French Presidential Elections

EKIMIKE

My knowledge of economics is pretty elementary too so don't take my word for it (not that you would, i'm sure).

There's a twisted irony behind this austerity drive. Of course it fits with the conservative mantra of small goverment, particularly when pitted against Keynesian policies generally associated with the left. The irony is that you would have thought the US would be the gold standard for austerity at the present time, considering their leftists are conservatives by anyone else's standards. But no, they back their businesses to the hilt with huge subsidies (as they always have done) but make threats to everyone else that if you don't enforce austerity it's gonna end bad.

Greece for example is a sovereign country. They don't have to endure austerity. They can stick two fingers up to the IMF and the ECB and write off the debt and start again. Like Iceland did. So why don't they do that? Well, because the primary casualties would be the political elite who would all lose their jobs and any future political career prospects. They want to retain their power. They're selling out the population for their political careers, power and status.

So in Iceland, a class of the powerful elite lost their power and in some cases wealth but no-one is starving to death as the US/IMF/ECB would like us to believe. Of course they have their problems but at least they have some building blocks to work with.

Equally the US car industry is making a solid comeback (after having billions of $$$ pumped in) and Wall Street is thriving again (i believe their bailout reached trillions of $$$) with banks that are bigger than the 'too big to fail's' of 2008.

inkyfingers

Right, let me get this straight. Anthony Charteau has just been voted in as President of France and has asked Rick Chasey to be his Chief Economic Adviser and also to help him improve his performances in the Belgian classics?

Okay, seriously. I'm not against Keynesian economics per se, but it only works if the government concerned doesn't have to put themselves in a black hole of debt to do it and also that they spend the money wisely. As we saw with the Labour government in the UK, just spending an extra £50 billion on the NHS doesn't make the service much better, it just means that everybody renegotiates there wages and pensions upwards and that a lot more consultants (of the management, rather than the medical type) get employed. That has a mild economic benefit in that some people have more money to spend and are a bit more confident, but it's effect is limited when all they do is buy cheap goods from outside of the UK and then realise that their taxes have had to go up to pay for it.

What you really need is for a government to do things which help businesses start and flourish, as this creates a direct economic benefit at all levels. Advocating a 75% tax on wealth creators is not the way to do this.

EKIMIKE

But if the culture amongst the nations 'wealth creators' is to hoard money offshore, spend it on niche, ultra luxury, imported goods or selectively donate it to obscure NGO's or Private Schools or heavily biased Political Advocacy organisations then you could be forgiven for giving them a kick up the arse with a 75% tax rate (not that i've heard this figure widely touted by any credible politician(s), economist(s) or commentator(s))

If the 'wealth creators' of Britain were more keen to re-invest the 'wealth' they created back into their businesses to keep them competitive and productive then maybe people wouldn't be pointing the finger. Instead they're more likely to sell the business to a foreign investor and sit on the cash they got from the sale for the rest of their luxury lives spent on golf courses and yachts. In the meantime the foreign investor moves production elsewhere pumping the unemployment figures.

It's short-termism. The primary concern of wealth creators in this country seems to be their personal wealth. That is only useful for them and their families.

inkyfingers

Some of what you say is true, but the reason that most people get rich (other than inheritance) is because they took risks, borrowed money, started businesses etc etc. Not many people get seriously rich by working for somebody else in a comfy secure job, we need to encourage a new generation to take on this mantle rather than just aiming for a cushy public sector job.

Hollande's 75% tax rate is not hearsay, he outlined it during the campaign. If I had money to invest I wouldn't invest it in France if i'm going to get taxed to death, i'd invest in Luxembourg or even the UK, where tax rates are much more reasonable. France is not an Island, you can work in London, Berlin or Brussels and be in your weekend home in France by 7PM on a friday evening.

One thing I do agree with is that we need to find a way to get businesses and welathy individuals to spend some money, but for that the government needs to inject some confidence into the system, but how....that's the $64,000 question.

