merits, showed something of a tin ear for diplomacy.

The Readiness Is All

This morning's Le Monde puts me in mind of Shakespeare:

"There ’s a special providence in the fall of a sparrow. If it be now, ’t is not to come; if it be not to come, it will be now; if it be not now, yet it will come: the readiness is all. Since no man has aught of what he leaves, what is ’t to leave betimes?" Hamlet V.2

The paper examines the timing of shifts in presidential vote sentiment over 5 previous election cycles, going back to 1981. In all of them the crucial turn seems to occur around mid-January to early February. And what we see now is two striking convergences: Hollande's early lead in the first round is evaporating, as his vote converges with that of Sarkozy. Marine Le Pen has begun a slow decline from her peak, which came in late November, while François Bayrou has been rising sharply since early November.

These trends are contradictory in import. Le Pen's slide, if it turns out to be real, obviously profits Nicolas Sarkozy. But Bayrou's rise is ambiguous. As in 2007, voters may be turning to the centrist because they have never liked Sarkozy but, having looked over the Socialist candidate, aren't pleased with what they see and want to keep their options open. On the other hand, the Bayrou total may be swelled by center-rightists who, when faced with the moment of choice, can't accept another five years of Sarkozy. No doubt there is a mixture of both in the MoDem vote, and we won't really know how it shakes out until the second round.

Some strategic maneuvering may lie ahead as well. Bayrou, who apparently contemplated a deal with Royal in 2007, might be more likely to go through with a bargain with Hollande, a more predictable partner than Royal would have been. It's hard to imagine a Bayrou-Sarko deal, since Bayrou has spent the last five years attacking every aspect of Sarkozy's reign, but, well ... Paris vaut bien une messe.

Interesting to speculate, but of course hindsight--which is what Le Monde's charts represent--is always more perspicacious than foresight.

Thursday, January 12, 2012

Euro Crisis Eases

Both Spain and Italy had successful bond auctions yesterday, easing pressure on the euro. 
The yield on Spanish 10-year bonds dropped to 5.1 percent, while Italy’s slid to 6.5 percent. German Bunds, the euro zone benchmark, were relatively unchanged at 1.8 percent.
In the auction Thursday in Madrid, the three-year bonds, which accounted for €4.3 billion, were sold at an average yield of 3.75 percent, compared with 4.87 percent at the previous auction of such bonds in July. Another €4.3 billion of a new three-year bond sold at a yield of 3.38 percent.
The Spanish Treasury also sold €3.2 billion worth of a bond maturing Oct. 31, 2016 for 3.91 percent, compared with 4.85 percent last November.
The 12-month bills sold by the Italian government were priced to yield 2.79 percent — down sharply from the 5.95 percent it paid to sell similar securities on Dec. 12.
Italy also sold €3.5 billion of three-month bills priced to yield 1.64 percent, down from 3.25 percent at the last auction.
Meanwhile, the number of immigrants to Germany classified as "highly qualified" is up sharply. Skilled workers and professionals are moving not only from Greece and Spain but also from Eastern Europe in the hope of finding work in the relatively healthy German economy, even though Germany experienced a slowdown in the last quarter and is expected to continue contracting in this quarter.

The FN Again

So, just after reporting poll results yesterday that suggested, to me at any rate, that the FN's rise under Marine Le Pen had been exaggerated, today we have another poll, this one from the SOFRES, suggesting precisely the opposite:
La hausse de 9 points, à 31 %, de l'adhésion aux idées du Front national révélée par le baromètre TNS Sofres réalisé pour France Info, Le Monde et Canal+, semble une bonne nouvelle pour Marine Le Pen, à cent jours du premier tour de l'élection présidentielle.
En mai 2002, 70 % des personnes interrogées estiment que le parti lepéniste représente "un danger pour la démocratie" (65 % en décembre 2006). Aujourd'hui, ce chiffre tombe à 53 %, pratiquement son niveau le plus faible depuis 1985 (50 % en 1985, 52 % en 2010).
Of course, in interpreting these results, a great deal depends on what questions were asked, and I don't have time to look into this right now. Perhaps some commenter will want to offer insights.

Wednesday, January 11, 2012

A Defense of Le Quotient familial


Annals of Absurdity: Jacques Lacan Special Number

Jacques Lacan's daughter has just won a slander judgment against his biographer, Elisabeth Roudinesco, who wrote that Lacan would have preferred a Catholic funeral to the "plain, intimates-only" ceremony he actually had. The court held that Roudinesco had no sufficient grounds for believing this, even if she wrote in good faith. She was sentenced to pay the aggrieved daughter 1 euro plus court costs of 6,000 euros.

