Monday, July 30, 2012


"Competitiveness" seems to be the watchword of the day. Much of Hollande's economic strategy is concerned with restoring French competitiveness by reducing unit labor costs. So just how bad is the situation?

The very term "competitiveness" is a contested one. Some observers, like Paul Krugman, think that it doesn't make much sense to talk about national competitiveness. A new paper (gated access) by Delgado, Ketels, Porter, and Stern begs to differ. Entitled "The Determinants of National Competitiveness," the paper constructs an index based on both macroeconomic and microeconomic factors. The authors then go on to consider labor costs relative to this competitiveness index and produce the following graph:

According to the authors' reasoning, France, as you can see, has a high "competitiveness score," which is a measure of its potential output per worker, but also a somewhat high unit labor cost compared to its potential output ranking (the point marked "France" lies above the regression line). As you can see, France looks relatively good compared to its main European competitors. Germany's residual is higher than France's; Spain, Italy, and Greece are off the charts in terms of labor cost relative to potential output. And countries like Singapore, Malaysia, China, India, and Chile are relatively attractive for investment.

So this graph more or less sums up conventional wisdom. But does it make sense? That depends on what one thinks of the index constructed by the authors, which, if you look at the details of the paper, in many ways reflects (and quantifies) conventional wisdom--or conventional neoliberal ideology, if you will. So take these findings cum grano salis. But there is food for thought here.

Duy and Krugman: Draghi Makes No Sense

Tim Duy and Paul Krugman parse Mario Draghi's speech and decide it makes no sense. Both the Fed and the ECB will make important decisions this week, so we will see if last week's market euphoria survives in the cold light of day. Initial German approval of Draghi's remarks has been walked back, as the saying goes. The Bundesbank has not moved one iota, and Schaüble sounds considerably less positive than he did at first.

Saturday, July 28, 2012

gentlemen's detail

The Call Center Controversy

The "optics" aren't good, as the saying goes: Ile-de-France Transport outsources its call center work to Morocco. One might have expected this from the efficiency-minded Right, but the Left? If the government can't keep government jobs at home, what jobs can it keep? I'm a wet social liberal, but this decision is a bit startling and seems a tad on the penny wise, pound foolish side.

I see Montebourg is on the case, but then again, what case hasn't he been on since he took office. His ubiquity reminds me of Sarkozy's as interior minister.

Well, at least this flap takes people's minds off Ségolène Royal's gaffe--or was it speaking truth to power--in saying that Najat Vallaud-Belkacem owed her job to her ethnic background. It would have been more gracious to say she owed her job to her good looks, but perhaps Royal had reasons for not going there.

Friday, July 27, 2012

Le Grand Paris

Remember Sarkozy's plan for "Le Grand Paris?" If you don't, it's not your fault: it was one of those here today, gone tomorrow Sarkoplans. There was a big urban transport project embedded in all the airy imaginings of a new urbanplex stretching from Paris to the sea, however, and that hasn't died--yet. Cécile Duflot seems to have become its champion, after having been its enemy. But the budget crunch may do for the rail line as well.

Has Germany Changed Its Mind?

German finance minister Wolfgang Schaüble has more or less endorsed ECB head Mario Draghi's statement yesterday that the ECB "will do what it takes" to save the euro and, added Draghi, "believe me, it will be enough." The markets are apparently interpreting this as a promise by the ECB to buy beleaguered sovereign debt. Pierre Moscovici, while taking care to emphasize the "independence" of the ECB, said yesterday that it appeared direct market intervention was on the table.

So have we turned a corner in the euro crisis? Has the ECB decided to start the printing presses running overtime, and have the Germans decided to stop warning about "moral hazard," "encouraging profligacy," etc.? The proof will be in the pudding. But would you want to speculate against the possibility that the ECB might in fact be ready to use the big bazooka and not just run at the mouth? (On the other hand ...)

If the change of course has in fact occurred, we can retrospectively attribute it to two things: the imminent disaster that Spain faced this week and the report that austerity hasn't worked out so well for the UK, which turned in a dismal 0.7% GDP shrinkage last quarter. And even Germany has begun to feel the bite of the global slowdown. So the Germans may have blinked. And the Dow is flirting with 13,000 again. Everybody's happy, what could possibly go wrong?