EKIMIKE

Why wouldn't you invest your money in Britain? Why Luxermbourg? Low tax = great for you, right? You're only looking for a selfish tax break... bloody useless for almost everything and everyone else.

True, to get a business up and running in the first place is risk which needs to be rewarded but by quickly selling out and not building something long-term and stable then you're absconding that risk entirely, when now as a successful, wealthy business owner you are the perfect individual to be taking risk as you can afford to absorb it if it goes wrong. 'Success breeds success' right. You have to keep the ball rolling.

The alternative is 'success provides an tempting opportunity to pull out of the game and live it up for 20, 30, 40 years'. By taking that option, your success transforms from an asset to the economy as a wealth creating venture, to a burden on the economy through tied up cash and often tax avoidance (be it offshore accounting or charitable donations).

Everyone knows it's bad/useless to have tonnes of cash in the bank as a business. So if you treat a national economy as a business, by having a load of stinking rich individuals who won't spend their money in the national economy or at all, you essentially have a tonne of cash in the bank. It's useless.

finchy

Stevo 666 wrote:

It'll be interesting to see what happens now that Hollande and the socialists are in power. Given that France is a competitor of the Uk I suppose we should be quite pleased he's been voted in

The idea that state spending can really solve the problems by stimulating growth is a bit of a fallacy - the French state already accounts for something like 56% of the French economy so it the theory were true, France would already be the richest country in Europe

Well, they're richer than us, have a smaller debt burden, life is cheaper, housing affordable and they live longer. And they have better public services.

How did neo-liberalism work out again?

Oh, yes, it....

Stevo_666

johnfinch wrote:

Well, they're richer than us, have a smaller debt burden, life is cheaper, housing affordable and they live longer. And they have better public services.

How did neo-liberalism work out again?

Oh, yes, it....

Got some figures to back those up? Reckon you're looking at France with some rose (or red) tinted specs there. Let's not forget who got their credit rating downgraded recently and who's tied into the mess that is the Euro...

While we're at it, care to compare unemployment levels or projected growth levels over the next year or so?

To give the French some credit, they seem to do quite well in spite of all the left wing crap that they're burdened with rather than because of it

finchy

Sure can do Stevo:

Richer than us

https://www.cia.gov/library/publication ... /2195.html

UK $2.4tn
France $2.8tn

Lower debt

https://www.cia.gov/library/publication ... 9rank.html

(Sorry, could only find external debt for this one)

Life is cheaper - well, I've lived there, and although the cost of living is quickly rising, it is still cheaper than here.

More affordable housing - go on to a French estate agent's website and have a look what you can get there.

Live longer - 1.3 years according to the United Nations

http://en.wikipedia.org/wiki/List_of_co ... expectancy

Better public services - they definitely have better public transport, telephone services aren't quite as good out there, the health service is better, I'm not sure I'd want to put my child through their education system. Things are just that bit more reliable over there though.

By the way, you'll find the same pattern repeated throughout all the other awful northern European liberal-lefty socialist hell-holes. The poor sods have to put up with being wealthier than us and living longer than us. Bloody communists.

Anyway, on to unemployment rates - the OFFICIAL unemployment rate in France is slightly higher than that of the UK. They are, though, still richer than us.

Growth forecasts? Well, didn't they fail to predict the current recession? I'm more interested in things that have happened, not what somebody predicts will happen.

EKIMIKE

Stevo 666 wrote:

Got some figures to back those up? Reckon you're looking at France with some rose (or red) tinted specs there.

Likewise, do you have any figures to demonstrate successes of neo-liberalism? Even so, statistics aren't the be all and end all. Like i said, economics that is overly reliant on mathematics is flawed and incapable. So why anyone would try to analyse the merits of a certain economic system or ideology based on a few snapshot statistics is beyond me.

Stevo 666 wrote:

Let's not forget who got their credit rating downgraded recently and who's tied into the mess that is the Euro...

