Posted tagged ‘France’

Foreign Relations, Bush League

October 11, 2018

The Trump Administration following the inspiration of their commander in chief have racked up quite a score card for foreign affairs.  Everything in the foreign affairs arena done in the Obama Administration was prima facia wrong (how about worst ever).  With this view, abandoning, walking away from, or reversing any and all Obama Administration policies was the Trump option of choice.

So, we have ended NAFTA (worst treaty ever), thumbed our nose at the Europeans by withdrawing from the Paris Climate Agreement, and roundly distanced the US from almost all other countries with our America First and indiscriminate use of new tariffs attitude.  President Trump said he expected each other country to act similarly, that is in the best interest of themselves.  Hmmm.

It is relatively easy to look good or at least get away with new policies regardless of how short sighted they may be, if you have actually inherited a good economy and a well defined foreign policy.  Deconstructing is much easier and for the short run less risky than for proposing and implementing sound, constructive longer term policies.  President Trump has and continues to show us how true that observation is.

Someone, however, with a “one off” set of tactics, runs a far ranging risk of “what goes around, comes around”.  Case in point, withdrawing from the Iran Nuclear Agreement.

A group of neoconservative hawks combined with far right Israeli supporters (remember the Iraq invasion in pursuit of non-existent WMDs) lobbied hard for President Trump to reverse the Obama Administration negotiated agreement with Iran.  With the most bellicose rhetoric the President could muster, with draw from the Iran Nuclear Agreement he did. 

Proud as a peacock, the President labeled the agreement “the worst ever”.  Hmmm.

The President then reimposed the economic sanctions which existed prior to Iran agreeing to halting their nuclear development.  Regime change (which Israel predicted) was just around the corner.  But…

The “but” is that the rest of the signatories (Germany, France, the UK, Russia, and China) did not wish to see Iran restart its testing.  The US cajoled and then threatened that dire consequences would befall them if they traded in violation of US sanctions.  For many businesses, the US market is extremely important and understandably these companies hesitated.

Making a straight up choice between the US and Iran as a trading partner would seem a no brainer.  The complication, however, was the US was not acting very trustworthy in its dealings with any other country forgetting about Iran.  Hmmm.

America First (or America Alone as it is practiced) will not work in todays global economy.  Supply chains are too intertwined to simply take a unilateral position unless one is willing to accept sharply higher costs of doing business and substantially lower economic growth.  So where does the US stand?

Russia and China are strategically challenging the US for world economic growth and strategic national interests.  Europe (the UK, France, and Germany) are simply unwilling to turn down trade with Iran on the basis of an unfriendly country asking them to.  Hmmm.

Reports this week that the other signatories to the Iran Nuclear Agreement were exploring a “barter” system with Iran as a means of out flanking the US squeeze on monetary based trades.  The details are not important but the fact that three important allies are openly discussing ways to circumvent US sanctions should send a huge message.

I wonder if anyone is listening?

Fairness and Hard Work

August 15, 2012

Headlines in today’s newspaper said Europe was slowly sliding into a deep recession.  Without a bailout (read German loans), dark days lay ahead.  How did this situation come about?

You can be sure it didn’t happen over night.  It has been building and is the result of cumulative events.  But then, life is usually that way.

France had riots this week in the city Amiens.  With unemployment over 20%, some French citizens have had enough and are not going to take any more.  But who should they blame?

French unions pushed for a 35 hour work week in 2000.  They claimed this reduction with working hours would required companies to hire more workers.  More workers, lower unemployment they reasoned.   Business owners saw it differently.

It might have worked had workers agreed to take a pay reduction equivalent to prorated 35 hours of pay.  Instead workers wanted to keep their full pay, in effect, a pay increase for working less hours.  Nice if you can get it.

France like most other European countries had used import restriction and fair price regulations to protect their industries (and their workers) from imports.  It may not have been efficient but life was quite comfortable for the French.  In 2000 with globalization and the Euro in place, these old tricks would not fly.

The French then turned to government subsidies and unbalanced budgets.  Almost unnoticed was the advent of big box discount stores.  Mom and Pop shops and businesses began to disappear.  With globally lower prices, jobs evaporated in France and reappeared in places like China.   Sound familiar?

Fast forward.   France finds itself today with high national debt, a mediocre global competitive position, no plan to balance its budget, and high unemployment.  To some extent, the same can be said for Greece, Italy, Spain, and Portugal.  How can these governments “spend” their way back to prosperity when they are tapped out on credit?

There is plenty of blame to go around.  Working less and getting more just doesn’t compute.  Thinking that good outcomes come from importing unlimited amounts of goods without a balance of trade is a loser idea too.

Politicians who offer the “free lunch” solution (lower taxes, increased government benefits, etc) do no one a favor. And greedy corporate and banking executives that see profits to be reaped and do not think about the long term consequences are very close to committing criminal actions.

This is all happening in Europe.  But wait, is this not also a blue print of the US economy?