Hollande the unflappable has kept his cool as the bad news poured in: first Aulnay, now Air France. Major layoffs will not make his life easier. Suspicious minds will naturally think that both firms, which have been in difficulty for quite some time, may have delayed their announcements until after the presidential election. In any case, the problem is now Hollande's to deal with. Michel Sapin sees unemployment back to 10% by the end of the year. Meanwhile, Hollande's pet project, the "generational contract," in which a firm will receive a tax exemption for hiring a young person to be tutored by an older employee nearing retirement, won't generate much employment, according to the OFCE. It's one of those symbolic gadgets that politicians like.

Not that symbolism is unimportant.  I've just read Franz Olivier-Giesbert's Derniers carnets. For Giesbert, symbolism is everything. Or, anyway, symbolism plus budget discipline and character, with considerable overlap in the latter two categories. The book has the usual Giesbert defects and qualities: astonishing quotes--so astonishing that one suspects half of them are made up, especially as certain tics of Giesbertian language appear frequently in the mouths of his subjects, portraits etched sometimes in acid and other times bathed in embarrassing sentiment, intense likes and dislike, and occasionally shrewd judgments. Surprisingly, Hollande wins his approval, perhaps in reaction against Sarkozy, whom he seems truly to detest while granting him high marks for political skill: "genius without talent," he says of Sarko, while Hollande has "talent without genius." A nice formula, even if it leaves all the important questions unanswered.

Still, one might make the case that Hollande's detachment is just the right attitude for the difficult times ahead. There will be no promises of fetching jobs with his teeth or bludgeoning recalcitrant opponents into submission. Indeed, those champions of the working class, Le Pen and Mélenchon, have been strangely silent since the election, despite the blows that have fallen upon their blue-collar constituencies. Perhaps they're waiting for the rentrée, on the theory that no one in France pays any attention to anything in July and August anyway.

Juppé and Bayrou also meet with Giesbert's approval. An odd trio indeed.

More on the European Auto Industry

In the wake of the PSA Aulnay plant's announced closing, we have been looking at the European auto industry. A war has erupted between Volkswagen and Fiat. Sergio Marchionne, the head of Fiat and president of the ACEA, the association of European auto manufacturers, has charged Volkswagen with being "too aggressive" in its price discounting. Marchionne claims that VW, which is selling 2 million vehicles a year in China, is using its profits on Chinese sales to capture European market shares from less well-placed European manufacturers such as Fiat, PSA-Peugeot, and Renault. VW is outraged by the charges and is calling on Marchionne to resign his ACEA position. What's interesting here (assuming that there is some truth to the charges) is the way in which all competition has become global. In an industry like automobile manufacturing, you can't concentrate on your local or regional market and hope to overcome the advantages of the global winner. Some years ago, Claude Bébéar, the head of Axa, the French insurance giant, warned his fellow French business magnates that they had only one choice: "Get big and compete, or find a niche." In automobiles, there are few niches.

Thursday, July 26, 2012

Juppé's Observations

What do you know? I agree with everything Alain Juppé says:

Mais pendant ce temps là… l’évolution de l’Europe et du monde nous mène à la catastrophe, dans une relative indifférence dont je ne suis pas sûr qu’elle soit seulement estivale.

J’écrivais il y a quelque jours que la probabilité d’une explosion de la zone euro ne cesse de croître. Chaque jour qui passe, hélas!, le confirme. Et que font les gouvernements européens pour conjurer le péril? Rien ou presque rien. C’est maintenant que la France devrait monter en première ligne pour proposer, à ceux de ses partenaires qui y sont prêts, d’aller plus loin dans l’unité politique dont ne peut se passer une union monétaire.

J’entends ce matin annoncer la fin du monde d’ici un siècle si nous continuons à détruire nos éco-systèmes. Routine. Indifférence générale. Perplexité aussi. Qui croire, qui suivre de ceux qui fixaient, récemment encore, la date du “pic” de pétrole aux alentours des années 2020/2030, et des autorités américaines qui se lancent à fond dans l’exploitation du gaz de schiste, susceptible de leur garantir un siècle d’indépendance énergétique? On a le sentiment que le monde a perdu le Nord, que personne ne fixe le cap, que chacun se débrouille et navigue à vue, alors que nous sommes tous sur la même galère. La France devrait parler fort pour appeler au ressaisissement.

