Scandalously Socialist France

Abstract: Dissecting an editorial misrepresenting the social, economic and political situation in France. However, the heavy misrepresentation is preceded by many things I said for years. It’s a sort of bait and switch with truth itself.

What’s the interest could big bankers find in this maneuver? Simply that the socialists governing France are represented as having given up on socialism. The truth is anything but.

Those who prefer to read me rather than Krugman can jump to the second part, “THE TRUTH”.

***

Pseudo panicky New York Times editorial by Paul Krugman “Scandal In France”. Yet it starts well:

I haven’t paid much attention to François Hollande, the president of France, since it became clear that he wasn’t going to break with Europe’s destructive, austerity-minded policy orthodoxy. But now he has done something truly scandalous.

I am not, of course, talking about his alleged affair with an actress, which, even if true, is neither surprising (hey, it’s France) nor disturbing.”

(In truth Hollande’s First Girlfriend, an arrogant woman… from a banking family, had her trouble coming: she, a star political journalist who made a career on her looks, pursued Segolene Royal, with whom Hollande had four children, with great vengeance and treachery, sabotaging even her political carreer, for all to see; Hollande’s family came to detest her; unsurprisingly, and hopefully, Hollande will send her packing.)

Krugman: ”No, what’s shocking is his embrace of discredited right-wing economic doctrines. It’s a reminder that Europe’s ongoing economic woes can’t be attributed solely to the bad ideas of the right. Yes, callous, wrongheaded conservatives have been driving policy, but they have been abetted and enabled by spineless, muddleheaded politicians on the moderate left.”

This is what I have been saying about Pelosi and Obama, for years. In Germany, Schroeder, a Socialist, carefully made the bed in which Merkel has been contently sleeping since. Yet, one can argue the tough reforms of Schroeder enabled Merkel herself to take a hard left turn in 2008… which boosted the German export machine.

Here is more Krugman repeating, almost verbatim, what I have been saying for years:

“Right now, Europe seems to be emerging from its double-dip recession and growing a bit. But this slight uptick follows years of disastrous performance. How disastrous? Consider: By 1936, seven years into the Great Depression, much of Europe was growing rapidly, with real G.D.P. per capita steadily reaching new highs. By contrast, European real G.D.P. per capita today is still well below its 2007 peak — and rising slowly at best.

Doing worse than you did in the Great Depression is, one might say, a remarkable achievement. How did the Europeans pull it off? Well, in the 1930s most European countries eventually abandoned economic orthodoxy: They went off the gold standard; they stopped trying to balance their budgets; and some of them began large military buildups that had the side effect of providing economic stimulus. The result was a strong recovery from 1933 onward.”

In this depressed and depressing landscape, France isn’t an especially bad performer. Obviously it has lagged behind Germany, which has been buoyed by its formidable export sector. But French performance has been better than that of most other European nations. And I’m not just talking about the debt-crisis countries. French growth has outpaced that of such pillars of orthodoxy as Finland and the Netherlands…

Mr. Hollande has spoken up about his plans to change France’s course — and it’s hard not to feel a sense of despair.

For Mr. Hollande, in announcing his intention to reduce taxes on businesses while cutting (unspecified) spending to offset the cost, declared, “It is upon supply that we need to act,” and he further declared that “supply actually creates demand.

Oh, boy. That echoes, almost verbatim, the long-debunked fallacy known as Say’s Law — the claim that overall shortfalls in demand can’t happen, because people have to spend their income on something… ”

All the evidence says that France is awash in productive resources, both labor and capital, that are sitting idle because demand is inadequate. For proof, one need only look at inflation, which is sliding fast. Indeed, both France and Europe as a whole are getting dangerously close to Japan-style deflation.

So what’s the significance of the fact that, at this of all times, Mr. Hollande has adopted this discredited doctrine?”

All right. End of the Krugman circus. I understand that he may mean well. But he so enormously misrepresents the situation in France, that he is not doing a service to progressivism in the USA. Now for a bit of real data.

