greybeta | Politics of the Day

- Even more interesting: according to dutch news show a senior participant in strategy sessions in the pentagon said that when the people playing Iran genuinely decided to stop testing they people playing the US just didn't believe them, no matter how hardt they tried to convince them.

- The dutch government hasn't had any real problems in deciding a stable an coherent direction in which to proceed. The funny thing about the elections in Italy was the fact there weren't that much choices: you vote either left wing and Prodi or right wing and Berlusconi. Along with what seems to be a long winded, possible judicial, end to the elections it's rather more like US elections than European ones.

- The entire notion is crap. France has a six months evaluation period after which you can be fired, just not easily. Firms have to specify why they're fired and there are appeals against losing jobs and compensation for doing so. More worker friendly, but reasonably comparable to what we Dutch, and quite possibly the rest of Europe, have.

From:

The dutch government hasn't had any real problems in deciding a stable an coherent direction in which to proceed. The funny thing about the elections in Italy was the fact there weren't that much choices: you vote either left wing and Prodi or right wing and Berlusconi. Along with what seems to be a long winded, possible judicial, end to the elections it's rather more like US elections than European ones.

Well, dunno, that depends on your definition of European. To American eyes, anything that has more than two parties and elects a Prime Minister is European. Could you explain a little more on the difference between Italian and Dutch elections?

From:

Sorry it took me so long to get back to you. Limited access the last couple of days.

Anyway: there isn't much difference in the actual process. The dutch system only has one directly chosen chamber, which can makes law, and an indirectly chosen one which has right of veto by majority. Both Italian chambers (US: congress and senate) have the same legislative powers and directly chosen by the Italians. This means you need to have a clear majority in both, otherwise the country becomes ungovernable.

To make this happen the Italian parties formed two alliances before the election. Which meant that though more than two parties were taking part in the elections there were basically only two choices for the Italian people: a left wing government under Prodi or a right wing under Berlusconi.

The forming of a pre-election coalition of parties hasn't happened and doesn't happen in the Netherlands, which means voting for a party does in no way guarantee what coalition will actually govern the country.

Hope this helps.

From:

Why wouldn't Iran stay on its current path? America is too outstretched to invade and nobody else is going to want to invade Iran.

Israel might. I certainly hope we (and the rest of the world) aren't banking on a popular uprising against Iran's current leadership. And I certainly hope we don't rely on bogus sanctions to resolve the issue.

One Fox News commentator said that the French just want cushy jobs where they can't be canned and that doesn't work under capitalism.

The Washington Post has said the same thing. So it isn't a case of seeing the world through right-wing-colored glasses. It's more a matter of seeing them through American (ugly or otherwise), non-socialist, glasses.

From Steven Pearstein's editorial today:

In one country, millions of hard-working people who earn modest wages and have no job security march to demand the right to continue participating in the global economy.

In another, millions of people without jobs and fearful of the global economy march to demand that, if and when they get a job, it comes with a 35-hour workweek, five weeks of vacation, mandatory profit-sharing, retirement at age 60 and the right never to be relocated, fired or demoted.

There, in a nutshell, is the difference between the political economy of the United States and France.

It's the reason one country's economy is growing at the annual rate of 4.5 percent and the other will be lucky to reach 2 percent.

Why one creates a million net new jobs in a year without breaking a sweat and why the other has trouble creating a million in a decade.

Why one has an unemployment rate of less than 5 percent and the other more than 10 percent.

Why one is a magnet for ambitious talent from all over the world and the other is slowly losing its best and brightest.

And the gap -- in terms of perception, in terms of economic performance -- is only going to get worse.

The decision by President Jacques Chirac to cave in to the demands of street protesters will set back market reform for a decade, not just in France, but in Europe generally.

Never mind that the law that sparked it -- a new labor contract that would have allowed companies to fire young workers during their first two years on the job -- failed to address the larger question of how any company can be expected to compete in a global economy while offering lifetime job security to its workers.

That Chirac and Prime Minister Dominique de Villepin drew a public line in the sand over such a modest reform and then failed to muster any serious support from business leaders, the media and the professional middle class will only embolden those who cling to the fantasy that the old socialist model can survive.

