France's chance

After a quarter-century of drift Nicolas Sarkozy offers the best hope of reform

Ah "reform". May I quote right away the Wall Street Journal as to what "reform", the overriding Holy Graal of the neo-liberals, really means?

[t]he recipe isn't complicated: Lower taxes to reduce wage costs, tighten rules government benefits, loosen up employment protection laws, for starters.

Lower wages, fewer rights for workers, lower taxes, fewer regulations on corporations. Transfer money and rights from the poor to the rich, in a word.

And as to the quarter century of drift, this is the catch all meant to signify that France has lost its influence in the world and, most gleefully, that its economic performance is inferior to that of the UK. The French would probably agree to the sense of drift, but would probably put its duration closer to 12 years, i.e. the period when the last right-wing cynical opportunist was president and did little with his presidency (if you want to include the last couple of years of the Mitterrand presidency, as it was battered by a sense of fin de régime replete with scandals, fair enough - the last 2 years were under a right wing government anyway).

But the stage is set: France is doing badly.

NO FRENCH presidential election in 50 years has looked as unpredictable as this year's, the first round of which takes place on April 22nd.

That very first sentence is what made me vow to do a line by line commentary. This is so patently false in so many ways that it's hard to take anything further seriously. Don't they remember the breathtakingly close finish of the 1974 race between Giscard d'Estaing and Mitterrand? Mitterrand was then the single candidate of the united left including the - then-20%-strong Communist Party and ran on a joint electoral programme. And what about the similarly close and uncertain race between the same two in 1981, which brought Mitterrand's historic victory? In both cases, there was a sharp contrast between left and right, and extremely narrow results.

And of course, there were no Presidential elections before 1965, so that reference on the "last 50 years" is pretty silly in its own right.

This is so even though the leader in every opinion poll so far has been Nicolas Sarkozy, the candidate of the ruling centre-right UMP party. His support may be overestimated, just as that of the far-right Jean-Marie Le Pen may be underestimated. The rise of the centrist François Bayrou, who at one point almost overtook the Socialist Ségolène Royal, has muddied the electoral arithmetic. And with only ten days to go, more than two in five voters are undecided.

Minor nitpick: Sarkozy's been in the lead in most polls (not all), and that only since January, when the UMP had its congress to "elect" him as candidate (he was the sole pretender), which was found mediocre by most people but the media nevertheless decided to quote the inflated numbers for the public that day (80,000 supporters in an exposition area with room for 25,000 people at most) and grant him a "bounce" in the polls before it even happened. That "leadership" in the polls was then boosted by nonstop talking about it and a frenetic focus on any contentious word by Royal (and full ignorance of most Sarkozy outrages), and a mindless repetition that her campaign was failing, "gaffe-prone", "catastrophic", "sinking" despite the fact that there never really has been a gap of more than a few points between them. When her numbers caught up with his again, that was barely worth a mention, but when they dropped again by a couple of points from that level, it was again a sign of her failing campaign.

This election matters. France is the euro zone's second-biggest member and home to ten of Europe's 50 biggest companies.

Only the economy matters. And only the ranking of who's biggest matters. And we wonder where the permanent obsession for growth comes from? Bigger means better in this world.

But it is deeply troubled.

Ah. Here we go. The one country that you can sure is described this way at all times. Things must be going really, really badly then. Let's see.

It has the slowest-growing large economy in Europe, ...

(Note - I will not dispute further the notion that GDP, growth and other similar macro-economic indicators are the most relevant indicators to evaluate a country. This is at the core of the arguments of the Economist, and as we've regularly discussed, it is a fundamentally flawed and biased way to not only appreciate a country's well being, but even to understand its economic performance and how its citizens are faring. But I'll go along for the purpose of this deconstruction, because even on that ground, arguments are not kind to them)

Even if you accept the (disputable) idea that one should only the most recent numbers, this is simply false. The fact is that France's growth in the last quarter was higher than that of the UK (see table above, (from this week's Economist itself) showing both 2006 numbers and Q4 growth at annual rate), and that its growth has been higher than that of Germany and Italy in every single year since 1994 - except in 2006. Can a difference of a few tenth of percentage points over one year (or, as in my own case of cherry-picking the data above, a quarter) be so significant that you can draw such wide conclusions ("slowest growing economy in Europe")?

