Economy in France

1. FRENCH ECONOMY
FRENCH ECONOMY....................................................................................................................................... 1
THE LEFT WING.....................................................................................................................................................2
ECONOMIC PROPOSALS ......................................................................................................................................18
CORPORATIONS.................................................................................................................................................. 92
BANKS.............................................................................................................................................................. 109
INTERNATIONAL.............................................................................................................................................. 113
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2. The left wing
MODIFICATION OF THE FRENCH CONSTITUTION
Once more, the Socialist Party has objected out of principle. Even if the
text that was proposed was not ideal in the eyes of the left wing, it was
nevertheless half-way through to its goal (reinforcing the power of
Parliament, initiating part of the agenda). Shooting itself in the foot in
order to trip Sarkozy up is not going to help the Socialist Party recover its
credibility.
SOCIALIST PROPOSALS
OK, so you reject the conclusions found in the Attali Report. The French
would like to know what exactly you are proposing instead. You are all
referring to Mitterand, but you seem to have forgotten that he won the
first leftist presidential elections of the 5th
Republic thanks to the much-
touted 110 proposals which, admittedly, have not all been followed, but at
least had the virtue of charting a course. As for you, the leaders of the
2000s, where are YOUR PROPOSALS? We’re sick of waiting …
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3. THE EXTREME LEFT
The Socialist Party must not let itself get trapped in the backward
adolescent discourse of Olivier Besancenot. He sells dreams, Utopia
(which, by definition exists nowhere). He’s always going to refuse to
confront the reality of the business world; it’s so much more comfortable
to dream and to be loved … A managed economy simply does not work
and has led to well-known catastrophes in history. Barter is an
unmanageable, real heahache. The gift/counter gift system does not work
on the scale of a country. The advantage of capitalism is that it takes
people where they’re at, and not where one would like them to be: we are
more greedy and selfish than generous and altruistic. What’s needed,
though, is for the State to regulate the ruthless power of the market. In
particular, Rhenish capitalism works more equitably than Anglo-Saxon
liberalism.
I propose the following leftist economic program: “Producing more to
redistribute more” through corporate taxes, the income tax, and the tax
on consumption (VAT). As for growth, let us say clearly: “Let us create
conditions which are conducive to the growth of the commercial sector so
that as many citizens as possible may earn a living”.
We need an industrial policy that is adapted to the structural scarcity of
petrol and the need to reduce greenhouse gas emission: this is the
economy of intelligence (research in renewable energy sources, green
chemistry, biotechnologies, medicine, high value added services,
universities, information technology, etc.).
ELECTIONS IN THE SOCIALIST PARTY
And the winner is … François Bayrou. Wagonloads of center-left supporters
will leave a party where elections are rigged. Martine Aubry should not
accept to be elected so wrongly, even if it is one or several of her
lieutenants who organized the rigging. The French are unhappy, and this
will weigh heavily in the next elections. The only way out is to vote again
to decide fairly between the two camps. No-one really knows crowd
psychology; consequently, one cannot pre-judge which camp will win, but
they won’t be level: those choosing Martine Aubry might feel encouraged
to confirm the vote, and those favoring Ségolène Royal to take revenge,
or else they will be already sick with the expression of democracy. It
might be worthwhile to set up a debate between the two finalists before
the elections, like those which are organized during the presidential
elections, aiming at distinguishing clearly the future options of each
candidate, orally, interactively, in a time format similar to that of debates
in the presidential run-off elections.
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4. GRANDES ECOLES [elite higher education establishments outside the main
framework of French universities]
The teaching staff in charge of selection into the French higher education
system ought to admit that they are imbued, perhaps unwittingly, with
the spirit of a Malthusian, social neo-Darwinian doctrine. And its
consequences on the young minds they are twisting, those of the elites of
the future: the competitive exam spirit in the “grandes écoles” and the
highly selective tracks in universities generate the selfishness and feeling
of superiority for life and in everything which, in fact, correspond merely
to the temporary meeting of a young, malleable mind, at a given time in
its life and concerning a few subjects taught by general consent, and of
clever, manipulative mentors (of the kind who think “if they pass this
exam despite its difficulty and my disheartening grading, I’ll dream up a
question that’s even more difficult next time; only 3 students must
pass!”). Do we really need today elites whose mind has been twisted by
this early torture?
NICOLAS SAID … AND SEGOLENE APOLOGIZED …
Pure childishness, absolutely not worthy of their respective
responsibilities!
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5. SUMMER FESTIVALS
On the channel Arte culture, I have just heard the Rennes theatre
director. Basically, he was saying that one ought to condemn the current
reform of local and regional authorities, even threaten the summer
festivals, because the UMP had calculated this reform to sink the critical
left-wing elites.
How can one hold such a Socialist Party propagandist argument? The
reform of the financing of regions, through abandoning that part of
professional taxes which weighs heavily on corporate investments, is
destined to create jobs in private enterprises.
Although one could regret that the possible drop in revenues will affect
cultural endeavors, one should not develop specious arguments which
would end up crippling cultural and intellectual occupations. In the current
case, it is best to keep to category-bound demands for job protection.
SCRAMBLING FOR THE SPOILS
Today, the government is falling in the polls. As a result, those who were
praising Nicolas Sarkozy to the skies when he was at the height of his
popularity now all bemoan a government catastrophe – whether through
plain cowardice, vile opportunism, or in terms of an economic model
(newspapers need to be sold, articles need to be accepted by chief
editors, TV news programmes must confirm what viewers want to hear so
as to increase the ratings and sell more ads).
In short, in a democratic society, the political and media economy is a
system regulated through the cyclical loops of positive feedback, which
means that the more popular an idea is, the more it is hammered in the
media coverage and in turn, the more popular it continues to be, as the
consumers’ brains are characterized by malleability rather than critical
sense!
I can’t help but feel embarrassed by such a gap between the theory of
democracy (whereby people judge in good conscience after careful
consideration) and what the media have turned it into - fuelled by a
collection of co-opted, official, self-righteous and politically correct
announcers whose editorial columns strive to deny the evidence of the
lived reality experienced by the working and middle classes.
THE MUMBO-JUMBO OF THE GREEN PARTY
From a sociological perspective, the Greens are intellectuals rebelling
against the established order. As such, they love any new dissenting idea.
Ay, here’s the rub: all the fashionable new ideas are not necessarily good!
Hence, the impression of mumbo-jumbo, newspeak, or mixed salad when
one is listening to the Greens’ discourse.
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6. THERE’S NO MAGIC IN MONEY
Pay attention, civil servants who are out of touch with the reality of
(public…) funds, and whose salary is secure, guaranteed identical every
month, for life: 850,000 of you work only 20 hours a week and enjoy 4
months of paid holidays.
Money is something you have to earn before you can spend it. This goes
for both individuals and the State. If you don’t want to save, then at least
you must keep within your budget. Otherwise, you’re putting your head in
the sand, and running away with revolving credit.
Believe it or not, money is not dirty! Teachers live in a utopian world
where knowledge alone is the exchange currency, in a gift/counter-gift
dynamic; it’s a world that simply does not exist in the real world when
they’ve left their classrooms, a world many pupils reject, disgusted with a
selection based on nonfunctional knowledge.
What is at stake in the State’s reform policy is making civil servants
understand that we live in a world with 200 countries, and we cannot
impose on others our French conception of money, i.e. that it is dirty,
because money is used to buy comfort through goods and services and
because money is currently the only symbol accepted by all humankind.
People’s relationship to money (how to spend it, how to save it, how to
earn it) comes as the result of lengthy training, but that’s precisely what is
not taught in French schools because teachers simply know nothing of it …
SOLIDARITY OPTIMUM LEVEL
For a lucid Socialist, the optimum level of solidarity is the maximum level
of solidarity that one can afford! And this without endangering future
generations while maintaining the capacity of our nation to absorb the
next foreseeable major international crises (or not; the thing is to keep
some leeway).
The key terms linked to public policy ought to be the following: ethics,
empowerment, readability, freedom, solidarity.
Concerning the current debate on pensions, the Socialist Party and the
Unions are touting the wrong answer to a real problem. How could we see
Nicolas Sarkozy as a sadistic leader trying to force us to work more for
fun? Or as a masochist wishing to cut himself off from part of the French
electorate? He is merely grappling with a serious difficulty that the Left
Wing will have to deal with again if they get back to power. The
hypotheses made by the Pensions Advisory Council (Conseil d'orientation
des retraites – CORE), based on a figure of 5% unemployment, are too
optimistic. Logically, we ought to get back to the rule of pension-at-65 for
most people, with a number of exceptions for medical reasons for the 60
year olds. That would follow the principle of readability of the taxation
system, so that the latter is widely accepted. Since people’s life
expectancy is increasing, which is destabilizing the equilibrium of the
unfunded (“pay-as-you-go”) pension scheme, the pension issue becomes
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7. a demographic issue which requires a demographic solution, namely
increasing the duration of the contributions.
As for free medical care, a good principle of readability would be to
impose a moderate healthcare fee (e.g. cheap non-prescription drugs, a
€5 excess for each medical consultation, and real supply competition
through the elimination of the limitations brought in by the numerus
clausus imposed by the medical corporations and a poor Social Security
policy). By contrast, the free management of serious illnesses (in terms of
healthcare personnel, drugs) must absolutely be maintained, otherwise
people suffering from those illnesses would find themselves in hopeless
medical and financial situations, which goes against current principled
standards of humanity in developed countries.
THE LIFE PLAN OF THE FRENCH PEOPLE
France is declining because French citizens, individually and collectively,
no longer have any ambition. What is most French people’s life plan, their
wildest dream? – to pay less tax, retire earlier, go on holiday abroad, be
taken care of like children by the welfare state, in particular by not
contributing financially to their own healthcare. Under these
circumstances, one should not accuse Germany, the United States, or
China, of one’s own failures.
In Germany, employees and employers talk to each other; all are aware of
their rights and obligations.
In the United States, individuals desire to become richer, and they make
every effort to succeed.
In China, life is hard for the workforce, but the hope of achieving upward
social mobility enables workers to cope with difficult conditions.
