Wednesday, August 29, 2012

2.3 Billion for Youth Jobs

Employment subsidies: Hollande has just announced 2.3 billion euros' worth. The money is earmarked for underskilled youth in the 16-25 age group. We have been this way before. The move is billed as a boost to French competitiveness, since it will reduce labor costs in some industries. But actually it doesn't reduce costs. It only transfers the costs to the state, meanwhile discouraging industry beneficiaries from investing in new, labor-saving technology to reduce costs over the long run while spurring employment among manufacturers of capital goods. In short, this is a bad investment. To be fair, youth unemployment is quite high, and this will provide some immediate relief. But similar measures have proved disappointing in the past, and there is no reason to think that this time will be different.

Budget Control

Mediapart has published a draft of the law implementing the fiscal pact in France. The draft envisions the creation of a High Commission of Public Finance, which will be charged with monitoring compliance with the terms of the fiscal pact and reducing expenditures deemed excessive in case of divergence. In particular, control of social security and local government expenses is to be exercised by the High Commission. The government insists that this text is merely a draft.

Regulating Gasoline Prices

Pierre Moscovici looked very proud of himself while making the announcement: gas prices would be cut by 6 centimes per liter, "a very substantial amount." Even Total tried to put a good face on things: This will be part of our commercial strategy to show our clients that we are participants in the national effort, said, in essence, the firm's chief. The national effort to do what? To subsidize the burning of fossil fuel despite an ostensible commitment to reducing carbon emissions? To reduce the share of gasoline in the average family budget still further (it has in fact been declining steadily for decades)? To prove that, even if "l'État ne peut pas tout," il peut parfois quand même faire quelque-chose.

But who is the dupe here? If the state picks up 3 of those 6 centimes but Hollande sticks to his goal of reducing the budget deficit, taxpayers--including those who don't drive--will be taking change out of one pocket to put it in the other. What the companies contribute or don't contribute will soon be camouflaged by normal fluctuations in the market price of crude and the regular ups and downs of the euro.

In short, Opération Prix de l'Essence is nothing but de la frime, de l'esbroufe, even if it does make good on a Hollande campaign promise. It's no mystery why politicians everywhere--the US is no different from France in this respect--like this particular swindle. Nobody likes oil companies. They make too much money. They corrupt the state (notoriously so in France). They operate as virtual global powers and make their own foreign policy. And the market for oil, both crude and refined, is subject to various sorts of manipulation. Consumers are sensitive to the price at the pump. It's well-known to be a prime irritant simply because it's such a visible manifestation of the capriciousness of the market.

But really. Isn't there some more grown-up way to respond? Under Sarkozy one became inured to what Hollande himself memorably called le coup d'éclat permanent. It would have been nice if the new president, having named the vice, had refrained from perpetuating it. But a promise is a promise, alas.

Richard Millet

Richard Millet, an editor at Gallimard who, according to Wikipedia, played an important role in the publication of Jonathan Littell's Holocaust novel Les Bienveillantes, has published a book in which he claims to be "struck by the formal perfection" of Anders Breivik's murder spree in Norway. He also despairs of the fact that European nations are "fraying socially as they lose their Christian essence to the benefit of general relativism."

Shocking. (h/t Peter Gordon)