The Cost of Freedom Fries

Andrew Sullivan points us to Free Exchange, the economics blog of The Economist, where we learn of a paper recently published by the Centre for Economic Policy Research in which the costs of anti-gallic sentiment in America following France's decision to not support the U.S. war effort in Iraq.

It seems that market forces have not yet stopped American businessmen indulging the Francophobia that swept the nation in the run-up to the invasion of Iraq. Between February 2002 and March 2003, the percentage of Americans who had a favourable view of France fell from 83% (it’s hard to remember it was ever so high) to just 35%. By 2005, that aversion to all things gallic was costing France about $5 billion-worth of exports, the two authors calculate. It was not just American shoppers boycotting French wine (down by 13% over six months in 2003) and holidays. The bulk of the fall was in inputs (industrial machinery etc.) not consumer goods. France rarely dominates these markets, leaving American businessmen freer to buy elsewhere. In consumer goods, however, France is either the Oscar-winning supplier (champagne) or it’s so anonymous that no one knows they’re buying from France in the first place.

It's easy to scoff, but I don't think it's really that big of a deal for France. After all, we're now spending $10bn./month in Iraq, and $2bn./month in Afghanistan, so $5 billion over the course of two or three years is getting off pretty cheaply; it surely would have been much more expensive for them if they'd given us support on par with, say, the U.K., which started out budgeting ~ £3bn./year for the war in 2003, and is now at £7.5bn. for this year. And France's total exports are ~ $500bn./year, so a loss of $5bn over a few years isn't that big of a deal. A far greater worry is their loss of domination over the wine industry.

Is Sarkozy the new Thatcher?

David Bell at TNR asks the question.

Sarkozy Wins

apparently, voter turnout was very high, and Sarkozy won by a big margin. i'm actually kind of surprised by how pleased i am at the news. To the extent that France has problems, Ms. Royal was not the person to fix them.

The French Are Not Happy

So says Will Wilkinson, over at Free Exchange. And he knows why:

Why so glum? The numbers show that high average incomes, a low unemployment rate, extensive economic freedom, and relatively open labor markets tend to boost happiness levels, while generous welfare handouts, lower levels of inequality, and bigger government have little or no positive effect. The areas where the French do relatively well, such as low inequality and size of government, tend not to make its people feel much better, while the areas where they do poorly, such as unemployment and economic freedom, take a real bite out of happiness.

Apparently, this lack of happiness has turned to self-loathing:

The French dislike themselves even more than the Americans dislike them, according to an opinion poll published on Friday.

To combat this phenomenon, Ms. Royal has said that France will burn if Mr. Sarkozy is elected president:

France risks violence and brutality if right-winger Nicolas Sarkozy wins Sunday's presidential election, his Socialist opponent Segolene Royal said on Friday.

On the last day of official campaigning, opinion polls showed Sarkozy enjoyed a commanding lead over Royal, who accused the former interior minister of lying and polarizing France.

"Choosing Nicolas Sarkozy would be a dangerous choice," Royal told RTL radio.

"It is my responsibility today to alert people to the risk of (his) candidature with regards to the violence and brutality that would be unleashed in the country (if he won)," she said.

Hmm.

The Importance of the French; or, How Europe Gets a Bad Rap from the American Right

I've been casually, but with great interest, following the French presidential election. Their system seemingly allows as many candidates to run as desire to run in a primary election (but only one from a single political party). It's a different system from ours, but not-illogical: if no one candidate receives at least 50%+1 of the vote, then the top two square-off in a run-off election. The usual result is that two candidates from opposite ends of the political spectrum meet in the final round, but both are sufficiently moderate to appeal to large swaths of the general population.

In France, the two final candidates are Ms. Segolene Royal - an extreme populist, who finds no shame in promising everything to everyone - and Mr. Nicholas Sarkozy - who is pro-market/pro-growth and nervous about immigration. sort of the typical right/left split.

the interesting thing is that, at this point, Mr. Sarkozy looks likely to win. Europe has long had a reputation in the States as being far more liberal than us, and they've earned that honor. but the times may be changing. the election of "Iron Frau" Angela Merkel in 2000 - so named in tribute to Maggie Thatcher - was one of the first signifiers of what may be a burgeoning trend. The resurrection of the U.K. Tories (a.k.a. Conservative & Unionist Party) in the form of neoliberal David Cameron, who also looks like to take back the British government from Blair's Labour group, is another. In 2008, the three most powerful European countries may have right-wing(ish) governments while the U.S. seems sure to have a left-leaning Congress and Democratic President.

It would be ironic to see the American right genuflecting towards their European counter-parts, hoping to mimic their success in the U.S. Perhaps "freedom fries" would get their proper name back.