Posted on 09/30/2012 1:44:36 PM PDT by bruinbirdman
If French President François Hollande thinks he can assuage the bond markets by dishing out tax-heavy austerity instead of genuine reform, he has been given very bad advice.
His tragically-misguided budget offers no strategic plan to reverse -- or even to stop -- thirty years of slow national decline. He offers no worthwhile measures to slim the Leviathan state, now a Nordic-sized 55pc of GDP, without Nordic labour flexibility or Nordic free markets.
He does not tell us how he will stem the slide in France’s share of eurozone exports over the last decade, down from 17pc to 13pc, or what he will do about the disastrous swing in France’s trade balance from a surplus of 2.5pc of GDP to a deficit of 2.4pc since 1999.
He proposes nothing credible to restore France’s viability within EMU, or to stop public debt spiralling beyond 90pc of GDP. Instead he has served up the most drastic retrenchment in forty years, at the worst possible time, and in the worst possible way. And markets are supposed to applaud?
The budget will tighten discretionary fiscal policy by 2pc of GDP next year into the teeth of deepening depression, without offsetting monetary stimulus or exchange rate relief.
Mr Hollande likes to quote Leon Blum, the Popular Front leader of the interwar years. The reality could hardly be more cruel. He is replicating the disastrous deflation policies of Labour Chancellor Snowden in 1931, before the Labour Party woke up to the delicious possibility that you could lift two fingers to the forces of reaction and leave the Gold Standard.
Worse yet, he is perilously close to re-enacting the desperate deflation decrees of Pierre Laval -- an ex-Socialist dreamer, pacifist, and utopian who lost his way, and ultimately cleaved too closely to foreign
(Excerpt) Read more at telegraph.co.uk ...
This really sucks. When France goes down the tubes, I won’t be able to kick it around any more.
Production of French wines may continue but people will discover that cheaper American/Chilean/Australian/South African etc. wines are just as good.
I think that’s the % of GDP that is produced by the public-sector...
Oh.
It is a Keynesian discussing the errors of a socialist. I hate to say that about AEP because he is very insightful on non economic things.
A 75% rate on the “rich” is to get the support and cheers of the proletariat. It is alwo shortsighted as hell because it ultimately mreduces everyone’s standard of living, especially those who do not have sufficient resources and connections to be able to move their assets and selves from the country. As class warfare, it misses the declared target and blows out the firing chamber.
A 75% rate on the “rich” is to get the support and cheers of the proletariat. It is also shortsighted as hell because it ultimately reduces everyone’s standard of living, especially those who do not have sufficient resources and connections to be able to move their assets and selves from the country. As class warfare, it misses the declared target and blows out the firing chamber.
Leni
AEP thinks the euro currency zone is a fiasco, a utopian fantasy. He predicts its demise.
However, he thinks money printing, while fruitless in the end, will temper the social upheaval associated with the current eonomic meltdown.
He does not favor a sudden massive catastrophy.
yitbos
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