Join 3,372 readers in helping fund MetaFilter (Hide)


« C’est maintenant que les ennuis commencent »
May 6, 2012 1:45 PM   Subscribe

France has a new president. With 51.9% of the second-round vote, François Hollande has beaten Nicolas Sarkozy to become the first Socialist president of France since 1995. In his victory speech, Hollande declared that "austerity is not inevitable," but international business interests have already started rumbling about Hollande's plans for higher taxes on the rich and large-scale public sector investment. The change in power is to be effected in next ten days, with Hollande scheduled to appear at the G8 and NATO summits on May 19 and 20.
posted by theodolite (195 comments total) 34 users marked this as a favorite

 
Wait until you see what happens at France's next bond auction!
posted by Chocolate Pickle at 1:51 PM on May 6, 2012


The self-styled Mr Normal who has promised to scale down the trappings of the presidency, will begin with the symbolic measure of cutting his own presidential salary by 30%, and that of his ministers. He will immediately issue a series of decrees to ease the French electorate's concerns about their finances, including a three-month freeze on fuel prices and a rise in allowances for parents.

Key first moves in an extraordinary summer session of parliament will be to alter the French tax system, dismantling tax breaks for the rich and pushing up taxes for the wealthy. This is one of the cornerstones of Hollande's manifesto, which he says would pump money into what he calls necessary spending on France's under-performing schools.

He will also quickly write into law a 75% tax on annual income above one million euros.

Another immediate measure to crack down on fat cat pay will be the fixing of a maximum salary in public companies. The top-paid executives in state companies will be barred from making more than 20 times the lowest-paid employee's salary.


Oh, I like him.
posted by Marisa Stole the Precious Thing at 1:57 PM on May 6, 2012 [188 favorites]


Ciao, petit Napoléon!
posted by brokkr at 1:57 PM on May 6, 2012 [5 favorites]


I'm so happy. Also, it has been good watching Jean-François Copé's bastard face on TF1 as he lives through this difficult night.
posted by two or three cars parked under the stars at 1:58 PM on May 6, 2012 [4 favorites]


The retirement age in France is only 60? Unbelievable. Ours in 65 and there's been talk about raising it to 75.
posted by Foci for Analysis at 1:59 PM on May 6, 2012 [3 favorites]


Yeah, Jesus, Marisa, that seems like the agenda of an actual human being.
posted by maxwelton at 2:00 PM on May 6, 2012 [15 favorites]


Goes up to the roof, fires off 5 rounds of the Kalašnikof!!!!
posted by Katjusa Roquette at 2:03 PM on May 6, 2012 [3 favorites]


Knocks back a shot of Maraškino! Lights up a Havana.
posted by Katjusa Roquette at 2:04 PM on May 6, 2012 [2 favorites]


The currency traders aren't happy, but they can go fuck themselves.
posted by wierdo at 2:04 PM on May 6, 2012 [20 favorites]


Actually the current U.S. retirement age is 67. :(.
posted by Katjusa Roquette at 2:06 PM on May 6, 2012


Good job France, keep up the good work. Set an example for us all.
It's too bad the word "Socialist" has such scary luggage.
posted by bleep at 2:14 PM on May 6, 2012 [9 favorites]


I thought the greatest implications weren't about France at all, but instead about the Eurozone - growth versus austerity.
posted by KokuRyu at 2:17 PM on May 6, 2012


So when do Americans get a chance to vote for someone like this?
posted by AElfwine Evenstar at 2:18 PM on May 6, 2012 [60 favorites]


Ten days? Merde. That makes it seem even weirder that it still takes the US nearly three months. It ain't 1933 anymore, you know?
posted by argonauta at 2:19 PM on May 6, 2012 [1 favorite]


So when do Americans get a chance to vote for someone like this?

I haven't laughed so hard in a long time, thanks. I'm going to go cry softly in the corner now.
posted by The Michael The at 2:21 PM on May 6, 2012 [21 favorites]


> So when do Americans get a chance to vote for someone like this?


AElfwine Evenstar, when the coasts let Jesusland go, merge with Canada and learn French.
posted by egor83 at 2:21 PM on May 6, 2012 [11 favorites]


The retirement age in France is only 60? Unbelievable. Ours in 65 and there's been talk about raising it to 75.

It has been raised to 62. More to the point, it's the minimum retirement age: unless you've paid Social Security dues for at least 41 years, you won't be able to claim your full state pension. That small detail has somehow be left out of most foreign reporting of French pensions reform.
posted by Skeptic at 2:22 PM on May 6, 2012 [7 favorites]


So when do Americans get a chance to vote for someone like this?
Do you know how Ann Romney feels about cake?
posted by fullerine at 2:22 PM on May 6, 2012 [12 favorites]


"He will also quickly write into law a 75% tax on annual income above one million euros."

...

So when do Americans get a chance to vote for someone like this?


Not any time soon. By comparison, Obama couldn't even manage "to ensure that [those with annual income above one million dollars] pay at least the same percentage of their earnings as middle-income taxpayers," which means something like a 25-35% tax rate. This despite the fact that the plan had 65% support among Americans, including two-thirds of independents and even 40% of self-identified Republicans.
posted by jedicus at 2:23 PM on May 6, 2012 [43 favorites]


United States of Americanada, eh? USA+ for short. Or USAC.
posted by egor83 at 2:25 PM on May 6, 2012 [2 favorites]


I always thought Sarkozy was a dick.
Wait until you see what happens at France's next bond auction!
Sure, bond rates will go down, because as has been proven by recent events, austerity means less growth (or even negative growth) thus lowering tax revenues, while stimulative spending grows the economy and increases tax revenues.

Look at the U.S (which did a stimulus, though weak) and the U.K, which has gone for Austerity and suffered greatly as a result.
posted by delmoi at 2:26 PM on May 6, 2012 [11 favorites]


The currency traders aren't happy, but they can go fuck themselves.
Agreed.

Though, I have to wonder how quickly financial powers will come-together to make the road very, very rocky for the new government? Having a socialist running a major western nation at a time of "necessary" austerity cannot be allowed to stand.
posted by Thorzdad at 2:28 PM on May 6, 2012 [9 favorites]


I thought the greatest implications weren't about France at all, but instead about the Eurozone - growth versus austerity.
Yeah, this will have huge implications. France is probably the second most powerful country in the Eurozone, after Germany. Germany has been pushing Austerity hard, and has been getting it's way. But Spain, Italy, Portugul and others have been suffering terrible. In some cases 50% unemployment among the young.

Hopefully this will result in some sanity in EU monetary policy.
posted by delmoi at 2:30 PM on May 6, 2012 [6 favorites]


Gothique Français
posted by goodnewsfortheinsane at 2:30 PM on May 6, 2012


It is only the second time that an incumbent French president has failed to win re-election since the start of the Fifth Republic in 1958 - last time was 1981. So basically Sarkozy pissed off a lot of people.

He's also promised to change the focus of Europe from austerity to growth - which has gotta be sending shivers down Merkel's spine, especially given the Greek elections are looking like a kicking for the two main centre parties that have been pushing through austerity measures. With France opposing German-imposed austerity across europe instead of hand-in-hand with Sarkozy, today will probably have a big impact on the next few years of the euro.

But a president promising to tax the rich to pay for public services? Makes a nice change...
posted by ArkhanJG at 2:30 PM on May 6, 2012 [1 favorite]


If his policies work—and I hope they do—there will be an awful lot of angry Europeans asking why we've been subjected to years of austerity. Many people are already referencing the US, where stimulus—Keynesianism?!—has helped their economy grow faster than ours.
posted by Jehan at 2:30 PM on May 6, 2012 [2 favorites]


the Tobin tax could not be used for deficit reduction, but only for investment purposes in the battle to restore France's waning competitiveness.
This sounds encouraging, but very challenging. It would be great to see more investment in basic research, science, green energy, etc.

He will also quickly write into law a 75% tax on annual income above one million euros.
Wow! That sounds extreme. I wonder if these tax reforms will be counter-productive and push multi-national companies and high-income citizens out of France, reducing tax revenue, and making it even more impossible to "restore France's waning competitiveness"

By comparison, Obama couldn't even manage "to ensure that [those with annual income above one million dollars] pay at least the same percentage of their earnings as middle-income taxpayers," which means something like a 25-35% tax rate. This despite the fact that the plan had 65% support among Americans, including two-thirds of independents and even 40% of self-identified Republicans.

I don't get some of the criticism of Obama. Clearly he does want to increase taxes on the very rich. Congress makes the tax laws. If so many people are for a more progressive tax system, why did they vote all these extreme right-wing republicans into congress? Reading this thread, I begin to see the answer: They didn't vote.
posted by Golden Eternity at 2:32 PM on May 6, 2012 [4 favorites]


Though, I have to wonder how quickly financial powers will come-together to make the road very, very rocky for the new government? Having a socialist running a major western nation at a time of "necessary" austerity cannot be allowed to stand.
What are they going to do about it, form Super PACs? Oh wait it's not America. There's no reason why governments have to grovel before corporate interests, it happens here because they need billions of dollars to run their campaigns, so they have to keep them happy.
Many people are already referencing the US, where stimulus—Keynesianism?!—has helped their economy grow faster than ours.
Yup, but the Stimulus was too small, and republicans have been trying to blame the current economic problems on the lack of Austerity.
posted by delmoi at 2:33 PM on May 6, 2012 [4 favorites]


We in the UK tend to compare ourselves with the USA, mainly because of language and history. This is silly on the face of it: there are huge differences between us. A more interesting comparison is with France - similar position, demographics, size, wealth. So the next few years will be interesting. I'd love to see more tax on wealth, as opposed to income, in the UK, but then I would say that (being not wealthy but having a relatively high income).

The main worry is that this will upset the current Euro support plans, destroy the single currency, and lead to absolute financial chaos. Which is not good for anyone, no matter how it might cheer some on the left and the right.
posted by alasdair at 2:33 PM on May 6, 2012 [3 favorites]


And this will be what we point to in four years to say, "Hey, morons! This is what a rising tide looks like!".
posted by Slackermagee at 2:35 PM on May 6, 2012 [3 favorites]


I don't get some of the criticism of Obama. Clearly he does want to increase taxes on the very rich. Congress makes the tax laws.
That's not true at all, the president can veto bills if he choses, which means that he has more power then 49% of the house and 39-49% of the senate, depending on how you feel about the filibuster. Since he can veto bills, he can negotiate with people in the house and senate about various things, just like everyone else in the house and senate.

Yes, obviously the republicans are going to block everything he does, but other then Healthcare reform, during his first two years the democrats controlled both houses of congress, and he still wasn't able to do anything - perhaps because he was not a good negotiator
posted by delmoi at 2:36 PM on May 6, 2012 [3 favorites]


If so many people are for a more progressive tax system, why did they vote all these extreme right-wing republicans into congress?

Because there hasn't been a vocal progressive alternative. The support for progressive taxation is out there (along with a lot of other progressive policies), but the Democrats need to pursue those plans more actively, and they need to engage decades long distortions by right-wing media activists.
posted by audi alteram partem at 2:37 PM on May 6, 2012 [1 favorite]


That's not true at all, the president can veto bills if he choses
What bills in DO republicans in congress want to pass? They aren't doing anything--which is very effective strategy on their part.
posted by Golden Eternity at 2:38 PM on May 6, 2012


If his policies work—and I hope they do—there will be an awful lot of angry Europeans asking why we've been subjected to years of austerity. Many people are already referencing the US, where stimulus—Keynesianism?!—has helped their economy grow faster than ours.

