1
Movies
In Iowa, but Dreaming of D.C.
“Caucus,” an A. J. Schnack documentary, chronicles the Republican nominating contest in Iowa in 2012.
2
Home & Garden
Trust Me: You Should Be Impressed
The architect Zaha Hadid has designed a superyacht featuring one of her trademark exoskeletons.
3
Sports
Jacksonville’s Blackmon Is Suspended Indefinitely
Justin Blackmon, the fifth overall pick in the 2012 draft, had earlier violations of the N.F.L.’s substance-abuse policy.
4
Business Day
S.&P. Downgrade Deals Blow to French Government
The agency cut its rating for France to AA, saying tax and labor reforms would probably not have much impact on growth in the medium term.ECB Thinking Explained
A correspondent sends me this picture, snapped from the river in Frankfurt, right near the ECB’s headquarters:
Yes: it’s the Confidence Ferry!"
Just barging in. It is not a ferry it's a barge.
Just barging in. It is not a ferry it's a barge.
Ideological Ratings
So S&P has downgraded France. What does this tell us?
The answer is, not much about France. It can’t be overemphasized that the rating agencies have no, repeat no, special information about national solvency — especially for big countries like France. Does S&P have inside knowledge of the state of French finances? No. Does it have a better macroeconomic model than, say, the IMF — or for that matter just about any one of the men and women sitting in this IMF conference room with me? You have to be kidding.
So what’s this about? I think it’s useful to compare IMF projections for France with those for another country that has been getting nice words from the raters lately, the UK. The charts below are from the WEO database — real numbers through 2012, IMF projections up to 2018.
First, real GDP per capita:
So France has done better than the UK so far, and the IMF expects that advantage to persist.
Next, debt relative to GDP:
France is slightly less indebted, and the IMF expects this difference to widen a bit.
So why is France getting downgraded? Because, S&P says, it hasn’t carried out the reforms that will enhance its medium-term growth prospects. What does that mean?
OK, another dirty little secret. What do we know — really know — about which economic reforms will generate growth, and how much growth they’ll generate? The answer is, not much! People at places like the European Commission talk with great confidence about structural reform and the wonderful things it does, but there’s very little clear evidence to support that confidence. Does anyone really know that Hollande’s policies will mean growth that is x.x percent — or more likely, 0.x percent — slower than it would be if Olli Rehn were put in control? No.
So, again, where is this coming from?
I’m sorry, but I think that when S&P complains about lack of reform, it’s actually complaining that Hollande is raising, not cutting taxes on the wealthy, and in general isn’t free-market enough to satisfy the Davos set. Remember that a couple of months ago Olli Rehn dismissed France’s fiscal restraint — which has actually been exemplary — because the French, unacceptably, are raising taxes rather than slashing the safety net.
So just as the austerity drive isn’t really about fiscal responsibility, the push for “structural reform” isn’t really about growth; in both cases, it’s mainly about dismantling the welfare state.
S&P may not be participating in this game in a fully conscious way; when you move in those circles, things that in fact nobody knows become part of what everyone knows. But don’t take this downgrade as a demonstration that something is really rotten in the state of France. It’s much more about ideology than about defensible economic analysis."
The answer is, not much about France. It can’t be overemphasized that the rating agencies have no, repeat no, special information about national solvency — especially for big countries like France. Does S&P have inside knowledge of the state of French finances? No. Does it have a better macroeconomic model than, say, the IMF — or for that matter just about any one of the men and women sitting in this IMF conference room with me? You have to be kidding.
So what’s this about? I think it’s useful to compare IMF projections for France with those for another country that has been getting nice words from the raters lately, the UK. The charts below are from the WEO database — real numbers through 2012, IMF projections up to 2018.
First, real GDP per capita:
Next, debt relative to GDP:
So why is France getting downgraded? Because, S&P says, it hasn’t carried out the reforms that will enhance its medium-term growth prospects. What does that mean?