I can tell you the one reason why Britain has not had its credit rating downgraded - London is the financial fraud capital of the world. Anything dodgy that the big banks and funds around the world don't want to be known (becuase they're making ludicrous profits in a fraudulent manner) happens in London. Bernie Madoff for one.

Remember why Cameron rejected the recent EU fiscal compact? In the words of the BBC: "Rejected by UK over financial service regulations that might affect the City of London"

If London wasn't such a linchpin for the whole toxic financial system then we'd be more like Italy than France.

rick_chasey

Stevo 666 wrote:

Got some figures to back those up? Reckon you're looking at France with some rose (or red) tinted specs there. Let's not forget who got their credit rating downgraded recently and who's tied into the mess that is the Euro...

French bond yields are not noticeably higher than before the downgrade I believe.

In my limited experience - investors pay less attention to the ratings than they used to. They're still AA, which is the same as the States.

nathancom

To be fair, the reputation of the credit ratings agencies has been downgraded to junk status as well.

Stevo_666

johnfinch wrote:

Sure can do Stevo:

Richer than us

https://www.cia.gov/library/publication ... /2195.html

UK $2.4tn
France $2.8tn

Lower debt

https://www.cia.gov/library/publication ... 9rank.html

(Sorry, could only find external debt for this one)

Life is cheaper - well, I've lived there, and although the cost of living is quickly rising, it is still cheaper than here.

More affordable housing - go on to a French estate agent's website and have a look what you can get there.

Live longer - 1.3 years according to the United Nations

http://en.wikipedia.org/wiki/List_of_co ... expectancy

Better public services - they definitely have better public transport, telephone services aren't quite as good out there, the health service is better, I'm not sure I'd want to put my child through their education system. Things are just that bit more reliable over there though.

By the way, you'll find the same pattern repeated throughout all the other awful northern European liberal-lefty socialist hell-holes. The poor sods have to put up with being wealthier than us and living longer than us. Bloody communists.

Anyway, on to unemployment rates - the OFFICIAL unemployment rate in France is slightly higher than that of the UK. They are, though, still richer than us.

Growth forecasts? Well, didn't they fail to predict the current recession? I'm more interested in things that have happened, not what somebody predicts will happen.

Fair play to you, you've done some homework.

Mind you, if you ask the questions in different ways the answer comes out different: for example the GDP per capita ratings (which takes into account cost of living) has UK above France:
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita
So looks like we're richer after all - and that gap is forecast to grow. You should be bothered with forecast growth rates (which you're not contesting I see) as a few years of shrinkage for France and a few years of moderate growth for the UK can change things like GDP quite a bit.

And as for the lefty hell holes, well look no further than Greece for a good example of how socialist states tend to fail miserably...and there are plenty of other examples through history. Hopefully Hollande won't balls it up quite as badly as the Greeks but lets see.

As for the longer life span - I found the same as you but who wants to live longer if your mates are all French?

Stevo_666

Rick Chasey wrote:

Stevo 666 wrote:

Got some figures to back those up? Reckon you're looking at France with some rose (or red) tinted specs there. Let's not forget who got their credit rating downgraded recently and who's tied into the mess that is the Euro...

French bond yields are not noticeably higher than before the downgrade I believe.

In my limited experience - investors pay less attention to the ratings than they used to. They're still AA, which is the same as the States.

One notch down maybe there is not much effect but any more and you've seen what happens to borrowing costs in places like Spain and Italy. Now the socialists are in power in France do you really think that was the last credit downgrade for France in the forseeable future?

Stevo_666

EKIMIKE wrote:

Stevo 666 wrote:

Got some figures to back those up? Reckon you're looking at France with some rose (or red) tinted specs there.

Likewise, do you have any figures to demonstrate successes of neo-liberalism? Even so, statistics aren't the be all and end all. Like i said, economics that is overly reliant on mathematics is flawed and incapable. So why anyone would try to analyse the merits of a certain economic system or ideology based on a few snapshot statistics is beyond me.

Stevo 666 wrote:

Let's not forget who got their credit rating downgraded recently and who's tied into the mess that is the Euro...