I call on the French politicians to take responsibility for setting ambitious
targets. Depending on one’s political standpoint, this could mean a variety
of things: above reproach ecology policies (which would set an example,
have a ripple effect in other countries, and be morally ethical), debt
repayment (sustainable balanced budget + striving for zero aggregate
debt), reducing absolute poverty by 50% in each five-year term, an SME-
based dynamic economy, efficient public services (reorganizing services,
revised and streamlined procedures, speed, the cult of simplicity, lower
costs, information which is available on the Internet for users and long-
lasting for administrations in interconnected databases, private sector
type of management, merit-based salary increases and promotions), and
a lesser and shared cost of social benefits.
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8. THE CHICKEN OR EGG DEBATE
On France2 yesterday, we witnessed a live debate in the great French
tradition, of the type “Which came first? The chicken or the egg?” The
whole point was to work out whether one should open a debate on Islam,
particularly regarding the financing of mosques. The 1905 law on the
principle of secularity (separation of church and State) prohibits any public
funding of religions, and this law seems to work well. Hence, one should
not tamper with it. This is well and good, but it is necessary to finance the
building of mosques and the training of the republican imams. So now,
what do we do? No idea whatsoever for our debating intelligentsia, the
country’s recognized intellectual elite! I believe that one could modify the
1905 law to include the financing of religions stemming from the presence
of new, often poor, populations …
François Bayrou provided the scoop of the evening when, facing the
cameras, he admitted in front of millions of French people that, as a
matter of fact, the French mayors are circumventing this famous 1905 law
every day. The French people are delighted to see what their elected
officials do with the law. Well now, since this law is so blatantly
circumvented, why not amend it? This is precisely the point where the
chicken and the egg crash together like an omelette into my saucepan.
THE SOCIALIST PARTY PRIMARY ELECTIONS: HOLLANDE VS FABIUS
After the disquieting self-elimination of Dominique Strauss Kahn and in
order to prevent any leadership battle within the Socialist Party (PS),
which would be fatal at the presidential election level, I propose a simple
yet representative choice between the party’s right wing (François
Hollande) and left wing (Laurent Fabius). These two pillars of the PS are
talented, experienced, and both possess presidential stature. The other
big guns of the party would join one or the other depending on the
programmes they each presented. This way, the primary’s electorate
would have a clear, open choice that would be truly representative of their
opinions.
And then, may the best man win!
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9. SARKO-BASHING FILM
A film on Nicolas Sarkozy’s conquest of presidential power has just come
out. Apparently, it’s courageous in France to criticize the top leaders.
Make films, sure, but at least make good ones! In this instance, it’s a
criticism that belittles Nicolas Sarkozy, Dominique de Villepin, and Jacques
Chirac. This is unjust because unbalanced, since the criticism falls on
powerful individuals in the public eye, uninformative, and a caricature. In
this country, pseudo-intellectuals and artists brought in at little (risk)
expense feel compelled to criticize the opposite camp systematically and
see themselves as courageous opponents of obscurantism and abuses.
Meanwhile, they can’t even begin to imagine a fraction of the stakes
facing statesmen. A little modesty is required …
As for the Socialist Party, once more, relying on Sarko-bashing
supporters, filling interviews with calls for civil disobedience, and creating
a mass movement through caricature will not lead to success in the
Presidential election. Even if the Socialists should win that election in such
poor conditions, the presidential programme (which is not ready yet, one
year before the election) would be swept away by the frenzied mass
movement … Exciting the baser instincts of mobs is like using a
boomerang weapon!
MANAGING COMPLEXITY
I write this article after reading the umpteenth report on the
chronobiology of school children. I’ve been following this issue for 15
years, and all the education-specialist pediatricians are in agreement.
Nothing comes out of it, however. New reports are written, ad infinitum.
All this to keep everyone happy: parents, school children, teachers,
hoteliers, etc. But, even at minimum level, it is impossible to keep
everyone happy …
This is not what democracy is all about! Obviously, information should
travel upwards and situations are complex, so one needs smart counselor-
rapporteurs who are able to synthesize issues objectively. In a democratic
state, however, a leader is elected periodically whose role, among others,
is to choose, to decide. Otherwise, what’s the point of electing a leader?
TIGHTENING UP THE CABINET
It’s well-known that meetings can’t function properly with over 8 or 10
people seated around the table. Hence, it’s essential that the number of
ministers be kept to those numbers.
Since issues are complex and numerous, one can envisage that each
minister should supervise 5 or 6 State secretaries who do not attend
Cabinet meetings. This tightening up of the governance mechanisms is
better able to pinpoint everyone’s responsibilities, from State secretaries
to line ministers.
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10. PREPARING PUBLIC OPINION FOR FINANCIAL EFFORTS
A presidential campaign is an excellent opportunity to mobilize public
opinion toward a particular project and vision for the future. The major
concern in France in 2012 is the reduction of the accumulated debt. And
yet, all the presidential candidates are touting public sector-stimulated
economic growth when the coffers are empty, which both they and the
voters know full well! Politics, in the French democratic State of 2012, is
thus synonymous with cynical demagoguery and incompetence on the
part of leaders, and stupidity, fairy tale delusions, and mindless belief in
the incantations of line management on the part of voters …
What will come out those economic lies is repeated strikes carried out by
cheated, unhappy French people – those strikes will paralyze the French
economy and bring down the governments that will follow one another to
try and get the economy back on track, as happened during the Fourth
Republic. Finally, after the next presidential election, the worst form of
extreme right-wing populist politics will come to power and crush down
the country for the next 30 years. You carry such heavy responsibility
through your demagogy, candidates Sarkozy, Hollande, Bayrou, & Co!
FRANCE WILL BE UNGOVERNABLE AFTER THE PRESIDENTIAL ELECTIONS
I’m really sick and tired of playing teacher, particularly a teacher whom
no-one listens to but who is right and whom people will bitterly regret not
having listened to when it is too late ….
Undoubtedly, after the election campaign François Hollande has just
conducted, during which he carefully refrained from asking voters for any
financial sacrifice, what is going to happen when, in September, 3 months
after his election, he will be confronted with an inescapable major massive
financial crisis, that will plague him to the end of his five-year term?
He will have to change his tune suddenly, dampening the enthusiasm of
the population, getting the representative/community associations
(unions, journalists, opposition parties, and a segment of his own
government) up in arms against him; he will have to establish financial
rigor (social expenditure reduced - pensions & healthcare, local
communities – tax increases for the middle and upper classes). It’s bound
to happen.
Problem is, since he won’t have prepared the population for this at the
time of his election, he will get massive strikes that will paralyze the
country, damage our credit abroad and with financiers, which will
undermine the recovery of our finances and wreck his one and only term
of office.
This is what happens when one is elected upon false premises…
Come, there are still a few days for explaining our country’s real financial
situation.
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11. WHY I AM CENTRE-LEFT
I have chosen the Socialist camp because I believe that it is necessary to
protect and even promote the working classes and that it is the middle
and upper classes that ought to provide the necessary financial solidarity
efforts.
In return, and it is also a limitation to this solidarity, the collected monies
need to be managed prudently. This is why I am centre-left.
FALLEN DOWN A BLACK HOLE!
I can’t believe that none of my readers is interested in arguments, the
exchange of ideas, and knowledge construction.
But in the four years I’ve written this blog of AMATEUR JOURNALISM, of
OPINION, I have received neither e-mail nor snail-mail from any of you …
Just in case, here are my contact details, for those who might wish to
remedy this.
Benoît Fabre
25 bis chemin des pinsons
31120 Portet sur Garonne (near Toulouse)
Tel (Mob): 06 76 67 56 56
Tel (H): 05 61 76 41 63
e-mail addresses: benoit.fabre@laposte.net ;
benoit_fabre.1969@yahoo.fr ; benoit.fabre.toulouse@gmail.com ;
benoit.fabre.toulouse@hotmail.com ; benoit.fabre.1969@orange.fr
Access map: http://goo.gl/maps/NP4f8
Photo : http://goo.gl/maps/TN9ZO ; http://goo.gl/maps/wCWEg
Portet sur Garonne taxis who know the place well: find at
http://www.pagesjaunes.fr
In order of proximity : 1. Desroches Philippe, 2. Ovalie Taxi, 3. Taxi Dat,
4. Taxi Bacqué
If you know or believe that communication networks are defective or
sabotaged, why not come in person? In case you live far from the
Toulouse area, why don’t you get local representation by a business
lawyer, or a bailiff, or a local private detective, or simply a Portet sur
Garonne taxi ?
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12. CLOSING THE BLOGS
As I explained earlier, there have been scant responses demonstrating
interest in my blogs: in all, 30-odd messages sent to Blogger, fewer than
5 e-mails sent to the benoit.fabre@laposte.net address, 2 responses in
Facebook.fr, no snail-mail, and neither telephone nor any actual contact
at my home in Portet sur Garonne. Hence, it is time to recognize that I
made a mistake in spending such a lot of time and energy writing these
blogs (learning through reading hundreds of academic books, regular
information retrieval through the mainstream TV news programmes and
continuous news channels, reading of the Web-based newsletters from
Figaro.fr, Monde.fr, and FranceTelevisions.fr).
Consequently, I wish to inform my too-few readers that my blogs are now
suspended for an indefinite period.
May you strive for and obtain good political judgment. I wish you well.
GOVERNING IS NOT THE SAME THING AS PLEASING
To be elected in a democratic state, one needs to collect the maximum
numbers of votes on one’s name. The problem is, governing is not the
same thing as pleasing! On the contrary, governing is being courageous
enough to implement the reforms that are necessary for the future of the
nation one is temporarily in charge of.
By the way, what are the current government’s positions regarding the
European economic crisis, the Euro, tax increases, who’s going to pay,
budget cuts, budget- and staff-affected administrations, local authorities,
the financing of the latter, the civil war in Syria? Let us end the hypocrisy
and get rid of those feeble consensus agreements that are meant to
please everyone and eventually penalize all …
ALLEGED COLLUSION BETWEEN FORMER PRESIDENT NICOLAS SARKOZY
AND OPULENT MME BETTENCOURT
What exactly is Nicolas Sarkozy being accused of? We need to identify the
ABUSE, if there is any. Basically, he’s accused of having benefited from
the billionaire’s largesse to the tune of 150,000 Euros. This person’s
assets are estimated to be worth 15 billion Euros, which would make the
gift of 150,000 / 15 000 000 000 = 10e
-6. To put this into perspective: an
executive who earns 100,000 Euros/year and whose assets amount to 1
million Euros would have given 1e
6 * 10e
-6 = 10 Euros for his chosen
candidate’s campaign, WHICH IS NEITHER DISHONEST NOR
DISCREDITABLE FOR EITHER PARTY (in fact, rather stingy!). If I
remember correctly, my annual subscription to the Socialist Party costs 70
Euros, and I’m not complaining.
In a capitalist democracy, we have the free choice of making use of our
own fortune as we please, in a reasonable fashion, without any excesses
or despoliation. OUR CONSTITUTION GUARANTEES THAT FRANCE IN THE
2000’s IS NOT A COMMUNIST COUNTRY.
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13. Who benefits from implicating the former President of the Republic? His
competitors, obviously. François Hollande himself, directly? No, I think
he’s too honest and ethical for this sort of thing – and I’ve been listening
to him for a long time. Henchmen in the Socialist Party? Yes, perhaps …
Why not Jean-François Copé himself, in-house competitor on the right of
Nicolas Sarkozy, who was smiling broadly about the charge against
Sarkozy this morning on the 7.45 a.m. France2 television news
programme? (now, this ought to be checked, confirmed, and then, if true,
acted upon!)
This sad business is conducted through the judicial system, which, once
more, brings discredit upon itself by lending credence to nauseating
accusations and, as is common nowadays, will let the situation deteriorate
by dragging it on while smearing the accused and ruining his career, if not
his private life. Surely, France deserves better, Your Honor!
MANAGEMENT’S AND WORKERS’ INTERESTS GO HAND IN HAND
Here is my message to trade unionists/ managers/ executives/ workers.
Essentially, the interests of shareholders, managers, executives, and
workers go hand in hand, at least up to a point.
Managers need their business to run smoothly.
Executives need to have satisfied bosses on the one hand, and
subordinates who do their job properly, on the other.
Workers need to do their job properly so that their company thrives and
they, in turn, are better paid, preferably according to a profit-sharing
mechanism. From the managers’ perspective, the fixed part of salaries
needs to be limited: should business slow down, the fixed charges will be
too heavy and will lead to layoffs. That situation would be
counterproductive to the interests of subordinates, managers, and
executives: loss of in-house skills, and costs of rehiring, retraining, and
recoordinating when business is better.
Majority shareholders need to get maximum profits on the long term;
hence, they seek effective worker training and stability.
As for politicians, they also need a dense and prosperous industrial fabric
across the territory. So, there’s no question of killing the goose that lays
the golden eggs nor of issuing ill-considered statements that will bring
about cacophony among employees and rivalry with the managers.
Consequently, I say once more that a capitalist industrial system will work
optimally provided that all actors play and sustain their role.
I would strongly advise investors to invest only in companies that, as a
bottom line, follow the principles enunciated above: their long-term return
on investment closely depends on it.
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14. BEING CHARGED UPON ILLEGAL EVIDENCE
Jérome Cahuzac, Budget Minister, has had to resign from the government
following a judicial indictment based upon completely illegal telephone-
tapping. In our democracy, the Constitution forbids judges to 1) carry out
illegal investigations, and 2) accept the so-called evidence that has been
illegally acquired.
Consequently, the constitutional judges need to demand the immediate
repeal of the indictment procedure and to promptly rehabilitate Jérome
Cahuzac. Otherwise, it means our country has NOT PROGRESSED since
the days of the 1940-1944 COLLABORATION WITH THE NAZIS.
PS: Two weeks after this message, former Minister Cahuzac admitted his
guilt. I am no professional lawyer, but believed that I had to defend a man
I thought was innocent with all my energy. It now turns out that he was
guilty. I wish for appeasement of the whole affair.
A FINE STATEMENT FROM FRANCOIS HOLLANDE, PRESIDENT OF THE
REPUBLIC
“We can also find enemies, targets, and seek a scapegoat. This happens in
all European countries. I have found a fine sentence from ROOSEVELT, as
he was confronted by another crisis, the 1929 crisis, of a different
magnitude. This is what he was telling his compatriots: “What we need to
fear most is fear. Even today, we need to bring hope and confidence. This
is what I told the firms I met, workers and managers alike, but I say it to
our fellow citizens too: A STRONG STATE IS A SIMPLE STATE; A
POWERFUL STATE IS A FAST STATE; AN EFFECTIVE STATE IS A STATE
THAT TRUSTS AND INSPIRES TRUST.”
François Hollande, Speech in Dijon, March 12, 2013.
Download from http://www.elysee.fr
http://www.elysee.fr/chronologie/#e2883,2013-03-11,deplacement-en-
cote-d-or
AN EXCELLENT ECONOMIC POLICY SPEECH FROM JEAN-MARC AYRAULT,
PRIME MINISTER
Speech given at the National Assembly on March 20, 2013.
Download from http://www.gouvernement.fr
http://www.gouvernement.fr/premier-ministre/discours-de-jean-marc-
ayrault-premier-ministre-reponse-a-la-motion-de-censure-de-je
A TOTALITARIAN PHENOMENON: CROSSCHECKING IN FRENCH VILLAGES
I am a witness to a phenomenon of crosschecking of the behavior of
people in a village; this practice, I imagine, would affect all the world’s
villages. What is the point of it? The drawbacks, lack of discretion, stifling
atmosphere of loss of freedom (deprivation) are obvious.
Could sociologists help me understand this phenomenon?
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15. IMPOSING STIFF SANCTIONS ON INCOMPETENT JUDGES
We are witnessing a serious breaking up of political life through repeated
attacks from judges on current political leaders, or those likely to influence
the course of things. To cap it all, a number of investigation procedures
are unconstitutional, hence illegal.
I urge the highest judicial authorities and the Justice Minister to impose
stiff sanctions on those incompetent judges who thus play havoc with our
democracy. Is the general idea to make us believe that we’ll be happy if
we do nothing and take no responsibility, make no decision on anything?
This needs to be investigated.
WHY I SUPPORT THE SUCCESSIVE DEMOCRATIC FRENCH GOVERNMENTS
Indeed, I have supported right-wing and left-wing French governments
the best way I could when they were going in the right direction, in the
best interest of France and the French people.
Besides, in our democratic system, major elections take place every five
years, which generally gives us one year to think and one month to make
a decision, each according to our own conscience. What I simply will never
accept is the voters’ unbelievable fickleness such that a good 50% of the
votes go to one particular face and programme, but, one year later,
opinion polls systematically announce only 35% of favorable opinions
going to the government. So,
either the programme that was adhered to at the time of voting was pure
demagogy, totally unrealistic, and the pedagogy of a realistic programme
was not attempted;
or the French are impatient, moaners and whiners, fickle, and incapable of
political thinking.
Hence, a question comes to mind: “Should we keep a popular democratic
system?”, “Should we go back to some as yet undefined suffrage by
census system?”
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16. OFFERING AN ECONOMIC POLICY FROM THE CENTRE-WING
Centre-wing politics are defined through a double opposition to left- and
right-wing politics. To offer a third path, the centre had better shop
around and collect centre-, left-, and right-wing ideas so as to offer its
own synthesis. In the political world, policies do not belong to anyone and
there is no such thing as copyright; ideas are invented by counselors who
are paid to do just that, but those ideas are then adopted and promoted
by those political parties that identify with them.
In particular, I suggest that (both left- and right-) centre-wing politics
adopt a mixed economic policy:
rigorous budgeting: no annual budget deficit, zero debt targeting for a
healthy macroeconomic environment (centrist politics), and room to
maneuver in the event of a geopolitical blow (Gaullist politics, the army)
promoting entrepreneurship to speed up growth (liberal politics, right-
wing politics)
redistributing: producing more and better (ecology) to redistribute more
to the poor (left-wing politics, even catholic-oriented)
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17. THE NECESSARY DEMOCRATIC ARBITRATION PROCESS
In politics, it is necessary to distinguish between what comes under hard
science (rules established through reasoning and experiments) and what
comes under human sciences (hypotheses and inferences based on fragile
ground). Rules do not require arbitration; they are applied until some
major event calls them into question. In contrast, contradictable reasoning
comes fully under the notion of arbitration; in a democracy, arguments
are the domain of specialists who try to convince the people who will
make decisions directly (elections or referendum) or indirectly through the
people’s representatives (House of councilors, House of decision makers,
President, Prime Minister, ministers).
Here is a typical case: the economy of developed countries has been in
recession for 40 years. Left-wing economists swear by Keynes (the notion
that redistributing purchasing power can stimulate business in the
country). Right-wing economists cling to the concept of low-risk
management according to which budgets are balanced so as not to imperil
the country’s future. Who’s right and who’s wrong? Both arguments, truly
at opposite ends of the spectrum, are scientifically true. In a democratic
state, only the people will be convinced by one argument rather than by
the other, and voters will decide between one and the other perspective.
We need to go beyond the scientific debate, to settle things once and for
all, so we may move on to public arbitration of other aspects of politics.
40 years of public debate have not seen the riddle solved. In fact,
Keynesian Stop and Go principles worked in the 1950s and 1960s in
England (Beveridge). The left wing tried to apply them in France in the
1980s and 1990s, but only the easy half of the economic policy was
carried out, namely the stimulus when at the bottom of the economic
cycle (Go phase). The difficult phase of the theory (Stop phase) was never
carried out, namely the savings in the expansion times of the cycle,
savings that are needed to pay debts and save for future bad times. In
these conditions, I strongly suggest abandoning Keynesian policies in
France, at least in the current situation and given the lack of economic
virtue from both the elites and our fellow citizens. Instead, I advocate
rigorous budget balancing, which means we don’t have to speculate on a
possible recovery nor gamble on our limited financial virtue; in addition,
this will encourage adaptive strategies from all economic stakeholders
(companies, workers, shareholders, the State), which, in turn, will enable
a strong economic recovery when the characteristics of the top (peak) of
the cycle are met.
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18. Economic proposals
THE 35-HOUR WORKWEEK
In order to reach agreement with the employees, the new law must
guarantee that all hours worked beyond the legal number of 35 hours will
be remunerated at the current favorable rate, or else that the extra 5
hours (from 35 to 40 hours/week) are paid with a 25% bonus, since the
current overtime rate starts beyond that (+25% then +50%)
TAX INCREASE
Reducing the lifestyle of the state is known to be necessary. But why is
there no talk of increasing revenue through VAT and income tax?
Balladur-type disinformation spreads as self-evident that “the French don’t
want to pay taxes any longer”, that “too much tax kills taxation”, etc.
Income tax is proportional to earnings, which means that if I pay 50% in
my high tax bracket, there’s 50% left in my pocket. So, it’s rather more
comfortable to keep 50% of a lot than to pay 0% of nothing, as the RMI
beneficiaries [RMI= a form of social welfare] do. Beside, do you really
believe that I will stop working once I have reached a certain income and
refuse extra earnings simply so that I do not pay the state taxes? What a
ludicrous argument! Doubly so since I, too, benefit from public services:
school, university, roads, health services, etc. And then, I would refuse to
help people who are struggling? Rather perverse, don’t you think? My
conclusion: in addition to improving the management of the state, we
need to increase taxation and legally compel the allocation of the surplus
to reducing the national debt. Our children will thank us for it …
URBAN TOLLS
To abandon giving mayors the choice to establish an urban toll is yet
another example of the government’s backing-down in the fight against
wastage of rare resources.
HOUSING
On the one hand, the French often need a little push to think of buying
their own home confidently. On the other hand, banks are somewhat
cautious, more or less justifiably. Consequently, why not extend the
state’s guarantee to real estate investment, or even rentals? It would be
good for the construction industry, morally equitable for the French (in
relation to the small-time speculators and bankers), and, in the end,
politically astute.
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19. RECESSION
This confirms it: INSEE [the French National Institute for Statistics and
Economic Studies] is at the beck and call of those in power. These Gyro
Gearloose types in the field of statistical economics must have postponed
some cost allocation or reduced some estimate, etc.; this is what is called
creative statistics. For instance, two INSEE researchers’ estimate of the
impact of the 35-hour workweek on the job market and the economy,
published one week before the Chirac vs Jospin presidential election, for
those who have long memories … And today, we see our Prime Minister
explaining during the evening news that his policies are bearing fruit and
that reality is in accordance with his predictions: technically speaking,
there is no recession in 2008 …. Sleep tight, good citizens, the state
machinery watches over your destiny impartially!
THE AUTOMOTIVE SECTOR
If public monies are to be used to support the automotive sector, these
should be focused on policies for the future, which are mainly
environmental in the transport industry: cash-for-clunkers schemes for
polluting vehicles (against the purchase of less polluting ones …), support
for research and development programs for lighter cars and cleaner
engines (fewer carbon dioxide and other toxic gases emissions, reduced
consumption of non renewable fossil energy), etc.
READINGS IN ECONOMICS
In order to update rapidly your economics knowledge, I strongly
recommend the following publications (in French):
Les Vraies Lois de l’Economie, I and II, by Jacques Généreux, professor at
SciencesPo, Paris
Le grand bond en arrière, by Serge Halimi
Vers un monde sans pauvreté, by Muhammad Yunus, Peace Nobel Prize
for 2006
On future trends in China:
Que pense la Chine ? by Mark Leonard, British academic.
THE PHILOSOPHY WHICH UNDERLIES THE ECONOMY
We need to abandon the concepts of profitability, of work (The French
word “travail” is derived from the Latin “trepallium” which is a torture
instrument) – duty – difficulties – divine punishment - guilt, to embrace
those of pleasure, liberty and corresponding accountability, solidarity,
mutual respect, and Life.
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20. T2A or activity-based financing in hospitals
Activity-based financing should not be used as a budget corset but rather
as an indicator of activity levels.
Let us assume that one act costs, on average and in a particular region,
100 euros, a minimum of 60 euros, a maximum of 170 euros, and in the
third quartile 120 euros (three quarters of this act cost less than 120
euros).
We do understand that to fix the repayment level at 120 euros, rather
than 100 euros, involves a different message, hence a different behavior
on the actors’ part:
- at 120 euros, only those hospitals structurally overspending on this
act are penalized, whereas the other hospitals save money on their
good cost management, which then enables them to finance loss-
making, unprofitable acts;
- at 100 euros, almost everyone is stressed out, the atmosphere
between the administrative and medical staff deteriorates, patients
receive poor care for common acts, and there’s no leeway left for
unprofitable acts.
Note: to fix the repayment of acts at the third quartile does not
necessarily lead to an automatic general increase of each hospital’s
allocation, if that cost (120 euros) involves only costs ascribable to the act
rather than costs taking into account the superstructure! Ask a controller
for an explanation of the various management costs: total costs, variable
costs, direct costs, indirect costs, etc.
UNIVERSITY ENTRY TICKETS
It is not unreasonable that students should pay “reasonable” amounts in
order to finance their education, given that this investment will bring in
dividends within 6 months of paid employment once students have
received their degree. In contrast, not only does workers’ and employees’
training cost nothing to the State, but they lose financially in their
professional career. Considering the state of public finances, it is high
time each socioprofessional category stood up and be counted and
produced an equitable effort, adapted to its capacities.
HOUSING POLICY
15 euros a day will enable you to own your home … you must be joking!
This is not even the cost of one family meal … The government is
muddling up people’s sense of reference and redefining the hierarchy of
expenses. What are they hiding? Mr Sarkozy is far from converting to
communism, so which political message is being delivered? How does he
propose to finance the measure; in other words, given the current budget
restrictions, which other social investment is going to be affected?
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21. TAX ON POLLUTING CARS
260 euros, such is the price for one or two tankfulls for those machines,
15 days on the road. Or 1/100th of the purchase price. Or the yearly
insurance certificate… Don’t overstep the mark, the poor dears can’t pay
to contribute to the depollution of the air I breathe and which they are
killing off! Boo to regulated climate! Hurrah for the 4x4s that never run on
potholed roads ... I want a big one, too (prosthesis).
STOCK OPTIONS
What’s going to happen in the concrete application of the law to
companies? Those lowest on the hierarchy ladder will be generously
granted one stock option while the senior executives will “deserve” to get
1000! What would be a reallly redistributive and motivating measure for
all employees, hence something good for entrepreneurs (despite
themselves!) is generalised participation in all companies. It would be
something that does not affect fixed charges and, instead, is applied only
in case of benefits which are at least partly due to the employees’ hard
work! Stock options should be forbidden; they despoil the bottom line
employees, are demotivating, and ultimately work to the financial
advantage of only the most influential ones, who do not really need
them...
EDF
Historically, as soon as they were strong enough, French companies have
given in to the American pipe dream; they wanted to play in the Big
League, that is, the United States: Renault, Peugeot, Vivendi, Alcatel, etc.
What happened?
Total collapse! It would seem that Americans are more chauvinistic than
they’re prepared to admit and that invisible barriers are working: the legal
system, public financing (in big structures, e.g. Boeing vs. EADS),
networks, etc.
Beware the awakening of those employees tantamount to civil servants of
the French State!
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22. TEACHER TRAINING IN PRIMARY/SECONDARY EDUCATION
Contrary to what the teachers who are specialists in a discipline claim, a
bachelors’ degree (i.e., a “licence” or 3-year degree) in that discipline is
more than enough. On the other hand, teachers these days are recruited
with i) utter ignorance of the realities of the classroom, and ii) obvious
gaps in psychology and pedagogy. Hence, I would strongly suggest that
one should establish a master’s cycle between the third and fifth year of
study, devoted to alternation training: class observation, practicum for
lessons + pedagogy and psychology theory classes. The competitive exam
for entry into the teaching profession would be based equally on those
subjects of the bachelor’s special field and psycho/pedagogy at the end of
the psycho/pedagogy master’s.
SOCIAL SECURITY
Is the social security institution also suffering from the Munchhaüsen by
proxy syndrome, that is, is it suffocating its members while pretending to
nurse them? One can wonder, when one considers the dismayed looks on
the faces of patients queuing up in corridors because of demands unmet
for outlandish reasons which, in fact, seem to stem from the overheated,
sustained imagination that continuously invents new forms, new
procedures, a myriad of different computer programs supposedly non-
interconnectable, all kinds of good reasons why the rights of social
security members cannot be honoured directly and quickly. The
employees follow orders; they have been trained to lose certain files for
months. What’s the point for the senior officials? 1) The argument
presented to the employees is the following: necessary savings are
effected. 2) In truth, the point is to prepare for privatizing the repayment
system, under pressure from public opinion itself, given the poor service
being rendered. Clever (devilish), isn’t it? You still don’t believe me? Then
send across France a few hidden or “candid camera” clients trained in
psychology and sociology and informed of the game the health insurance
funds are playing. Scoops, for sure!
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23. TAX HAVENS
We are faced with an obvious asymmetrical information-sharing setup. So,
why not do the following: threaten to freeze certain kinds of cooperation
activities requiring information of a financial, commercial, economic,
diplomatic, military, or political nature, in order to put pressure on tax
havens to restore tax-related information parity.
CONTINENTAL (Tire maker Continental closed down its Clairoix plant)
The Continental agreement relating to the “suppression of the legal 35-
hour workweek, replaced by a 40-hour workweek, in exchange for the
extension of the plant life until 2012”, surely, must have been ratified by a
contract signed by both parties? So, this is the situation: HRD tells me
that it’s legal, the executive tells me that it’s legal, and I, the employees’
union, I cannot afford a competent, independent laywer to check what the
executive says? Is this how it works in France? Somewhat odd …
BAR TALK
In order to limit the consumption of alcohol in cafés, create companies
and recruit barflies …
GUADELOUPE
Have you heard the Guadeloupian employers’ leader’s words? This is a
collection of clichés and threats to justify a balance of power largely in
favour of the (white) employers. Now, do we want France to stay in the
West Indies or would we rather see a separatist revolution take place? If
we want to stay, then the local employers need to be forced to salary
redistribution.