Even on a medium term basis, it's hard to see any such thing:

... a state that soaks up half of GDP,...

True, but fundamentally irrelevant. As this table from the FT two years ago show (and as the high ranking of the Scandinavian countries in most "competitivity" league tables similarly demonstrate), there is no linkage whatsoever between the proportion spent by the State and economic performance:

In fact, it can be argued from recent data that those countries that increase State spending most are those with the best growth: the biggest increases in State spending have taken place (in that order) in the US, the UK, France, Germany over the past ten years, and growth numbers have followed the exact same pattern. Should Keynes be rehabilitated?

 the fastest-rising public debt in western Europe over the past ten years...

Let's conveniently exclude the US when necessary, and fail to mention that debt did not increase in the UK because Gordon Brown - gasp - increased taxes. He has been helped by the fact that he inherited surpluses in 1997, and was smart in his first two budgets to cut taxes, thereby creating a reputation that has stuck with him of a "good" Chancellor even though he has presided over increasing budget deficits (worse than France in terms of the Maastrich criteria) and has had to raise taxes several times. So is the Economist arguing for tax increases, then? It should certainly find Royal's proposals in that respect more reasonable than Sarkozy's, if the goal is only to limit the deficit.

 and, above all, entrenched high unemployment.

AH, the hammer of unemployment, endlessly used to damn the French economy. May I again quote Laurent Guerby?

In the fourth quarter of 2004, the normalised unemployment rate for men aged 25 to 54 was, according to the OECD, 4.6% in the USA and 7.4% en France. At the same time, for the same group, the employment ratio was 86.3% in the USA and 86.7% in France.

We thus have an unemployment number which is 60% higher in France than in the USA even though more people work in the selected group, which is rather counter-intuitive if we expect the unemployment rate to reflect the situation of the labor market.

One should thus avoid hasty interpretations of unemployment numbers. In fact, the definition of unemployment is built on the - fragile - distinction between the unemployment of an potentially active worker his/her non-employment. Despite the best efforts to normalise this distinction, it remains heavily subjective and thus easily influenceable by various policies which have otherwise no real effect on the labor market.

Today, from the same Economist table quoted above, I read that French unemployment is 8.4%, the UK's 5.5% and the US's 4.4%. This is not to deny that unemployment is not a problem in France, but rather to point out that the problem is in fact the precarious economic situation of a large portion of the population which is empoverished as its ability to find well paying jobs diminishes under the pressure of the policies relentlessly pushed by the Economist et al.

Precarity and poverty take different forms in different countries.

• Some send mothers back home;
  
• Some pay handicapped, or old, people to come out of the job market;
  
• Some have let wages or time flexibility go so far that the working poor have grown and have to juggle with temporary positions, unpredictable timetables and multiple jobs;
  
• Some have effectively cut off healthcare access for significant numbers of workers;
  
•  And some have chosen to protect the standards of living of those in the work force at the expense of those that are not yet in or that are kicked out of it.

Over the past 25 years French GDP per person has declined from seventh-highest in the world to 17th.

The ultimate indictment: a dropping ranking. It matters not that these rankings are all of European countries that essentially have equivalent standards of living, give or take a few %, and it matters even less that these rankings would look terribly different if one measured the GDP per person of the median citizen (to correct for the fact that GDP is in effect an average, which means that it is distorted by increasing inequality) , or the GDP per person excluding the top 0.1% of the population.

 The smouldering mood of the suburbs (banlieues), home to many jobless youths from ethnic minorities, blazed into riots in 2005 and lay behind new trouble that flared recently at a Paris railway station.

Again, this is only about unemployment (but introducing the concept that France is failing to be open to the world). It has nothing to do with the provocations of police forces, and of their minister for most of the past 5 years, Sarkozy Nicolas, who regularly insults said jobless youth from ethnic minorities, taunts them and orders the police to harass them, and has steadily toughened laws and reduced budgets for preventive action - prefering to send riot police to the suburbs after having eliminated permanent local police forces (yes, really). And the Gare du Nord incidents had nothing to do with disproportionate force being used against one person trying to get in without a ticket, and against the people that simply protested against the harsh treatment being meted out.