I can tell you the one reason why Britain has not had its credit rating downgraded - London is the financial fraud capital of the world. Anything dodgy that the big banks and funds around the world don't want to be known (becuase they're making ludicrous profits in a fraudulent manner) happens in London. Bernie Madoff for one.

Remember why Cameron rejected the recent EU fiscal compact? In the words of the BBC: "Rejected by UK over financial service regulations that might affect the City of London"

If London wasn't such a linchpin for the whole toxic financial system then we'd be more like Italy than France.

Sounds like you're just having a bit of rant than an argument. Take a leaf out of johnfinch's book and try a reasoned argument.

The fiscal compact was rejected because it was going to damage one of the UK's most successful industries and revenue earners. Sarko and Merkel knew that France and German finacial sectors couldn't compete with the City so they tried to hobble it with socialist over-regulation - jealousy basically. And cleverly tried to paint the UK for being the bad boy when Cameron was just protecting our interests. If we or the EU tried to introduce rules that damamged one of France's most successful industries, do you honestly think Sarko would have said 'OK, fine we'll just accept it'' ?

rick_chasey

Stevo 666 wrote:

EKIMIKE wrote:

Stevo 666 wrote:

Got some figures to back those up? Reckon you're looking at France with some rose (or red) tinted specs there.

Likewise, do you have any figures to demonstrate successes of neo-liberalism? Even so, statistics aren't the be all and end all. Like i said, economics that is overly reliant on mathematics is flawed and incapable. So why anyone would try to analyse the merits of a certain economic system or ideology based on a few snapshot statistics is beyond me.

Stevo 666 wrote:

Let's not forget who got their credit rating downgraded recently and who's tied into the mess that is the Euro...

I can tell you the one reason why Britain has not had its credit rating downgraded - London is the financial fraud capital of the world. Anything dodgy that the big banks and funds around the world don't want to be known (becuase they're making ludicrous profits in a fraudulent manner) happens in London. Bernie Madoff for one.

Remember why Cameron rejected the recent EU fiscal compact? In the words of the BBC: "Rejected by UK over financial service regulations that might affect the City of London"

If London wasn't such a linchpin for the whole toxic financial system then we'd be more like Italy than France.

Sounds like you're just having a bit of rant than an argument. Take a leaf out of johnfinch's book and try a reasoned argument.

The fiscal compact was rejected because it was going to damage one of the UK's most successful industries and revenue earners. Sarko and Merkel knew that France and German finacial sectors couldn't compete with the City so they tried to hobble it with socialist over-regulation - jealousy basically. And cleverly tried to paint the UK for being the bad boy when Cameron was just protecting our interests. If we or the EU tried to introduce rules that damamged one of France's most successful industries, do you honestly think Sarko would have said 'OK, fine we'll just accept it'' ?

We all know the financial sector is not sustainable in its current form. Even the people I speak to every day know that, even if they don't like it. It was too lightly regulated during the '00s. I'm not entirely sure having the City in its current form necessarily protects the 'nation's' interest.

The City's interest perhaps, but their interests aren't always aligned with the rest of the nation.

International agreement on levels of regulation makes a lot of sense.

Think of it this way - the car industry is to Germany what the City is to the UK - yet they seem to understand that international agreement on car regulation is a good thing to reduce the negative externalities of their industry.

In reality, it's more likely a local thing - Tories get around half their funding from the City - so they'd be mad to hurt their main doners (ironic that said doners did so well under labour, but that's a different issue ).

As an aside, if Hollande does follow through on his 'finance is my enemy' rhetoric, which I'm not sure he will, the City will do well out of it anyway.

People are quick to forget how heavily the City had to be bailed out. It was that that made the deficit so bad. For sure, it was pretty 'socialist' (nationalising banks and all), but it was better than having a Lehman. The city was happy for the gov't to be socalist when it suited :P. It obviously wasn't functioning properly, and was sickly. It still is. It's just a pecularity of finance that often the early symptoms of being sickly are enormous profits, before a paricularly heavy fall.

