Economic proposals (1/6)

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.

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.

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?

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...

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!
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.

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!

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!

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.

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!

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!

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.