The disenchantment of voters is reflected not only in opinion polls but also in their rejection of the European Union constitution in 2005. Tellingly, they have not re-elected an incumbent government for a quarter-century.

They did, in 1995 (and they re-elected both Mitterrand in 1988 and Chirac in 2002)

The most urgent cure for all these ills is to get the economy growing faster.

Of course. Naturally. Only the economy matters.

That requires radical liberalisation of labour and product markets, more competition and less protection, lower taxes and cuts in public spending, plus a shake-up of the coddled public services.

Ah yes, "reform". Paying workers less and giving them access to lots of cheap Chinese crap is the solution to everything. (Increasing budget spending exclusively to pad the income of government contractors, ideally in the militaro-industrial or the consultancy sectors is okay, too, even if it breaches the "cuts in public spending" bit. It's only cuts in public spending that goes to the poor that's required, because they are too "coddled".

None of these things was seriously tackled in the past 26 years, under the presidencies of François Mitterrand, from the left, and Jacques Chirac, from the right. This was a time when other European countries, such as Britain, Spain, the Netherlands, Ireland and the Nordics, transformed themselves for the better, and still largely retained their cherished social models and welfare systems. Here lies the biggest challenge for the next French president.

A bit of snark: "transformed themselves for the better" begs the question: who exactly is "the better", and who decides who it is? Or is it just the rich?

And if the requirement is growth and jobs, how can the Economist fail to note that the two periods when France had great numbers in that respect were in 1988-1991 and 1997-2001, i.e. under two socialist governments with moderate Prime Ministers managing disparate coalitions (Rocard with help from the centrists, Jospin with the gauche plurielle "rainbow" coalition with the Greens and the Communists):

How do the candidates measure up? Only three of the 12 are serious runners.

What's a "serious" runner? One that has a chance to win, or one that has a chance to shape policy? "Small" candidates do matter, as the number of voters that expresses a preference for them and their programmes will directly influence the programmes of the front runners and the kinds of commitments they have to make to be preferred by a majority.

Systems beyond the US two-party one and the British first-past-the-post exist and have different qualities and issues. But saying that those that cannot "win" are not "serious" is yet another sign of the mindset noted above.

A fourth who may shape the outcome is Mr Le Pen, the veteran leader of the racist National Front, who shamed France by edging past the Socialist candidate into the run-off against Mr Chirac in 2002. Mr Le Pen's poll numbers are better now than they were at the equivalent stage then. It is vital for France and its image that Mr Le Pen be kept out of the second round this time.

Oh... I see. The Economist is really pulling its punches. Let's just wait until Le Pen is in the second round and then we'll know what it really thinks of France. Barf.

Ms Royal would be an asset in the second round, turning it into a satisfyingly direct left-right contest.

In the second round only, of course (not by winning). What is needed is an outcome that can be described as a legitimation for "reform", i.e. a routing of the (extremist) left by the "reformist" Sarkozy. It doesn't matter the reality of what the candidates propose and of what they will most likely do, what matters is the label that are pasted onto them now (Sarkozy = "reform") and the corresponding claims that will be made then on that basis ("France votes for reform" or - gasp - "France abandons last chance to reform")

 She has other attractions: the first woman to be a serious contender, the boldness to push past the elephants in her party to win the nomination, a willingness to break with Socialist taboos by praising Britain's Tony Blair and criticising the French state's imposition of a maximum 35-hour working week.

Again, it does not matter that she has praised Blair because he is actually increasing spending on public services, and that she criticized the 35-hour week because it was too favorable to companies and created new constraints on blue collar workers (which is true) - these words are taken as an endorsement of "reform" even as they mean the opposite, because we know by now, from sheer repetition, that

Blair=reform

and

35-hour week = evil socialist bureaucratic plot that is the opposite of reform

Unfortunately her policies are woolly even by modern standards.

Modern standards means that the "serious" left is, like in the US and in the UK, where the rightwing was 30 years ago.

And in economics, she stands squarely behind all the old left-wing shibboleths: state intervention, rigid labour protection and high taxes.

