Macronomics will not save France

Anatole Kaletsky wrote in “A ‘Macroneconomic’ Revolution?” that the new French President has figured out the golden mean of economic policy that will lead France out of the swamp of despair into which its economy has sunk for a decade.

Typical of socialists, Kaletsky blames Europe’s lost decade on too much capitalism, or as he says, market fundamentalism. In the great film Casablanca, the Police Chief tells his deputy to “round up the usual suspects” after a crime has been committed. There was no effort to investigate or search for evidence. He had a standard set of criminal types that he harassed on a regular basis in order to appear to be doing something. Socialists respond to every economic crisis by rounding up one usual suspect – capitalism.

The US had become increasingly socialist since the election of Wilson. A nation that takes 45% of GDP for all levels of government, has over three million pages of business regulations that grow at the rate of 100,000 pages per year, and most of its citizens get their income from the government cannot be considered a capitalist or market fundamentalist nation. Europe has been socialist much longer. See Hayek’s Counter-Revolution in Science and Bastiat’s essays for evidence from the 19th century France. Germany was completely socialist by 1918 and still indicted capitalism for its problems.

JP Morgan Chase CEO explodes over socialist policies

Jamie Dimon, CEO at JP Morgan Chase, exploded during a recent earnings call over Congress’ failure to jump start the US economy. He said,

It’s almost an embarrassment being an American citizen traveling around the world and listening to the stupid s--- we have to deal with in this country… And at one point we all have to get our act together or we won’t do what we’re supposed to for the average Americans.

Since the Great Recession, which is now 8 years old, we’ve been growing at 1.5 to 2 percent in spite of stupidity and political gridlock, because the American business sector is powerful and strong… What I’m saying is it would be much stronger growth had we made intelligent decisions and were there not gridlock. 

He added that the United States has become “one of the most bureaucratic, confusing, litigious societies on the planet,” and that “it’s hurting the average American that we don’t have these right policies.”

Macron tries extortion on Merkel

French President Emmanuel Macron pressured German Chancellor Angela Merkel recently to bail out the failed southern conference of the Big EZ. According to a Dow Jones Newswires report,

The French leader said the eurozone has deepened disparities, loading indebted nations with yet more debt and making competitive countries even more competitive.

France's public debt stands at more than 96% of economic output, compared with 68.3% in Germany at the end of last year. Unemployment is above 9% in France but closer to 4% in Germany.

Mr. Macron is calling for a shared eurozone budget that could be used to for a variety of reasons, including helping currency members in economic distress, believing that would help address flaws revealed by the 2010 debt crisis.

For the eurozone to have a future, the French leader said, it must have "powerful solidarity mechanisms."

The French leader said Germany should assist with a stimulus of public and private investment in Europe and work with France to find "the right macroeconomic plan."

OECD wants every nation to be Greece

Greece's financial troubles have slipped from the headlines lately, but the financial apocalypse that began there with the Great Recession continues. Now the Organization for Economic Cooperation and Development has made it clear it wants the rest of the developed world to imitate Greece, as it stated in a recent report:

Fiscal redistribution through taxes and transfers plays a crucial role in containing the impact of market income inequality on disposable income… Policies aimed at promoting growth should consider how growth will have an impact on many other outcomes, and how to ensure that those policies avoid the “grow first, distribute later” assumption that has characterised the economic paradigm until recently. It is now clear that growth strategies need to consider from the outset the way in which their benefits will be distributed to different income groups. … Inequalities tear at the fabric of our societies. Inequality of incomes translates seamlessly into inequality of opportunities for children, including education, health and jobs, and lower future prospects to flourish individually and collectively. …inequalities are reaching a tipping point.

Strengthening inheritance and gift taxes can support inclusive growth. … Inheritance taxes can…help achieve intergenerational equity goals. …In order to be effective, inheritance taxes must also be combined with taxes on gifts and wealth transfers during the taxpayers’ lifetime, as well as with measures to address avoidance and evasion.

Sufficiently generous unemployment benefits and social-assistance systems with a wide coverage are also a key.