My in-laws and extended family all live in France (mainly Paris). The truth is, from my experience, that medical service is very good there. Physicians come to your home, no lines (it's also private to a large extent). Yes, true, Parisian physicians are on vacation in August (my Mother in law died because of that; an ordinary infection from her pacemaker was misdiagnosed because all the experts were on the Riviera).

But the heat wave deaths you talked about have to do with something else -- less the problem with medical services than other regulations. Those who view Paris's uniformity as beauty do not know that it is highly regulated and very costly for the dwellers. Houses must be repainted every few years (and they must be sanded -- an expensive method). You're allowed to change windows -- but you must keep the 19th century style (very expensive too), so you cannot install air-conditioning units toward the street (which, if you know the design of these houses means that the options for air conditioning are very limited). These nice apartments are expensive to maintain. They were built before running water pipes were introduced. So you have pipes for gas, electricity, and water running in complex mazes, hard to repair. All these expenses make apartments look nice for tourists -- but dwellers are left with not much discretionary income (especially after France's savage taxes) to renovate the apartments inside. Most Americans would be shocked to see the state of bathroom and kitchens in apartments in even the most expensive parts of Paris.

No wonder Parisians are "renting" coffee tables, sitting there for hours (the coffee costs 5 euro, not for it, but for the rental), rather than go home to stuffy, airless, dark, hot apartments. Boheme may look romantic in Zeffirelli's staging on the Met's enormous stage, or even on Broadway. But it is not surprising that in reality people die under the hot roofs -- OK, not from tuberculosis, as Mimi.

Also, many of these houses do not have elevators to the top floors -- those just under those nice roofs for tourists, heat traps if you live under them -- because those had been once the servants' quarters. They used the servants' stairs at the back of buildings. Today, this is where many poorer, older people still live -- and they could not walk down the stairs, and certainly not climb them in that heat. In many of these houses, the top floors have one shared bathroom and one shared shower (in a state comparable to some bad slums in US cities), and one small window opening to the roof.

All this said, the major issue with French numbers is elsewhere -- and Krugman is truly clueless. The French are a dying breed. They have no kids. This causes a divergence between his numbers, your numbers -- and standards of living. Actually, the French are living much better than the numbers or just Paris would suggest. For the moment -- but it is nothing any society can or would like to emulate.

Since the French have been having fewer kids for a while, inheriting money right and left -- including country houses (whose value does not appear clearly in any books; keep in mind that France collaborated with the Nazis, and there was very little destruction there). So this generation lives rather well, 35 hour work week, and little enthusiasm notwithstanding. A big topic among middle aged French, and even among the young, is who will inherit what, from whom -- and when.

And in typical French fashion they say "apres moi le deluge." You know French, right? "After me the flood". Which will come -- in fact it's already there -- in the shape of some 6 million Muslims, who have kids. Now if the French are morose and dying,  what's the meaning of those aggregate economic numbers? That as they get older, they work less? That they have inherited more (and keep their money in Switzerland or tax-free Luxembourg)?

But what does Krugman know about real life? I never found even one insight in his writings about the US (never mind human behavior; even on monetary affairs he does not know what he is talking about). So why would anyone expect that he would know anything about France?

I've made this point about tax rates before on these pages but it bears repeating because it reflects a fundamental economic insight that gets to the heart of policy making: People respond to incentives. You don't make economic policy for nations, you make it for people. And it's the responses of those people, when aggregated, that give us those data that we all love to analyze.

So, why did the European labor supply decrease by a third from the early 1970s to the mid-1990s? Because the marginal effective tax rate was increased to 60% from 40%. People chose to work less than before. Consequently, tax revenues fell. You can't raise revenues by taxing people beyond their willingness to pay. And you can't expect an economy to grow when people don't have the incentive to work, or when entrepreneurs lack the incentive to take a chance.

Maurice Lévy, the head of the media giant Publicis, whose company owns Saatchi and Saatchi and has offices in 100 countries across six continents, said France had failed to get the 2012 Olympics because the world now saw it as a nation of perdants - "losers".

For good measure, he described the 35-hour week as "absurd" and the wails of complaint that followed Paris's loss of the Games to London as "pathetic".

His forthright critique was published in the opinion section on the front page of the respected daily newspaper Le Monde.

It was in stark contrast to the slick advertising campaigns dreamed up by Publicis to promote its international clients, which include BMW, Renault, Coca-Cola, L'Oréal, and Club Med. Such campaigns helped earn the company net profits of €130 million euros (£90 million) for the first six months of this year.

ANGERS, France - A court convicted 62 defendants Wednesday in a mass pedophilia trial and sentenced some of them to up to 28 years in prison for their roles in a network that systematically raped and prostituted children in western France.

In the harrowing case, prosecutors said 45 children between the ages of 6 months and 14 years were raped and abused by their parents, grandparents or acquaintances in a working-class neighborhood of Angers from 1999 to 2002 -- at times in exchange for small amounts of money, food, alcohol or cigarettes.