Australia should be the poster child of Keynesian economic policies. Why it's not is beyond my comprehension.
posted by Talez at 2:39 PM on May 6, 2012 [1 favorite]


The main worry is that this will upset the current Euro support plans, destroy the single currency, and lead to absolute financial chaos. Which is not good for anyone, no matter how it might cheer some on the left and the right.
It's interesting. Krugman said the Euro was a bad idea back in the 90s, precisely because it couldn't respond to asymmetric shocks. The U.S has one currency, but we have a massive federal taxation system that distributes tons of money to the states, and people can move between states easily, whereas in Europe you have totally different cultures and languages.

But the question is, how much suffering is the euro actually worth? If moving off the euro could lower unemployment and boost the economy, why not do it?
If so many people are for a more progressive tax system, why did they vote all these extreme right-wing republicans into congress?
Gay people and Abortion.
posted by delmoi at 2:39 PM on May 6, 2012 [18 favorites]


Like a dandelion, democracy pushes its way through the concrete. Good luck to President Hollande. Maybe he'll start a trend.
posted by Kevin Street at 2:42 PM on May 6, 2012 [10 favorites]


I don't get some of the criticism of Obama. Clearly he does want to increase taxes on the very rich. Congress makes the tax laws. If so many people are for a more progressive tax system, why did they vote all these extreme right-wing republicans into congress? Reading this thread, I begin to see the answer: They didn't vote.

First, Obama's plan was, at best, to bring rates for the ultra-rich up to par with the middle class. Hollande is operating at a completely different level. There's little evidence that Obama would support a new 75% top marginal rate.

Second, your conclusion that "they didn't vote" is a complete non sequitur. Republicans and independents who favor progressive taxation may still vote for an extreme Republican because of other issues, especially wedge issues like gay rights and abortion. And Democrats may vote for centrist Democrats because there's no viable progressive or socialist candidate or because other issues, like gay rights and abortion, are more important.
posted by jedicus at 2:43 PM on May 6, 2012 [3 favorites]


It's interesting. Krugman said the Euro was a bad idea back in the 90s, precisely because it couldn't respond to asymmetric shocks.

That's not necessarily true. A supra-national currency is all well and good but without transfer payments to back it up when the shit hits the fan. The EU specifically prohibits one country bailing another out.

Imagine if New York, California and New Jersey weren't around to backstop the economies of Mississipi, Kentucky and West Virginia. They'd be absolutely fucked right now instead of sorta-fucked.
posted by Talez at 2:47 PM on May 6, 2012 [17 favorites]


Another interesting thing about the French election was an 80% turnout, which is not unusual. Imagine if you had that level in civil engagement elsewhere.
posted by ArkhanJG at 2:54 PM on May 6, 2012 [14 favorites]


First, Obama's plan was, at best, to bring rates for the ultra-rich up to par with the middle class. Perhaps that is because wanted a plan that he felt could actually get through congress. If he had his druthers, he probably would have gone further. Perhaps he also bought into the idea that raising taxes too much would hurt the economy.

Second, your conclusion that "they didn't vote" is a complete non sequitur.

2010 Young Voters turnout fell 60% from 2008 to 2010.

National Voter Turnout:
2010** 235,809,266 NA 90,682,968 37.8%
2008* 231,229,580 NA 132,618,580* 56.8
http://www.infoplease.com/ipa/A0781453.html
posted by Golden Eternity at 2:59 PM on May 6, 2012 [2 favorites]


Australia should be the poster child of Keynesian economic policies. Why it's not is beyond my comprehension.

Because much of Australia's current prosperity results from the happy coincidence of abundant mineral resources, rapacious Chinese demand, and their relative geographic proximity.
posted by anigbrowl at 3:08 PM on May 6, 2012 [6 favorites]


Because much of Australia's current prosperity results from the happy coincidence of abundant mineral resources, rapacious Chinese demand, and their relative geographic proximity.

Only 19% of our GDP comes from mining and mining related activities. 68% of our economic output is service sector activities.

The massive stimulus and nation building activities on the other hand...
posted by Talez at 3:14 PM on May 6, 2012 [5 favorites]


If the US had 80 percent turnout, the Dems would control both houses of congress and the presidency into the foreseeable future. It is the single biggest variable, and it's why the GOP has tried to hard to restrict voting access, and the Obama campaign is spending so much money trying to counter that with registration and voter outreach.

When you see a Mitt Romney rally, you see almost exclusively elderly white people. But they vote in hugely greater proportion than any other demographic segment.

And if you look around at popular culture, and the utter cynicism with which the US media cover politics, you see why.

Fuck.
posted by spitbull at 3:15 PM on May 6, 2012 [24 favorites]


If his policies work—and I hope they do—there will be an awful lot of angry Europeans asking why we've been subjected to years of austerity. Many people are already referencing the US, where stimulus—Keynesianism?!—has helped their economy grow faster than ours.

Meanwhile in the US, both parties are gearing up for a Grand Bargain to cut Social Security rather than raise a single cent in taxes during the lame duck session.

Everyone on both sides of the Atlantic learns the same lessons on different time scales, the confidence faeries must have a sacrifice, therefore beatings will continue until morale improves.
posted by T.D. Strange at 3:16 PM on May 6, 2012 [4 favorites]


I wonder, if 2012 brought about a Democratic House and Senate (I can dream, can't I?), would Obama have learned enough from his mistakes to go "fuck bipartisanism; the Tea-Party-controlled Republicans are fucking obstructionists and I refuse to attempt to negotiate any longer; "compromise" is apparently a joke; I'm going to do what I think will help the county for real this time. Suck it."

Again -- I can dream.
posted by tzikeh at 3:16 PM on May 6, 2012 [6 favorites]


Canada, Australia and the USA all had virtually the same responses to the 2008 crash, the differences in experience are largely due to the resource boom, as well as stronger regulatory environments preventing the banks from eating themselves. This is why Canada and Australia are not used as standard Keynesian examples, because the effect of stimulus and the effect of resource demand can't be isolated.
posted by mek at 3:20 PM on May 6, 2012


So, to get back to France, can this new President do the things he wants to do or will there be legislative pushback?
posted by GenjiandProust at 3:20 PM on May 6, 2012 [5 favorites]


which has gotta be sending shivers down Merkel's spine, especially given the Greek elections are looking like a kicking for the two main centre parties that have been pushing through austerity measures.

Down to 33% from roughly 80%. Coalition of the Radical Left, which is what it sounds like, is the second party now. And there will be 20 neonazi MPs for the first time since the restoration of democracy. Based on 60% of results.

It's interesting that half the discussion about the election of the new French president is about U.S. politics. I hope Hollande can withstand the pressure and promote his brand of growth-based economic policies.
posted by ersatz at 3:21 PM on May 6, 2012 [1 favorite]


Actually if you're going to attribute Australian prosperity to Chinese mineral demand, it is still a Keynesian success story; without the Chinese government's trillion dollar economic stimulus program during the crisis, they (and we) would have been pretty much rooted. Australia can thank both their own government's fairly robust Keynesian stimulus as well as China's gargantuan Keynesisn stimulus
posted by moorooka at 3:26 PM on May 6, 2012 [6 favorites]


would Obama have learned enough from his mistakes to go "fuck bipartisanism [...]"

I think Obama getting re-elected rather depends on his ability to show that he tried very very hard to work with the GOP and they preferred opposition to cooperation. FDR's first term wasn't exactly gravy either, which was why he made a virtue out of his unpopulaarity with some segments of the electorate in his 1936 re-election campaign.
posted by anigbrowl at 3:27 PM on May 6, 2012 [4 favorites]


Only 19% of our GDP comes from mining and mining related activities. 68% of our economic output is service sector activities.

"only'? 1/5th of your GDP coming from mining is a very large proportion. In the US, mining only makes up about 4% of GDP.
posted by anigbrowl at 3:35 PM on May 6, 2012 [2 favorites]


so, does anybody know how Angela is doing now that there's no MERKOZY?
posted by liza at 3:36 PM on May 6, 2012 [2 favorites]


and if things don't work out for Holllande, countdown to President Le Pen...
posted by ennui.bz at 3:41 PM on May 6, 2012 [1 favorite]


so, does anybody know how Angela is doing now that there's no MERKOZY?

The state elections in Schleswig-Holstein yesterday did not go well for the CDU. National elections are a year off, but this was seen as a test of the CDU's hold on the government. The shift in France will undoubtedly weaken Germany's ability to shove austerity down the throats of the rest of Europe at any rate.
posted by briank at 3:42 PM on May 6, 2012 [2 favorites]


While a lot of blame can be laid at Obama's feet as a bad negotiator, the much more important difference between the US situation and Hollande's proposals is that their democratic system, like that in most of the developed world (apart from the US and a couple others), actually allows the winners to implement their party's platform. The "checks and balances" US system has been a disaster for getting things done for decades if not centuries, and of course the filibuster has made things worse. Obama may be to the right of where many Democrats would like him to be, but if we had a unicameral legislature with him as prime minister, you can be sure he would be proposing (as well as passing) stuff far to the left of what he can do now, even if he weren't a pre-compromiser.

And yes, allowing the Republicans freer rein during their time would still, in the long run, be better than the increasing calcification we now have.
posted by chortly at 3:44 PM on May 6, 2012 [6 favorites]



'so, does anybody know how Angela is doing now that there's no MERKOZY?'
posted by liza at 3:36 PM on May 6 [+] [!]


MERKOLLANDE!
posted by travelwithcats at 3:45 PM on May 6, 2012 [2 favorites]


Félicitations la France! Je suis très heureuse pour vous!
posted by MelanieL at 3:47 PM on May 6, 2012


The top-paid executives in state companies will be barred from making more than 20 times the lowest-paid employee's salary.

In completely unrelated news, everyone below the board of directors has been fired and rehired as a contractor.
posted by hattifattener at 3:53 PM on May 6, 2012 [4 favorites]


'There was no immediate comment from Angela Merkel, the German chancellor, on the French election results on Sunday night. A spokesman said she would respond in the morning.

The chancellor’s office in Berlin has made it clear in recent days that Ms Merkel expects to be able to forge a good working relationship with Mr Hollande, in spite of their different party politics.'

posted by travelwithcats at 3:58 PM on May 6, 2012 [1 favorite]


why did they vote all these extreme right-wing republicans into congress?

Voter fraud?
posted by nzero at 4:03 PM on May 6, 2012


Historical top tax rate in the United States, note the 90+ percent rates in the 50s and 60s.

In comparison, I understand that Mr. Mélenchon, running to the left of Mr. Hollande, was prooposing a tax rate on earnings over €500000 of 100%.
posted by gimonca at 4:09 PM on May 6, 2012 [1 favorite]


While a lot of blame can be laid at Obama's feet as a bad negotiator, the much more important difference between the US situation and Hollande's proposals is that their democratic system, like that in most of the developed world (apart from the US and a couple others), actually allows the winners to implement their party's platform.
Yeah. We need reforms in the U.S. While "let the winning party do whatever it wants" might not be a good idea in the short term, I'd much rather see the country move towards a parliamentary system where sets are apportioned according to the vote, and break up the two party doupoly. Hopefully we could do it in a gradual way - say create X number of 'at large' districts in congress, to be filled by the parties who win based on raw percentages.
posted by delmoi at 4:10 PM on May 6, 2012 [3 favorites]


And there will be 20 neonazi MPs for the first time since the restoration of democracy. Based on 60% of results.