Republicans are telling voters it is time to stop digging. (Good idea)  Unfortunately, their message of stop digging (eliminating a large amount of government spending) is selective.  The holes associated with defense and energy industries do not upset Republicans as does health care and social programs.   And, taxes, Republicans incredibly say, can only help if they were lower (making the deficit closure more onerous).

Democrats seem mostly in favor of riding the current situation out and hoping it will improve.  Democrats do call for higher taxes for the top 2%   While that may restore some amount of fairness, it will not balance the budget nor bring the deficit and debt under control.

The French government knows its own situation well.  These bureaucrats know full well what should be done.  The problem is voters.

Until France tells its citizens the full truth and calls for across the board sacrifices (fairness and hard work) followed by living within its means, it cannot expect to aid its economy.

The same is true for the US but who here wants to learn from Europeans?

Romney’s Magic Kingdom

June 13, 2012

Mitt Romney doubled down on his Obamacare position.  Mitt says he will “repeal and replace” the Affordable Care Act, if elected, and if the Supreme Court has not already struck it down.  The math, however, doesn’t seem to be there.

Romney has promised that his plan would be a real “consumer” driven health care marketplace.  In Romneyland, consumers will use their buying power and drive down the cost of healthcare plan options.  Competition is the element that has been missing and Bain Capital’s former leader will take America back to it.

Romney’s speech sounds good, almost too good to be true.  And it almost certainly is too good if you take what he says at face value.

The first hurdle is the reality that healthcare is not a normal consumer item like blue jeans or breakfast cereals.  You can’t outsource nurses to China and deliver care in Baltimore.

In addition, most people when they get sick do not have a clue how to negotiate with doctors or hospitals or later with drug companies.  People are so worried about whether they will get better they follow the first advice they hear.   Most of us lack depth in medical knowledge, we hear the doctor, shake out heads, and do what the doctor says.

What a Romney “consumer market” will really look like is a place where insurance companies offer a wide variety of insurance plans with varying degrees of coverage.  Many will be watered down plans, some which may cost less, but you will get what you paid for.  These watered down plans will be inadequate when a person really gets sick.

The average American deserves at least the coverage a Congress members or federal workers receive.   In such a case, the insurance will cost every bit as much as today and no amount of calling it a consumer market will lower the price.

Romney also made a point that he does not want pre-existing conditions to put insurance out of reach for Americans.  This should make us take notice.  Does he think we are stupid?

Why in a free market economy would insurance companies reinstate equal coverage for men and women, pre-existing conditions or not, without a full enrollment of all Americans?  The individual mandate is out in Romneyland so where are the insurance companies going to get enough enrollees to offset these costs?  I hope Romney doesn’t expect the insurance companies to suddenly shave their profits.

Romney also threw Medicaid gratuitously into the mix.  His proposal is to provide block grants to States and let them deal with those who qualify for Medicaid.  In other words, without any standards of care, someone in Maine could receive far different Medicaid health care than someone in Texas or Kansas.  How can we accept health care that varies by where you live?

Romney needs to look at the fundamentals if he is serious.

The US spends more than twice as much as Germany or France on a health care system that is not as good and does not cover everyone.  At an estimated $7500 per person per year, the US is spending on health care $2.4 trillion or almost 17% of the national GDP.

The ACA addressed one half of the US problem.  ACA provided a route to insuring almost everyone.  It is unclear where it made the cost problem better or worse but it certainly did not lower the gap between German and France.  In this sense,the ACA is a wounded duck from a cost reduction perspective.

For the many who have already concluded they are against the Affordable Care Act or simply against President Obama, Romney’s words, when said quickly, sound pretty good. They are, however, hollow and are an enormous disservice to Americans.

Oh, if only in Romneyland they could speak the truth supported with data.

France’s Big Vote

May 5, 2012

France will elect its President for a five year term this Sunday.  Will it be the current President Nicolas Sarkozy or challenger Francois Hollende?  The betting money seems to be on the Socialist Hollende but with a poll lead of 28 to 26%, Hollende should not spike the football yet.

Conservative Sarkozy ought to be assured victory since the other right of center candidates (with a combined 46% of the poll numbers) were eliminated in the first round of voting.  The view, however, is that Hollende will pick up enough votes to beat Sarkozy with many right wingers just staying home because they see Sarkozy as not being right enough.

Sound familiar?

France like the US has some fundamental problems which a full conservative or full socialist agenda won’t fix.  France runs a deficit budget and has over 50% of its GDP attributable to government spending.  Unemployment is high and the economy is relatively weak.  So which path should France follow?

Socialist want to add government jobs and raise marginal tax rates (on the wealthiest).  They also want to roll back retirement age from 62 to 60 and strengthen the rules supporting their 37 hour work week.  All in all this seems desirable for workers but unlikely to strengthen the economy without bankrupting France first.

The conservatives want to hold the course.  Whatever course that is or was.  Their five years in office have been largely captive to the world financial crisis of 2008.  France’s economy has hardly been growing.  