Il est vrai que notre ministre du redressement productif parle beaucoup. Agit-il vraiment? J’en doute. Soutenir la production de véhicules électriques, dans la droite ligne des propositions de la commission Juppé-Rocard sur les investissements d’avenir, c’est sympathique, et sans aucun doute utile à moyen/long terme. Mais qui ne voit qu’à court terme, ce n’est pas la réponse attendue pour redonner force à notre filière automobile? Tant que le nouveau pouvoir évitera soigneusement d’ouvrir le débat et d’engager l’action sur la compétitivité du secteur productif français, nous manquerons la cible.

Draghi: "Whatever It Takes"

After his Le Monde interview the other day, Mario Draghi is back, this time speaking to the Global Investment Conference in London, where he said that the ECB will do "whatever it takes" to preserve the euro:
«All'interno del proprio mandato, la Bce è pronta a fare qualunque cosa per preservare l'euro, e credetemi, questo basterà».
And his words were not without effect: spreads on Italian and Spanish bonds immediately decreased. Perhaps investors missed the phrase "within its mandate." German public sentiment has rapidly hardened against "doing whatever it takes," and it remains to be seen how free a hand Draghi actually has. The speech received a lot of play in Italy (which is why I'm quoting from the Corriere della sera) but none at all in France. The imminence of doom has apparently sharpened Italy's focus. France is still preoccupied with internal problems.

European Auto Industry

The Times looks at Europe's auto industry and sees overcapacity everywhere. Will the French strategy--promoting "clean" cars (hybrids and electrics)--work? It will be costly, with bonuses of up to €7000 euros per car. Montebourg thinks this will be "self-financing" because of the penalties attached to the purchase of highly polluting vehicles, but I'm not sure the arithmetic works out: if the plan is self-financing, it would be effective in stimulating a moribund industry or encouraging a shift to new technologies, and if it isn't self-financing, it will heavily burden the state. Meanwhile, PSA announced huge losses of nearly $1 billion for the quarter.

Tuesday, July 24, 2012

Italy Wants a Signal

As I said in a previous post, the euro crisis is coming to a head. Italy wants a "signal" from "Europe" that it will stand by commitments made at the recent summit.

ROMA - Per Corrado Passera non c'è più tempo. "Un segnale lo deve dare l'Europa. Ed è ora che lo dia". Sia per tranquillizare i mercati che per raffreddare lo spread. Così il ministro per lo Sviluppo Economico, a margine di un'audizione sulle ecomafie, ha risposto ai giornalisti che gli chiedevano un commento sull'attuale situazione economica dell'eurozona.
But who speaks for "Europe"? And what sort of signal will it take to calm the markets this time? La Repubblica seems to think that "Parigi" is standing with Italy:
Parigi, Roma e Madrid: "Attuare impegni"

But "Parigi" is speaking softly, if at all, and not carrying a very big stick, as far as I can see.

UPDATE: See Trisha Craig's comment on the regional contribution to the woes of Italy and Spain.

Response to Commenters

Some comments on a previous thread concerning Hollande's speech at the Vel' d'Hiv' prompted this response from me, which I think is worth posting here, where it will be more visible:

Yes, Roosevelt loathed de Gaulle, because in his eyes de Gaulle was a fantasist who took himself to be "France." A bit like Joan of Arc hearing voices, or an asylum inmate imagining that he is Napoleon. And you can see the thing from Roosevelt's point of view. In one discussion, Roosevelt and Churchill were laying plans for a major operation, talking about deployments of troops, fleets, airplanes. De Gaulle piped up: "France will contribute 1,000," he said. Roosevelt wondered, "One thousand what? Tanks? Divisions? Ships?" So he put the question to de Gaulle. The answer: "One thousand men." To a leader thinking in terms of hundreds of thousands of troops, this may well have seemed ... risible.

But Roosevelt underestimated the importance of symbolism, which was de Gaulle's forte, and when circumstances are right, symbolism can turn into real force. It has been estimated that the French Resistance was worth several divisions to the Allies. But all this is quite irrelevant to Hollande's apology. Unlike Boris, I find the Franco-Israeli historian's contribution quite small-minded. True, de Gaulle and the Resistance did not have the fate of French Jewry in mind (nor did Roosevelt, for that matter). But it's quite right of Hollande, who is the leader of all the French, not just French Jewry, to recall, while apologizing for France's failings, that de Gaulle and the Resistance did save France's honor by refusing to capitulate. What made Hollande's speech so splendid was that he didn't feel the need to choose: either I am a Gaullist or I am a defender of the Jews. No: he said forthrightly that one can speak of the Jews and still pay homage to de Gaulle. I wish that Henri Guaino, now joined by Bruno Le Maire, who really should know better, understood this.

