Sunday, January 6, 2013

Times Expresses Impatience With Hollande

The New York Times thinks that François Hollande is moving too slowly on economic reforms. After all, the piece suggests, Hollande could simply overhaul French labor laws, end "corporate welfare," increase carbon taxes (as Ireland has done), and subsidize shorter working hours without reduction in pay (as Germany does with its Kurzarbeit program). The life of the editorial writer is so easy: he or she needn't recall that a higher carbon tax ran into a buzzsaw of opposition under Sarkozy; that "corporate welfare"--not only in France but also in the United States--is entrenched by powerful networks of interests, and that subsidizing shorter working hours may conflict with the imperative--which the Times writer fully acknowledges--of reducing French borrowing from financial markets. In sum, the Times editorial is little more than an exercise in nostalgia for the decisiveness of the Sarkozy years, when the president was so full of certitudes that the country lurched from one set of goals to another without so much as a moment's pause to catch one's breath in between.

Yes, Hollande is rapidly losing the support of many of the people who elected him. Yes, the prospect of a collapsing center is alarming to many intermittent observers of the French scene. And yet to propose that it's high time that the French simply "get on with" reforms that everyone knows must come is disingenuous in its utter neglect of the reasons why "stalemate" has been so characteristic a feature of French politics for so long and abject in its implicit comparison with the United States, which is silently portrayed as a place where people know how to get things done. And yet this same editorial writer may well have been working a day or two ago on a piece about the fiscal cliff deal as a classic exercise in kicking-can-down-road politics. Rather than blame "Flanby" for his mushiness, it might be better to recognize that mushiness is inherent in the structure of the crisis itself (and in welfare state retrenchment more generally).Is there a new world waiting to be born, or a field strewn with wounded lions awaiting opportunities to pounce as soon as they've regained the last necessary increment of strength? Multiple equilibria no doubt exist, with the conditions permitting transition from one to another murky at best.


brent said...

Your scorn for the fatuous tone of the Times editorial is well-deserved, but hasn't Hollande earned some measure of the Times's criticism? As the ridiculous 75% tax blows up in his face and occupies nearly the whole terrain of public discourse ,we are properly reminded that !) candidate Hollande pulled this proposal out of his hat rather than craft a real tax code revision with meaningful numbers, and 2)a year later he still hasn't made any serious efforts to shift the fiscal burden to those who can afford it.

In fairness, the Times writer desists from making the comparison you suggest with the American 'can-do' government ... thankfully, since our government makes France's look like a model of precision.

I take your larger point to heart, though: the crisis throughout the OECD world IS 'mushy," or at least gives rise to innumerable mushy calls for "growth" without any real basis for achieving such. Since those "wounded lions" are indeed waiting their next kill, wouldn't it behoove us to invent that "new world," and quick, before the existing system wastes the lives of an entire generation of its citizens?

Mitch Guthman said...

Apparently, the life of the president of France is also pretty easy, too. One simply looks around, sees that the way forward is blocked by powerful, entrenched interests and fraught with peril. At which point it is time to turn one’s attention to whether French schoolchildren should do quite so much homework.

Hollande needs to make some choices. That's a part of his job. He can't simply remain inert. Inertia soon becomes entropy and then it's too late.

Anonymous said...

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Keep up the good work

a parisian wanderer

DavidinParis said...

OK, let's do the comparison with the USA. The last 4 years in the US has been a veritable war between the right and left. Major concessions on BOTH sides have been made. Both sides are unhappy. Obama is detested by the right and a disappointment to many on the left. He remains nonetheless highly admired. Why? Because he is getting things done and reshaping the political, economic and even moral landscape of the country.

Now lets look at Hollande...and keep looking...zzzzzzzzzzzzzzzz

FrédéricLN said...

A very nice post, indeed. I agree in full with your conclusion (and, no, this is no spam ;-) ).

The business mood in France *has* changed a meaningful way since around 3 months.

Since 2007 and until August/September, we just had wounded lions waiting for some opportunity to catch a wounded antelope and hide for some months digesting it, and hoping — well, hoping to get retirement and the "retraite chapeau" before their death.

Now, business people start understanding that the-times-they-are-a-changin', and that it's not only about banks getting the supreme power to channel the world's money down to Chinese mafias. That the nature of business is also changin' in our own countries. It seems their iPhone convinced them after all, whereas (we) intellectuals failed to. Yet intellectuals may still help; I noticed many people remarked Michel Serres' interview in the JdD

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