That work. That created the middle classes, brought prosperity and decent services for all. But no, today, these are "shibboleths" (like "kerfuffle", a dismissive "bon mot" that the rightwing ideologues like to use to show that they really are smarter and more cultivated that the supposed intellectuals of the left. Not being second at anything is a fundamental part of their worldview [what's the word? Oh yeah. Weltansschauung. Using German words is even more snobbish than French ones]).

On the face of it, the centrist Mr Bayrou is more promising. His pledge to curb the public debt is more credible than Ms Royal's and even Mr Sarkozy's.

Because? Nah. No need for arguments. Just because we say so. Not that we'd bother looking at actual track records of governmental action (that Bayrou has, like Sarkozy, been part of right wing governments that, over the past 25 years, have increased public debt at record speed, whereas Royal has been part of leftwing governments that have been far more restrained and even managed, under Jospin, to lower public spending is, of course, irrelevant)

But he has failed to promote a free-market agenda--he is distressingly fond of farm subsidies and state intervention.

That's the Economist's traditional agenda (free trade), so I certainly won't blame them for pushing an idea they have consistently supported. But opposing state intervention and free trade is needlessly reductive. After all, it is state intervention that can open borders or create "level playing fields".

Nor is it clear how he would form a government: his centrist party is tiny, and his vague musings of drawing in like-minded leaders from left and right smack of the lowest common denominator.

A more relevant criticism is that it is highly unlikely (although not totally impossible) that he will manage to create a lasting coalition around him (as the experience of the fourth Republic can suggest). The fear of the "lowest common denominator" rather reflects the Economist's opinion that anyone that has support from the left can do any good in government. (And by "good", they mean, of course, "reform")

Which leaves Mr Sarkozy as the best of the bunch.

Not quite a ringing endorsement, thus. Just a little bit less worse than the others. But what do you expect from France?

Unlike the others, and despite his long service as a minister under Mr Chirac, he makes no bones of admitting that France needs radical change.

Despite being the number two of all Chirac governments in the past 5 years, and thus a highly influential minister - probably the man with the single most say on what these governments did during the whole period, would be the more appropriate description. Why did he not fight for radical change in government? Why did he endorse, by his top level support, ineffective or useless government action?

He is an outsider,

Bleh. He's been part of the core RPR apparatus since the late 70s, when he was in his twenties. He has not done anything in life apart from politics. He's been the mayor of Neuilly, probably the richest city in France on an average - and also median - basis since 1977, and a MP since 1986. And he was at the core of the RPR party machine in the rich Haut de Seine départment (where the most egregious example of bad management of public funds have taken place over the past 25 years, many of which have led to convictions, and many more to legal procedures killed by political interference or manoeuvring).

born to an aristocratic Hungarian émigré father; he openly admires America; he is enthusiastic about the economic renaissance of Britain. He plans an early legislative blitz to take on hitherto untouchable issues such as labour-market liberalisation, cutting corporate and income taxes and trimming public-sector pensions.

"aristocratic" "admires America" "enthusiastic about Britain" "labour market liberalization", "cutting taxes". I understand that Economist's writers having an orgasm right there, but I'm just not sure that (beyond the fact that it's certainly not what's needed) he will actually implement it in any recognisable way.

• He has backpedalled on his position viz. America, essentially aligning himself on Chirac's foreign policy line (including the lack of enthusiasm for Europe, by the way);
  
• He has similarly backpedalled on his totally unrealistic promises to cut taxes (he initially promised to reduce taxes by 4% of GDP; when it was pointed out that Thatcher herself had only achieved a 2% drop and that his current government had presided over an increase in tax levels, the subject was dropped off, although, strangely enough, he suffered no accusations of "embarrassment", flip-flopping" or incompetence in the media);
  
• As to any labor market reform, it remains to be seen what he would propose, and whether he would manage to actually put it in place.

  And I cannot help point out again his main claim about the UK economy, which he noted had created 2.5 million jobs in the past 10 years whereas France's unemployment rate had remained stuck at 10%. The fact is, France created just as many jobs in the past 10 years - all of them under the Jospin government - and more of them were in the private sector than in the UK, which has essentially relied on public sector increased spending to boost public employment levels.