(I will have to rethink my previous praise for Le Maire. Both his interview with Mediapart and his statement on the Hollande speech were extremely disappointing. I gave him credit for more intelligence.)

Greece Is On Its Way Out ...

I'm not normally a betting man (although I do invest in the casino known as the financial markets, which may be a crazier thing to do than putting on a tux and heading for Monte Carlo), but I'm willing to give odds that Germany has decided to let Greece go. I know that the FDP doesn't speak for Germany, but here is what the party's secretary-general said:
"Athen ist bei der Euro-Rettung zum Hemmschuh geworden. Die mangelnden Fortschritte Griechenlands bei allen Reformen, Sparvorhaben und Privatisierungen führen dazu, dass die Finanzmärkte die immensen Anstrengungen in anderen europäischen Ländern nicht ausreichend würdigen", beklagte Döring nun.
"Athens has become an impediment to saving the euro." You can't put it any more bluntly than that. Making an example of Greece didn't prevent contagion to Spain and Italy, which was the real purpose of putting the screws to Greece, so why bother pouring more money into that bottomless pit? So say Germany's archest neoliberals. So it's on to plan B, or is it plan W--I've lost count.

Hollande has thus far been quiet, but with Germany now on negative watch by the ratings agencies, it's clear that Europe must try something new. If the Germans jettison Greece, there's not much France can do to stop them--if it even wants to. But the growing danger is that Germany may decide that it's had enough of the euro altogether. It may persuade itself that it conceded too much to France in the construction of the euro, not to say the EU, and decide to go it alone, or propose a new currency union excluding the troubled economies. I think the endgame has begun, and France will not be able to remain silent much longer.

La Bise, or France Comes to America

After freedom fries, French kissing in the land of the free and home of the brave, armed to the hilt? The French are amused.

Monday, July 23, 2012


In today's mail arrived the news that I have been promoted from Chevalier to Officier de l'Ordre des Arts et des Lettres. Indeed, it seems that the promotion was actually made some months ago, while Sarkozy was still president, but since the wheels of the French bureaucracy grind exceedingly slowly, I had no idea. As someone told me the last time I received a French decoration, the proper attitude to take is, "Ça ne se demande pas, ça ne se refuse pas, ça ne se porte pas," but I confess that I do occasionally wear my lapel ribbon.

Is the End Nigh?

For the euro, that is. As FT Alphaville points out, Spain has €44 billion in reserves and imminent needs to fund a lot more than that in interest and principal turnover:

Italy is not in much better shape. So, will the ECB start buying? Will Germany let it? Will Greece exit, since the IMF is ready to pull the plug? Will a Greek exit precipitate a general collapse or a division of the euro into two zones, a Neurozone and a Seurozone? The old worries are back with a vengeance.

Le Cacheux on Competitiveness

Jacques Le Cacheux has an excellent analysis of France's competitive position and of proposals to improve it. Among other things, Le Cacheux notes (as I have repeatedly emphasized here) that France has a serious problem in manufacturing due in part to high unit labor costs in that sector:
Pourtant, l’indicateur se référant à la seule industrie manufacturière délivre un message bien différent (graphique 2) : en moyenne depuis le lancement de l’euro, la compétitivité-coût de l’industrie française par rapport à ses partenaires de la zone s’est sensiblement maintenue, se dégradant très légèrement sur la période ; mais dans le même temps, l’industrie allemande a, quant à elle, très substantiellement amélioré la sienne – de près de 20%.
This is not the whole story of France's deteriorating current account balance, to be sure, but it is part of the story, and Hollande's determination to attack this problem is praiseworthy. In the remainder of his piece, Le Cacheux carefully analyzes the positive and negative aspects of both the social VAT and the CSG. Here is his bottom line--cautious approval of the Socialist strategy.:
Alléger le coût du travail en transférant la charge d’une partie du financement de la protection sociale vers des prélèvements autres que les cotisations sociales apparaît souhaitable et possible, tout en rendant le système fiscal français plus juste. Pour ce faire, il convient de compenser la baisse des cotisations sociales, patronales, mais aussi éventuellement salariés, par un alourdissement des prélèvements pesant sur la consommation et sur les activités polluantes, afin de modifier résolument les prix relatifs, donc les incitations qui pèsent sur les entreprises et les ménages dans leurs choix de techniques de production et d’emploi et dans leurs choix de consommation ; et de conduire en même temps une réforme de la fiscalité directe qui permette de compenser les effets négatifs de ces modifications sur le pouvoir d’achat des détenteurs de revenus modestes et de rendre l’ensemble des prélèvements directs plus progressifs. Alourdir la CSG sans conduire cette grande réforme[2] serait léser ces catégories.