If anyone has a link, I would love to read some more background about the rise of Neo-Nazi parties in Greece. I mean, it seems so counter-intuitive to me - the actual Nazis viewed latter-day Greeks as total scum, and latter-day Germany would surely be number one on the international shit-list for many Greeks.
posted by smoke at 4:14 PM on May 6, 2012 [1 favorite]


Well, there are neo-Nazis in freakin' Russia of all places, too.
posted by Marisa Stole the Precious Thing at 4:18 PM on May 6, 2012 [3 favorites]


Hurrah!! Thank god for the French. Hopefully it will be a wakeup call for the rest of Europe.

Mrs Merkel later said she had invited Mr Hollande to come to Berlin soon, AFP reported

Yeah, so she can tell him how Germany wants him to run France. God, they lose a war...

[BBC] The current voting situation in Greece

Interesting times?
posted by marienbad at 4:19 PM on May 6, 2012 [1 favorite]


I love how any international news that gets reported on MetaFilter instantly gets transferred and debased back to US domestic issues.

Guys, America is not the world, Sarkozy is not a republican, Hollande is not a Democrat.
posted by wilful at 4:19 PM on May 6, 2012 [44 favorites]


GenjiandProust > So, to get back to France, can this new President do the things he wants to do or will there be legislative pushback?

Sure. Legislatives are in June. The presidential election is on the same five-year cycle as the legislatives since 2002 (after a referendum in 2000), meaning the same party can win both and get a fairly strong presidential regime.
posted by Tobu at 4:21 PM on May 6, 2012 [1 favorite]


So when do Americans get a chance to vote for someone like this?

When Americans get it into their heads that European social democracy isn't commuism?
When Americans get it into their heads that taxation pays for social services?
When Americans get it into their heads that there is more to living than self interest?
posted by tomcosgrave at 4:21 PM on May 6, 2012 [48 favorites]


I wonder if these tax reforms will be counter-productive and push multi-national companies and high-income citizens out of France...

That's the beautiful part. If you want to live in the South of France, there's only one country you can go to. (Well, two, but the tiny one is really hard to get into, unless you're an F1 driver or something.)
posted by Capt. Renault at 4:22 PM on May 6, 2012 [9 favorites]


"If anyone has a link, I would love to read some more background about the rise of Neo-Nazi parties in Greece"

I don't have a link but I think it comes partly from the fact that after the war Greece went way left, practically communist, and the USA intervened and supported the far right because the wanted anything but communism.

See Here and Here (although it isn't loading now)
posted by marienbad at 4:23 PM on May 6, 2012 [2 favorites]


Damn ... Edit window? ...a link handy... (searches bookmarks....)
posted by marienbad at 4:24 PM on May 6, 2012


wilful > Well it's an American web site innit?

Still.

*throws handful of confetti onto self, blows into blowout, drinks vodka*
posted by surrendering monkey at 4:26 PM on May 6, 2012 [1 favorite]


Well, there are neo-Nazis in freakin' Russia of all places, too.

A friend of mine worked at a rehab center in East Germany where there were neo-nazi patients. One of her swastika-tattooed patients told her that in his view, Jews were alright, because they were "white, civilized, and European", and the older Nazis were just mistaken and old-fashioned in their antisemitism. It was the brown people that he hated. What I take from this is that we shouldn't assume that badly educated bigots really embody, care about, or even know very much about the historical nature of the symbols/ideologies they take on.

I'm sure that to plenty of Greeks, a swastika is mostly about vague authoritarianism and disliking brown people. Telling them about the vileness of the symbol is probably about as effective as trying to have a theological argument with a wishi-washily-religious person who's never actually read the damn bible.
posted by tempythethird at 4:28 PM on May 6, 2012 [5 favorites]


"It was the brown people that he hated. What I take from this is that we shouldn't assume that badly educated bigots really embody, care about, or even know very much about the historical nature of the symbols/ideologies they take on.

So freakin' hilarious, seeing as the swastika is a Hindu symbol.
posted by marienbad at 4:36 PM on May 6, 2012 [4 favorites]


"Guys, America is not the world, Sarkozy is not a republican, Hollande is not a Democrat."

No, but Hollande is who a lot of us in the US wish we could have voted for.

("I voted for the secret Muslim socialist and all I got was a center right slight improvement and this stupid t-shirt.")
posted by klangklangston at 4:40 PM on May 6, 2012 [23 favorites]


I'm sure that to plenty of Greeks, a swastika is mostly about vague authoritarianism and disliking brown people. Telling them about the vileness of the symbol is probably about as effective as trying to have a theological argument with a wishi-washily-religious person who's never actually read the damn bible.

Yeah, that was kind of my point: you can't really count on eugenicists to have a tight grasp of things like history and science.
posted by Marisa Stole the Precious Thing at 4:45 PM on May 6, 2012


smoke> the rise of Neo-Nazi parties in Greece ... seems so counter-intuitive to me - the actual Nazis viewed latter-day Greeks as total scum

Marisa Stole the Precious Thing> Well, there are neo-Nazis in freakin' Russia of all places, too.


Exactly, and there ain't exactly few of them (a few photos from recent Russian Marches).

And I recall I heard a good story once. Back when the Internet was just starting, some of the more technically-advanced Russian neo-Nazis found their brethren in Germany and tried to contact them - "hey guys, we hate jews and muslims just like you do, let's join forces etc etc". Well, the answer was more like "GTFO, Slawischen untermenschen".

Not sure if that's a true story, but se non è vero, è ben trovato.
posted by egor83 at 4:47 PM on May 6, 2012 [1 favorite]


If the US had 80 percent turnout, the Dems would control both houses of congress and the presidency into the foreseeable future.

Gallup suggests otherwise
posted by IndigoJones at 4:52 PM on May 6, 2012 [1 favorite]


"The time for fear has come," saysNikolaos Michaloliakos, leader of the far-right Golden Dawn in Greece. The far right has been advancing in several European nations.
posted by anigbrowl at 4:58 PM on May 6, 2012 [2 favorites]


So I'm not a huge fan of extremism on any side, but this seems like the natural pendulum effect of people being pissed at right wing extremism.

The only thing that scares me about this is that when the two side get too far apart, and refuse to have any sort of common ground, then there's also only one effective response.
posted by Blue_Villain at 5:07 PM on May 6, 2012


Gallup suggests otherwise

The Obama disapproval ratings are probably misleading; I hope. Many here, for example, disapprove of him immensely because he's too far right.
posted by Golden Eternity at 5:13 PM on May 6, 2012 [5 favorites]


"The time for fear has come," saysNikolaos Michaloliakos, leader of the far-right Golden Dawn in Greece.

19 seats in a 300-seat parliament by itself doesn't sound too scary. But of course, this all depends on the rest of parliament - what other parties get in, and who'll make up the ruling coalition. The article mentions:
With Greece the main entry-point for illegal migrants into Europe, thousands of migrants unable to cross to other EU states due to legal constraints have created urban ghettos in Athens, Patras and other cities.
The other part of this, though, is the Dublin Regulation, which gives EU member states the permission to deport refugees back to their previous point of arrival. As Greece is a popular point of entry for many refugees, you have them moving through the country, and then returning to it, to be detained in refugee camps. EU law basically ensures Greece is inundated with refugees it cannot handle, and in fact doesn't handle well at all. It fans the flames of far-righters like Golden Dawn.
posted by Marisa Stole the Precious Thing at 5:19 PM on May 6, 2012 [2 favorites]


which has gotta be sending shivers down Merkel's spine

Sounds like a job for former President Bush!
posted by wensink at 5:23 PM on May 6, 2012 [7 favorites]


With the caveat that I don't really know anything about French politics and government, how likely is it that Hollande will actually implement his campaign promises? As an American, I'm quite used to hearing politicians dream big during election season yet fail to follow through for a variety of reasons once in office.
posted by asciident at 5:28 PM on May 6, 2012 [1 favorite]


Link to der spiegel article (in English) on Greek right wing.
posted by bukvich at 5:31 PM on May 6, 2012 [1 favorite]


As a practical matter, this election is probably bad news for Obama. Not only does it set up the argument for the GOP that Obama is just like that new French Socialist president, it also is likely to destabilize the stock market along with much of the global economy.

So long as the US economy is unstable or declining, Obama is open to attack. The European debt crisis has had a major impact on stability back here in the US. Any perception that things are in flux over the next several months will probably result in at least mixed economic indicators.

This in no way is meant to say this was a bad development for France or the world, it's just a reality of the election's probable impact. If similar things happen in Greece, Spain, Portugal and Italy, then there's a probability that the EU will not survive as a unit. Again, the more that happens across the ocean, the harder the election in likely to be for Obama.

So, if you're looking for global change towards the left, this may be a bad thing if the greater prize is the US. I know, everyone wants to say Obama is no different than the GOP. Well, to that I say just see what happens if Romney gets elected.
posted by Muddler at 5:32 PM on May 6, 2012 [2 favorites]


Well, Vive la France.

Bonne chance, friends :)
posted by Grlnxtdr at 5:41 PM on May 6, 2012


But what is his stance on immigration?
posted by TwelveTwo at 5:47 PM on May 6, 2012


travelwithcats: "'MERKOLLANDE!"

or "Merde" for short!
posted by notsnot at 5:53 PM on May 6, 2012 [3 favorites]


Just spent most of the night at a nightclub here in Berlin, where there are quite a few French expatriates (who all seem to know each other). Everyone had their smart phones out right at seven o'clock to start checking results. As I was dancing, a French friend came up, grabbed my shoulder, and said, "Hollande will be the next president!"

And then we did a little victory dance.

And then the rest of the night was a litany of other French friends coming up and repeating the news to me, so that we could do more victory dances.
posted by LMGM at 5:54 PM on May 6, 2012 [6 favorites]


The top-paid executives in state companies will be barred from making more than 20 times the lowest-paid employee's salary.

In completely unrelated news, everyone below the board of directors has been fired and rehired as a contractor.


France does not have at-will employment. You can only fire for cause. Incroyable, non?
posted by ambrosia at 5:57 PM on May 6, 2012 [17 favorites]


With the caveat that I don't really know anything about French politics and government, how likely is it that Hollande will actually implement his campaign promises? As an American, I'm quite used to hearing politicians dream big during election season yet fail to follow through for a variety of reasons once in office.

So far, so good.

But what is his stance on immigration?

Seems like he's toeing the line - wants to fight illegal immigration, against letting immigrants vote, supports the burqa ban, and supports an immigration cap. A little more liberal than Sarkozy, so an improvement of sorts.
posted by Marisa Stole the Precious Thing at 5:59 PM on May 6, 2012 [1 favorite]


He's also promised to change the focus of Europe from austerity to growth - which has gotta be sending shivers down Merkel's spine

For Chancellor, Torturous Months Lie Ahead
posted by homunculus at 6:04 PM on May 6, 2012 [1 favorite]


wants to fight illegal immigration, against letting immigrants vote, supports the burqa ban, and supports an immigration cap.