Not surprisingly, union and student leaders have already declared that they aren't done yet with rolling back earlier reforms that allow for temporary jobs and give small businesses more freedom to hire and fire.

And, as if to punctuate the full measure of their retreat from the cause of market-based reform, the alternative program for reducing youth unemployment involves yet another round of government subsidies supported by another tax increase. Can a fresh crop of new lifetime government jobs be far behind?

From:

and the right never to be relocated, fired or demoted.

Bullshit: Critics oppose the CPE because it removes the job protection provided in the existing long-term contract known as the CDI (contract of indeterminate duration). The CDI has a maximum trial period of six months, after which employers must justify any firing in detail and employees have extensive rights to appeal their firing and get compensation for it.

As found on CNN

From:

Steven Pearstein is having an on-line chat at washingtonpost.com right now if you wish to call shenanigans on his article. :-)

Even if you don't get to the site in time to participate, the Q&A is an interesting read. He even states that not only could France benefit from adopting a more Scandanavian economic model, but the US could learn a thing or two from them as well.

The CDI has a maximum trial period of six months, after which employers must justify any firing in detail and employees have extensive rights to appeal their firing and get compensation for it.

Reading this, I see: "it would be a bigger pain in the ass to fire an incompetent person than it would be to keep that person on the payroll...and potentially be less expensive to keep the person on in the long run."

A French journalist friend of mine had offered her opinion on the matter, and quoted another friend of hers:

"Employers who take on new staff know that they are stuck with them for life, after an initial trial period of usually three months. One of my best friends has ended up in the employment court every time he has sacked anyone (he says for gross incompetence) and has had to pay some gruesome compensation."

Now, I'm just an ugly American, so I can only take her friend at her word.

It reminds me of government jobs here. While there isn't an explicity "you're here forever" law, it is a self-fulfilling concept because employers aren't willing to undertake the time, effort, and expense (and potentially bad pr) needed to fire even the most incompetent people.

From:

Well, I asked Steven the following on the chat, and this is his response (if you're curious):

Steven, in regards to current French labor laws, I have heard a number of people in France and Europe who claim that they do not have a "job for life." Are we misinterpreting their laws, or are they?

Steven Pearlstein: No, I don't think we are. Although legally a company can dismiss a worker for cause,or economic reasons, it has to be adjudicated in a long and expensive process that usually finds in favor of the employee. And on top of that is a large severance mandated by law.

There is also a social cost. I have spoken with a number of entrepreneurs whose businesses failed and, in their towns, they are still regarded as pariahs because their failure cost some of their neighbors their jobs.
In France, a job is viewed as a property right.

From:

In France, a job is viewed as a property right.
Whereas we who live in the American Dream can only be confused by such a concept.

From:

It is a bit difficult to wrap one's mind around... a job as a right...

What happens if your economic policies stagnate growth so much there aren't jobs to be had? Grow government to pick up the slack?

From:

That's what universal welfare is for.

From:

Paid for by...

From:

Taxes, and therefor by us loyal citizens.

From:

But there comes a point where the tax burden becomes too great.

From:

Sure, but that point would need a certain state of the economy that might never be reached. The Dutch have general welfare and though it does costs us a lot of money, it's definitely bearable. And has been at points when things were worse.

From:

Well, we have welfare here, too. I'm not sure how it compares with the Dutch system, though. The scenario I was thinking about, though, is when the number of workers isn't sufficient to support the entitlement system because the number of jobs has dwindled significantly.

From:

That's the scenario I had in mind. I think that's not one we'd have to be very anxious of, because it's not the economy that's the problem. Currently the Dutch system in general, specially pensions, is facing a major problem know as "the greying of society". In other words: we'll have more old, retired people than can be sustained by the work force. Ratio is suspected to be something like 2:1, which is not feasible. Which probably means that retirement age will go up and the possibilities for early retirement will disappear. But it still doesn't really have me worried. I've still got 30 to 35 years to take care of that.

From:

Sounds like Social Security here! Baby boomers are reaching retirement age, and there won't be enough people paying into the system to support it.