Du Rififi chez les ex-Sarkozystes

Defeat is a beautiful thing in politics because it strips away all the hypocrisies that surround power as long as it lasts. Thus we learn that Raffarin saw Fillon as a man "sérieux, secret et solitaire" who lacks the stuff of a "party leader," though other "missions of the first rank" might be found for him at some future date. Copé, on the other hand, gets Raffarin's support not because he has the stuff of a party leader but because he was loyal to Raffarin when the latter was prime minister--"he scratched my back, so I'll scratch his," a high political principle, to be sure. Meanwhile, NKM has thrown her hat in the ring, while Bruno Le Maire, as we saw last week, has timidly dipped his toe in the waters.

NKM and Le Maire are running on what they call their "ideas," although no actual ideas are in evidence. What they mean by "ideas" is a readiness to reconsider the premises of Sarkozy's program. Having judged that the party received a "whupping," both think that they need to put a new face on the interests that the UMP represents. Copé, on the other hand, is interested only in lining up big battalions behind him. He has the stuff of a party leader, dixit Raffarin, which means first and foremost knowing how to count. Fillon, on the other hand, is counting the number of party members who can't stomach Copé. This is substantial but probably not quite enough to put him over the top. So it's not a very edifying contest on the right, but at least it distracts the UMP from what would otherwise be its full-time occupation, sniping at everything Hollande has done. With the exception of Raffarin, who actually has some remarkably kind words for the new Socialist government. In fact, I'm surprised that these judgments didn't cause more of a stir than his relatively mild dig at Fillon:

Comment jugez-vous les premiers pas de la présidence et du gouvernement socialistes ?Le mérite de l'exécutif, ces premières semaines, c'est d'apporter un certain apaisement, dont la société française avait besoin. Je vois plusieurs éléments positifs, notamment en matière de politique étrangère : Laurent Fabius semble avoir réussi sa mise en trajectoire.
Mais apaiser n'est pas anesthésier, et je crains que l'évaluation que fait M. Hollande de la crise manque de gravité. Par exemple, le choix de la loi organique plutôt que de la loi constitutionnelle concernant la "règle d'or" serait un mauvais signal, à la fois pour nos amis allemands et pour les marchés. Je crains que de trop nombreuses décisions ne soient reportées à 2013. Les impôts tout de suite, les réformes demain, c'est dangereux.
Que pensez-vous de la suppression des exonérations de charges sur les heures supplémentaires votée mercredi à l'Assemblée nationale ?Je comprends qu'il s'agit de tenir des promesses. Mais je pense que la décision est mauvaise. Nous n'avons pas la même philosophie que la gauche en matière de travail. La droite est favorable à l'augmentation du travail, la gauche au partage du travail. C'est un vrai clivage.
La gauche semble s'être convertie à la baisse du coût du travail, est-ce une bonne nouvelle ?Progressivement, la réalité s'impose à tous les gouvernements. Trop de socialistes ont cru que la crise était imputable à Nicolas Sarkozy. Mais ce dernier est parti, et la crise et ses effets sont toujours là. M. Louis Gallois [ancien président d'EADS, commissaire général à l'investissement] a appelé à un"choc de compétitivité" pour la France, c'est le nouvel "impératif industriel". Je pense que c'est un début de lucidité économique.

Hollande at the Vel' d'Hiv'

François Hollande gave a superb speech, one of his best, at the site of the Vel' d'Hiv', where Jews rounded up by the French police in 1942 were taken to await deportation. Giving full credit to Jacques Chirac, who was the first French president to acknowledge the responsibility of the French state--the French Republic--in this crime, he went even further than Chirac had.