***

THE TRUTH: FRANCE IS SOCIALIST, BUT IS NOT GOING TO ATTACK THE USA:

General government spending in France is 57% of GDP. Only Denmark exceeds 55% in Europe. (The USA is at 39% of GDP, Federal government spending plus States plus Local Governments; it’s 37% in Japan.)

France has both a very centralized state and a government made of 15 “regions”. In consequence, France has several times the number of civil servants of some other European countries (relatively speaking). The USA has less than 20 million civil servants, France nearly seven millions.

French workers are paid nearly 50 dollars an hour (more than Germany). French minimum wage is more than 13 dollars per hour. Schooling, all the way to universities is free. Health care is free and universal.

So Mr. Hollande can go as much right as he wants, the French Republic is going to stay socialist by inertia, for a very long time to come.

Some of the measures proposed by Hollande are just about doing away with some department, to create more… local government. For example the city of Lyon will grow, at the expense of the department it lays in. There is talk to remove the 4 departments that dissect the city of Paris.

True, Hollande is not rabidly anti-plutocratic. But he is not going to declare war to Washington and Wall Street. All Americans are behind those, or nearly so.

Thus Hollande will stick to the 75% tax on income above one million euros that was introduced a few weeks ago.

France is, by USA standards, the very definition of a socialist country. But, without fighting the American Circus, little can be done against global plutocracy. The USA pretty much behaves like a Den of Thieves. Look at the F35 program, the most expensive military program in the history of the world, by far. It has dragged many countries into a most dangerous corruption.

Similarly, what can France and Germany do against the increasingly crazed surveillance state of the USA? Attack? Or talk slowly, and try to walk the patient through his derangement? It starts with getting to know reality. And reality is that Europe is physically small and civilizationally socialist, whereas the USA is physically huge, and thus relentlessly exploitative.

Last, but not least, the honorable professor Krugman does not explain how the mad spending of the 1930s ended. First France did not join it. Second Germany got broke down economically very quickly (by 1938), albeit “solved” the problem… with the “final solution” (stealing Jews and other Europeans).

Great Britain made the economy of an army, thus losing in 1940, but in the end did not escape expensive debts to the USA, that ruined the UK thereafter. The USA won, because all the spending, and a timely late, cheap intervention in the war, allowed it to win, and grab the world.

The only lesson? Keep cool, and try to understand what is really going on.

Patrice Ayme’

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13 Responses to “Scandalously Socialist France”

  1. Paul Handover Says:

    And it’s a most delightful country. I was brought up by parents who always took a summer vacation in France. My mother studied French at University. I taught at a French University in Quimper (Chris Snuggs was my Head of Studies) as part of an exchange programme with Exeter University. Jean speaks fluent French.

    And so on. You get my message!

    Plus French red wine is to die for! 😉

    • Patrice Ayme Says:

      In the old French Third Republic, free extreme quality education with scholarships based on merit was provided. That was central to the Republic. After the successful but costly victory over the Nazis, in France, as in the UK, free universal health care was added. Meanwhile layers of welfare were added.

      Hidalgo, 50 year old, the vice mayor of Paris is candidate to the Paris City Hall, as a socialist. However, she is getting… retirement. Already. Now that could be excused… Yet, in recent decades, Italians retired in their forties has been a common spectacle, especially when connected to national education (engineers employed in private companies until their sixties, though). Italian MPs also enjoy sizable riches (they are much richer than their USA equivalents). And so on. In other words, some of Chris Snuggs’ critiques are on the mark.

      There is also no doubt that France could operate with much fewer civil servants: look at the UK… Not even half, there…
      PA

  2. gmax Says:

    Krugman talks about Europe a lot. SOME OF WHAT he said recently is not as idiotic as he used to, having no doubt learned much from thousands of heavilty censored Patrice comments.

    Yet, he is basically an ignorant man in European matters, with a very Wall Street, TBTF big US banks agenda. Not a friend of the EU

  3. John Rogers Says:

    Patrice

    A note on the progress of the US surveillance state.
    I have learned that NY City will be installing surveillance cameras on city buses, ostensibly “to gather evidence against anyone attacking a bus driver”. Of course, they can keep an eye on everyone else too.