Whenever real reform is discussed, there is a general uproar, so politicians avoid it like the plague. Say what you will about Bush, but I give him credit for proposing reform to the plan before it becomes an even more critical issue.

The scenario we have here is:

Politician A: "Social Security will be bankrupt in 30 years. We need to fix it now."
Citizenry: "Yeah, fix it! It can't go bankrupt. But when you're formulating the reform plan, we have a few requirements."
Politician A: "Okay, what are they?"
Citizenry: "Well, we don't want the retirement age to change, and we don't want the level of benefits to change."
Politician A: "Ummm...okay...but I just got through telling you that it would be bankrupt at the current rate, so..."
Citizenry: "And did we mention that we don't want to pay any more taxes?"
Politician A: "Wha?!"
Politicians B - Z: "This won't be an issue for 30 years! Politician A is just trying to scare you! Change nothing, we'll worry about it later!"

This is why I am not relying on Social Security for my retirement income.

From:

Thanks for asking.

I think Pearlstein is right in so far as he claims that French labor laws are probably too extensive and should be toned down as they are definitely very pro-employee.

I'm not sure whether the Netherlands is following the Scandinavian system, but I think our labor laws are a good way to do things. The general rules, it varies a bit depending on which industry your on, an employer gets to hire on a temporary basis for three years in which your contract can only be extended up to three times. Either clause can lead to a contract for an indeterminate time. Employers can chose not to extend the contract, but have to decided up to several months before a temporary contract runs out.

Employees with a contract for an indeterminate time can be fired after acquiring a license by going through a judicial process. Whether or not an employee gets any compensation largely depends on the grounds for dismissal. Economic reasons usually mean they do, incompetence means they don't.

Of course it's a bit more complicated than that, but that's the general gist of it. In other words: I reasonably secure I still got a job tomorrow, or that I will be compensated when I don't and the employers have a reasonable way to get rid of me if they want to.

I think France would be better off than they're now when they are now, but I still don't feel the current labor laws merit a "job for life" label as such. Maybe employers make it that way, but as such it's a two way street if you get my drift.

When it comes to the protests I think there's a couple of circumstances that spurred on the protest. As mentioned in the article: the law was pretty much being forced down the throats of the French youth. Secondly it only targeted said youth. It might have gone down a whole lot better if things had been handled different. On the other hand it might have not, as we all like to preserve the rights we currently have.

I feel he's off base when it comes to the social costs. If people get fired because their firm is going under, any boss in any system will be blamed. This has nothing to do with what labor laws are in place.

From:

If people get fired because their firm is going under, any boss in any system will be blamed

That would depend upon why the firm went under. If it was through malfeasance or other criminal activity, sure. Here, though, it is understood that businesses - especially small businesses - have a fairly low rate of success. A friend of mine had a business that went under. He was not made out to be a social pariah.

From:

Let me rephrase that: if the reasons are the same, the system you're in doesn't matter, you're almost certain to get the same reaction.

From:

fub.livejournal.com

The decision by President Jacques Chirac to cave in to the demands of street protesters will set back market reform for a decade, not just in France, but in Europe generally.
Even if we agree that things are not well, this law is certainly not going to fix it. In fact, it will make things worse, as I laid out in a post on my journal.

From:

I don't think that Steven was arguing that this specific law would fix what ails France's economy. No one law is going to do that.

While I cannot speak for him, I think his point is that reform is necessary, and the status quo will only further drag down France's position in the global economy and create a vicious cycle where the citizens become more and more dependent on social programs (and have fewer workers to support the programs). What Chirac and Vellipan did was embrace the status quo out of fear of making a politically unpopular move. That's what happens when politicians are mainly interested in the next election cycle.

With regards to your linked post, I agree that the law was unfair as structured, relegating it to younger people. I would doubt they could pass such a law in the US because it would violate EEO. I do have to disagree with this statement, though:

But once they hit 26 or after two years (whichever comes first) they will fire these people, just before the benefits clause kicks in...If you don't think that this would happen, then you are stupid.

I have been an at-will employee who has worked for at-will employers for twenty years. Each of these employers had their own "vesting" schedule, where benefits would only kick in after a specific service period. I have never seen the scenario you describe happen, either at companies for whom I have worked or companies for whom my friends and family have worked.