Some people on the right are not happy, however. Henri Guaino is one of them. From Guaino we hear the familiar refrain that Vichy was not France, that the true France was in London with de Gaulle, etc. etc. One can understand the argument at a symbolic level, however feeble the actual adherence to the idea, let alone the reality, of resistance in 1942. What is not acceptable, however, is Guaino's further suggestion that Hollande's acceptance of responsibility in the name of France is motivated by an alleged affinity between Hollande and the collaborators of the 1940s:

Peut-être que M. Hollande se sent plus proche de la France des notables apeurés qui se sont précipités à Vichy après l'armistice? Ce n'est pas ma France.
This is a slur on anyone whose reading of history is different from Guaino's. It is tantamount to an allegation that anyone who does not believe that l'Appel du 18 juin exonerates France--the state and the nation--of all responsibility for what happened during World War II is "objectively" a collaborationist. Such a charge is unworthy of M. Guaino, who is a student of history. He should know better, however commendable his commitment to the Man of June 18.

Friday, July 20, 2012

Euro Falling Again

The markets are not happy with the Spanish bailout:

And the euro is falling again:

Interview with Doug Henwood

Doug Henwood, the perspicacious mind behind the Left Business Observer, interviewed me the other day for his radio program. You can find a recording here. I'm the first guest for the July 19 broadcast.

The Montebourg Enigma

Arnaud Montebourg: grande gueule and showboat, as his detractors say, or pourfendeur des patrons et protecteur des veuves et des orphelins, as Audrey Pulvar no doubt imagines him? Perhaps a little of both. The two are hardly incompatible. In any case, the omnipresent Arnaud has riled up the Peugeot family, Copé, and perhaps a few Socialists a little jealous of his Sarkozyesque flair for putting himself in front of cameras and microphones at every turn. The real question, however, is not whether Montebourg is too theatrical--of course he is--but whether theatrics can be more effective this time than when, say, Eric Besson, with similar effets de manche, called in the CEO of PSA to jawbone him out of outsourcing some productive functions to Eastern Europe. Because you can't simultaneously fault Peugeot for its failure to develop a winning business strategy and for its failure to face down the previous government when a business strategy that might have proved effective ran counter to the government's wishes.

To be sure, Montebourg's specific charges include an excessive withdrawal of capital from the firm by family interests, which arranged to pay themselves too much in dividends rather than plow the cash back into a failing company. But let's face it: a Socialist government trying to manage a neoliberal economy is frequently going to find itself hoist by its own petard. Outsiders who watch the shadowboxing exhibitions mounted for the diversion of the public can't really form a clear picture of what's going on. Montebourg might have some idea, but then again he might not. He might give himself a better shot at acquiring a clear idea if he adopted a less aggressive public line, if he sought to reconcile company executives, union representatives, suppliers, and other interested parties for the purpose of reaching a consensus as to what a viable strategy might be. This would be the German approach, but neocorporatism wasn't built in a day, and it may not be compatible with French mores. So what alternative does Montebourg have, realistically speaking? If he finds the right combination, he may be destined for great things. If, as is more likely, he doesn't, he may find himself the first ex-minister of the Ayrault government.

UPDATE: Apparently there will be subsidies to manufacturers for producing the "right" kinds of cars:

Ce plan passera par un "soutien massif" aux véhicules "innovants et propres",mais le gouvernement exigera des "contreparties" des constructeurs, selon le ministre du redressement productif. "Nous écartons la prime à la casse et nous nous dirigeons vers des formes de soutien massif vers les véhicules (...) hybrides et électriques", avait expliqué M. Montebourg. "Nous sommes très tentés d'accentuer les mesures liées au bonus malus écologique", avait-il ajouté.
Renault a fait de l'électrique un axe majeur de son développement, tandis que PSA Peugeot Citroën privilégie l'hybride. "Nous souhaitons pousser cet avantage, donc finalement favoriser les constructeurs qui travaillent sur le territoire français", avait déclaré M. Montebourg.
Is this the "right" strategy? Without knowing more about where the research & development efforts of the respective companies stand at the moment, it's hard to say. Competitive new technologies cannot be put in place overnight. PSA's partnership with GM may be key here, but what PSA has in mind does not appear to be a Euro version of the Chevy Volt. If it is going hybrid, it will be competing directly with Honda and Toyota, which have a substantial advance. Unless PSA has a winning product up its sleeve, one might question the wisdom of this choice.