Vive la France! Vive la République!

An Incredible Story

Le Monde today breaks an incredible story of a renegade investigation by the IGS, the "internal affairs" office of the National Police, which seems to have been targeted at current and former officials with left-wing sympathies. IGS agents allegedly fabricated documents in their zeal to discredit political enemies of the government. Caution is in order, however, since these allegations remain to be proven.

Trisha Craig on La Gauche Outre-Manche

In the UK, Labour leader Ed Miliband made an important speech intended to put his leadership of the opposition back on track. Trisha Craig describes the situation.

BVA Poll

The latest BVA poll has some surprises. Bayrou is up to 11%. Hollande's advantage over Sarkozy in round 1 has shrunk to 28-24. Villepin is taking 4% from Sarkozy, while Mélenchon is taking 8% from Hollande. Marine Le Pen stands at 17%--a considerable number but well short of vindicating the more alarmist readings of her strength (including, I confess, mine). Has she really attracted new adherents to the PS, or has she merely reconstructed the hard core of FN support that Sarkozy decimated in 2007? And has her repositioning of the FN really mattered, or is the party's resurgence simply a matter of disappointment with Sarkozy?

Once again, the Bayrou factor could be significant. And again, the question is, Is this a vote of adherence, or a "ni-ni" option?

And one non-factor: the NPA seems to have disappeared with Philippe Poutou as its candidate. Olivier Besancenot had put the party on the map, but Mélenchon's dynamism, combined with Poutou's media-shyness, seems to have erased it as an electoral force.

Social VAT vs Family Tax Credit

Bernard Girard contrasts the competing tax reform proposals of the left and right. The right proposes a social VAT, which, by reducing payroll taxes and shifting the burden of financing social programs to consumers, is supposed to make French industry more competitive, a claim that Bernard disposes of by referring to the arguments of economist Olivier Bouba-Olga. Meanwhile, the Socialists want to revise le quotient familial, more or less equivalent to the dependency deduction in the US, and add a tax credit that would award a larger break to those earning up to 3 times the SMIC while increasing the overall tax bill for earners above that line. 3*SMIC is a pretty healthy middle-class income, so if the PS program turns out to be workable when more details are released, it will give the lie to the charge made most prominently by Laurent Wauquiez that the left has abandoned "the middle class" by assisting only the poor and excluded. Hollande's reform seems intended to bolster the middle class while putting more money in the hands of those likely to spend it rather than save it--an effective stimulus measure and a break in the ranks of the "all austerity all the time" consensus that threatens to sink Europe as it is sinking Greece.

Tuesday, January 10, 2012


Everyone is talking about inequality these days, but François Hollande has proposed to do something about it with a plan for tax credits that has received the imprimatur of the Treasury:
Suite à ces constatations, le Trésor a testé plusieurs scénarios de réforme du quotient familial. Selon Les Echos :

« L'intérêt de ces simulations est qu'elles collent parfaitement avec le projet socialiste : les scénarios étudiés ont été calibrés pour assurer un rendement constant pour l'Etat, ce qui est l'objectif visé par François Hollande. »
Verdict de ces différentes simulations (réduction d'impôt, abattement sur le salaire imposable, crédit d'impôt, etc.) : le projet du PS – remplacer le quotient familial par un crédit d'impôt forfaitaire pour chaque enfant – est celui qui, selon Les Echos, « réduit le plus les inégalités », car c'est « le seul à bénéficier aux non-imposables ».

Nevertheless, President Sarkozy calls the plan "crazy."

Monday, January 9, 2012

Modell Deutschland über alles

Sigh. Chancellor Merkel and President Sarkozy have met again, and Sarkozy sums up their agreement thus: "What our German friends have done with their industry must undeniably become a model for us." And what have our German friends done, exactly? Merkel is of no two minds about that: they have restrained wages and made German industry competitive around the world. But this idea--to generalize the German export-led growth model to all of Europe through Europe-wide wage restraint cannot work, as many observers have repeatedly emphasized. EU countries trade mainly with each other, and all cannot have export surpluses. German industry is specialized in certain niches, such as machine tools, where it has a comparative advantage. This advantage does not exist elsewhere. Und so weiter. Merkel and Sarkozy are deluding themselves, living in a fool's paradise. The difference is that Merkel may actually believe what she is saying; Sarkozy cannot, but neither can he risk an open breach with Germany at this stage in his re-election campaign. So he is trying to paper over the differences.