    The cost will be $18,000 per bus or about $18,000,000 for a thousand buses. And I’m sure the contracting for that $18,000 figure was all on the up and up. After all, the people mover Air Train at JFK Airport only cost $1.9 billion for 8.1 miles of track.

    • Patrice Ayme Says:

      Thanks for the data, John. Wow about the Air Train.
      There is good surveillance, and bad surveillance. For example, to take an innocuous example, I am for GOOD speed limits, but against bad ones, and especially against speed traps.

      I agree that, if they can catch the bad guys for good reasons, they can catch the good ones for bad reasons. Solution? Counter-measures. I have seen a cop threatening to kill a citizen for zero good reason whatsoever. I did report it, sort of, but did not engage a formal action, because that would have been daunting. It should not be daunting.

      Another important thing would be to weaken the power of the powerful, by ever more checks and balances. And the fact that, imitating Switzerland, laws should originate only from the citizenry itself.

      The surveillance state that is ascending under Obama is, obviously, a bad thing. It’s telling that this is happening, but no serious stimulus to the economy was tried. But it was obvious, that, when he let instituted his drone death panel, and nobody protested, that was the next step.

      Also the rabid pursuit of Manning, although he revealed a seriously criminal firing methodology, was a bad indication of things to come. Now we are in full sci-fi. I hear they tempered with the encryption methodology, worldwide…
      PA

    • Patrice Ayme Says:

      Some people aggressively asked me about my “sources” for some data common to wisdom in distant countries. I realized that different languages, widely different searches, and wildly dissimilar sources.

      People love to find “sources” in “search engines”. Yet who (re)searched these “engines”? But, all too often, for the NSA & its subsidiaries?

      It’s not just bodies that are under surveillance, but minds, under construction.
      PA

  4. Dominique Deux Says:

    I’ll carefully refrain from saying which is right, Krugman or you. But as a Frenchman living in France and listening to a great many comments about Hollande, mostly of the “We got shafted” variety, I can safely say his position would find more echoes here than yours. So, right or wrong, he’s not that badly out ot touch with French realities.

    French voters who did not choose Hollande will never like him. Unwavering hatred is to the right side as virgin blood is to the Dracula family. Like Obama and for the same reasons, he is finding out that no amount of snuggling up to the Masters of the Universe will earn him more than a kick in the ribs and admonitions to stay off their well-pressed pant cuffs. The difference is he has been more cautious (or decent) in his fawning, so that illusions of a long term deception strategy can still be entertained by the faithful. But most of his voters have been bitter way before the current ruckus. Think of your own, much changed, feelings about Obama and you’ll be close to the mark.

    That ruckus in France is not about his apparent coming out for supply side economics, contrary to what (supply-sider) French commentators would have us believe (so as to declare victory and drive home). The French public has no side in the supply vs demand quarrel, apart from a gut feeling that both are needed and the issue is about finding the right mix.

    What raised eyebrows was Hollande’s specific proposal to throw more cash to employers, with the understanding they would retaliate by hiring lots of people. That kind of understanding was aired before, a pair of times, in the form of formal commitments from the employers’ union in exchange for that holy cow of “reformist” economists: relaxation of labor laws. The honest promiser was already a Mr Gattaz – the current promiser’s father. Needless to say not a job was created; the Gattazs are masters of the Gallic shrug. How the clever Mr Hollande got himself hoodwinked AGAIN is beyond most people’s understanding. Mr Gattaz Jr is less forgetful: this time, he carefully refrained from making any formal commitment to a hiring spree.

    What Krugman also has to say about France’s basically sound economy also needs being said and in fact hammered home. The overwhelming assumption that France is sliding down the drains is a weapon of economic destruction, a self-fulfilling prophecy, part and parcel of the “plot against France” which is not a thing of the past only. The usual collaborationists are hard at work in France to make it the doxa, with the French’s cultural, ingrained pessimism a big help (many studies on that recently). So, even if Krugman sounds a bit rosy, by all means let him be heard. He is needed.

