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French Choice
Krugman reaches for a silver lining among the shards of France's failing economy.


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Donald L. Luskin

According to Paul Krugman’s New York Times column Friday, “there’s a lot to be said for the French choice”–the choice to live in a decaying welfare state with no growth, no jobs, and no future, but plenty of free time on your hands.

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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 U.S. 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 U.S. counterpart worked 1,824 hours. The average French worker took seven weeks off in vacation and holidays–his U.S. 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 U.S. 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 U.S. 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 how bad things are in the French workers’ paradise and from understanding 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 U.S.’s tax burdens are nearly perfectly proportional 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 importantly, those people died because so many doctors were on vacation.

Hey–it was their “choice.”

Donald Luskin is chief investment officer of Trend Macrolytics LLC, an independent economics and investment-research firm..



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