UPDATE: Here is Paul Krugman's take on the issue.

Front National, workers' party

Christophe Guilluy in Mediapart:

La classe ouvrière est tombée sur la tête de Le Pen sans qu’il le cherche. Je pense que ça l’a surpris. Ce n’est pas un marxiste, il n’est pas franchement dans une lecture de classe de la société française, mais il a pris. En 1995, le FN est donc devenu le premier parti ouvrier de France et, peu à peu, son discours a évolué. C’était un parti vraiment très libéral, anti-fonctionnaire, anti-Etat, mais qui s’est adapté.
Aujourd’hui, Marine Le Pen est la candidate qui a le mieux calé son discours sur son électorat, en transformant le discours du FN. Elle ne capte plus seulement la classe ouvrière en déshérence, mais aussi les employés, les petits cols blancs. Elle a adapté son discours à la nouvelle géographie sociale. Elle porte un vrai diagnostic de ce qu’est devenue la société française, qui rend vains les discours moralisateurs sur le vote FN.

Sunday, January 8, 2012

The Tobin Tax and the Populist Pitch

Nicolas Sarkozy knows that in order to win re-election, he needs to scarf up the "populist" vote that he won in 2007 by poaching on the FN's xenophobic territory and that he risks losing in 2012 because the FN is poaching on his "defend the working man" territory. Since a lot of people are angry at the financial sector, attacking "speculation" seems like a political vein worth exploiting, and Sarkozy is going after it by proposing to establish a "Tobin tax" on financial transactions whether his EU partners like it or not. This was the issue that drove David Cameron out of the euro settlement, and now it risks alienating Monti in Italy and perhaps Merkel as well.

There's a problem, though, in making this a campaign issue: Sarkozy was against the Tobin Tax (especially when implemented by a country in the absence of cooperation from competitors) before he was for it (h/t Mediapart):

Gotchas aside, is the Tobin tax a good idea? I think so, provided that its proceeds are used to finance deposit insurance. And of course it would be a better idea if everyone would adopt it, but that seems impossible while David Cameron remains in office.

Saturday, January 7, 2012

English-language Coverage of French Elections

From Greg Brown at UNLV, this list of Web coverage of the elections in English, compiled with Rebecca Bolen for a course he is teaching:

Students will be encouraged to follow the election through the following sites. Some articles or news programs will be required reading, and will be identified as such in class and on the course blog http://hist362.blogspot.com
1. "French Politics" blog: <http://artgoldhammer.blogspot.com/>Observation and commentary by Art Goldhammer (Center for European Studies, Harvard), a leading American scholar and commentator on French culture, economy and politics (updated daily)
2. EuroNews coverage of French Presidential Election 2012-french-presidential-election/>Online news articles and video news coverage of French presidential election by a British-based news organization (updated daily)
3. "France 24" is an English-language 24-hour cable news channel and website of news coverage about France. With sponsorship from the French government but editorially independent. This site hosts several weekly news programs devoted to coverage of the election campaign as well as several blogs written by reporters covering the campaign. They are listed below:
3a. Campaign Chronicles <http://www.france24.com/en/taxonomy/emission/20153> a weekly television news program that broadcasts each week on Friday afternoon (Paris time, early Friday morning Las Vegas time) offering a round-up of weekly news on the campaign.

3b. France 2012 <http://www.france24.com/en/taxonomy/emission/20131> a weekly television program broadcast Thursday afternoon (Paris time, early Thurs morning Las Vegas time) with weekly news on the major campaign developments.
3c. Politics <http://www.france24.com/en/taxonomy/emission/18012>, a weekly political interview show broadcast Thursday afternoon (Paris time, early Thurs morning Las Vegas time).
3d. "Presidential Pate" <http://pate.blogs.france24.com/> "the greasiest and most savoury mouthfuls from French democracy's grand banquet." by France24 journalists.
3e. "Vue d'ailleurs" <http://frenchpolitics.blogs.france24.com/> Weekly blog offering "analysis of contemporary French issues" by a British scholar

4. "Opinion polling for the French presidential election, 2012" <http://en.wikipedia.org/wiki/Opinion_polling_for_the_French_presidential_election,_2012> Wikipedia site (all usual caveats apply) compiling publicly released horserace polls on the election

Friday, January 6, 2012

The Mainstreaming of French Economics

An interesting new paper by Olivier Godechot on the development of the economics profession in France. See also Marion Fourcade's book (link below).