While on the surface it may make sense for a company to behave as you predict, from a practical standpoint few companies would entertain the idea. Why? A few reasons:

1. Businesses invest time and money in developing new employees. It is in their best interest to retain good employees who have acquired their specific business knowledge. (I am, of course, assuming we are not talking about unskilled labor here.)
2. Employers who follow this practice would have a difficult time finding good employees who will work for them.

So what do the employers do? They hire people on a temporary contract. They extend that contract twice. And then they fire you.

The contractor vs employee issue goes on here as well. As does outsourcing/offshoring. However, companies here do not terminate contracts because they are forced into a temp-to-hire situation. Contracts are signed for specific projects, and terminate themselves upon completion of the SOW. There are many people who opt for the "excitement" of contract work. I am not one of those people.

Companies need to weigh the benefit of reduced total compensation amounts with the brain drain that occurs when the contractors leave. We have found that, in many cases, the brain drain isn't worth the saved expense, so we try to do most work in-house.

The problem you describe with contractors, it would seem, is in the government's strong-arming of companies - forcing them to commit to long-term contracts. The reason they are contracting the work is because they either don't want to increase FTE headcount, or don't need to. Forcing their hand will understandably cause them to behave as you have described. I wouldn't fault the companies for that - I would fault the government for passing a law mandating that behavior.

From:

fub.livejournal.com

What Chirac and Vellipan did was embrace the status quo out of fear of making a politically unpopular move.
Yes. But the law wouldn't have fixed the issues, so it's kind of a moot point.

1. Businesses invest time and money in developing new employees. It is in their best interest to retain good employees who have acquired their specific business knowledge. (I am, of course, assuming we are not talking about unskilled labor here.)
Young people, fresh from college, just aren't that valuable to a business. They may know how the work is done theoretically, but it takes quite a bit of training and time before they are up to speed.
Yes, college will learn you some skills, but those skills are cheap, because everyone who finished college has those skills. Until you have acquired the skills they don't teach at college that are needed for the company, you can be replaced almost immediately and without any problems by someone who comes fresh out of college.
Yes, as a business you need to train a new generation of managers -- but the rest of the employees is certainly expendable.
At the complete underside of the market, unskilled labor, you are completely out of luck, because these issues count doubly there.

2. Employers who follow this practice would have a difficult time finding good employees who will work for them.
Unless you are the only game in town.

The problem you describe with contractors, it would seem, is in the government's strong-arming of companies - forcing them to commit to long-term contracts.
That is true. And deregulating would fix (most) of that -- but if you only deregulate a part of the market, you're not fixing anything but rather making things worse.

From:

Yes. But the law wouldn't have fixed the issues, so it's kind of a moot point.

And if students, young people, and unions are opposed to any and all reform, then it's an even mooter point. If that's even possible (being a mooter point). [g]

Young people, fresh from college, just aren't that valuable to a business. They may know how the work is done theoretically, but it takes quite a bit of training and time before they are up to speed.
Yes, college will learn you some skills, but those skills are cheap, because everyone who finished college has those skills. Until you have acquired the skills they don't teach at college that are needed for the company, you can be replaced almost immediately and without any problems by someone who comes fresh out of college.

If a new-hire was unable to ramp up their business knowledge in two years, I would want to fire them. As an employer, I wouldn't have the time to train someone at such a glacial pace.

Yes, as a business you need to train a new generation of managers -- but the rest of the employees is certainly expendable.

I'm not a manager, and I'm far from expendable. ;-)

At my company, it is usually middle management that gets the axe because they don't contribute as much as other employees.

From:

bonerici.livejournal.com

Iran wants to play ball with the big boys. The big boys are going to play ball back. Gotta love the "we came here first" mentality. Even if Iran is discouraged from continuing its nuclear program, it will win many favorable concessions as a result of doing so. Why wouldn't Iran stay on its current path? America is too outstretched to invade and nobody else is going to want to invade Iran.

