Thursday, June 18, 2015

Consensus in Favor of a Gloomy Status Quo

A brilliant analysis of the functional dysfunctionality of the French labor market by Olivier Galland (h/t Jane Jenson):

Le compromis générationnel dont on vient de décrire les contours induit une préférence pour le statu quo. En effet, le pessimisme sur la société et la défiance à l’égard des politiques sont tels que ces arrangements informels paraissent aux jeunes préférables aux réformes. Ils doutent qu’elles puissent améliorer le sort commun et n’en retiennent que le risque potentiel qu’elles comportent d’amoindrir leurs chances personnelles. La défiance engendre l’individualisme.
Par exemple, l’idée de réduire le clivage entre CDD et CDI, sur laquelle s’accordent beaucoup d’économistes et qui a été à la base de la réforme du marché du travail menée en Italie par Mateo Renzi, peine à s’imposer en France. Un récent sondage le montre bien (Observatoire politique du CSA pour Les Echos et l’institut Montaigne, 2-3 juin 2015). Les mesures qui touchent au CDI n’emportent pas l’adhésion d’une majorité de Français, alors que celles qui visent à étendre l’emploi des CDD sont très largement approuvées. Au fond, les Français préfèrent donc pérenniser et même renforcer le principe clivant du marché de travail que nous connaissons actuellement.

Hollande's "Battle Plan" for 2017

A saturnine temperament like mine is no doubt a disqualification for politics, but I wonder if the phantasmagorical optimism abundantly on display in François Hollande's "battle plan" for 2017 isn't equally disqualifying. The president's plan, it seems, is to do the opposite of what Lionel Jospin did in 2002. Not a bad idea, given what happened to Jospin. And since Jospin went into the election campaign with a record of solid economic growth behind him, Hollande is off to a really good start: he begins the campaign with a record of solid economic failure.

The next step in Hollande's analysis is to note that Jospin suffered from a bit of flagging economic performance toward the end of his prime ministership. Hollande will therefore try to flog the economy into showing a few signs of life in 2016. At that he may well succeed--unless of course Grexit, which appears imminent, sandbags the feeble European recovery. To be sure, Hollande can't be blamed if Greece goes down and the euro is battered as a result, since he didn't lift a finger for Greece and has been an obedient servant of "the Institutions" whose infinite wisdom will have led to this debacle. Blame them. FH had nothing to do with it.

Jospin was of course done in by Jean-Marie Le Pen, and Jean-Marie is now on the ropes, tossed out of the FN by his own daughter and beached in the terminal naufrage of old age. So the Hollande plan has that angle covered, right? Nothing to worry about on the extreme right.

Hollande will also try in 2016 to establish himself firmly in the minds of the French as the sole candidate of the Left. He will do this by presenting his plan to collect income tax at the source as the beginning of a "great redistributional reform," despite assurances that the change in the mode of tax collection will lead to absolutely no change in the amount of taxes collected--an interesting notion of redistribution. This will be presented as the capstone of the Great Reforms already accomplished in the period of 2012-2015 and the beginning of the famous comprehensive overhaul of the tax code that Hollande promised in his last campaign but somehow never got around to.

I thought at first that this Le Monde article might be the first episode in its series of Summer Beach Reading, this one obviously entered in the Fantasy category. But no, it seems to be a piece of straight political reportage. The article does note that Hollande's first task will be to "restore a minimal level of popularity." Indeed, I think that would be a good place to begin. It's a long way from 13% to 50%, and it's never too early to get started.