Carla Bruni's Foundation

Frédéric Martel has an exclusive piece on alleged financial irregularities connected with Carla Bruni's charitable foundation.

The Social VAT

The so-called social VAT is back in the news, plumped by the right and opposed by the left. Jacques Le Cacheux offers a dispassionate analysis. Conclusion:

En bref, la TVA « sociale » ne mérite ni excès d’honneur ni indignité. Comme pour toute réforme de la fiscalité, il ne faut certes pas en attendre le remède miracle contre le chômage, ni même un redressement massif de nos comptes extérieurs, même si elle participerait à l’amélioration de notre compétitivité-prix. Mais le rééquilibrage de nos prélèvements obligatoires, pour les faire porter davantage sur la consommation et moins sur le coût du travail doit être un objectif. Taxer la consommation est une bonne manière de procurer des ressources aux finances publiques dans un contexte de mondialisation, et la TVA, invention française adoptée par presque tous les pays, est une modalité commode de le faire, et de pratiquer, sans le dire, un forme de protectionnisme en détaxant les exportations.

The Signature Scandal

On France2 last night, Marine Le Pen told David Pujadas that she was having trouble collecting the 750 official signatures needed to secure a place on the presidential ballot. She maintained her position despite Pujadas' open skepticism.

One doesn't have to believe in a conspiracy mounted by the Élysée to think that Le Pen might have difficulty collecting signatures. Many a mayor might have perfectly conscientious reasons for refusing to further an FN candidacy. But if the result is to exclude MLP from the ballot, the very legitimacy of the election will be at stake, because the FN candidate is expected to receive around 20% of the first-round vote. You can't exclude 20% of the electorate and call an election legitimate.

In a related vein, there is a report from Thierry Desjardins that Dominique de Villepin has thrown the Élysée into a tizzy by registering at 8% in private polling. This would of course ensure Sarkozy's defeat, as Villepin would likely siphon off old Gaullist and Chiraquien elements of the UMP whose support Sarkozy absolutely requires. What to do? Try to prevent him from gathering enough signatures? Desjardins suggests that such a move is underway. De bonne guerre? Not really. In the end, it may be Villepin who hangs Sarko from a butcher's hook rather than the other way around.

Mont de Piété

The Times has an article about the Crédit Municipal in Paris, a venerable state-run pawnshop that has served the famous as well as the obscure for centuries.
Neither buyers nor sellers are inclined to identify themselves. Cameras are prohibited and security guards are omnipresent. One anonymous buyer admitted that good deals are now hard to come by. Watches and jewelry are the most common items to be pawned these days. Electronic goods, rapidly devalued by new technology, are refused.
Back in the old days mattresses were hard currency — a last resort for the desperate, and one of the few possessions bailiffs were not (and are still not today under French law) allowed to confiscate from your home. An inventory taken in 1868 counted 15,000 mattresses. The Crédit Municipal still has a 19th century mattress-delousing machine, a giant cylindrical contraption the pumped high pressure steam to kill any bedbugs.
Famous clients include Victor Hugo, Émile Zola, and the Prince de Joinville, a 19th-century gambler who once covered his debts by pawning a watch, a gift from his mother. When she asked why he wasn’t wearing it, he deftly replied, “It’s at my aunt’s.” This expression has become a French euphemism for a visit to the Crédit Municipal.

But my favorite French (and Spanish and Italian and even English euphemism for pawnbroker remains the title of this post.

France Pays Higher Interest

France auctioned sovereign debt yesterday and yields rose slightly:

The French Treasury sold €4 billion, or $5.1 billion, of 10-year bonds at an average yield of 3.29 percent, up from the 3.18 percent it paid at the last such auction in early December. Investors bid for 1.64 times the amount of the securities on offer.
Not panic but not a good sign either.

Wednesday, January 4, 2012

La "racaille," c'est ... ce "sale mec"

Hollande has had his "racaille" moment. Running for president 5 years ago, Sarkozy demonstrated his toughness by going to Argenteuil and contriving to slip the word "racaille" into his characterization of the neighborhood's inhabitants, vowing to clean them out with a high-pressure hose. One can't imagine, say, de Gaulle performing such a stunt, but it was thought to be an effective campaign ploy: en faisant popu', the candidate drew to his side voters who might otherwise have opted for the FN. And indeed, Le Pen's numbers were down seriously compared with the previous election.