"The people who write for Op-Ed have a responsibility to be forthright and specific in their arguments."

It's not so bad in France, claims America's most dangerous liberal pundit. It's a "highly productive" nation, he says. Oh yeah? Its average real GDP growth since 1991 has been 1.8% per year, compared to 3.1% for the United States. Its GDP per capita is lower than all but the poorest four US states -- lower even than Alabama, a state Krugman nastily described the week before last as being populated by people too poorly educated to work in automobile factories.

But Krugman claims that's "mainly a matter of choice." He says it's because the French have chosen to spend less time working, and more time at leisure. At least he's right about the leisure -- France is about the most leisurely nation there is. The average French worker worked 1,441 hours last year -- while his US counterpart worked 1,824 hours. The average French worker took seven weeks off in vacation and holidays -- his US counterpart took less than four.

But all that leisure isn't really a choice. If the French wanted to work more, they couldn't -- the French economy just isn't producing any jobs. The French unemployment rate in May was a catastrophic 9.8%, and that's actually better than the average over the last 15 years.

Over that period, the French unemployment rate has run, on average 4.9% higher than the US rate. Following his "disturbing habit of shaping, slicing and selectively citing numbers," Krugman lies about that in Friday's column, saying it's been "about four percentage points higher." And Krugman lies by omission when he neglects to mention the most tragic aspect of France's unemployment picture: more than 41% of the unemployed have been out of work for more than a year.

Krugman minimizes the whole matter by saying nothing more than that it's "a real problem." How very differently he has dealt with unemployment in the United States on George W. Bush's watch. With unemployment here coming out of the 2001 recession never getting anywhere near French levels, Krugman still hasn't stopped whining about "the anxiety and humiliation" and "the indignity and financial hardship" of it. 

Even with all that unemployment, the French jobs picture is worse than it seems. What Krugman calls the "choice" to work less is, in fact, a case of the employed being underemployed. When the economy can't produce more work for them to do, they couldn't work more than their 1,441 hours a year if they wanted to.

Until recently it was a matter of law. In 1998, powerful unions pressured France's socialist government into mandating a 35-hour work week, under the doctrine of "work less, work all." The first part of that has been a success -- people are working "less." The second part has been a miserable failure -- "all" are not working. It's gotten so bad that last March France's General Assembly voted to, in effect, dismantle the law by allowing up to 13 hours of overtime. It remains to be seen if that will make any difference.

In the meantime, Krugman rationalizes it away as a matter of "family values" -- deliberately mocking the slogan of some American conservatives. He says members of  the typical "French family are compensated for their lower income with much more time together," and that France is "extremely supportive of the family as an institution."

Let's talk about that "lower income." Krugman Truth Squad member Bruce Bartlett points to a report by the European consulting firm Timbro that found that total private consumption per capita in France is about half that of the US. The average French family has a lower standard of living than Americans living below the poverty level. Impoverished Americans have 16% more dwelling space per capita than the average French; the American poor are more likely to have a car, a dishwasher, a microwave oven, a personal computer, and a clothes drier.

So now we know what French families are doing with all that extra time together -- they're crouching in cramped living quarters doing household labor. And, by the way, we can guess what they're not doing. The French birth rate is so low that its current population isn't even replacing itself.

Are the French as happy with their "choice" as Krugman thinks they are? New Krugman Truth Squad member Tino Sanandaji on the Truck and Barter blog points to a Harris Poll that says they're not. When asked if you are "very satisfied...with the life you lead" only 18% of Frenchmen said yes, compared to 58% of Americans. It turns out that the French aren't even all that wild about the families they spend so much time with instead of working. Sanandaji points to a Pew Foundation survey showing that only 43% of Frenchmen are "very satisfied" with their family life, compared to 67% of Americans.

Why has Krugman mounted such an absurd defense of the failing French economy? It's a matter of first principles -- he describes himself as an "unabashed defender of the welfare state." So that keeps him both from wanting to admit either how bad things are in the French workers' paradise or understand why. The root cause is one that Krugman can never acknowledge -- France's crushing tax burden. In fact, the differences between France's and the US's tax burdens are nearly perfectly proportionate to the differences in hours worked.

Also, at the moment, the most important item on Krugman's Leftist agenda is socialized medicine -- and he would like Americans to believe that if we imitate France's model, we can get what he calls their "excellent health care." And if we trash our economy in the process like France did, don't worry about it -- they're "highly productive," and "French workers spend more time with their families."

Oh, and about that "excellent health care"... I seem to remember something from about two years ago, when about 15,000 elderly people in France died in a heat wave. That's more than five times as many as were killed in the terrorist attacks of September 11, 2001. And why did it happen? In part, because most French households are too poor to afford air conditioners. But more important, those people died because so many doctors were on vacation. Hey -- it was their "choice."

Posted by Donald L. Luskin at 5:22 AM | link    

Sunday, July 31, 2005