Anyway - hopefully Hollande will provide a bit of ballast to the 'growth' focussed argument in Europe. So far it was increadibly one sided, which is never good for a balanced solution.

finchy

Stevo 666 wrote:

Fair play to you, you've done some homework.

Not much homework to be done. I've lived there and I know all of the pros and cons of that country compared to this one through experience. I'm not particularly Francophile (I like it as much as I like anywhere else), but I think that life is slightly better over there than it is here.

Stevo 666 wrote:

Mind you, if you ask the questions in different ways the answer comes out different: for example the GDP per capita ratings (which takes into account cost of living) has UK above France:
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita
So looks like we're richer after all - and that gap is forecast to grow. You should be bothered with forecast growth rates (which you're not contesting I see) as a few years of shrinkage for France and a few years of moderate growth for the UK can change things like GDP quite a bit.

As for the PPP, I suspect that current exchange rates might be messing about with that one quite a bit. No way in a million years is the UK a cheaper place to live than France.

The article you linked to wrote:

PPP figures are estimates rather than hard facts, and should be used with caution.

It's not that I don't think that growth rates aren't important, it's more that I don't think they can be trusted. The UK is in recession at the moment and I'm sure we had growth predicted.

I also think that France is in a bit of a bad way at the moment - just not as bad as here in the UK.

Stevo 666 wrote:

And as for the lefty hell holes, well look no further than Greece for a good example of how socialist states tend to fail miserably...and there are plenty of other examples through history. Hopefully Hollande won't balls it up quite as badly as the Greeks but lets see.

Was Greece a socialist state?

Stevo 666 wrote:

As for the longer life span - I found the same as you but who wants to live longer if your mates are all French?

Depends how well they're football team are doing. If they win the World Cup or European Championship they're absolutely unbearable. If I ever go and live there again and the French do win one of these trophies I'm just going to pack my bags and come back to England.

EKIMIKE

Stevo 666 wrote:

Sounds like you're just having a bit of rant than an argument. Take a leaf out of johnfinch's book and try a reasoned argument.

The fiscal compact was rejected because it was going to damage one of the UK's most successful industries and revenue earners. Sarko and Merkel knew that France and German finacial sectors couldn't compete with the City so they tried to hobble it with socialist over-regulation - jealousy basically. And cleverly tried to paint the UK for being the bad boy when Cameron was just protecting our interests. If we or the EU tried to introduce rules that damamged one of France's most successful industries, do you honestly think Sarko would have said 'OK, fine we'll just accept it'' ?

Absolutely not. There were some concrete facts in there. Just no numbers or statistics or links. Although i did give you the general source of one fact.

If anything I would level it at you that you're just on a rant about socialism.

As for reasoned argument > you've equated the rejection of the fiscal pact to a 'socialist over-regulation' conspiracy theory. Whilst on the other hand, I equated it to the well documented fact that the worlds money hawks and scammers use London and the City as their playground (thanks to the lack of pretty much any 'red-tape'). Bernie Madoff is just the tip of the iceberg.

Think about it, if you provide a platform where 'anything goes' > you get a lot of people drawn to it. So to counter your point about a 'socialist over-regulation' conspiracy, I would argue that for the benefit of this country (and the world economy actually) the City needs to have at least a higher level of regulation than it does (rather doesn't ) now. I think Rick has and would give you a better insight into that than me.

Now i know what you will do > chuck the 'free market' book of zero regulation at me. Fine. Do it. Call me a socialist, maybe even a communist if you're feeling really bigoted (it's just a joke). But i'd remind you that you can have sensible rules and regulations without being a socialist. On the other hand, if you have next to no regulation, you're pretty much guaranteed to attract the fraudsters. I don't care how much money the City makes, the current situation is just embarrassing for Britain. Financial fraud capital of the world? Not my cup of tea thank you.

EKIMIKE

Stevo 666 wrote:

Mind you, if you ask the questions in different ways the answer comes out different: for example the GDP per capita ratings (which takes into account cost of living) has UK above France:
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita
So looks like we're richer after all - and that gap is forecast to grow.

That's a fantastic demonstration of how statistics can give the easily led some severe myopia. Don't get blinded by the statistics! They are only persuasive as best (with long term data gathering and trend analysis). Not conclusive.

As for forecasting > read guess. A guess using numbers, but still a guess. Hindsight doesn't equal foresight. (Although if enough people make enough guesses then you can always create the illusion of 'science' because, ironically, statistically one is bound to be right )

Stevo_666

I guess we'll have to agree to disagree gents. We could go round in circles arguing this for ages and get sidetracked into 'leftybollox vs Adam Smith' type arguments, but having done that sort of thing to death with Ricky boy on the Commuting forum I don't feel the urge any more

France and the UK have always been quite closely matched on a few things and add to that being next door neighbours we're always going to be natural rivals. Don't get me wrong, I like the place have been there loads of times - they do have an unfair advantage when it comes to mountains and weather...

But it will be interesting to see how things pan out over the next year or so with France and the Eurozone. If things to t1ts up in France I'll get the 'I told you so' T-shirts printed up

finchy

No need to get them printed on my behalf Stevo, I also believe that France will go t1ts up in a way - I just think that our t1ts will go up even further.

Anyway, looks like I've failed on my mission to save a poor, misguided Tory boy's soul.

Stevo_666

johnfinch wrote:

No need to get them printed on my behalf Stevo, I also believe that France will go t1ts up in a way - I just think that our t1ts will go up even further.

Anyway, looks like I've failed on my mission to save a poor, misguided Tory boy's soul.

I'll place a sportmans bet with you that the Frech t1ts go more up than we do in the next couple of years, although whatever happens we'll never agree on who's come out worst.

Don't worry about saving my soul, I'm a tax advisor so I sold mine long ago I admit I've never managed to get anyone to change their political views, I prefer to just leave them and let them get a bit older, more experienced and successful in life - tends to turn many people Tory that does

finchy

Stevo 666 wrote:

I'll place a sportmans bet with you that the Frech t1ts go more up than we do in the next couple of years, although whatever happens we'll never agree on who's come out worst.

No. I would not be surprised if the French came out worse on such a short time scale, it's in the long term that I think the French will come out better than us.

Stevo 666 wrote:

Don't worry about saving my soul, I'm a tax advisor so I sold mine long ago I admit I've never managed to get anyone to change their political views, I prefer to just leave them and let them get a bit older, more experienced and successful in life - tends to turn many people Tory that does

Won't turn me Tory - I come from a teaching family and the way the modern Tories use education as an extension of political ideology makes me sick. (I also think that Labour messed up on education, but they are, for me, the lesser of two evils in this respect)

EKIMIKE

I certainly wouldn't be surprised if France went baps up. Simply the dire nature of the situation.

For me, the socialist vote is merely symbolic. The people, when given a say, are rejecting 'all out austerity' a la Greece and Italy (unelected leaders). Possibly more an anti 'all out austerity' vote than a pro socialist vote.

rick_chasey

EKIMIKE wrote:

I certainly wouldn't be surprised if France went baps up. Simply the dire nature of the situation.

For me, the socialist vote is merely symbolic. The people, when given a say, are rejecting 'all out austerity' a la Greece and Italy (unelected leaders). Possibly more an anti 'all out austerity' vote than a pro socialist vote.

Which is why it's Hayek vs Keynes innit? :P

EKIMIKE

Of course that's how they pitch themselves. No point in sounding too similar.

Doesn't mean a) the policy will be Keynes/Stimulus or b) the policy should be one or the other. A targeted mix would be the clever/realistic way of going about it. Obviously getting the second term now becomes objective number one so stupid decisions will be made in order to 'satisfy' the electorate as a means to those ends. But who knows, maybe Hollande is different. Most political leaders are in it for the power though, unfortunately. We could do with a few more selfless leaders.