Last night on France2, one saw a new François Hollande: aggressive, punchy, answering questions in short sentences, showing flashes of anger, setting his jaw firmly, and conveying with body language a readiness to get down and dirty. Il a fait popu', in short. Not quite the same as shouting up to the lady in the balcony from the dalle d'Argenteuil, but it was a sign. And now, in this morning's Le Parisien, it is reported that a next step has been taken: Hollande is supposed to have referred to the president as "un sale mec."

De la classe? No, but that's the point, I guess. Or the calculation. Supposedly there are a lot of voters out there who would like to kick Sarkozy's ass, who remember the president shouting at the worker in the crane above his head, "Descends de là si t'es un homme." As Sarko called out the worker, Hollande has called out le sale mec: "Descends de là si t'es un homme." 

This is rather a different approach from Chirac's to Mitterrand when he invited the then president to debate him as an equal, to drop their respective titles of Prime Minister and President and address each other simply as Monsieur Mitterrand and Monsieur Chirac. A thrust that Mitterrand disposed of with a deftly ironic parry: "Oui, comme vous voulez, Monsieur le Premier Ministre." Ah, those were the days when streetfighters posed as gentlemen. Today, alas, gentlemen pose as streetfighters, so we have the spectacle of le pourfendeur de la racaille versus le flingueur du sale mec.

Enough. Let's get on with this show. Time for a discussion of the issues, I would think.

Tuesday, January 3, 2012

Comedy Break

For background.
Sarkozy, le majordome soumis de Merkel dans un... by Nouvelobs

Wolfgang Streeck on the Euro Crisis

Here. These are the same questions that Peter Hall and I answered in previous installments of this Current Moment series.

Unit Labor Costs

Eurozone adjustment will necessarily involve some adjustment in unit labor costs. A discussion can be found here.

The Social VAT

It's baaaack ... comment outsourced to Autheuil.

Hollande's Manifesto

Libération has published a text by François Hollande defining the main themes of his campaign, which had seemed to be losing steam over the past few weeks. It's a worthy effort in the grand style of political manifestos, gesturing in this direction and that while anticipating the objections and critiques of the adverse party. In fact, the text bears some of the hallmarks of the best speeches by Henri Guaino, minus the incessant anaphora that is Guaino's hallmark.

For a good analysis of Hollande's themes, see Bernard Girard, who is slightly more upbeat than I would be, for two reasons. First, I tend to discount the significance of these exercises in soaring rhetoric and glittering generality. Second, I discount the significance even more when the rhetoric is couched in a printed document rather than a speech. The spoken word is like music: it can convey an emotion while circumventing the rational censor--if it is delivered well. That is why the Sarkozy-Guaino tandem has been so effective: the two are on the same wavelength and compensate for each other's defects. Guaino softens Sarkozy's hard-edged crudeness, while Sarkozy lends muscle to Guaino's airiness.* The question remains whether Hollande can effectively deliver the lines that he and his speechwriters have written. And even in the text there is a sort of sauce hollandaise, unctuously smooth and lemony tart: "Comme les choses seraient faciles si l’échec devenait une excuse, si l’expérience - même malheureuse - devenait une justification opportune de poursuivre et l’abandon des promesses, une preuve de courage !" One can see the sly smile of the former leader of the PS, so adept in his time at placing the one-liners that would become the next day's headlines. Sarkozy will run on his experience, so what could be more logical than to remind voters, with a slight play on words, that that experience has been malheureuse.

Still, the campaign is now on in earnest. Hollande, who may be about to change his stand on combining the CSG and the income tax, will have to deal with endless obfuscatory attacks on the details of any policy he announces, did well to start things off with a strong if vague statement of purpose. If he can grow into his own words and make himself their embodiment, he will have done most of what he needs to do to defeat Sarkozy, who, for better or for worse, is stuck with the "unhappy experience" that fate has dealt him.

* Just after writing these lines, I came across this little essay on Sarkozy and Guaino by Philippe Bilger, who ofters this quote: "Nicolas Sarkozy gère tout à l'affect. La contrepartie de l'affect, c'est la brutalité."

Knock Me Over with a Feather

Well, I'll be: from this morning's Times I learn that a key player in French policymaking around the euro is Ramon Fernandez, the son of novelist Dominique Fernandez, whose biography (Ramon) of his father, also named Ramon Fernandez, is one of the most fascinating books I've read in recent years. It tells the story of how the elder Ramon Fernandez, the technocrat's grandfather, went from Parisian aesthete and distinguished literary critic to rabble-rousing fascist orator and party captain in Doriot's quasi-fascist PPF. An amazing book, and now am I further amazed to discover that Ramon Fernandez's namesake is making policy about the euro.