Oh, and here I was starting to think he was French and not just another European. I guess the taxation and services will be nice for the native born, I guess.
posted by TwelveTwo at 6:11 PM on May 6, 2012


Nothing wrong with an immigration cap, the impetus behind it however usually has less to do with objective ability to handle an influx of unskilled workers than bigotry sadly.
posted by karmiolz at 6:15 PM on May 6, 2012 [1 favorite]


I just understood the French Revolution differently is all.
posted by TwelveTwo at 6:17 PM on May 6, 2012 [1 favorite]


Yeah, the immigration platform is definitely lacking, but he has shifted the emphasis onto employers rather than the immigrants themselves as the source of the problem. Could and should go much further than that, though, of course.
posted by Marisa Stole the Precious Thing at 6:17 PM on May 6, 2012 [3 favorites]


well, my MENA TL over at twitter exploded with cheers for Sarkozy's loss and with cautious optimism for Hollande, notwithstanding his stance inre: immigration & mulsims.

FWIW, allegedly Hollande won handily because of the MENA vote. so the whole political situation should be interesting in the coming months. electoral favors will be meted at the point, n'est pas?
posted by liza at 6:23 PM on May 6, 2012


n'est ce pas :P
posted by liza at 6:23 PM on May 6, 2012


Regarding 'Keynesian' economics, this comment appeared on reddit recently:
If your only econ education comes via internet forums, you might think that there are two "schools" of economics, "Austrian" and "Keynesian". In truth, "Keynesian" is not really a "school", it's what fringe economists accuse mainstream economists of being.

John Maynard Keynes contributed a lot of ideas to econ, but the big one that sticks in the craw of so-called "Austrian" or "classical" economists is the notion that government deficit-spending can boost economic activity. This is absolutely, 100%, uncontested mainstream economics-- no fortune 1,000 company would ever hire a senior economist who did not believe that government spending could impact economic growth. There is no "school of thought" dispute on this point: right or wrong, what Austrians call "Keynesian" is mainstream, and everything else is fringe or heterodox. Economists do not call themselves "keynesian economists" any more than physicists call themselves "Eisenstein" physicists. That's something you get accused of being, by people who want to imply a sense of parity with non-mainstream ideas.

If you only know econ from internet debates, you might think that "Keynesian" is some kind of liberal theory of social justice or something, but it's not. It's a baked-in-the-cake component of mainstream economics that says that governments have the ability to stimulate economic growth through spending.

Without taking a position on the rightness or wrongness, it is fair to say that "keynsian" is mainstream econ, and those who reject it run the gamut from heterodox to "fringe".
The full comment is longer, I just quoted the relevant part.
posted by Ritchie at 6:25 PM on May 6, 2012 [42 favorites]


I'm hoping the Greek Anarchists can do their job as they have traditionally done w/r/t the Neo Nazis and others of their ilk. I will leave the reader to discern what, exactly, that job was.
posted by symbioid at 6:50 PM on May 6, 2012 [2 favorites]


From my limited conversations with very intelligent and urbane French citizens, hardly right-wingers by American standards, the French system is extremely stratified and ossified. There is little social mobility; the system is extremely rigid regarding employment and stifles creativity and growth; and the whole system is poised for a serious fall unless it reforms.

Hollande is probably not going to help that -- but who cares as long as his election satisfies American socialists, I guess.
posted by shivohum at 7:01 PM on May 6, 2012 [2 favorites]


There is little social mobility; the system is extremely rigid regarding employment and stifles creativity and growth; and the whole system is poised for a serious fall unless it reforms.

Revolution! Or, as it would actually be, European Union Civil War. Maybe they'll adopt a federated model afterwards.
posted by TwelveTwo at 7:04 PM on May 6, 2012


shivohum, interesting. While measuring social mobility id fraught with difficulties, one study cited on Wikipedia agrees with your friend's observations. Of nine countries studied, France has the third worst social mobility (beating only the UK and US), well behind Canada and the scandinavian utopias.
posted by wilful at 7:08 PM on May 6, 2012 [1 favorite]


So the more social-democratic models have better social mobility? If that's the case, then I don't see how Hollande couldn't improve matters.
posted by Marisa Stole the Precious Thing at 7:11 PM on May 6, 2012


It's good that somebody gets it: Taxes are how you buy civilization.
posted by Freen at 7:16 PM on May 6, 2012 [8 favorites]


Without taking a position on the rightness or wrongness, it is fair to say that "keynsian" is mainstream econ, and those who reject it run the gamut from heterodox to "fringe".

And also control large majorities in the US House, Bundestag, Parliment and ECB.
posted by T.D. Strange at 7:21 PM on May 6, 2012 [1 favorite]


Todays European elections in pictures is interesting, if you're into that sort voyeuristic kinda thing.
posted by vozworth at 7:34 PM on May 6, 2012 [1 favorite]


A large order of freedom fries, with dijon in the side, please!
posted by Danf at 7:38 PM on May 6, 2012


So, I take it that in support of freedom and democracy the U.S. gonna have to do an Allende on his ass?
posted by George_Spiggott at 8:19 PM on May 6, 2012 [2 favorites]


From vozworth's link, I like how the Greeks make everybody go down to the local kindergarten to vote.
posted by benito.strauss at 8:52 PM on May 6, 2012 [1 favorite]


"The time for fear has come," saysNikolaos Michaloliakos, leader of the far-right Golden Dawn in Greece. The far right has been advancing in several European nations.
The extremes on both sides are advancing, due to a failure in the middle. Even the Pirate Party is gaining ground in germany.
As a practical matter, this election is probably bad news for Obama. Not only does it set up the argument for the GOP that Obama is just like that new French Socialist president, it also is likely to destabilize the stock market along with much of the global economy.
Dude, you expect Mitt Romney to try to claim that Obama is too French? Do you know anything about the guy?

Plus, are you seriously thinking about the election of a major leftist is one of the most powerful countries in the Eurozone, which is currently suffering greatly under austerity policies in terms of it's minute impact on Obama's popularity? If the French do stimulate, and especially if they can get the rest of Europe to do the same, that will also boost the US economy, although perhaps not in the next few months before the election.
For Chancellor, Torturous Months Lie Ahead
Perhaps she should consider the possibility that her ideas are unpopular because they are wrong, and she should change them
Oh, and here I was starting to think he was French and not just another European. I guess the taxation and services will be nice for the native born, I guess.
What does this even mean? Would you prefer he try to reconquer Algeria?
posted by delmoi at 8:56 PM on May 6, 2012 [1 favorite]


As a practical matter, this election is probably bad news for Obama. Not only does it set up the argument for the GOP that Obama is just like that new French Socialist president, it also is likely to destabilize the stock market along with much of the global economy.

Yes, yes, everything is about you.
posted by KokuRyu at 9:12 PM on May 6, 2012 [7 favorites]


But it's great news for John McCain?
posted by mek at 9:20 PM on May 6, 2012 [2 favorites]


From independent journalist Alan Austin in Nîmes:
One bizarre sidebar to yesterday’s elections is the phenomenon of voters turning out to post a "vote blanc" or informal vote. Where voting is not compulsory, why bother?

In yet another quirk of Gallic democracy, this is a right taken very seriously indeed. In the village near Nimes where I watched the sacred ceremony of the formal count -- along with 10% of the village’s population -- the votes blancs were 11% of all votes cast. What message does this send? And to whom?

"It is a message to whoever wins," explained one citoyen. "We are not happy with you, nor with your opponent. But we are still voting, and we will vote again next time."
posted by wilful at 9:24 PM on May 6, 2012 [15 favorites]


KokuRyu: Yes, yes, everything is about you.

You'll note that there is also a good deal of discussion in this thread about how Hollande's election and stated policies will affect Greece and Germany, as well as the entire EU.
posted by tzikeh at 9:27 PM on May 6, 2012 [1 favorite]


Usually, I would argue that the claim that "higher tax rates imposed on the rich would cause the rich to flee for tax havens" was spurious.

But 75% seems overly high, especially in comparison to other European countries. Even Sweden, which has the one of the highest income tax rates in the world, only has a top income tax bracket of 56.6%.
posted by His thoughts were red thoughts at 9:44 PM on May 6, 2012


it also is likely to destabilize the stock market along with much of the global economy.

Yes, because both of those things have been so rock-stable the past decade or so.
posted by Celsius1414 at 10:37 PM on May 6, 2012 [5 favorites]


But 75% seems overly high, especially in comparison to other European countries. Even Sweden, which has the one of the highest income tax rates in the world, only has a top income tax bracket of 56.6%.

The most progressive time in American history had a marginal tax rate of anywhere between 70 and 92%.

Then Reagan came in and fucked it all up.
posted by Talez at 11:06 PM on May 6, 2012 [5 favorites]


it also is likely to destabilize the stock market along with much of the global economy.

It's not like that would be much of a change.

But even if you could attribute such destablisation to the French change of Government, it would likely be fleeting. Hollande's not proposing to outlaw corporations or nationalise any industries. Income and corporate tax reform in France would have a piddlingly small effect on the bottom line of most publicly traded corporations.

If similar things happen in Greece, Spain, Portugal and Italy, then there's a probability that the EU will not survive as a unit.


Citation needed, I think. Why would having a government open to tax reform kill the European Union?
posted by His thoughts were red thoughts at 11:09 PM on May 6, 2012


His thoughts were red thoughts: "But 75% seems overly high, especially in comparison to other European countries. Even Sweden, which has the one of the highest income tax rates in the world, only has a top income tax bracket of 56.6%."

Has negotiation become a dirty word or something? You start high so you have room to bargain. If you start out asking for what you really want, you'll inevitably get much less.
posted by wierdo at 11:38 PM on May 6, 2012 [3 favorites]


You'll note that there is also a good deal of discussion in this thread about how Hollande's election and stated policies will affect Greece and Germany, as well as the entire EU.
I don't know if you've noticed, but Greece, Germany, and France all share a currency and monetary union. The policies of that union have a huge impact on the economy in all those countries. On the other hand, the UK, which is in the EU but not in the Eurozone, probably won't be impacted all that much.

The U.S. won't be affected at all, at least not before the election I don't think. And somewhat annoyingly, it wasn't even really about the actual impact on the U.S. from an economic standpoint, but rather how the "stereotypical" U.S voter is going to view the election, based on the fact that they supposedly hate France for some reason. Except Mitt Romney can't shut up about how much he loves France (here's the clip again), so if voters really do hate France they'll have to vote for Obama.

But the reality is 99% of voters couldn't name the president of France. Over the long term, it may help lessen the stigma of the word "socialist"

Also, this bit:
it also is likely to destabilize the stock market along with much of the global economy. -- Muddler

Is kind of ridiculous. Minor fluxuations in the stock market don't matter long term.
posted by delmoi at 11:52 PM on May 6, 2012 [1 favorite]


Maybe too late for this conversation, but: a lot of the stuff being said about the economy going (further) down because of Hollande's election is classic conservative scaremongering. When you grow old enough, you discover that the stock markets never panic, and industry never flees the country when the socialists win. French economy is already a really strange thing which no one can explain how works. Nobody seems to work much, they have one of the best healthcare systems in the world, and they are averse to communicating with other people in ways the rest of the world find practical. Still, they have a high standard of living and seem to exist happily.
Greece is something different. That will be interesting..

btw, wilful: when I went to school, blanc votes were explained to us as our civic duty, if we didn't like what the politicians were offering. Staying at home on the couch was just not done, the teachers said. Now, as everything is americanized, I'm not sure they teach this anymore, but it must contribute to high voting turn-outs in the parts of Europe where this was taught.
posted by mumimor at 12:01 AM on May 7, 2012 [12 favorites]


The U.S. won't be affected at all, at least not before the election I don't think.

Of course not, the EU is only the largest trading partner of the US, taking some 20% of our exports.

Markets and euro stumble following elections

The Euro is going to come under severe pressure this summer. A collapse of the currency would be an unmitigated disaster.

Is kind of ridiculous. Minor fluxuations in the stock market don't matter long term.

How about major fluctuations?
posted by anigbrowl at 12:02 AM on May 7, 2012


Stock markets have been getting hammered today so far, thanks to the increased likelihood of a Greek exit from the Euro (although the election results really shouldn't have been that much of a surprise)
posted by moorooka at 1:00 AM on May 7, 2012


That's the beautiful part. If you want to live in the South of France, there's only one country you can go to. If you want to live in the South of France, there's only one country you can go to. (Well, two, but the tiny one is really hard to get into, unless you're an F1 driver or something.)

Even more beautifully, a treaty between Monaco and France forces Monaco to refuse residence to French citizens. (France controls the water supply to Monaco, so it has pretty effective means of retorsion...)

In a particularly comical episode a couple of years back, the aging French rock star Johnny Halliday suddenly "rediscovered" his Belgian roots and applied for Belgian citizenship in a pretty crass bid to get rid of his French passport and move to Monaco (he's currently a Swiss tax resident, but the mountain weather doesn't seem to agree with him, and the French tax authorities are after him anyway). The Belgian auhorities told him that he was welcome back in Belgium, but he would have to live there (and pay Belgian taxes) for a few years before he came into consideration for a Belgian passport, even if his absentee father was nominally Belgian. Somehow, that quickly extinguished Halliday's sudden passion for all things Belgian...
posted by Skeptic at 1:08 AM on May 7, 2012 [5 favorites]


But the question is, how much suffering is the euro actually worth? If moving off the euro could lower unemployment and boost the economy, why not do it?

Because moving off the euro won't do that, but rather lead to a wider meltdown. Even Krugman gets that nowadays.
posted by Skeptic at 1:18 AM on May 7, 2012


the aging French rock star Johnny Halliday

I'm pretty sure only the French would call what Johnny Halliday does "rock".
posted by Wolof at 1:21 AM on May 7, 2012 [7 favorites]


I mean, it seems so counter-intuitive to me - the actual Nazis viewed latter-day Greeks as total scum, and latter-day Germany would surely be number one on the international shit-list for many Greeks.

A high tolerance for cognitive dissonance is probably a requirement for this kind of ideology anyway. Other than that, their official position is that they are not neo-nazis, just people with a healthy interest in body building, ancient Greek history, racial purity and beating up brown people. Greek history provides them with plenty of material for their mythology, so they don't need to make any overt references to German nazism - last time I ran across them in person they were having a public celebration for the anniversary of the battle of Marathon, for example.
posted by Dr Dracator at 1:40 AM on May 7, 2012 [2 favorites]


How about major fluctuations?
What about 'em? Why should the average voter worry about stock price fluxuations? How about young voters in europe who can't even find work because of the economic problems, and are suffering due to austerity measures?

In fact, if you think about, increased taxes on corporate profits would, in fact reduce the "actual" value of the stock, as less money would make it to stockholders as dividends. But that would not mean less actual corporate activity. It would just mean the company would be taking out of the money that would go to shareholders, and handing it over to the government.

In that case, why would a reduced share value be a bad thing?
posted by delmoi at 1:41 AM on May 7, 2012


Because moving off the euro won't do that, but rather lead to a wider meltdown. Even Krugman gets that nowadays.
The first line of the article:
The French are revolting. The Greeks, too. And it’s about time.
Later he says:
One answer — an answer that makes more sense than almost anyone in Europe is willing to admit — would be to break up the euro, Europe’s common currency. Europe wouldn’t be in this fix if Greece still had its drachma, Spain its peseta, Ireland its punt, and so on, because Greece and Spain would have what they now lack: a quick way to restore cost-competitiveness and boost exports, namely devaluation.

As a counterpoint to Ireland’s sad story, consider the case of Iceland, which was ground zero for the financial crisis but was able to respond by devaluing its currency, the krona (and also had the courage to let its banks fail and default on their debts). Sure enough, Iceland is experiencing the recovery Ireland was supposed to have, but hasn’t.
This is the entirety of his negative statement about braeking up the Euro: "Yet breaking up the euro would be highly disruptive, and would also represent a huge defeat for the “European project,” the long-run effort to promote peace and democracy through closer integration."

That's it. He goes on to say that stimulus in other countries, rather then Austerity would be a better way to deal with the problem. And in fact, he actually concludes that the Euro is more likely to survive now with the breakup of “Merkozy,”

Basically he's saying the same things I was saying upthread - which isn't surprising since I was basically just guessing about what I thought Krugman would probably say. I used to read his blog all the time (although recently I've not been using Google reader much, so pretty much all my blog reading has gone way down)
posted by delmoi at 1:50 AM on May 7, 2012


He goes on to say that stimulus in other countries, rather then Austerity would be a better way to deal with the problem.
Er, I should say, the basic point was that stimulus in the countries having problems would be better then the breakup of the Euro - but in general he's pointing out what he's always said (even back in the '90s) That the Euro prevents countries that are having problems devalue their currency to stay competitive, and economic shocks can't be dealt with easily.
posted by delmoi at 1:55 AM on May 7, 2012


What a ride. In the 1990s Hollande was known as Monsieur Royal, a pudgy figure hidden in the shadow of his flamboyant, spotlight-loving companion Ségolène Royal. Royal lost to Sarkozy in 2007, paving the way for the formidable DSK, a sure-fire winner oozing testosterone and economic cred who would eat Sarko for breakfast. Meanwhile, Hollande was still the Socialist Party's backroom boy with the charisma of a wet sock (call sign: flanby, an industrial, tasteless and flabby dessert). Then DSK jammed his dick in hotel room doors - again and again and again -, Hollande reinvented himself and the rest is history. By the way, here's the joke that was all over the francophone Twitter yesterday: Meanwhile, at the Swiss border....
posted by elgilito at 2:24 AM on May 7, 2012 [11 favorites]


Has negotiation become a dirty word or something?

To be frank, given the state of politics recently (in my home country, and the US too) it hadn't occurred to me that negotiation was even an option.
posted by His thoughts were red thoughts at 2:43 AM on May 7, 2012 [2 favorites]


Er, I should say, the basic point was that stimulus in the countries having problems would be better then the breakup of the Euro - but in general he's pointing out what he's always said (even back in the '90s) That the Euro prevents countries that are having problems devalue their currency to stay competitive, and economic shocks can't be dealt with easily.

But at least he finally acknowledges (with clenched teeth) that the actual process of breaking up the euro wouldn't be at all pretty. Which is quite a spectacular change of mind for him.

In my opinion, he still doesn't quite get just how much of a mess it would be. His obsession with competitive devaluation is also rather tiring: Germany didn't require a competitive devaluation to increase its competitiveness during the past decade.
posted by Skeptic at 2:46 AM on May 7, 2012


How about major fluctuations?

What of them? The only stock market fluctuations that matter is in the valuations of major banks, and they only matter if they're portending the possible collapse of said banks, because collapse will require bailout if the banks are big enough. Otherwise, its the bond markets that matter, not the stock markets. It was, after all, the bond markets pushing up Italy's borrowing costs that managed to push Berlusconi out - something that even Italy's voters and justice system proved to weak to manage.
posted by tempythethird at 3:25 AM on May 7, 2012


"Economists do not call themselves "keynesian economists" any more than physicists call themselves "Eisenstein" physicists
posted by Ritchie

I'm a Potemkinist myself.
posted by marienbad at 4:00 AM on May 7, 2012


In completely unrelated news, everyone below the board of directors has been fired and rehired as a contractor.

THIS JUST IN: Per tradition in a nation with a strong labor tradition, a general strike has ensued, bringing the country to a standstill. The whereabouts of the CEOs now in hiding is not known...
posted by Rykey at 4:34 AM on May 7, 2012 [4 favorites]


Question for French Mefiters: which power that be control/supports Hollande?
posted by elpapacito at 4:34 AM on May 7, 2012 [1 favorite]


elpapacito, France has very strong campaign rules; all campaigns have to use the same amount of money and have the same amount of media time (on all media types). In other words, while there's probably an influence of power on Hollande, he's not controlled, per se, as you (we) get in the US. (I have dual US-French nationality, thus the pronouns :) )

I VOTED FOR HOLLANDE omg it feels so awesome to say. My first presidential vote with my year-old French citizenship and holy crap it's great.

I scrolled past most of the comments so don't know if it was also mentioned – Hollande also supports marriage and adoption "for all people". That's how he worded it in his campaign :D "Couple wants to get married? Adopt? Okay. Why're you talking about 'gay', they're people."

Sarkozy's latest campaigning was so brazenly xenophobic, trying to cater to Front National voters, that I couldn't help but smile when my upstairs neighbors, whose parents are originally from Morocco (they also have French citizenship now), jumped up and down last night and used "niquer" ("fuck") in abundantly creative ways regarding Sarko.

And don't get me started on how he raised "employer" taxes that were actually paid by employees last year. Always nice to see your 3% raise reduced to zero. Not. Good riddance.

I sincerely hope Hollande lives up to his promises – he's been a politician for a while now, ever since I can remember (first arrived in France in 1997), and he always had held a comparatively stable, trustworthy record. Previous elections, that worked against him; he tends to present as boring and predictable. This election? Predictable is EXACTLY what we need.
posted by fraula at 4:54 AM on May 7, 2012 [12 favorites]


elgilito: "By the way, here's the joke that was all over the francophone Twitter yesterday: Meanwhile, at the Swiss border..."

First off: congratulations to France, I sincerely hope this all works out great!

Second: could someone translate and explain the linked French joke for me?
posted by barnacles at 4:59 AM on May 7, 2012


Translation: "Meanwhile, at the [Franco-]Swiss border..."
It being the Swiss border with France is clearly implied.
(made me LOL :) )
posted by fraula at 5:05 AM on May 7, 2012


fraula, it would appear that I can't see it because the free internet in the airport lounge is not loading the image. So, errr, my fault. :)
posted by barnacles at 5:12 AM on May 7, 2012


the free internet in the airport lounge is not loading the image

Spoiler: It's a large queue of vehicles, most of them red, fast and Italian...
posted by Skeptic at 5:47 AM on May 7, 2012 [1 favorite]


Second: could someone translate and explain the linked French joke for me?
Right-wingers in France always prophetize that, if the Left gets into power, rich people will flee in droves, leaving behind a third-world shell of a country. Indeed, after Mitterrand won the election in 1981, rumors circulated in some quarters that Russian tanks were on their way to Paris, and some people crossed the Franco-Swiss border with briefcases full of cash or gold (so the legend goes, it's hard to find verifiable examples).
posted by elgilito at 6:05 AM on May 7, 2012 [1 favorite]


Hollande also supports marriage and adoption "for all people". That's how he worded it in his campaign :D "Couple wants to get married? Adopt? Okay. Why're you talking about 'gay', they're people."

Infinity This
posted by crayz at 6:06 AM on May 7, 2012


The most progressive time in American history had a marginal tax rate of anywhere between 70 and 92%.

Indeed, the top tax rate was 92% under the noted communist firebrand Dwight D. Eisenhower in the 1950s.
posted by gimonca at 6:21 AM on May 7, 2012 [5 favorites]


Indeed, the top tax rate was 92% under the noted communist firebrand Dwight D. Eisenhower in the 1950s.