OK, another dirty little secret. What do we know — really know — about which economic reforms will generate growth, and how much growth they’ll generate? The answer is, not much! People at places like the European Commission talk with great confidence about structural reform and the wonderful things it does, but there’s very little clear evidence to support that confidence. Does anyone really know that Hollande’s policies will mean growth that is x.x percent — or more likely, 0.x percent — slower than it would be if Olli Rehn were put in control? No.
So, again, where is this coming from?
I’m sorry, but I think that when S&P complains about lack of reform, it’s actually complaining that Hollande is raising, not cutting taxes on the wealthy, and in general isn’t free-market enough to satisfy the Davos set. Remember that a couple of months ago Olli Rehn dismissed France’s fiscal restraint — which has actually been exemplary — because the French, unacceptably, are raising taxes rather than slashing the safety net.
So just as the austerity drive isn’t really about fiscal responsibility, the push for “structural reform” isn’t really about growth; in both cases, it’s mainly about dismantling the welfare state.
S&P may not be participating in this game in a fully conscious way; when you move in those circles, things that in fact nobody knows become part of what everyone knows. But don’t take this downgrade as a demonstration that something is really rotten in the state of France. It’s much more about ideology than about defensible economic analysis."
5
Sports
To Avoid Big Upset, Seahawks Stage Their Biggest Comeback
Led by Russell Wilson and Marshawn Lynch, Seattle set a franchise record by rallying from a 21-point deficit to defeat winless Tampa Bay in overtime.
6
Opinion
Learning to Speak Brazinglish
Pre-World Cup pessimism reigns, yet we are doing all we can to get ready.
7
U.S.
Texas’ Stringent Voter ID Law Makes a Dent at Polls
Texas rolled out its tough new voter ID law this week, which requires voters for the first time to show a state-approved form of identification to vote.
8
World
U.S. Is Losing Advantage in Spying, Report Says
A congressional panel charged that the United States intelligence agencies’ research-and-development efforts were disorganized and unfocused.
9
U.S.
In a Message to Poachers, U.S. Will Destroy Its Ivory
Six tons of illegal elephant ivory that the government has been stockpiling for three decades will be crushed and used in antipoaching memorials, officials announced.
10
Fashion & Style
Dick Cavett and Alec Baldwin Start the Conversation
Mr. Cavett and Mr. Baldwin had lunch with Philip Galanes and discussed talk shows, Richard Nixon, being chased by the paparazzi and dealing with depression.
11
Technology
Samsung to Double Dividend in Bid to Lift Its Stock Price
The world’s largest maker of smartphones said it would increase its cash returns to shareholders and shift from hardware to software.
12
Dining & Wine
Farm-Raised Salmon, Maple Cotton Candy and More
Recommendations for the week of Nov. 5.
13
Business Day
Social Security's Job
A study from the Urban Institute finds that in its transfers across the generations, Social Security redistributes money from minorities to wealthier whites.
14
Automobiles
Wheelies: The Pickup Slowdown Edition
Pickup truck sales slowed in October, and Carlos Ghosn gained more control of Renault-Nissan with the elimination of the chief operating officer position at Nissan.
15
U.S.
Arkansas: ExxonMobil Fines Proposed After Oil Spill
More than $2.6 million in penalties are proposed for nine probable violations after one of the oil company’s pipelines spilled thousands of barrels of oil in Mayflower in March.
16
Automobiles
344,000 Minivans Recalled by Honda for Brake Problem
The recall, like an earlier one in March, is to fix a problem in the vehicle’s computer that could result in unexpected braking.
17
Style
During I.V.F., Keeping a Marriage Strong
A loving partnership can make fertility treatments far easier to bear — but we have to protect our partnerships from the toll that in vitro fertilization can take.
18
Education
Catching Up on the Bennett Hypothesis
What’s to blame for the high cost of college? It’s financial aid, stupid.
19
Business Day
Cyprus in Plan to Develop a Natural Gas Industry
The island nation seeks to rebuild its economy after the collapse of its banking industry, but its natural gas industry so far exists mainly in theory.
20
World
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