Method No 1: voting for the distribution of benefits as proposed by the
President of the Republic: 1/3 to the employees, 1/3 to investment
opportunities, 1/3 to shareholders. These new charges would be variable
rather than fixed and would not weigh upon employment!
Method No 2: starting salary negotiations between employers and
employees, with a public mediator.
Method No 3: if unsuccessful, levying a permanent tax on overseas
companies and redistibuting it entirely to the low salaries and in the form
of family and social benefits.
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24. GUADELOUPE / MARTINIQUE
It clearly appears today that Elie Domota is being dishonest: he is
concealing separatist demands behind impossible demands that he is
forcing the French State to meet lest it should show its own inability or
bias. At a push, should his 143 demands be on the point of being met, he
will wreck the negotiations, or even make new demands before the
negotiated compromise has been implemented!
The question is: 1) Does the Guadeloupian/Martinican people want
independence? The answer is: no. 2) Does the French State want to part
with its DOM-TOM [French overseas departments and territories]? The
answer is: no. A new strategy thus must be found, one which puts in
check the separatist demands while granting the justified economic
demands.
1. Make the Békés [a Creole term to describe descendants of the early
French settlers in the French Antilles who, while in the minority, control
much of the local economy] understand that their head is on the block, so
that they start actively negotiating and do not think that they are safe
from the impunity the State is proposing via the bragging of Michelle
Alliot-Marie’s; France is surely not going to risk a security blood bath in
the DOM-TOM!
2. The Guadeloupian and Martinican elected representatives should
publicly denounce the duplicity of Elie Domota’s strategy. The people do
not espouse separatist views!
3. The State should immediately introduce the themes of post-colonial
development into the negotiations. We seek the emancipation of African
states, so let’s show a model of it in our DOM-TOM, for a start!
The list of what could also be done includes, but is not limited to,
the following: offering microcredit via a French bank, promoting the new
“auto-entrepreneur” (self-entrepreneur) system for small businesses,
lightening the tax burden for SMEs, introducing affirmative action into the
recruitment process in territorial and state communities (DOM-TOM +
mother country), reorganizing the distribution and import/export
networks, developing semi-self-sufficient rural settlements (food-
producing agriculture, handicrafts), raising the double issue of land
ownership and its agricultural purpose, promoting integration and
development field experiences, raising the issue of alternative work
organization (such as cooperative associations, mutual associations).
4. Speed up the start of the discussion Forum (but not its conclusion:
the issues require much debating time!). The island’s diverse groups
(Békés, Creole bourgeoisie, elected representatives, union members, the
population) need to express their opinions and find points of agreement
they can show the mother country, or else ask for Parliament’s and the
government’s arbitration on the points of disagreement. It’s too easy to
say that Paris organizes everything all the time for the DOM-TOMs if the
populations cannot reach consensus in order to play a role in determining
their own destiny!
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25. HOSPITAL LAW
As in all organizations, one should strengthen the top-down and bottom-
up information/reciprocal influence flows, through both strict chains of
command and direct channels:
1. Advertize it
2. Realize it
3. Wait and see its effects …
THE CARBON TAX
When it’s a matter of words, everybody agrees, but when it’s a matter of
paying up, nobody does … What an appalling notion of the sharing spirit
necessary to any society and present in all religions! The good Earth which
feeds us is dying through our collective fault. France and Europe should
set a good environmental example, all the more so as we are rich (in per
capita GDP terms) and consequently we can afford it. Additionally,
ecological undertakings will spawn a new economy and consequently job
creation.
H1N1 FLU VIRUS
Ask the epidemiologists and you will be able to put the seriousness of the
situation into perspective: from memory, the “ordinary” flu virus causes
about 3000 deaths each winter in France, in contrast to the 2000 deaths
worldwide caused by the H1N1 flu virus. One should also consider the
expenditure to fight malaria (3 million deaths each year worldwide,
including a large proportion of children).
I am not the only one to know these figures, so I wonder about the dual,
matched media and political outburst. Isn’t it time we trusted the
statistician epidemiologists for such health-related events?
THE TRUCK DRIVERS’ STRIKE
The SMIC [guaranteed minimum wage] is law, hence concerns everyone,
provided that companies are not at risk following the European dumping.
In such a case, one should be imaginative and respectful of companies,
entrepreneurs and employees.
LOMBARD FRANCE TELECOM
Why hasn’t Lombard been ousted yet? Who is the majority shareholder or
with veto rights? This is intolerable!
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26. STORM IN THE CHARENTES
1. There’s such a thing as dykes, and they work beautifully in the
Netherlands.
2. If the decision is to vacate the disaster areas, then the compensation
offered should not despoil the inhabitants.
INCREASING THE CONSULTING FEES OF GPs
GPs ought to take the responsibility of asking their patients to pay 1 extra
euro which neither the Social Security system nor the “mutuelles”
[supplementary health insurance schemes] will reimburse. This would test
the maturity of the health insurance beneficiaries along the arduous road
towards spending accountability!
QUESTIONS TO SARKOZY
1) What’s happened to the project concerning the equitable distribution of
benefits among the employees (1/3), the company (reinvesting 1/3) and
the shareholders (1/3)? Laurence Parisot has mentioned that a company
could wish to reinvest 1/3 of the benefits, in which case the shareholders
would give up their 1/3, so that the total reinvestment would be 2/3,
which would be enough.
2) What do you think of adjusting corporate taxes according to
corporations’ behavior – reinvestment of a portion of the benefits, opening
negotiations to the unions’ satisfaction?
3) The legal codes (civil, taxation, company codes, etc.) have become so
entangled that they are readily accessible only to competent professionals,
which is contrary to the principle of the Republic according to which
ignorance of the law is no excuse. What do you think of the idea of
providing a law book of a hundred pages or so, taught in schools and
available in bookshops? Following its prescriptions would be enough to
establish the presumption of good faith. It would thus be a type of filter,
before one sinks into the long, expensive, stressful legal hassles.
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27. TAX SHARING
I have been observing politics for 15 years, and keep hearing the same
old tune concerning taxes. On the right, the well-off and super rich classes
no longer want to pay; in the centre, the middle classes consider that they
are paying for everyone else; on the left, the working classes maintain
that they cannot pay anything. The outcome is that nobody pays anything
and the deficit automatically worsens.
Taxpayers’ mental perceptions are noxious; they lead to a dead-end:
agreeing simply to say that “others must pay” simply does not work!
I believe that all population categories need to make an extra effort,
except those households whose income is less than the SMIC+10%
[minimum guaranteed interprofessional wages]. The purpose of this
exception is first to protect this population segment and second to avoid
the usual miserabilist moans when there is talk of increasing taxes … In
practice, if some general tax is increased (VAT, CSG, CRDS, TIPP, etc.),
the previously mentioned poorest population segment could receive a
monthly compensatory allowance calculated by INSEE [the French
National Institute for Statistics and Economic Studies] and index-linked to
income (salary + allowances) and the geographical area (Paris region,
very large conurbations).
TAX SHIELD: WITCHCRAFT TRIALS
Whether a tax shield is necessary or not has mobilized the left wing for 2
years and the right wing for 1 month, and if my intuition is correct, the
squabble has only just started.
The point is that the amounts involved are insignificant: 700 millions
euros, compared to the 700 billions of our public budget, that is, 1/1000.
Additionally, we still do not have any reliable analysis of the expatriations
made by some wealthy tax payers, whereas this problem has been around
for more than 10 years! We should perhaps interview those people who
have made this choice ….
In the end, Parliament is paralyzed by this issue which cannot be resolved
given the current state of affairs; voters are taken hostage by this media
hold-up, to the detriment of many other issues that ought to move
forward. This constitutes the perfect example of what one should not do
when one truly wishes one’s country to go forward …
Post Scriptum: If the left wing cannot offer anything else other than this
stirred-up issue, after 10 years in opposition, without working on a
concrete program to offer the electorate, we should return our
membership cards!
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28. TAXES
To avoid the lack of accountability linked to the fragmentation of each tax
being collected by several different centers (State, region, “département”,
municipality), I would like to receive, at the end of the fiscal year, a
summary of the sums of money each collecting center has received from
me, whereas I currently receive only sheets for each individual tax. This
makes it much more difficult for me to recalculate what I have contributed
to each collecting center, whereas the Finance Department computers
could do this very easily for me. I believe that it is essential that each tax
payer should know as precisely as possible what his/her money is used
for. Democracy demands it. It’s also the only way to satisfy tax payers,
whereas the current system makes everybody unhappy!
TAXES AND SERVICES
In a service-based society, both individuals and companies would accept
more easily a high tax level if the tax administration could provide a
general, turnkey package of numerous value-added services. For example,
as far as information finding is concerned, the administration ought to go
to the companies rather than the other way round!
Let’s compare this to car sales: I don’t really need to know much about
the inside workings of a car to buy one and drive it; the purchase cost is
rather high for the average household, but if I am happy with it, if what I
was promised at the time of purchase proves to correspond to what I was
expecting, then I will return to the same dealer a few years later, and
even go upscale!
Another way of putting this is that the tax level does not necessarily have
to be reduced or criticized if tax payers accept its validity (redistribution,
services provided to the community by the State, simplicity and even-
handedness of the tax collection).
PENSIONS
The only valid goal of the pension reform is to target the balance of the
general system of pensions and to settle the debt that has accumulated
for years.
Since the serious efforts required of employees (i.e. the legal pensionable
age shifted to 63, 44 years of contributions for full pension) lead to only a
50% deficit reduction, other resources need to be found from capital
(extra tax on capital gains from shares, on stock options, a French-type
Tobin tax on short-term, risk-bearing capital movements, etc.).
Shared effort between employees and capitalists is the only way that
unions will accept the efforts required of employees!
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29. FUNDED PENSION SCHEMES
To introduce capitalization into the individual preparation of pensions
would enable those used to a comfortable lifestyle to avoid an
unacceptable drop in said lifestyle in the likely case that contributory
pension schemes collapse and be reduced to a minimum old-age pension
equal for all.
But on condition that the collected savings be secured and reinvested into
industry and services, for instance the capitalization of SMEs, VSEs, start-
ups.
NATIONAL PLANNING AND DEVELOPMENT
The future lies with the revitalization of medium-sized cities (prefectures,
sub-prefectures) star-connected to their regional metropolis (Lyon,
Marseille, Toulouse, Lille, Nantes, Bordeaux, Montpellier, Nice, and
Strasbourg; any others?).
The point is that, on the one hand, trafic is congested in the regional
metropolises and, on the other hand, there is quality human and material
infrastructure in the prefectures and sub-prefectures. One should plan for
plant relocations and rail and national road star networks.
THE CULT OF PERFORMANCE
We are all collectively suffering from the cult of performance: in sport
(football…), in our job, in the economy (GDP), in technology, even in our
sexual life.
It is high time we took interest in topics and people that have not
attracted much media attention up till now. It is desirable that we should
find delight in the little events, the small things that make up life, so that
we can lessen the pathological stress levels, so as to live better and
happier.
If we live happy, we will exceed our unavowed goals.
PENSIONS
Balancing the books is an adequate goal, but the population thresholds
that have been fixed (legal pensionable age of 62, a minimum of 41.5
years of contributions) are not rigorous enough to be effective.
Nevertheless, one should set up safeguards taking into account long
careers and arduous working conditions to ensure the acceptability of the
reform by all:
1. To take long careers into account, one could put a ceiling of a 45-
year contribution requirement, for example: just as 67 years would
be the maximum legal retirement age, 45 years would be the
maximum contribution requirement for a full pension.
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30. 2. To take arduous working conditions into account, one could use a
life expectancy of 67 years (the maximum legal age) as a starting
point. For example, if a 67-year-old executive can hope for another
15 years’ life expectancy, the maximum legal retirement age must
be reduced for the category of threatened workers in such a way
that they will have statistically the same amount of pensionable time
left (i.e., 15 years in this example). The maximum thus defined will
be evaluated according to category/type of worker/employee and
reviewed regularly (for instance, every year or every 3 years).
NO TAX/ FIXED CHARGE ON SALARIES
In this country, we need to ease conditions for companies to help them
create jobs without giving up their contribution to the country’s burden.
I suggest a drastic simplification of company tax, namely replacing all
taxes/fixed charges on salaries (pension, health, unemployment
contributions, etc.) by a single corporation tax contribution = variable
charge for the companies. Hence, the contribution asked of one company
will be considerable when business is good and much reduced when there
are serious problems; the salaries paid to those members of staff still in
place will advantageously replace the unemployment insurance, since the
company will be less likely to go bankrupt.
The idea would be to calculate the new company tax rate in such a way as
to garner the same resources as brought by the old company tax + the
fixed charge on salaries. Then, one should round off to a meaningful figure
for entrepreneurs and shareholders: 1/3 (33%) or ½ (50%).
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31. LEAVING THE EURO?
The main flaw of the Euro is well known: the currency-unified economic
zones are not aligned in their economic operations (industry, services).
This has led to regular imbalance over time, of the type that monetary
devaluations or revaluations used to compensate for, in particular in the
monetary snake. Past efforts to achieve monetary unification without
economic governance (the industrial and budget policy of the states) have
all failed (c.f. the franc zone of the Latin Union 1865-1927 – it lasted 60
years with 32 signatory countries).
The instigators were well aware of this flaw. The policy of monetary union
constituted a bold attempt to force member states to adopt budget
moderation policies, thus reaching harmonious rigor without (federal)
coordination efforts. The question is: Can one survive on an illusion?
Should one be loyal to Germany, a country that has shared so little of the
economy cake (in terms of both economic development and the power
brought by directing the currency)?
It could well be that the sole solution to bring down our country’s debt
easily and quickly involves leaving the Euro and creating inflation by
printing money.
As in all revolutions, some will win and others lose. In this case,
pensioners whose capital is already constituted and whose resources
barely grow will lose. Winners will be the workforce, the young people in
particular, and export businesses and tourism. Raw materials will be more
expensive, and so will Chinese junk, which will lead to some relocating.
The fall of the Euro will bring that of the Dollar, affected by the excessive
American debt, of the Yen, and of the Yuan since Chinese financial assets
are involved in the Dollar. Countries will have to offer the Chinese
government political or even economic support to prevent the economic
shock wave from degenerating into riots, then civil war, in a country
possessing nuclear weapons. In other words, one should do nothing to
bolster the desire for freedom in the faltering country; abandoning the
communist dictatorship can take place only within the sense of equanimity
brought by a flourishing economy.
Let’s not kid ourselves, however: leaving the Euro will signal the country’s
prolonged inability to achieve the necessary administrative and political
reforms and a whining people, forever expecting increased state
allocations but with fewer obligations towards the state and enterprises.
Leaving the Euro will also represent the failure of the policies of austerity
that were initiated in 1983, the failure of 30 years of public policies,
including the fight in favor of the Maastricht referendum.
What the French people urgently need is a rousing vision of the 21st
century future perils, just as in other places and other times, Americans
rallied in the face of the “Red peril”, the Russians in the face of American
imperialism, and the Chinese in the face of foreign interference. What are
the perils coming to us? We can cite climate crises (global warming due to
the release of carbon dioxide), ecology crises (rising sea levels),
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32. unbalanced global demography (falling for us, but showing exponential
growth in Africa and India, thus leading to famines and migrations more
or less well tolerated), a third World War that would start in the nuclear
powder keg of China/India/Pakistan or a regional war against Iran. All
these events will require solid public finances so that one can address
them with a winning spirit.
NO, PROGRESS IS NOT LINEAR!
We’re still living under what is left of the late 19th
century positivist
philosophy which, in essence, posits that progress increases from
generation to generation and will soon reach the sky.
For instance, Westerners increasingly receive better medical care, live in
greater comfort, in particular energy-driven comfort (abundant and cheap
oil, electricity), travel increasingly faster and further and further, eat
better; in addition, there are fewer wars (though they are more lethal and
devastating), etc.
Yet, this ascending straight line of progress was the result of huge efforts
from each generation, sacrifices, and massive breakdowns (two world
wars). The concept of steady progress is a dangerous delusion that blinds
us and makes us doze in the comfort of our declining social democracy, in
opposition to the nations that consent to considerable efforts, the pioneers
or those who wish to catch up with them (United States, China, India). I
cannot envision any other path for our leaders than to re-mobilize us in a
realistic project for the 21st
century, something that would highlight the
future hardships our generation needs to face and overcome.
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33. MAKING LABOR LAW A BACK-UP SOLUTION ONLY
Our current labor law is implicitly based on the assumption that
employees are “weak” and must be protected in their relationship with the
“strong”, i.e., employers. This means leaving out the notion that
employers do not hire in order to lay off automatically and quickly.
Recruiting employees costs time and money (unfulfilled contracts,
financing the time human resources directors and managers spend
interviewing, provisioning the anticipated costs of breaching work
contracts). Then, there are also the costs of training / further training and
of accepting the inefficiency of the first months of work.
In addition, the work contract, as it is currently planned, protects those
individuals who have succeeded in getting hired, but also keeps
unemployed those who would bring a lesser benefit to companies,
precisely because of the hiring and potential firing costs that keep
entrepreneurs from hiring.
Finally, our society is based on the principle of individual accountability. It
would be advisable to re-establish it at the level of the work contract.
Companies are the only ones to know their business opportunities and
what is needed to address them. Then, it would be up to the employees to
accept the constraints or not!
Thus, I suggest giving labor law a back-up role, that is, it would be
applicable only if contractual terms have not been entered into.
Perhaps one could consider giving this back-up role to other fields of law.
It is time we called a stop to the glorified nursery that replaces individual
initiative with never quenched thirst for state benefits!
FISCAL RESOURCES
Here are a few leads to obtain extra fiscal resources:
• Why should we treat as taboo the figure of a 10% reduction of the
tax havens deductions? Perhaps one should consider the more
significant figure of ½ (50%) or even 90% if one considers tax
havens as unproductive, almost useless but, nevertheless, highly
symbolic. These flat rates would, of course, not exclude and in fact
add to the study of the current usefulness of each tax haven.
• Modify VAT rates to 5% and 20% (1/5) to simplify the mental
calculations of business people and consumers.
• Keep the same VAT rate in the fast food and traditional domains,
either 5% or 20%, so as not to skew the competition.
• Eliminate all the aids to companies regarding the limits of a 35-hour
workweek. Surely, a properly managed company will have carried
out the organizational change from 39 to 35 hours several years
ago!
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34. FISCAL PRESSURE LIMITS
In our open environment, we compete with countries in the same category
as ours: Great Britain, Germany, Italy, or even Japan and the United
States. Our taxation limits must be in the same range as they are in these
countries, namely between 40% and 45% of the GDP (unless I am
mistaken). This proportion will change over time; there are “fashionable”
practices in the management of both public and private affairs. Why
should we not use part of our influence to help change those practices
towards modes that suit us?
We should not think that France will be right in the face of opposition from
the rest of the world. We boast like self-satisfied, arrogant roosters – the
old image is still prevalent… We need to note that not only does the rest
of the world not adopt our social model, it is also secretly happy to see us
stray outside the flock: we are disqualifying ourselves in a field where
being right only works from inside the group. In this domain, solo racing
brings nothing except rejection.
SIMPLIFYING INCOME TAX
We need to make taxation more readable, understood and accepted, and
defended by governments. Hence, the mode of taxation determining must
be easy to understand and the rates easy to calculate. We should not aim
to optimize the rates for the revenue of one particular year, which would
only increase confusion and bring the rejection of this instability.
Hence, as far as income tax is concerned, one would end up with the
following:
Tax bracket Rate
€0-10,000 0%
€10,000-20,000 10%
€20,000-30,000 20%
€30,000-40,000 30%
€40,000-50,000 40%
€50,000+ 50%
And for VAT:
Reduced rate 5%
Full rate 20% or 25% (1/5 or ¼)
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35. ALLOWING LOCAL AND TERRITORIAL AUTHORITIES TO RAISE THEIR
OWN TAXES
We need to speed up decentralization and deconcentration to promote
efficiency through proximity, as local stakeholders are best placed to
negotiate among themselves what they believe will be best for them. Paris
is too far away, online information channels lose something, answers are
late; in other words, from a regional perspective, nobody is happy with
the State.