Misleading. This was a marginal tax rate, affecting only those dollars earned over, in inflation-adjusted terms, something like $20 million. Also, with various tax breaks, people did not pay the nominal tax rates of the time, though they did pay somewhat higher taxes than today. Effective tax rates were considerably lower than they seem from the numbers, though.
posted by shivohum at 6:32 AM on May 7, 2012 [1 favorite]


Misleading. This was a marginal tax rate

Hollande's proposed 75% rate would also be a marginal tax rate, affecting only the earnings over €1M.
posted by Skeptic at 6:44 AM on May 7, 2012 [1 favorite]


So, how many people do we expect will be affected by this new tax rate? Does France have a lot of people making over 1 million euros per year and not funneling it through seventeen layers of off-shore shell companies?
posted by Dr Dracator at 6:45 AM on May 7, 2012


Wait until you see what happens at France's next bond auction!


As it happens, that bond auction has just occurred: France has sold 2.2 billion euros worth of 12 month paper at a yield of 0.174%, compared to the pre-election 0.25%. Admittedly these are short-term bonds, but it points to a debt market unafraid of Hollande.
posted by emergent at 6:48 AM on May 7, 2012 [2 favorites]


Hollande's proposed 75% rate would also be a marginal tax rate

Exactly.
posted by Wolof at 6:48 AM on May 7, 2012


So, how many people do we expect will be affected by this new tax rate? Does France have a lot of people making over 1 million euros per year and not funneling it through seventeen layers of off-shore shell companies?

I have heard rumors that in some countries even the wealthy have to obey the law, or at least more of it...

Before I went to France, I was somewhat afraid that I would find the faltering socialist state that I kept hearing about from certain news outlets. But after I rode a nuclear powered electric bullet train from one end of the country to the other, I began to realize that France isn't the country that needs to catch up.
posted by deanklear at 6:52 AM on May 7, 2012 [19 favorites]


I knew this was a good thing when the editors of The Economist had a giant meltdown in last week's issue.
posted by moammargaret at 7:05 AM on May 7, 2012 [4 favorites]


I knew this was a good thing when the editors of The Economist had a giant meltdown in last week's issue.

Yeah, that was weird. Usually the Economist tries to keep an ostensibly centrist line, and it has been pretty critical of some right-wing politicians, like Bush Jr., Berlusconi or indeed Sarkozy himself.
What has made its over-the-top attacks on Hollande so strange is:

1) It isn't as if Hollande's economic programme was as different from Sarkozy's. Indeed, in some aspects (for example his emphasis on growth), Sarkozy is rather closer to the Economist's own recommendations than Sarkozy.

2) If Sarkozy had won, he'd have been hostage to Le Pen, whose own economic programme is far off in cloud-cuckoo land, and whose xenophobia is the exact opposite of the Economist's own professed cosmopolitism.

Strange, but the Economist is taking a very curious editorial line lately, that with the cover in which it made a parallel between the current criticism of bankers in the City of London and the Blitz, the "Skintland" cover or its endorsement of Boris Johnson as mayor of London. Cynical minds would suspect that, seeing News Corp in disarray, the Economist's Pearson Group sees some scope in picking up disaffected right-wing readers...
posted by Skeptic at 7:36 AM on May 7, 2012 [1 favorite]


I have heard rumors that in some countries even the wealthy have to obey the law, or at least more of it...

No question about it - I don't think any of those off-shore companies are illegal though, nor do I think any of the French (or German, Dutch or whatever) millionaires are too shy to use one.

Do we have any real estimate of what this new tax is expected to produce? Because I am thinking of a 1000% tax for personal incomes over 20 billion euros, which surely is a much better idea.
posted by Dr Dracator at 8:06 AM on May 7, 2012


I don't think any of those off-shore companies are illegal though,

They may not be illegal per se, but the ways in which they are used quite often are. The way in which those tax havens and loopholes work is not so much that they allow to legally avoid paying taxes, but rather that it is too much of a hassle to prove the illegality of those schemes. Especially if the argument pits top-notch tax lawyers against overworked tax inspectors earning ten times less.

nor do I think any of the French (or German, Dutch or whatever) millionaires are too shy to use one.

Oh, certainly. But somehow the high taxes of Sweden or Norway haven't driven the local talent away, so perhaps the threats of fleeing capital are indeed somewhat overstated.
posted by Skeptic at 8:35 AM on May 7, 2012 [1 favorite]


> Imagine if New York, California and New Jersey weren't around to backstop the economies of
> Mississipi, Kentucky and West Virginia. They'd be absolutely fucked right now instead of sorta-fucked.

California backstopping anybody, BWAAAAHAHAHAHAHA
posted by jfuller at 9:09 AM on May 7, 2012 [1 favorite]


Er, I should say, the basic point was that stimulus in the countries having problems would be better then the breakup of the Euro - but in general he's pointing out what he's always said (even back in the '90s) That the Euro prevents countries that are having problems devalue their currency to stay competitive, and economic shocks can't be dealt with easily.

If you don't actually export anything that anyone wants inflating your currency to hell isn't going to do shit except make your populous miserable. Which would be exactly what would happen in Greece.
posted by Talez at 9:19 AM on May 7, 2012


California backstopping anybody, BWAAAAHAHAHAHAHA

http://en.wikipedia.org/wiki/Comparison_between_U.S._states_and_countries_by_GDP_%28PPP%29
posted by Celsius1414 at 9:26 AM on May 7, 2012 [2 favorites]


Skeptic, they've tacked hard-right recently, to the extent that they are parroting Fox News talking points on US domestic politics ("class warfare", etc.)
posted by moammargaret at 9:30 AM on May 7, 2012


With the caveat that I don't really know anything about French politics and government, how likely is it that Hollande will actually implement his campaign promises?

Germany have announced that renegotiating the European fiscal pact on austerity measures is 'not possible', but they've also been touting a 'pragmatic solution'.

I suspect that 'not possible' and 'pragmatic solution' might mean the same thing, which doesn't bode well for some of Hollande's campaign promises, but Merkel is genuinely a pragmatist and doesn't have the ideologically-driven lust for austerity measures that, say, the Tories in the UK do.

I imagine the most likely outcome is Hollande having to ditch some of his promised reforms in return for some compromise from the austerity fans - maybe a tax on financial transactions?

Or - and this is a bit of a long shot, but there are rumours swirling around already - Merkel might eventually concede that the whole austerity thing isn't working out too well, join up with the Social Democrats after the next elections in Germany and turn away from hardcore austerity measures as the solution to Europe's problems. Fingers crossed.
posted by jack_mo at 9:48 AM on May 7, 2012


Heh, the second I finished typing that, the announcer on Radio 4 reported that Merkel says she will "welcome Hollande with open arms", but he "cannot renegotiate" the fiscal pact.
posted by jack_mo at 9:52 AM on May 7, 2012 [1 favorite]


So NPR's correspondent Eleanor Beardsley said that Sarkozy never recovered from an event a couple of years ago where he told some farmer to "get lost, jerk" -- or rather, a saltier version that wasn't fit for a family broadcast. Can someone tell us (MeMail it to me if you're modest) just what he said that day?

Also, I have a lapel pin shaped like François Mitterrand as Kermit the Frog from 20 years ago. I wonder if it's time to wear it again.
posted by wenestvedt at 10:04 AM on May 7, 2012


Germany have announced that renegotiating the European fiscal pact on austerity measures is 'not possible', but they've also been touting a 'pragmatic solution'.

What has been around the news since last week is that the fiscal pact would be maintained, but a parallel "growth pact" could be tacked on. This sounds like something that both Hollande (whose programme also included balancing the budget...just not yet) and merkel could live with.

It must also be said, that, contrary to the fiscal bogeyman she has often been pictured as abroad, Merkel herself is quite pragmatic. The problem is that she has had to endure continuous sniping from both her party's right wing and from her increasingly right-leaning (and quite doomed) Free Democrat coalition partners. But it was a German politician who once said that "politics is the art of the possible" and with the German elections approaching, Germany's Social Democrats looking strong, and most of Europe starting to get fed up of the austerity-only course, she'll be far better placed to wring their arms.
posted by Skeptic at 10:09 AM on May 7, 2012 [1 favorite]


wenestvedt, Sarkozy's precise words were "Casse-toi, pauvre con." As it happens, it has indeed been one of the Left's most popular campaign slogans during this campaign...
posted by Skeptic at 10:10 AM on May 7, 2012 [1 favorite]


California backstopping anybody, BWAAAAHAHAHAHAHA

California, despite it's fiscal trouble, the people (not the state) remit more tax revenue than any other state and only get 78c in the dollar back in federal funds. New York and New Jersey also sit in the 70-80% returned while remitting a massive share of federal taxes. Texas is #2 in taxes remitted but sit on 94% of it back in federal spending.

Believe me, they're backstopping the economies of poorer states even if the state's finances are a god damn wreck.
posted by Talez at 10:25 AM on May 7, 2012 [9 favorites]


Thank you, Skeptic! There is a surprisingly (for Yahoo Answers) thorough discussion of the rude remark here

I really want one of those campaign buttons. :7)
posted by wenestvedt at 10:35 AM on May 7, 2012


Three relevant posts from Lenin's Tomb over the past few weeks (2 from the past 2 days and one from April 24)...

Syriza! and the Greek Elections

France: Sarkozy's defeat is our victory, but there are bigger battles to come

Jim Wolfreys on French Elections (a 45 minute video - this is the one from April 24th)
posted by symbioid at 11:09 AM on May 7, 2012


What about 'em? Why should the average voter worry about stock price fluxuations? How about young voters in europe who can't even find work because of the economic problems, and are suffering due to austerity measures?

They're fluctuations, not fluxuations, and the average voter rightly worries about them because they're likely to impact his or her pension and/or likelihood of finding a job. If you don't see why a collapsing stock market or the breakup of a currency union could be a problem for ordinary people then I don't see any point in continuing this conversation. As it happens, I believe you understand that quite well but are choosing to be disingenuous in lieu of addressing the argument.
posted by anigbrowl at 11:22 AM on May 7, 2012 [1 favorite]


Sorry, I hit post before I had finished my reply.

In fact, if you think about, increased taxes on corporate profits would, in fact reduce the "actual" value of the stock, as less money would make it to stockholders as dividends. But that would not mean less actual corporate activity. It would just mean the company would be taking out of the money that would go to shareholders, and handing it over to the government.

That's not how investors calculate value. A tax on dividends should not drive a share price down by itself, because said price is based upon the company's future earnings potential.

In that case, why would a reduced share value be a bad thing?

Because dividend income, while nice, is a fringe benefit to asset growth, which is what investors really care about. A lot of investors prefer stocks that don't pay a dividend, but where the money is reinvested in the company instead. It's only in the last quarter that Apple paid a dividend for the first time in years and years, because the company literally has more cash sitting idle than it knows what to do with.
posted by anigbrowl at 11:52 AM on May 7, 2012


(Krugman)
One answer — an answer that makes more sense than almost anyone in Europe is willing to admit — would be to break up the euro, Europe’s common currency. Europe wouldn’t be in this fix if Greece still had its drachma, Spain its peseta, Ireland its punt, and so on, because Greece and Spain would have what they now lack: a quick way to restore cost-competitiveness and boost exports, namely devaluation.