The New ISF in Images

Under the Socialists, the rich will pay more in wealth tax, more in income tax, and more in the CSG. In short, the entire fiscal program of Nicolas Sarkozy has effectively been repealed. The image shows the increase in wealth tax for various levels of wealth.

Thursday, July 19, 2012

The IMF Is Alarmed

“The euro area crisis has reached a new and critical stage. Despite major policy actions, financial markets in parts of the region remain under acute stress, raising questions about the viability of the monetary union itself. The adverse links between sovereigns, banks, and the real economy are stronger than ever. As a consequence, financial markets are increasingly fragmenting along national borders, demand is weakening, inflation pressures are subsiding, and unemployment is increasing. A further intensification of the crisis would have a substantial impact on neighboring European countries and the rest of the world.”
More here.

Wednesday, July 18, 2012

Whither France?

The growing strength of the Front National was vividly driven home to me today. Some years ago, as a result of my blogging, I was contacted by a young Frenchman, a student then 18 or 19 years old, who was a passionate supporter of Ségolène Royal. He intensely disliked Sarkozy and was such a Ségo enthusiast that he ran a Web site devoted to her doings. We would gChat from time to time. It was interesting to me to make contact with this young man from the provinces, quite interested in politics, a little untutored, to judge by his frequent grammatical errors, but reasonably well-informed. Over the past two years or so, he stopped contacting me, and I more or less forgot about him, until today, when he turned up on my screen. I said I recalled his prediction that Sarkozy would lose in 2012, which at the time was by no means a sure bet. And he replied that yes, the Left had won, but he could no longer support the Left because he had gone over to Marine Le Pen. He liked her patriotism, her defense of the French worker, and her strong image, while he disliked the Left's "betrayal" of what he considered to be the traditional values of the Left. I reminded him that he had once been such an admirer of Royal's that he had asked me to pass her a note when she came to Harvard, which I did. He didn't like to recall those days, when he was "naive." Now, having passed his nursing school exams, he plans to apply for a position in the Gendarmerie.

When one reads about the progress of the FN in the abstract, it's one thing. When one sees the effect on a person one knows, however remotely, it's quite another, and actually startling.

The Master's Brush Cleaner Review

Good evening and thank you for joining us once again in our dark corner of paradise. This week my offering to our Lord Nurgle is a review on the brush soap that was recommended to me after I reviewed my Winsor & Newton brushes.

I picked up a pot but until now I hadn't felt my brushes has seen enough action to deserve some special attention so this post has been a long time coming.

Recently I have been working on an Aegis Defence line I picked up in anticipation of sixth edition and the changes to the FOC, it also worked out well as a test for my airbrush. The terrain is coming along nicely and should hopefully have it done over the weekend ready to share with all you followers of Nurgle.

As I have been adding the reinforced areas by hand I noticed my brush was starting to lose the shape of its tip so I broke out the cleaner from my trusty paint chest and decided to have a cheeky read of the instructions to prevent me damaging my brush.

The instructions were pretty straight forward and consisted of rinsing your brush, working the block of soap into a lather and then repeating the process until clean. My only concern with this is the brush recommends to only clean with cold water so I used more of a tepid water to be on the safe side. I am not sure if it was due to this or if it was the because this was the first time I had used the soap but the lather just did not seem to form for a good minute or two.

After it being slow to form I wasn't expecting much from it however it quickly started to strip the red hue my brush that had acquired over time from my over use of Burnt Cadre Red. Once I repeated this a few times and gave it a proper rinse I was pleased with how much it had removed, most of which I hadn't even noticed had built up. The tip is also back with a strong tip and ready to be put back into the fray.

Overall I am happy with the results the soap gave and will be using it again, though I don't think it will be needed after every session it should prolong the life of my brushes. If you have treat yourself to a decent set of brushes I would recommend picking up this up to keep your brush in tiptop condition.

As for using it with cheaper brushes, such as my dry brushes I don't think any amount of soap can save them from the horrors they endure but that shouldn't deter you from trying.

Until next time spread his blessings to everyone you meet and all shall you know shall fall under his domain.


Tuesday, July 17, 2012

Overtime Taxed Again

Another Sarkozy reform disappears: taxation of overtime pay will resume on Aug. 1. There will be no retroactive tax, however. Overtime tax exemption did increase pay for a substantial number of workers, but it probably (the point is mildly controversial) encouraged employers to substitute overtime for new hires, so that its impact on employment was likely somewhat negative.