Lunchtime Must-Read: Paul Krugman on France’s Rightward Austerity Turn

Paul Krugman: France by the Numbers:

‘You shall not crucify mankind upon a croissant d’or’. That was Alan Taylor’s response (in correspondence) to François Hollande’s embrace of Say’s law–he literally said that ‘supply actually creates demand’–together with a shift to, again in his own words, supply-side policies…. Mark Thoma is your go-to site for the rapidly growing avalanche of horrified snark. The amazing thing… is the extreme pessimism that has evidently enveloped French elite opinion. You’d think that France was a disaster area…. You do have to wonder why the French elite is so easily intimidated into making a hard right turn while the elites of much worse cases like Finland and the Netherlands remain steadfast in their notion that the worse things get, the more committed they have to be to inflicting further pain.

Do go visit Mark Thoma: Economist’s View: ‘L’Offre Crée Même la Demande’, with links to Gloomy European Economist, Kevin O’Rourke, Ambrose Evans-Pritchard. As Mark says, it is indeed the case that:

Hollande’s extraordinary statement that supply creates its own demand, at a time when the Eurozone economy is up against the zero lower bound, and unemployment is terrifyingly high in several EMU member states, is just an extreme, self-satirizing, example of the phenomenon. If what Europe needs is for France to make Germany an offer it can’t refuse–allow the ECB to seriously loosen monetary policy, or we may not be able to stick with EMU–then we’re not getting it any time soon…