As a corollary, the resources of local/territorial/regional authorities need to
grow, but these entities must be responsible for raising their own taxes
(mode and rates of taxation). The mode should be coordinated by the
associations of mayors, elected representatives, region presidents. Rates
should be determined by local representatives. Easy mobility on the
national territory and voter patronage ensure relatively moderate rates.
Finally, if determining a particular type of tax for a specific level of local
authority is not considered possible, one should not forget to send
households an annual summary of the taxes paid for each level of
authority. The computer specialists in the Ministry of Budget have all the
data, the process is easily done by computers but tedious for private
individuals who do not do it systematically. This summary would represent
a guarantee of proper local management since everyone would know who
receives the monies from the local taxes and who the local person
determining the rates is, and would be in a position to see excesses from
year to year.
Equalization mechanisms between regions and departments are necessary
but must remain limited so as to avoid skewed arguments of the type “I
raise taxes for others”. As a baseline for discussions, I suggest that a rate
of 10% of the raised taxes be allocated to the equalization processes
between local authorities at the same level. This rate is quite low (1/10°).
In addition, the figure is significant and allows taxpayers to carry out
mental calculations easily; this is essential as taxation readability is a
necessary condition to acceptance by the population at large. We’ve had
enough of these silly figures (19.6 or 5.5 and why not 12.02?) that result
from a compromise, power struggle, optimization, barstool psychology
(designed to hide the required financial effort) – all those arguments
which are at best valid the year the tax is being created and downright
crippling afterwards. As for the redistribution criteria used by the
equalization fund, they need to be negotiated (to reach consensus on the
part of the region presidents/representatives regarding their respective
level) and subject to change with electoral changes (agreement would
need to be reached within 6 months, otherwise the government would
have the final say).
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36. BREAKDOWN OF THE BENEFITS MADE BY COMPANIES
What we need:
• To finance our public debt
• Equal footing with our European and global competitors in the
context of mobility of capital, companies, entrepreneurs
• GDP growth arising out of investments and companies’ economic
good health
• Promoting entrepreneurial capitalism rather than financial capitalism
• National social cohesion (equitable benefit sharing) at a time when
fashionable management theories promote hard squeezing / squeezing to
death / draining the last drop / milking dry which only makes employees
lose their motivation or even their health
• Readable taxation that brings acceptability.
What I suggest regarding corporate taxation:
• ¼ (25%) of the companies’ benefits go to the State (this is in line
with European practice)
• ¼ (25%) go to the shareholders (return on capital risk)
• ¼ (25%) go to self-financing (to promote companies’ growth)
• ¼ (25%) go to the employees (with a distribution key equal for all
employees rather than proportional to the salaries earned)
Mme Parisot has objected that certain companies would like to grow
faster; fair enough – in which case, shareholders give up their share (thus
brought to 0%), which goes to self-financing (which becomes 50% of the
benefits, more than enough to achieve self-funded growth).
Another distribution system, much more innovating and worthwhile, I
believe, is desirable if my previous suggestion (see relevant article)
concerning a single corporate tax is accepted. This tax on benefits (with
variable charge) would substitute for the fixed charges on salaries
(URSSAF, pensions, unemployment, health funds, etc.) + the former
variable charge (IS). As a reminder, this shift from fixed to variable
charges was suggested because fixed charges constitute the major cause
of bankruptcy when the revenue drops; similarly, the level of fixed
charges on the salaries is the main brake on employment.
The distribution now becomes:
• ½ (50%) of the companies’ benefits go to the State
• 1/6 go to the shareholders (maximum figure)
• 1/6 go to self-financing (minimum figure)
• 1/6 go to the employees.
Should the shareholders want faster growth, their share could drop to 0%
and self-financing rise to 1/3 (33%); variations are all possible between
the minimum level of self-financing (1/6) and the maximum level for
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37. shareholders (1/6). At first, this type of taxation benefits employees and
management; then, it also benefits shareholders (healthy companies +
dynamic companies and fully motivated employees).
SIMPLIFYING THE RED TAPE
Filling in administrative forms constitutes endless bureaucratic red tape,
time wasted in needless repetition of information already collected by the
various administrations!
I suggest setting up a centrally managed administrative Web site where
users willingly enter oft requested basic information: surname, name,
birth date, birth place, marriage place and date, name of spouse, civil
status, INSEE number, vehicle registration number, driver’s license
number, number of children and their names, birth dates, etc. Users
authorize the requesting service access to the information by email. The
information is then used to “pre-populate” administrative forms, so that
users can concentrate on the really useful areas.
In any event, it is unacceptable to find the same administration
requesting the same information in different forms, once the information
has been collected. This only serves to demonstrate the chronic inability of
their IT specialists to set up simple databases.
WORKING ON THE TAXATION SYSTEM
Contrary to what the head of State explained during his televised
performance, as it was understood by commentators, it is not only asset
taxation that has to be reviewed in France.
What needs to be worked on:
- Assets (fiscal shield, ISF, high incomes, stock options, severance
agreements - the so-called golden handshakes)
- Local authorities (dedicated tax according to the level of local
authority with 10% equalization mechanism)
- The corporate business tax, replaced by VAT on each company’s
production (variable charge)
- Rates and share of taxes on companies’ benefits: benefits to be
shared equally between the State, self-financing, shareholders,
employee profit-sharing measures
- Simplification of the individuals’ income tax brackets to promote
acceptance of this tax through greater readability. Rates should not
be optimized in line with the year’s specific needs!
- Increasing VAT from 20% to 25% but maintaining the low rate at
5%
- Modifying labor taxation (fixed charge in terms of the revenue) into
a variable charge through integration into benefit taxation.
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38. THE RIGHT TO HOTEL ACCOMMODATION FOR HOLIDAYS???
Yet another alarmist report from the INSEE signals that 1 out of 4 French
people has been in a situation of “poverty” in the last 5 years. One of the
comfort criteria that came into use is the right to spend one’s holidays out
of one’s home, not in a family member’s home, but rather in a hotel in
weekly or monthly rentals.
We are now sinking into INSEE-managed feelings of misery, whereas the
only real poverty indicator is the absolute poverty rate (basket of essential
goods, housing). Continuing on the road of relative poverty indicators
would lead a cash-strapped country into a dead end, create artificial
frustration in a country full of depressed people (who hold the record of
psychotropic drug use).
PS_1. I cannot afford to go into a hotel, but I live well and do not
complain because of this … This does not make me poor, or unhappy, or
unhappy and poor!
PS_2. I’ve heard of a poverty threshold of less than €1,000 a month; but
is this per individual, adult, or household? It does make a difference.
AN INDUSTRIAL POLICY FOR FRANCE
Through an incentive plan, the State needs to coordinate 3 types of
industrial and commercial companies that overlap partly:
- VSEs and SMEs destined to do business on the national territory.
They create jobs and generate fiscal revenue.
- Innovative start-ups designed to shelter France from international
competition by being several steps ahead, as chess players say.
These days, those lean-structured companies like start-ups are
more innovative than the big companies (because they focus on
innovation rather than on a financial casino, the monopoly of
corporate takeovers, or gaining the upper hand via advertising and
overwhelming and expensive marketing).
- Export businesses, the mature and performing ones, such as the
large groups and the large medium enterprises that bring in
currency, prestige, and some influence abroad.
Clearly defined companies pursuing different goals are now emerging. All
have a role to play; all deserve public support in the country’s own best
interest through a clear incentive plan both administrations and the
companies understand and through well-adapted taxation (most notably
by limiting the fixed charges that cripple companies during an economic
downturn and so terrify entrepreneurs that they do not hire in good times
in a country where it is so difficult to lay people off in bad times).
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39. JOB RELOCATION FROM PARIS TO THE PROVINCES
At issue here is relocation to the large regional centers, the prefectures
and sub-prefectures.
- Under normal conditions, we have reached saturation point in road
transport, so now, what will happen in snowy conditions …
- Local air pollution is already a major concern (allergies, asthma)
- The cost of housing for individuals is much too high 1. in terms of
salaries and 2. in terms of provincial standards
- The salary levels are 1. high in terms of provincial standards (hence
a cost increase for the companies) and 2. low for employees in
terms of the housing costs.
It is high time entrepreneurs realized that a skilled or unskilled labor force
exists in the provinces, that the cost of living is much lower, that all
employees, including the executives, live well, that there is no shortage of
information networks (the Internet, newspapers, books + DVDs through
Amazon.fr and local bookshops, teleconferencing, the TGV train,
airplanes), that open-air leisure activities are pleasant, etc.
So now, where is the initial State support? Could we have an update on
the government’s vision regarding land use planning?
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40. THE TARGET: ZERO ACCUMULATED DEBT
The time always comes when individuals, companies, and states have to
settle their debt because the latter has become counter-productive. This is
the situation in France today. Which target can we fix for our debt
settlement? Surely, the zero level is the one that will give us maximum
leeway in a century filled with numerous and definite threats, though one
cannot set a date for them: a climate crisis (rising sea levels, rainfall
floods brought by local climate changes), pollution ->depollution, the end
of cheap oil, pressure upon raw materials (agriculture, energy), more or
less serious wars, etc.
Stop and Go Keynesian policies cannot be used, given the current state of
indebtedness: in order to stimulate the economy, one needs money! So
we need to forget the myth of revenue-producing growth, as this myth
has not worked for the last 30 years. In other words, we need to make do
with a 0% growth, as long as we repay our debt. An annual 3% growth
based on an annual 3% extra debt is nothing but a misleading delusion
destined to an economically immature electorate.
Clearing our debt requires using at least 3 tools:
• Increasing taxation (which signals the capacity of a state to make
citizens understand the seriousness of a situation)
• Reducing costs: operational costs (salaries, status, pension
calculations for the civil servants of the 3 public services + costs of
transactions, flow and storage of information, infrastructures, and
procurement policies), social policy costs (lowering the retirement
pensions beyond a certain minimum, increasing people’s financial
participation to remaining in good health). Nevertheless, the
objective should also be to reduce by half the number of people
living in absolute poverty.