With the European sovereign debt crisis, France has reluctantly supported Germany in the Euro defense.  “Austerity” is the word and the proposed solution for Europe’s debt problems and that doesn’t seem compatible with hiring lots of new government workers like the socialists want.  What is a leader to do?

There is much talk in Europe now that their anemic economy might be related to their new found diet of austerity.  Maybe some stimulus would be helpful, many economist say.  But who will lend them the money? Hmmm.  Sounds a bit like what we are hearing here at home.

Ironically, conservative Mitt Romney is running on the platform of austerity while President Obama is proposing “more of the same” (which is debt driven).  We can look to Europe to see what is likely to happen if we simply slash government spending.  Yet, we know we cannot use the debt option forever.    Looks like the middle might be a good place.

It is tempting to equate Obama to Hollende and Romney to Sarkozy.  President Obama, however, has used his first term to stake out the middle.  Should Romney try to move in that direction, he will disappear under the President’s shadow.


Did I See the Future?

October 20, 2010

I returned yesterday from a week in France. This social democracy is often held up as what is in store for the US if we elect Democrats. Great food, good wine, clean subways, and a simply pleasant experience, not a bad future.

France along with Germany developed Airbus which makes planes that compete favorably with Boing. Peugeot and Renault build cars every bit as good as GM or Ford. And not much has to be said about French fashion in terms of how good it is. What have I forgotten?

Oh, yes, it is health care. France has a national system which produce health outcomes (life expectancy) superior to the US and a health care delivery system that ranks in the top three worldwide (US ranks number 16). In France everyone is covered for health care and never denied medical care for lack of insurance or pre-existing conditions. And let me not forget, France’s health care cost per capita about 60% of what it costs in the US. So, what so bad about this social democracy?

Well, I saw another aspect of French life this week also. There were nationwide demonstrations against government programs to “roll back” a key social benefit. The Government has determined that it must delay the age at which French citizens can retire and collect their retirement payments. This is the same situation that the US faces with social security and Medicare/Medicaid. In the case of France, current law defines retirement age as 60, and the Government wants to move it to 62.

The result has been street protests and disruption of fuel deliveries and train service. Much can be said about the dark side of unions and looking at the situation in France, you can find validation of ones fears. Union leaders have sought to involve student groups (both university and high school) in demonstrations. This calculated move hopes to scare the government into reversing its intentions. (Students are known to be unpredictable and can easily turn a demonstration from peaceful to violent.) French unions are just as prone to short sighted actions as any in the US.

But just looking at the basic issue is amazing to an American. Retirement at age 62 with a life expectancy of over 80, what is so bad about that?

The answer is nothing, of course.  The 60 and out appeals to many but not most. The French have fought recently over the length of the work week too. In the 90’s, the French reduced the work week to 37 and 1/2 hours with cumbersome restrictions on overtime. As the country’s economy began to fall behind others, compromises were made to provide more flexibility, but not without similar demonstrations.

Some things are neither Democrat or Republican, they are common sense instead. Retiring at 60 is neither right or wrong, but it must be paid for. The change to 62 does not deny French citizens the right to retire with a social plan, it just changes the timing. Health care where private, for profit, companies can raise premiums or deny coverage creates situations where one day a person gets coverage and the next he/she does not.

The French way of resolving these policy differences makes no sense to me, but then no one asked me about my opinion. What I do admire is that France is just the same a pleasant place with a reasonably diverse population (not as diverse as the US).  France works quite well and offers a living experience worthy of study. No one should be fooled into thinking we should strive to look just like France, but to understand how their worldclass systems operate, is free for the look.

What Are Angela, Nicolas, and Gordon Thinking?

June 11, 2008

President George W Bush took time from his busy schedule of dinners and picture taking to join Chancellor Angela Merkel at a news conference yesterday.  In a deep, sincere, “no kidding around” voice, our chief Chicken Hawk once again threatened Iran with military action.  George, whom we have come to learn can lie like a rug, said he preferred to go the non-military route.  That declaration makes me much more comfortable.  NOT!!!

Iran presents a serious problem to the Middle East and certainly indirectly to the US.  The Iranian Government marches to a different drummer and seems to opaque for our boys in red to figure out.  What do you think a Country sitting under onerous sanctions with oil to sell and people to feed would do if denied for long the ability to exercise international commerce like any other country?  My guess is there would be very little reason to hold all the proprietary nuclear information secret (from other Islamic brothers) should Iran get into that position.  The Iran situation and its status as a member of the world needs to be totally rethought.  That this range of thinking is not in George’s repertoire is not a surprise after 8 years.  What is a surprise is why the leaders of Germany, France, and the UK waste their time with him.

To some degree, all three are in political tight spots.  Merkel is probably the most secure but as the leader of the “grand coalition”, she must be on the alert everyday.  So I guess they all think that maybe association with the US is helpful now and if it must come with our “Chicken Hawk in chief”, so be it.