But there are two doubts about Mr Sarkozy. As he showed in his brief stint as finance minister, he has most of the traditional French politician's meddlesome economic instincts, favouring a strong industrial policy, protected national champions and even interfering in supermarket prices. Recently he has taken to heaping blame on the European Central Bank for France's self-inflicted failings.

Actually, he is worse than most French politicians, because his "meddlesome instincts" are focused exclusively on what short term political impact his decisions may have. Which means that he is the worst of both worlds: an interventionist State (which the Economist does not like), and one that does so incoherently and with no long term strategy (something that, contrary to the Economist, I believe can be done and I think the French State proved in the past could be done)

Such economic populism may merely be a ploy to win over an electorate that has long been averse to the market.

Populism (in its new, extended meaning of actually caring about the poor, not just being demagogic) = evil

But hey, if it's for the purpose of winning, maybe it's okay.

But in Mr Sarkozy it is yoked to a second unattractive streak: a form of nativism, reflected in his harsh comments about immigrants and national identity. His supporters say he must tack right to lure voters from Mr Le Pen.

Yeah, he is spouting hard right talking points, and has done so for a long time. But calling it "nativism"? WTF?

But he is now so unpopular in the banlieues that--unlike Mr Le Pen--he has barely set foot in them during the campaign. As interior minister, he took great interest in how to improve the lives of French Muslims, but he has dropped all such talk as a candidate.

He dropped the talk, but he never stopped the walk, of course, because it never was there. And the reason why he is not welcome in the banlieues (which house, for the most part, French people (and a few foreigners). Only a minority is Muslim, and an even smaller minority would claim that as its main identifier, as all studies show repeatedly) is not really mentioned, so let's state it again: his absolute, blanket, contempt for them and his exclusive use of the riot police as a means of "dialogue" with the banlieues.

This may also explain the biggest defect in Mr Sarkozy's foreign policy: his fierce hostility to letting Turkey join the EU.

Why this is a "defect" (in absolute terms, or more to the point in terms of French policy) need not be explained, of course. A good French president should be subversient to strategic UK interests, as defined by the neoliberal clique (which means, of course, US interests, as spouted by the Bush administration).

Ms Royal has bravely supported the principle of Turkish membership.

But she is socialist, therefore bad. Facts are not meant to influence our ideological choices.

But this is unlikely to be put to the test for at least a decade, and on other EU issues, such as the future of the constitution, Mr Sarkozy has a more sensible, pragmatic approach than either of his main rivals. He is also the most likely candidate to repair France's tattered relations with America.

Yeah, France's relations with the USA are tattered, not US relations with France or with the rest of Europe. And Sarkozy's "sensible" approach to the EU Constitution is to go for a minimalist mini-treaty (the UK preference) without a referendum (also the UK preference, and the strong preference of the Economist, which has never noted the contradiction between its smug moaning about the (imagined) lack of Brussels accountability and its desire to steamroll Europe's population when convenient for neolib theses).

On the evidence of his career and his campaign, Mr Sarkozy is less a principled liberal than a brutal pragmatist.

Or a cynical  opportunist. Or a dangerous hate-mongerer.

Yet he is the only candidate brave enough to advocate the "rupture" with its past that France needs after so many gloomy years.

Let's say it again. The gloomy years are mostly in the minds of the English language talking heads, mindlessly propagated by the French elites which seem unable to remember, let alone defend, their own achievements.

This is not to say that there are no problems, of course, but that they are no worse, and probably a lot more manageable than those in other countries, in particular the neoliberal (and mostly English speaking) havens. But it's time to take a hard look at facts and try to fix real problems rather than those that the neolibs are fixated upon, and which can be summarised in one simple slogan: let the rich get richer.

 It has been said that France advances by revolution from time to time but seldom, if ever, manages to reform. Mr Sarkozy offers at least a chance of proving this aphorism wrong.

Hah. I think Sarkozy is more likely to bring revolution than reform to France. But that's a matter of opinion, or may be of wishful thinking, and it is almost the only time in this whole sorry article where I have no facts to trump the Economist's pseudo-religious tripe.

Sadly, 2,000 people at best will read me, whereas 250,000 business and political leaders will read the Economist, and wish for Sarkozy's victory.