• Selling the family jewels that are not essential to the sovereign
functions of the State: selling buildings and land (SNCF, the army,
town halls, etc.), privatizing state-owned companies and public
enterprises (EDF, GDF-Suez, SNCF, etc.) whenever possible,
reducing and eliminating the non-strategic participations of the
Caisse des Dépôts et Consignations [a French financial organization
designed to safeguard public funds], stopping investments in
expensive economic development projects (freeways, expensive
military weapons programs).
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41. JOINT REGULATION OF WORKING TIME AND LABOR COSTS
I’ve read an interesting proposition in the Juppé/Rocard interview book: a
four-fold reduction of the hourly rates below 32 hours/week, and a four-
fold increase beyond. It seems to me that the figure of “4” is debatable;
why not “2”?
Note 1: in the fields of mathematical optimization, automatic control, and
economy, when it is not easy to regulate through bans/authorizations (in
other words, all or nothing) according to a rigid threshold to be defined, it
is worth defining an incentive cost function while letting those in charge
(in this case, the company managers, the payers) make the decisions.
Note 2: the link thus established between the working time and the labor
costs enables a double regulation: that of working time and that of the
costs of salaried labor.
A SAVINGS BOOK TO BENEFIT VSE/SME FINANCING
M. President Sarkozy, how far have got with the idea from the CGT, which
you accepted in 2 broadcasted speeches, and that deals with the launch of
savings books designed to help finance French VSEs and SMEs? This is
both urgent and essential:
1. Commercial banks no longer finance the “real economy,” as they
choose, instead, to speculate on financial securities and to finance large
companies, which are less risky in the long term. However, when
considered collectively, VSEs and SMEs are worth investing in and solid.
2. VSEs and SMEs have the highest hiring rate in proportion to the
invested capital. Their leaders have not fallen prey to the by now well-
known management style of “hiring less for a higher rate of return.” VSEs
and SMEs believe in the future, they invest, they hire.
3. Neither start-ups nor export companies should be supported or
financed via these funds. I could be mistaken, of course, but I believe that
there are other financing channels for these 2 categories (e.g., business
angels, banks, Coface) that are attractive to commercial banks (? To be
confirmed)
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42. MULTI-CRITERIA SELECTION OF PUBLIC PROCUREMENT
At the moment, public contracts are awarded mainly to the lower bidder,
which involves bias towards lower quality and products from low-cost
countries.
However, mathematical rational choice/multi-criteria selection theories
have been around for at least a couple of decades. These theories
combine, for instance, the following issues:
• Costs
• Quality
• Esthetics (if needed)
• Ecological footprints (type of materials, energy savings, carbon
value, etc.)
• The nationality of companies (French, European, countries favored
by a treaty, WTO, others)
• The strength of companies (balance sheet analysis over several
years, type of shareholding, management options +/- in sync with
the payer)
• The way employers treat employees (salary policy, human rights,
occupational injury rates)
• Etc.
The mathematical technique involves 1) evaluating each criterion
numerically (a cutoff threshold can be established), and 2) comparing all
the scores for one criterion in pairs, so as to establish a classification for
each criterion separately. Finally, 3) in order to determine the overall
classification for all criteria, one can establish a score = the sum of all the
scores for each criterion, and the winner is the one that has the lowest
score.
For instance, the one who is 1st
on Criterion 1, 5th
on Criterion 2, 2nd
on
Criterion 3 receives the overall score of 1+5+2=8; the one who is 2nd
on
Criterion 1, 2nd
on Criterion 2, and 3rd
on Criterion 3 will have an overall
score of 2+2+3=7. So, the second project is chosen over the first; if the
second project is also better than the third project, it will be termed
“dominant” and will be selected in the end.
Another type of multi-criteria algorithm to be tested involves giving a
score between 0 and 10, then multiplying all the scores related to one
project. The highest overall score will indicate the best project.
To select one of two multi-criteria algorithms, testing is necessary so as to
select the one closest to human cognitive intuition.
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43. STRUCTURAL REFORMS TO BE CARRIED OUT IN THE PUBLIC SERVICES
The February 2011 issue of Capital magazine deserves top priority reading
by those interested in reducing public expenditure through the more
effective organizational functioning of administrations. And no, it is not yet
another ordinary pamphlet against civil servants! The idea is to
demonstrate, via examples, that a more effective organization of those
(miserable!) basic civil servants would result in a wealth of productivity
and … well-being in the workplace. But it is essential that government
officials take full ownership of the analyses presented in the magazine,
this particular approach, and types of resolutions. So what on earth is the
ministry tasked with the modernization of administrations and the General
Public Policy Review (RGPP) doing?
PS. I already knew about the multiplicity of statuses that is an important
brake on mobility. What I really enjoyed reading about is at the end of the
Capital feature: In Canada, civil servants are offered a financial incentive
to suggest effective reforms (10% of the savings realized at the end of the
first year of the suggested reform).
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44. TEACHING THE FRENCH PEOPLE THE REAL COST OF GOODS AND
SERVICES
The French have a deep-rooted aversion to and contempt for money. But I
can’t think of a better economic system than capitalism to determine
guide the complex transactions that determine behaviors. As we know,
Marxism, this community-based utopia, ended dismally in the real world.
Bartering is inadequate to manage decentralized transactions. Christian
giving/ counter-giving simply does not work to enable progress in a
society with diverse individual behaviors. Hence, it is high time the French
acquired a positive way of considering the business world.
More specifically: politicians mollycoddled the French society after the
reconstruction (around 1960). The real cost of medical care is carefully
hidden (100% reimbursement rate, third-party insurance), which the care
community (which I know well) cashes in on; most of its members are
more interested in making money than in actually helping the sick…
Up till now, petrol costs have been cleverly overtaxed in order to deter
wastage of this precious resource, hence reducing costly imports. They’re
now talking about setting up a social rebate on pump prices; surely, this
goes against the notion of waste reduction. If we are legitimately
concerned about the poor, it would be better to reinforce the RSA, which
tallies quite accurately with people living in a situation of absolute
poverty. Similarly, freezing the price of gas is currently in the news.
Problem is, the price of gas results from contracts on the world market.
The only thing that can be done is to check that the gas, petrol, electricity,
postal, etc. companies do not abuse their oligopolistic situation to gorge
themselves. All that’s needed is to carry out a cost analysis and evaluate
the cost increases within international competition; this must be done by a
management controller paid by the State. Freezing increases in the
sectors previously mentioned is done purely for electoral purposes and
delays the adaptation of the French people to the reality of costing in the
market world where they are going to have to live for a long time.
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45. TAXATION FOR THE AUTOENTREPRENEURS
The autoentrepreneur status was created in order to
- facilitate testing the self-employment route
- supplement paid employment
- fight moonlighting
To succeed, what autoentrepreneurs need is administrative simplicity:
- The accounting system required by the banks and the tax
authorities must be extremely simple to set up and to verify. I’m
thinking of a mandatory professional bank account, which, a
posteriori, the tax authorities can verify and the banks are
authorized by the account holder to access. This system differs from
the accounting records which are required a priori from all other
companies. I would also suggest developing business accounting
software that would be interfaced with the various administrations
(tax authorities, URSSAF, etc.).
- The tax charge must be based on the turnover or the benefits; it
must be either proportional or progressive. It should not include any
fixed charge (that is, independent of the activity) precisely because
autoentrepreneurs’ activity is highly variable, and fixed income and
social taxes would doom many activities to failure and, worse,
would inhibit the emergence of new autoentrepreneurs, particularly
as the start-up phase is crucial for these low volume activities.
After testing, should this system without fixed charges work, it should be
extended to include the VSEs (1-10 persons).
I repeat that the issue is not that the absolute level of taxation on
business activities that matters, as entrepreneurs are happy to pay taxes,
like everyone else, provided taxation does not kill their activities, hence
their assets and salary. This is the MANTRA: fixed charges linked to
administration (income and social taxes) must be brought to zero level.
The only fixed charges must be those linked to employee salaries, which
will consequently be more manageable, which is turn is better for
employment, activities, hence for the State (fewer unemployment
benefits, more activity-based revenue, and increased spending resulting
from increased purchasing power, hence increases of indirect salaries).
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46. FINDING ECONOMIC GROWTH
Economic growth cannot be imposed by decree. It does not result from
some vague and substance-free political will, nor from trust in the
capacities of key political leaders; it is no longer derived from adjustments
to macroeconomic equilibrium; it comes from attention to microeconomic
detail.
Macroeconomic domain:
The European Central Bank (ECB) deliberately maintains high interest
rates and low inflation rates to force governments to be virtuous (the debt
burden), to sustain the medium-term visibility of prices for consumers,
manufacturers, financiers, and to prevent inflation from wiping out the
income from annuities in an ageing Europe where the well-off
elderly/pensioners hold power. Given the current power dynamics
between the ECB + Germany and southern Europe, it is unrealistic to
expect any protest-driven shift; all one could hope for is a loosening of the
inflation rates from 2% to 4%, as the figure is not cast in stone for the
institutions.
As far as the notion of budget deficit-driven Keynesian stimulus is
concerned, I have already shown that Go policies are feasible only if
budget surplus has been accumulated during the Stop phases, which is
evidently not the case. Transferring the stimulus burden to a European
budget level would serve only to extend the deadline for massive
reimbursement, given the leaking expenses basket. Above Europe, there’s
only the IMF, which knows how to get reimbursed the hard way if need
be. We would then lose our economic sovereignty, and voters would
overwhelmingly choose the extreme parties.
Microeconomic domain:
The prototype (and tool) of the kind of much-needed microeconomic
future is the Internet world: everything is dead simple (90% of the time,
all that is needed is to click on OK in successive windows, except for
special cases), servers are competing to offer something extra
(information, services, goods), the consumers are more than willing to use
their bank card to pay online (a turnover of billions, and steadily
increasing).
As far as administration is concerned, the Internet micro-economy
involves legal simplification, the cult of administrative simplicity,
interfacing with private industry software, and promoting dedicated social
networks of the Facebook type reaching civil servants in a group of
administrations who are potentially interacting, senior government officials
in all administrations and sectors: law, healthcare, agriculture - water and
forestry, sanitation, agribusiness, etc.
As far as the private sector is concerned, it is essential to fight for the
maximum innovation at all levels: technical, organizational, service-based,
etc. This is necessary to keep ahead of the products from countries with
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