    The issue of France’s Socialism is a moot one, sorry. The electoral record puts France firmly on the right. But even under recurrent conservative leadership in Paris, to some segments of US opinion France always remains a Godless, pinko commie country with good wines. So what. What should be said, though, is that the comparisons with other countries about the size of the state-owned or managed sector are basically irrelevant. The French public resents the privatization of utilities and public services which have been private abroad for decades; it feels, with some reason, that the benefits which had been trumpeted never happened. So France is bound to keep a large public sector. The issue is that, in addition to being large, it is also bloated in parts. There is room for some careful paring and slimming down – not the berserker axe wielding Sarkozy and The Economist alike keep advocating.

    • Patrice Ayme Says:

      Dear Dominique: Maybe I did not make that clear, but the reason I quoted Krugman extensively, in this particular essay, is that I agreed with much he said. Actually he pretty much uses arguments I have used for years in hundreds of comments to his site.

      I don’t know how much Hollande suddenly favors companies, I did not study his proposals, because they are just that, proposals. I do know, though, that French companies are overtaxed. Apple Inc, the world’s largest tech company (I own Apple products, including McAir), pays only 2% tax. (Although Irish leaders claim it pays 12% or do.) This is typical.

      My solution: let the companies make profits, but then tax individuals’ income, high salaries, etc.

      Marissa Maier, the young blonde heading Yahoo last year hired some guy from Google for fortune. A market, Wall Street deal type of guy. She just fired him. It’s known that his severance package is more than 42 million dollars.

      Let them do what they want, but tax them 93% as President Ike used to.

      On the personal level, it seems clear to me that both Obama and Hollande viewed their presidencies from the hedonistic-let’s make connections with the mighty, level.

      It seems also clear that there are way too many civil “servants” in France. And, as far as having public companies, which are those? Nobody is privatizing the medical sector (thankfully). French energy giants (EDF) and giant water companies are both playing on their de facto monopoly in France to gobble up companies in the rest of Europe. I’m not complaining, just observing.

      Total (I have relationship with that one) is happily going to try fracking in Great Britain (if the Natives can be pacified).

      The Economist, part of a tax dodging corporation, is inimical to France, precisely as a covering maneuver to protect said dodging.
      PA

    • Patrice Ayme Says:

      My main point (hidden below a morass of secondary, tertiary points, as usual) is that Krugman’s position is a subtle manipulation. To say France made a scandalous right turn is not what’s going on. With a 75% tax on higher incomes, just implemented, France is where one would wish the entire West to be, firmly redistributive.
      It’s clear that there is not enough research and development in France at this point (the USA is nearly at 3% relative to GDP, France much less). Innovation, for the last 15 centuries, is what has supported France most.
      For example, France does not have a serious Thorium fission research program (although China, India, and to some extent the USA have).
      PA

      • Dominique Deux Says:

        Agreed on most points. However you say “let the companies make profits, but then tax individuals’ income, high salaries, etc.”, then “With a 75% tax on higher incomes, just implemented”. OK with me.

        But Hollande precisely is NOT implementing that tax. He bowed to the Constitutional Court which threw it out as confiscatory; now it is the COMPANIES paying that kind of salary which will fork out the tax from their bottom line.. Good disincentive but the reverse of what you rightly propose. It will merely increase company pilfering by the top level suits. And non-salary incomes are off the hook.

        • Patrice Ayme Says:

          Dear Dominique: I thought the Constitutional Court found that there was an inequality issue at work (I did not find out what). True, Hollande did not try too hard.

          In general, I am not enamored with Hollande. I have no reason to believe he is more left than, say, Angela Merkel. In 2008, Angela is roughly the only “leader” who operated a hard left blow, as if she were doing Kung Fu (in one of my essays I compared her to Hitler at some point, when she was apparently wavering on the Euro). He talks more left than Sarkoko, but barely. And words are easy.

          This being said, one has to explain stuff, and have the right ideas. The right ideas are not in sight, thanks to the likes of Krude Man, who censored me today… As I explain thoroughly in my latest essay.
          PA

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