As a euro, I find the repetition of this idea by Krugman, a Nobel Laureate, infuriating. Does he propose dealing with US recessions by breaking up the dollar and returning to multiple competing currencies as in the early 19th century? No, because that's a stupid idea thanks to the well-documented tendency for such currencies to overinflate and collapse. So why is it good for Europe, then? We used to have lots of competing currencies like this not so long ago and it sucked. Prior to the introduction of the ERM (where currencies were pegged closer and closer to a basket in preparation for the launch of the single currency), exchange rates fluctuated wildly and every government's first resort to dealing with economic headwinds was to devalue the currency in an attempt to boost exports - unsurprisingly, most were reluctant to revalue the currency upwards to put a brake on excess growth. This was awful for savers, awful for tourists, and awful for businesses. It encourages people to store their money outside the currency, which has often resulted in currency controls. Monetary policy has typically been a tool for governments to avoid dealing with fiscal problems. It's also extremely regressive.

Krugman is surely aware of all this, and it just baffles me that he keeps advancing monetarist solutions as a great idea. Why does he think the EU countries entered into a currency union in the first place?

As a counterpoint to Ireland’s sad story, consider the case of Iceland, which was ground zero for the financial crisis but was able to respond by devaluing its currency, the krona (and also had the courage to let its banks fail and default on their debts). Sure enough, Iceland is experiencing the recovery Ireland was supposed to have, but hasn’t.

Icelandic recovery - including currency controls and austerity measures, and a currency that wasn't in the euro to start with. "Ireland shouldn't copy Icelandic default," says...Icelandic finance minister. Irish Recovery and ana analysis of what went wrong in the Irish property market. The drunkenness metaphors are apt; irresponsible though several Irish banks were, the basic fact is that when you wake up with a hangover it's not the fault of the bartender.

Still, I've got to be impressed with Krugman, who manages to express his economic opinions without citing a single number in support of his claims.
posted by anigbrowl at 1:05 PM on May 7, 2012 [1 favorite]


Does he propose dealing with US recessions by breaking up the dollar and returning to multiple competing currencies as in the early 19th century?

No, he proposes the European Central Bank needs to worry less about inflation and worry more about lending. "Not only does the ECB have to accept and take on the role of lender of last resort, but it also has to be more tolerant of inflation."
posted by mek at 1:17 PM on May 7, 2012


Krugman is surely aware of all this, and it just baffles me that he keeps advancing monetarist solutions as a great idea. Why does he think the EU countries entered into a currency union in the first place?

It's a good point--when econo-bloggers discussing the downsides of breaking up the Euro (or specific countries leaving), they mostly discuss the shock to the economy from the act of the breakup, rather than the loss of the advantages the Euro brought.

But with all its downsides you point out, fiscal tools are very important, and the ECB is largely unwilling to use them--because why should Germany devalue its currency because of Greece's problems?
posted by benbenson at 1:24 PM on May 7, 2012


Skeptic: "Germany didn't require a competitive devaluation to increase its competitiveness during the past decade."

Sure, it did other things to produce similar effects at much greater cost.

anigbrowl: "Krugman is surely aware of all this, and it just baffles me that he keeps advancing monetarist solutions as a great idea. Why does he think the EU countries entered into a currency union in the first place?"

Because the EU is not and will not realistically be a transfer union any time soon and the sooner they realize that a monetary union without a transfer union is at best temporary the better off everyone will be? They either need to shit or get off the pot, but what they're doing now is leading them inexorably toward disaster, yet they all fiddle while Athens burns.
posted by wierdo at 2:24 PM on May 7, 2012 [2 favorites]


This has been an amazing thing to witness. The French are, shall we say, somewhat riled up about getting rid of Sarkozy. Last night, Place de la Bastille was filled with tens of thousands of people chanting «Merkel's next!», and the ubiquitous «Casse-toi, pov' con!» He's gone and they're still angry. One woman I spoke to said, «He tried every trick, the little weasel, but he still got what he deserved.» People spit when they say his name. His gravestone is spray-painted on the walls of alleyways all over Paris. There's no way Hollande's government can mess this up before the legislative elections.
posted by notionoriety at 2:31 PM on May 7, 2012


No, he proposes the European Central Bank needs to worry less about inflation and worry more about lending. "Not only does the ECB have to accept and take on the role of lender of last resort, but it also has to be more tolerant of inflation."

I support that too. What has that got to do with his advocacy of individual currencies instead of the Euro?
posted by anigbrowl at 3:47 PM on May 7, 2012


He's not actively against the Euro, as has already been pointed out above, that is a serious misreading of his position. He argues that unless the ECB acts in a way that it is currently not doing, the Euro is doomed. He's been saying that consistently for at least a year now. If the ECB isn't going to act like the Fed or the BoE, then the Euro cannot survive. And in that situation it is better to dump the Euro sooner rather than later, before more countries are dragged into the muck.
posted by mek at 3:57 PM on May 7, 2012


But with all its downsides you point out, fiscal tools are very important, and the ECB is largely unwilling to use them--because why should Germany devalue its currency because of Greece's problems?

Distrust of their neighbors, to be frank. During the 90s and 2000s, Germany's big economic issue was trying to reintegrate East and West Germany, an expensive undertaking by any measure. So while much of the rest of Europe was booming, German politicians, industry, and labor were largely working together to hold down wage increases and manage the economy in frugal fashion. After all, the other side of Keynesian stimulus during bad times is fiscal discipline and saving during good times, such that government spending and policy is designed to counterbalance the business cycle. If you don't save for a rainy day then spending is correspondingly more difficult when it arrives.

My view of the situation is that the Germans have dispensed a fair amount of cash already, but they're deeply upset about the fact that many other governments in Europe were so spendthrift during the boom. Now they're all talking about stimulus as the key component of growth, which is great, except for the fact that they seemed oblivious to the risks of unrestrained growth a few years ago. Take the Irish property bubble, for example. It's all very well complain that the banks were handing out loads of money at low rates of interest, but to put all the blame on the banks requires believing that nobody else has any effect on the market. But it's a basic tenet of microeconomics that if there's a behavior with undesirable externalities that you wish to curb - in this case, house price inflation - then a simple way to do so is to increase taxes. This didn't happen. Likewise, in Greece, rates of tax are nominally high but collection has been hopelessly low. There were a lot of warnings about the fiscal unsustainability of such situations, not least from the Germans.

Because the EU is not and will not realistically be a transfer union any time soon and the sooner they realize that a monetary union without a transfer union is at best temporary the better off everyone will be?

I don't recall anyone throwing money at the Germans to help them with the costs of reunification while their own treasuries were awash with cash. It's a two-way street.
posted by anigbrowl at 4:17 PM on May 7, 2012 [1 favorite]


He's not actively against the Euro, as has already been pointed out above, that is a serious misreading of his position.

Oh really.

One answer — an answer that makes more sense than almost anyone in Europe is willing to admit — would be to break up the euro, Europe’s common currency. Europe wouldn’t be in this fix if Greece still had its drachma, Spain its peseta, Ireland its punt, and so on, because Greece and Spain would have what they now lack: a quick way to restore cost-competitiveness and boost exports, namely devaluation.

I don't know how much more active his opposition could be, short of burning bundles of Euro notes in public.

His idea of more transfer payments from Germany to the rest of the EU is presented as a second-best scenario, and even when making his case for that he omits to mention the reason Germany's economy was 'in the doldrums' - because the Germans exerted some fiscal discipline upon themselves until they were done paying for the cost of reunification. Coming from someone with his intellect and experience, I find his line or argument screamingly dishonest.
posted by anigbrowl at 4:29 PM on May 7, 2012


My view of the situation is that the Germans have dispensed a fair amount of cash already, but they're deeply upset about the fact that many other governments in Europe were so spendthrift during the boom.

This is complete nonsense when talking about Spain, as Spain was fiscally responsible right up until the crisis began - in fact they were in much better shape than Germany. Their crash was caused by a real estate bubble largely fueled by French and German banks. To go to Krugman again, this is not about fiscal irresponsibility. (And look, he has numbers.) He rightly states that "the essential craziness of the orthodox German-inspired diagnosis of the crisis is on full display."

I can only reiterate so many times that Krugman is not arguing that dropping the Euro is a good outcome, he's arguing it's an inevitable outcome if governments insist on pursuing austerity. All the wishing in the world will not change the basic reality of the situation, which is that entire nations are not going to submit themselves to appease German banks. Every economist in the world recognizes the immense value of the Euro project, but basic requirements for its longevity are simply not being met, and responsible economists are pointing that out and considering alternatives.
posted by mek at 4:46 PM on May 7, 2012


So while much of the rest of Europe was booming, German politicians, industry, and labor were largely working together to hold down wage increases and manage the economy in frugal fashion.

I don't think this is completely accurate:

As eastern Germany went into a deep recession during the first phase of unification, the western German economy went into a small boom. Western German GDP grew at a rate of 4.6 percent for 1990, reflecting the new demand from eastern Germany.....The dramatic improvement in the western German figures resulted from the opening in eastern Germany of a large new market of 16 million persons and the simultaneous availability of many new workers from eastern Germany.

The Bundesbank became worried about three elements of the sudden boom: the sudden financial shifts between east and west, which led to a jump in money supply; government deficits resulting from large expenditures in eastern Germany; and the potentially inflationary effects of a rapid growth rate in the west. The bank warned that interest rates would have to remain high........


After reunification the Euro probably benefited Germany in many ways:

Since the introduction of the euro at the beginning of 1999, the European Central Bank calculates that Germany has gained competitiveness, not only against other major industrial nations but against all other members of the euro zone.

German competitiveness against the rest of the world was probably helped by the fact that the relatively poor performance of other members of the euro zone held down the appreciation of the euro against other currencies.


German and French banks purchase of European sovereign debt may have helped devalue the Euro and funded demand for German technology.
posted by Golden Eternity at 5:20 PM on May 7, 2012 [1 favorite]


Their crash was caused by a real estate bubble largely fueled by French and German banks. To go to Krugman again, this is not about fiscal irresponsibility.

Right, and I have a hangover that was caused by an alcoholic bubble largely fueled by Californian beer brewers, with their tasty, tasty beverages. It's not my fault that I consumed so much of it, it's their fault for serving it to me!

GMAFB, of course it's about fiscal irresponsibility. German public debt in 2007 - again, the aftermath of reuinification, which Krugman conveniently omits to mention. Spain's economic situation is considerably more complex than Krugman admits, from the inflexibility of its labor market to a property bubble that started back in the 90s and was based on inward investment from places like the UK.

I can only reiterate so many times that Krugman is not arguing that dropping the Euro is a good outcome

Yes he is. He's saying so in plain English. Deal with it.

Golden Eternity, look at the slow wage growth in Germany over the least decade. My point is that the Germans kept the fiscal discipline going through the boom, and avoided inflationary bubbles of their own.
posted by anigbrowl at 6:31 PM on May 7, 2012


Skeptic: His obsession with competitive devaluation is also rather tiring: Germany didn't require a competitive devaluation to increase its competitiveness during the past decade.

Krugman addresses this very point here. He points out that the German boom in the 2000s was as a result of a relative devaluation -- inflation in the periphery meant that relative labor costs in Germany decreased (devaluation). Devaluation in Germany led to a trade surplus through exports to the periphery. This trend needs to be reversed by increasing inflation in Germany which makes the periphery devalue their labor costs and become more competitive and so they can begin exporting to Germany.