Monday, January 2, 2012

French Sociology

Mediapart is running a series of articles on Pierre Bourdieu, who is without a doubt the most influential French sociologist:

The reasons for this extraordinary influence are less clear.

Karachigate: The Political Connection

Investigators seem to be increasingly convinced that, as long rumored, the Karachigate kickbacks did indeed end up in the campaign coffers of Edouard Balladur:
Les juges Renaud Van Ruymbeke et Roger Le Loire, en charge du volet financier de l'affaire de Karachi, se rapprochent de plus en plus d'Edouard Balladur. Les soupçons sur un financement illicite de sa campagne présidentielle malheureuse de 1995, via des contrats d'armement et/ou les fonds secrets ne cessent de se renforcer. Ces dernières semaines, ils ont placé en garde à vue plusieurs des anciens responsables de sa campagne, chez qui les policiers ont également conduit des perquisitions.

UPDATE: Meanwhile, Mediapart puts Sarkozy at the scene of the crime.

"Straight into a wall"

As trans-European austerity begins to bite, some are beginning to realize that this was the wrong answer to the problem of the euro:

“Every government in Europe with the exception of Germany is bending over backwards to prove to the market that they won’t hesitate to do what it takes,” said Charles Wyplosz, a professor of economics at the Graduate Institute of Geneva. “We’re going straight into a wall with this kind of policy. It’s sheer madness.”Rather than the austerity measures now being imposed, Mr. Wyplosz said he would like to see governments halt the recent tax increases and spending reductions, and instead cut consumption taxes in a bid to encourage consumer spending. More belt-tightening, he said, increases the likelihood that Europe will see a “lost decade” of economic torpor like Japan faced in the 1990s.

There is also a high risk of multiple bank failures according to the ECB:

La Banque centrale européenne (BCE) n'est pas optimiste. Dans son rapport semestriel sur la stabilité financière de la zone euro, publié lundi 19 décembre, l'institution de Francfort met en garde contre le risque de défaut d'une ou plusieurs banques de la zone euro.
La probabilité de défaut simultané de deux banques ou plus, écrit la BCE, s'est accrue depuis six mois, à un niveau jamais atteint depuis le début de la crise financière de 2007. Quasi nul il y a cinq ans, cet indicateur de risque "systémique" du secteur, qui renseigne sur la solidité du système bancaire, a culminé autour de 15 % lors de la crise des subprimes, ces crédits hypothécaires à risque. Il s'établit aujourd'hui à 25 %.

Sunday, January 1, 2012

"Mes chers compatriotes"

I watched last night's Sarkovoeux. The president did a pretty fair imitation of gravitas, amplified by his increasingly drawn features and the dimmed sparkle in his eyes. In substance his speech contained no surprises: the crisis was bad, very bad, worse than anyone could have imagined, and only he--a president inured to crisis and wise in the ways of the world--can save the economy while at the same time protecting French sovereignty and independence.

If you believe him, it was an effective performance, but is there any reason to believe that he is the only person capable of grasping the magnitude of the problem and the contours of a solution? Clearly not. Opinions about the nature of the problem abound, yet there is little consensus about the solution or certainty that any particular course of action will succeed. Sarkozy's record has not been the abysmal failure that its opponents claim--this was in fact the gist of Hollande's contre-voeux--but neither does it stand as a testimonial to presidential clairvoyance, perspicacity, and fortitude. He underestimated the initial difficulty--a failure that was not his alone, to be sure. He believed, or professed to believe, in any number of solutions that quickly proved to be inadequate--and that many observers predicted would be inadequate even as they were enacted.

So an accurate portrayal of the record would require the president to defend himself by claiming to have learned from his mistakes as only a head of state can. Learning from failure does not make for a particularly attractive campaign theme, however, so instead we have the gravitas ploy: I have grown in office in ways you cannot see, just as I have aged in ways that you can see and matured as I intend to convey to you through my subdued, sober tone and restrained body language. Events are likely to overtake communication before the election, however, and this latest round of presidential theater will fade into the past with all the others: the jogger, the president in Luxor, the president courting at Disneyland, the president tongue-lashing the editor of Libération Laurent Joffrin, the president presiding over the EC or the G20, the president as shuttle diplomat, etc. etc. Perhaps I will assemble a photomontage of "the many faces of Nicolas Sarkozy." It would be an interesting document.