Has France swung too far to the right – farther in fact, than the United States under President Obama? According to Pierre-Alain Muet, a Socialist Party member of the French National Assembly, the United States and the rest of the world is leaving Sarkozy’s France behind by embracing FDR’s program of restoring equality to income distribution and keeping savings banks out of the business of speculation.
For France’s Le Monde newspaper, Pierre-Alain Muet writes in part:
“With the New Deal, Roosevelt laid the foundation of the modern welfare state in a country where the culture of social protections was totally foreign. Europe’s widespread adoption of these public policies coupled with the development of the welfare state and a highly regulated financial economy contributed to the long period of postwar prosperity.”
And on taxes, Muet suggests going much farther than Obama’s plan to return to Clinton-era tax rates:
“On the eve of Roosevelt’s arrival at the White House, the marginal tax rate on higher incomes was never more than 25 percent. He raised rates to 63 percent and in 1941, 91 percent. For half a century, the United States lived with a marginal tax rate on very high incomes of nearly 80 percent. This dissuasive taxation on very high incomes would lead to a strong reduction in inequality before taxes (and, even more so, after); it was a situation that one would find in nearly all industrialized countries during the post-war period. ”
By Pierre-Alain Muet
Translated By L. McKenzie Zeiss
March 10, 2009
France – Le Monde – Original Article (French)
Just like the crisis of 1929, the current crisis has two faces. The exposed face is of course the financial crisis. Demands for profitability incompatible with the real economy that were maintained by a proliferation of financial innovations, have collapsed like a house of cards now that market expectations have turned sour.
But the crisis has another face: the constant pressure on wages resulting from the demand for profitability has profoundly increased the gap between income from wages and income from capital. The American economy continued to grow in the 2000s even as median wages stagnated, with demand fueled by the debt of the most modest households. To a lesser degree, this situation was also found in the European countries, including France. As it was on the eve of the 1929 crisis, liberal globalization has led to a formidable accumulation of wealth in a small minority of the population.
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