The key point is that devaluation is not an absolute number but labor costs relative to another country when they have the same currency. Spain inflating labor costs and Germany devaluing labor costs were two sides of the same coin during the last decade. Krugman is suggesting that now Germany needs to inflate so that Spain can devalue and become more competitive.

Just as a side note, Krugman received his Nobel prize for his work in international trade and finance. He actually knows a little about this subject.
posted by JackFlash at 7:26 PM on May 7, 2012


Yes he is. He's saying so in plain English. Deal with it.

Krugman less than a week ago: But now that [the Euro] exists, it would be a political disaster to let it fail.
posted by mek at 8:03 PM on May 7, 2012 [1 favorite]


anigbrowl: "I don't recall anyone throwing money at the Germans to help them with the costs of reunification while their own treasuries were awash with cash. It's a two-way street."

I don't recall the Euro being instituted until the late 90s. Without a monetary union, there is no need for a transfer union. Within limits, fluctuations in exchange rates handle the problem. I also don't recall the Germans asking for help, but I was a mere teen then.
posted by wierdo at 8:03 PM on May 7, 2012


Krugman addresses this very point here. He points out that the German boom in the 2000s was as a result of a relative devaluation -- inflation in the periphery meant that relative labor costs in Germany decreased (devaluation). Devaluation in Germany led to a trade surplus through exports to the periphery. This trend needs to be reversed by increasing inflation in Germany which makes the periphery devalue their labor costs and become more competitive and so they can begin exporting to Germany.

You don't see a little problem with this? Germany kept a lid on costs and was able to export a lot by maiking high quality products efficiently, and has wound up better off as a result. So now they've got to pay the bill for other countries' relative lack of fiscal responsibility because...er...well, I mean how dare they be so frugal and value-conscious.

Krugman is suggesting that now Germany needs to inflate so that Spain can devalue and become more competitive.

Or Spain could try - gasp - exporting more stuff outside the EU instead of insisting that Germany deliberately make its economy less efficient.

Just as a side note, Krugman received his Nobel prize for his work in international trade and finance. He actually knows a little about this subject.

Yes, I've already cited his Nobel Laureate status as the reason that I find his position disingenuous.

I don't recall the Euro being instituted until the late 90s. Without a monetary union, there is no need for a transfer union.

Do you remember the European Exchange Rate Mechanism?

Krugman less than a week ago: But now that [the Euro] exists, it would be a political disaster to let it fail.

Which doesn't alter the fact that he's explicitly advocating its breakup. I'm not trying to read some subtext into his arguments here: he says frankly that a breakup of the euro would be a good thing in economic terms. Then he qualifies that by admitting it would be a political disaster, but's still advocating monetarism as the solution to a fiscal problem.
posted by anigbrowl at 8:34 PM on May 7, 2012


No, he gives two paths for the Euro to survive, which he says are preferable to letting it fail. He says that in the original article you linked, and he said it again in the comment I just linked. The only person being disingenuous here is you.
posted by mek at 8:54 PM on May 7, 2012 [1 favorite]


Anigbrowl, as long as you continue to view economics as a morality tale, you will never understand it. That is the view of a child. Economics is about numbers.

You keep citing other countries' lack of fiscal responsibility. Apparently you are unaware that Ireland and Spain were running budget surpluses while Germany was running deficits. Italy was reducing its debt relative to GDP, which was smaller than Germany's. Does that make Germany the fiscally irresponsible country?

Germany did nothing of virtue to achieve their trade surplus. Speculative, greedy German bankers shoveled billions of euros into the periphery fueling a housing boom. This housing boom caused inflation. This inflation provided the conditions that allowed Germany to export to the periphery. Now you would like to blame the periphery for the conditions that Germany created. It had nothing to do with Germany being frugal and value-conscious. To the contrary, Germany's reckless investments were the root of the problem.

A trade imbalance normally requires currency adjustments to restore imbalance. That adjustment cannot occur because they all use the same currency. The only way to restore balance is for labor costs to adjust between Germany and the periphery. This is a simple mathematical fact. The most efficient way for that to occur is for inflation to increase faster in Germany than in the periphery.

anigbrowl: Or Spain could try - gasp - exporting more stuff outside the EU instead of insisting that Germany deliberately make its economy less efficient.

But that is exactly the problem. The way you get out of a crisis and export out of the EU is by devaluing your currency. But Spain, Ireland and Italy can't do that because Germany controls the currency.

As Krugman points out you have two choices. Germany can inflate to reduce the trade imbalance or else the periphery must exit the euro so that they can devalue.
posted by JackFlash at 9:16 PM on May 7, 2012 [6 favorites]


Here is quite a good long article looking at Hollande and some of history.
posted by wilful at 9:31 PM on May 7, 2012


Right, and I have a hangover that was caused by an alcoholic bubble largely fueled by Californian beer brewers, with their tasty, tasty beverages. It's not my fault that I consumed so much of it, it's their fault for serving it to me!

I don't think this is a very good analogy. If I want to loan $500k dollars to someone at 4% interest, I'm sure I could find plenty of takers, but I would have to be out of my mind to lend even $100 to them if I expected to be paid back. So why did the banks make loans to people who, in all probability, wouldn't pay them back? a) The markets were still indicating a long-term global economic boom in which real estate prices would remain high for a very long time. b) they were lending our money not theirs, and taking a huge cut up front, through CDO's sold to pension funds, and eventually through tax bail-outs. In my opinion, the financial industry is much more responsible for the housing bubbles than the borrowers, in the US at least.

Germany probably avoided these bubbles due to their more conservative home lending regulations:

German mortgages appear to provide only limited options to borrowers. The
loan-to-value ratios on first position mortgages are low (60 percent or less), and
such mortgages generally have “yield maintenance” clauses—requirements that
when borrowers prepay, they pay the lender all the interest they would have paid
had they amortized the mortgage to maturity. If borrowers wish to borrow more
than 60 percent, they may take out second mortgages up to an additional 20
percent of value.


And it is understandable that they don't want to pay for mistakes they managed not to make themselves.

Germany kept a lid on costs and was able to export a lot by making high quality products efficiently AND by having a large market to sell into, fueled by a devalued Euro and deficit spending throughout Europe.
posted by Golden Eternity at 9:33 PM on May 7, 2012


Anigbrowl, as long as you continue to view economics as a morality tale, you will never understand it. That is the view of a child. Economics is about numbers.

Oh, you don't say.

You keep citing other countries' lack of fiscal responsibility. Apparently you are unaware that Ireland and Spain were running budget surpluses while Germany was running deficits. Italy was reducing its debt relative to GDP, which was smaller than Germany's. Does that make Germany the fiscally irresponsible country?

Ireland and Spain were running budget surpluses because they were raking in money in transfer taxes in the middle of a property bubble. What they should have been doing was raising those transfer taxes or VAT to take the heat out of the market.

Germany did nothing of virtue to achieve their trade surplus. Speculative, greedy German bankers shoveled billions of euros into the periphery fueling a housing boom.

Oh bullshit. I sat out the housing boom in the US and waited until last year to get a place. I don't remember anyone holding a gun to my head and telling me I had to take out a mortgage or else. I'm not a big fan of cheap money, but you have a cheek telling me that I view economics as a morality play and then grousing about greedy German bankers.

A trade imbalance normally requires currency adjustments to restore imbalance. That adjustment cannot occur because they all use the same currency. The only way to restore balance is for labor costs to adjust between Germany and the periphery. This is a simple mathematical fact. The most efficient way for that to occur is for inflation to increase faster in Germany than in the periphery.

Well no. The periphery could make more stuff that people want to buy. Germany doesn't have stellar export performance because other countries in Europe wanted to do the poor Germans a favor, they have it because they make a lot of high-quality products.

If I want to loan $500k dollars to someone at 4% interest, I'm sure I could find plenty of takers, but I would have to be out of my mind to lend even $100 to them if I expected to be paid back. So why did the banks make loans to people who, in all probability, wouldn't pay them back? a) The markets were still indicating a long-term global economic boom in which real estate prices would remain high for a very long time.

That kind of contradicts your assertion that they didn't expect to get paid back, doesn't it?

Germany probably avoided these bubbles due to their more conservative home lending regulations:[...] And it is understandable that they don't want to pay for mistakes they managed not to make themselves.

This I agree with, especially since there were lots of warnings about property bubbles and the dangers of reckless borrowing.

AND by having a large market to sell into, fueled by a devalued Euro and deficit spending throughout Europe.

The Euro is still low in value, and Germany had plenty of world-class brands before the Eurozone became a single market. I mean, I can't help observing that everyone else in Europe also has a large market to sell into. Unfortunately, a good number of them apparently got the idea that the existence of this market had abolished the business cycle, and ignored the looming cost burdens in their own economies.
posted by anigbrowl at 10:44 PM on May 7, 2012 [2 favorites]


He points out that the German boom in the 2000s was as a result of a relative devaluation -- inflation in the periphery meant that relative labor costs in Germany decreased (devaluation). Devaluation in Germany led to a trade surplus through exports to the periphery.

The thing is, Germany's trade surplus didn't come just from exports to the rest of the EU, but also, to a great extent, to exports outside of the EU, where the "relative devaluation" argument doesn't hold, especially as the euro wasn't particularly undervalued at the time.

I agree that one should not see economics too much as a morality tale. And I also believe that the ECB should open the moneytaps somewhat. At the same time, and I'm a Spaniard who has lived in Germany, I also believe that competitive devaluations worked for a long time as heroin fixes for the economies of the periphery: they provided a short but illusory respite, and discouraged those countries from addressing the real causes of their lack of competitiveness: ossified labour and financial markets, cronyism, low levels of innovation, and below par educational systems. Worse of all, those economies became addicted to the devaluation drug. What we have now is not a hangover: it's cold turkey.

But Krugman infuriates me because he appears to see the periphery's low performance as somehow innate, and quite frankly, that is even more condescending than the most supercilious Bundesbanker. At least he appears to have shifted his position from euro breakup as no. 1 solution to euro inflation as preferred solution, with the euro breakup as a distant second option. He's still very disingenuous in attributing his shift solely to politics, and seemingly ignoring the economic earthquake that a breakup of the euro would represent, but it's a slight improvement...
posted by Skeptic at 12:45 AM on May 8, 2012 [3 favorites]


The thing is, Germany's trade surplus didn't come just from exports to the rest of the EU, but also, to a great extent, to exports outside of the EU, where the "relative devaluation" argument doesn't hold, especially as the euro wasn't particularly undervalued at the time.

If Germany were not on the Euro they would have had to fight appreciation of the deutsche mark. This would have affected exports globally. Likewise, Greece and other periphery nations would be able to devalue their currency, were it not for th Euro. I'm guessing it would be consensus opinion among economists that the Euro has benefited Germany in this way, and been detrimental to Greece and others. From what I can tell, which may not be much, economists consider relative currency valuation to be an extremely important factor in global competitiveness; however, you and anigbrowl perhaps make a good that it is ultimately the ability to produce competitive products that is the biggest success factor. And this requires a lot more than just low labor costs.
posted by Golden Eternity at 10:28 AM on May 8, 2012


So it looks like they've failed to form a government in Greece with the lead party, so now the 2nd place (leftist Syriza) gets a chance, which I guess will likely fail, so they'll head to new elections in summer? And how the hell would *that* play out?
posted by symbioid at 1:59 PM on May 8, 2012


« Older Wanna...  |  Arizona leads with another gro... Newer »


This thread has been archived and is closed to new comments