Iran saw that we invaded Iraq and left North Korean alone. It has made the conclusion that if you are developing nuclear weapons, you may be invaded by the USA, but if you possess working nuclear weapons we will use diplomacy. This realization is the number one spur for them to hasten development of their nuclear weapons program, bar none. It's not about consessions, protection, being a "big player" it's all about Iran being worried sick about getting invaded and trying to get nuclear weapons so that we treat it like we do North Korea: like a dangerous rattlesnake to be handled with care.

France back downs on youth law. One Fox News commentator said that the French just want cushy jobs where they can't be canned and that doesn't work under capitalism. I don't know just how true that is, but something tells me that's what a lot of Americans think. No, don't give me all that high end theoretical economic theory, I'm talking about your average American here who watches Fox News. You know there are a lot of them because otherwise we wouldn't have elected our current president otherwise.

You don't have to watch fox to have that opinion. This is not a conservative opinion, it's an american one. Liberals look at those youths rioting because they don't want to be fired, and, well how did Jon Stewart put it? Something about, oh yes, these are the young people we want to hire, the ones wearing masks, who are throwing rocks at police, lighting cars on fire, they will make great employees.

From:

Iran saw that we invaded Iraq and left North Korean alone. It has made the conclusion that if you are developing nuclear weapons, you may be invaded by the USA, but if you possess working nuclear weapons we will use diplomacy. This realization is the number one spur for them to hasten development of their nuclear weapons program, bar none. It's not about consessions, protection, being a "big player" it's all about Iran being worried sick about getting invaded and trying to get nuclear weapons so that we treat it like we do North Korea: like a dangerous rattlesnake to be handled with care.
Hmmm, interesting point. But quite a few other countries including Russia don't want Iran to go forward with their nuclear program either. Is it the same principle?

You don't have to watch fox to have that opinion. This is not a conservative opinion, it's an american one. Liberals look at those youths rioting because they don't want to be fired, and, well how did Jon Stewart put it? Something about, oh yes, these are the young people we want to hire, the ones wearing masks, who are throwing rocks at police, lighting cars on fire, they will make great employees.
I remember watching that show, with the Stewart rant from his past. I think I'm getting confused between conservatism and American ideals because I've had to read up on Bush too much.

From:

bonerici.livejournal.com

Hmmm, interesting point. But quite a few other countries including Russia don't want Iran to go forward with their nuclear program either. Is it the same principle?

nobody wants iran to get nukes, that's obvious, but the usa is the only nation in the world which will wage a preventative war, so what the other nations say about iran and nuclear tech is not nearly as important to Ayatollah Ali Khamenei. That's the critical thing to remember. Only the USA will and can invade Iran. Everyone else will be happy to use trade embargoes and diplomacy. So Iran has two choices, 1) quit making nukes and face the possibility of invasion anyway for a different reason and 2) develop nukes, test them in a way which shows they have them, and force the USA to the negotiating table.

From:

Only the USA will and can invade Iran.

Israel launched a pre-emptive strike against Iraq's nuclear facilities. Do you think they would attempt the same thing with Iran? I'm sure they would have broad political support from Israelis for that action. I think the only thing preventing them so far is that Iran's facilities are so well hidden and protected.

From:

bonerici.livejournal.com

no doubt isreal has the will to attack iraq if they think it poses a nuclear threat. Isreal in fact would attack iraq even after they had the bomb and were willing to use it to retaliate, that's the difference between them and the usa policy. If you have the bomb that means the usa wont attack and will negotiate.

From:

I think I'm getting confused between conservatism and American ideals because I've had to read up on Bush too much.

There are also French people who share the same view of the protests. They are conservative French people, but still...they're not American and don't necessarily follow American ideals. Conservatives with capitalist leanings, I suppose.

From:

fub.livejournal.com

The thing is that each party wants to control who these illegal immigrants will vote for down the road (if they aren't already voting).
How can you register to vote if you don't have citizen status?
Also, if the immigrants are booted out, they won't be voting in the coming election. :)

From:

Well, technically, they shouldn't be voting. You have to be a citizen to do that. And to the Democratic Party in Chicago: that means a living citizen. :-)

The concern is more about the legal citizens - specifically the Hispanics - who would vote against politicians who endorse immigration reform. Which is why politicians from both parties run scared from initiating real reform.

From: