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Saturday, October 19, 2019

China’s Liu Confirms Phase One of U.S. Trade Deal is in Progress [feedly]

Looks like Trump has made some concessions.....we will see.

China's Liu Confirms Phase One of U.S. Trade Deal is in Progress
https://www.bloomberg.com/news/articles/2019-10-19/china-s-liu-confirms-phase-one-of-u-s-trade-deal-is-in-progress


China's top trade negotiator offered positive signals that talks with the U.S. are making progress and both sides are working toward a partial trade deal.

"China and the U.S. have made substantial progress in many aspects, and laid an important foundation for a phase one agreement," Vice Premier Liu He said at a technology conference in Nanchang, Jiangxi, on Saturday. He reiterated that China is "willing to work in concert with the U.S. to address each other's core concerns on the basis of equality and mutual respect."

The comments come as the U.S. and China work toward getting some sort of agreement ready for presidents Donald Trump and Xi Jinping to sign at the Asia-Pacific Economic Cooperation summit next month in Chile. The U.S. has said China will buy as much as $50 billion in U.S. agricultural goods in exchange for the suspension of additional tariffs, though Bloomberg has reported that the Chinese want more talks and would need existing tariffs rolled back in order to reach that amount of imports.

Read More: China Ties Agriculture Binge to Trump Reducing U.S. Tariffs

The "phase one" deal described by Washington may not address many of the larger issues that initiated the trade war which has dragged on for more than a year, such as forced technology transfers and industrial subsidies. The White House is also looking at rolling out a previously agreed currency pact with China, people familiar said earlier. The agreement would be similar to commitments China has already made in accordance with International Monetary Fund standards, they said.

Liu did not address any specifics in his speech, though he reiterated that China would boost intellectual property protection, especially for small and medium enterprises.

U.S. Treasury Secretary Steven Mnuchin said that lower-level talks would take place by phone this week. Chinese officials are working on the text of an agreement on trade in close contact with U.S. negotiators, and have begun discussions on the next stage, Ministry of Commerce spokesman Gao Feng said on Thursday.

China's economic growth slowed further to 6% in the third quarter, according to data released on Friday, increasing pressure on Beijing to put an end to the trade conflict. With a drop-off in exports to the U.S. expected to continue as long as tariffs remain, the economy is likely to keep struggling as deflationary pressures hit company profits.

China is targeting 6% to 6.5% gross domestic product growth this year. Liu said the fundamentals of China's economy remain unchanged, even as it goes through a significant re-balancing, and the nation is "confident" of reaching its economic targets.


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Friday, October 18, 2019

Krugman: Democrats, Avoid the Robot Rabbit Hole [feedly]

Provocative post on automation from PK

Democrats, Avoid the Robot Rabbit Hole

Paul Krugman
https://www.nytimes.com/2019/10/17/opinion/democrats-automation.html

TEXT ONL

One of the less discussed parts of Tuesday's Democratic debate was the exchange that took place over automation and how to deal with it. But it's worth focusing on that exchange, because it was interesting — by which I mean depressing. CNN's Erin Burnett, one of the moderators, asked a bad question, and the debaters by and large — with the perhaps surprising exception of Bernie Sanders — gave pretty bad answers.

So let me make a plea to the Democrats: Please don't go down the robot rabbit hole.

Burnett declared that a recent study shows that "about a quarter of U.S. jobs could be lost to automation in just the next 10 years." What the study actually says is less alarming: It finds that a quarter of U.S. jobs will face "high exposure to automation over the next several decades."

But if you think even that sounds bad, ask yourself the following question: When, in modern history, has something like that statement not been true?

After all, in the late 1940s America had about seven million farmers and around 12 million production workers in manufacturing. Machinery could and did take over much of the work those Americans were doing — and people at the time wondered where the new jobs would come from. If you think that concerns about automation are somehow new, bear in mind that Kurt Vonnegut's novel "Player Piano," envisioning a dystopian future in which machines have taken away all the jobs, was published in … 1952.



Yet the generation that followed was a golden age for American workers, who saw dramatic increases in their income, with many entering a rapidly growing middle class.

You might say that this time is different, because the pace of technological change is so much faster. But that's not what the data say. On the contrary, worker productivity — which is how we measure the extent to which workers are being replaced by machines — has lately been growing much more slowly than in the past; it rose less than half as much from 2007 to 2018 as it did over the previous 11 years.

Which makes you wonder what Andrew Yang is talking about. Yang has based his whole campaign on the premise that automation is destroying jobs en masse and that the answer is to give everyone a stipend — one that would fall far short of what decent jobs pay. As far as I can tell, he's offering an inadequate solution to an imaginary problem, which is in a way kind of impressive.

Let me also give a shout-out to Joe Biden, who echoed Yang's talk about a "fourth industrial revolution." More on that in a minute.

[For an even deeper look at what's on Paul Krugman's mind, sign up for his weekly newsletter.]

Elizabeth Warren questioned Burnett's premise, saying that the principal reason we're losing jobs is trade policy that has encouraged jobs to move overseas. This claim was slammed by the fact-checkers at The Associated Press, who declared that automation was the "primary culprit" in manufacturing job loss between 2000 and 2010. As it happens, Warren was more right than the supposed fact-checkers; reasonable estimates say that trade was responsible for a large share of manufacturing job loss in the decade before the Great Recession.



Warren was surely wrong to suggest, however, that changing trade policy would do much to bring good jobs back. She got onto much sounder footing when she moved on to her wider agenda of tackling inequality and the power of the wealthy.

The best answer, as I said, came from Sanders. No, I don't support his proposed job guarantee, which probably isn't workable. But he was right to say that there's plenty of work to do in America, and right to call for large-scale public investment, which even mainstream economists have been advocating as a response to persistent economic weakness.

Why? Because the persistent weakness — yes, we have low unemployment at the moment, but thanks only to extremely low interest rates, and we're very poorly prepared for the next recession — isn't about automation; it's about inadequate private spending.

So what's with the fixation on automation? It may be inevitable that many tech guys like Yang believe that what they and their friends are doing is epochal, unprecedented and changes everything, even if history begs to differ. But more broadly, as I've argued in the past, for a significant part of the political and media establishment, robot-talk — i.e., technological determinism — is in effect a diversionary tactic.

That is, blaming robots for our problems is both an easy way to sound trendy and forward-looking (hence Biden talking about the fourth industrial revolution) and an excuse for not supporting policies that would address the real causes of weak growth and soaring inequality.

So harping on the dangers of automation, while it may sound tough-minded, is in practice a sort of escapist fantasy for centrists who don't want to confront truly hard questions. And progressives like Warren and Sanders who reject technological determinism and face up to the political roots of our problems are, on this issue at least, the actual hardheaded realists in the room.

Other Democrats should follow their lead. They should focus on the real issues, and not get sidetracked by the pseudo-issue of automation.

The Times is committed to publishing a diversity of letters to the editor. We'd like to hear what you think about this or any of our articles. Here are some tips. And here's our email: letters@nytimes.com.

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Paul Krugman has been an Opinion columnist since 2000 and is also a Distinguished Professor at the City University of New York Graduate Center. He won the 2008 Nobel Memorial Prize in Economic Sciences for his work on international trade and economic geography. @PaulKrugman
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Wednesday, October 16, 2019

Piketty: Towards a circular economy [feedly]

A  compelling graphic picture of the real story behind growth and progressive taxation....and a discomforting correlation that confirm "long wavers" theories about tech financial cycles deeper than supply and demand in capitalism.


Thomas Piketty: Towards a circular economy
https://www.lemonde.fr/blog/piketty/2019/10/15/towards-a-circular-economy/

The idea of the circular economy frequently brings to mind issues of recycling waste and materials and making moderate use of natural resources. But if a new system is to emerge which is sustainable and equitable the whole economic model will have to be re-thought. With the differences in wealth which exist at the moment, no ecological ambition is possible.  Energy saving can only come from economic and social restraint and not from excessive fortunes and life-syles. We will have to construct new norms of social, educational, fiscal and climate justice through democratic discussion. These norms will have to say no to the present hyper concentration of economic power. On the contrary, the economy of the 21st century must be based on the permanent circulation of power, wealth and knowledge.

It is the spread of property ownership and education which enabled social and human progress to become a reality in the 20th century. A powerful movement of reduction in social inequality and increased mobility  (the first intellectual signs of which were already visible in the 18th and 19th centuries) gained momentum from 1900-1910 and into the years 1970-1980, thanks to an unprecedented level of investment in education. A new equilibrium was established with the rights of shareholders being matched by those of the wage-earners (particularly in Northern Europe) – the circulation of incomes and wealth was accompanied by progressive taxation (in particular in the USA), and so on.

This movement was interrupted in the decade 1980-1990 following the change in direction in the wake of the post-communist disillusion and lapse into the Reagan approach. Post-communism then became hyper-capitalism's best ally. Natural resources were over-exploited and privatised to the advantage of a minority, legal systems were systematically circumvented via fiscal paradises, any form of progressive taxation was completely eliminated. In Poutine's Russia, income tax is 13% whether your income is 1000 roubles or one billion roubles. The same excesses can be seen in China, where those close to those in power, have carved out empires for themselves which they transmit to their heirs with no inheritance tax. Hong Kong is thus an astonishing example of a country which has become even more unequal b submitting to the authority of a supposedly communist regime.

The Reagan approach in the 1980s was less radical: it lowered the rate of taxation applied to the wealthiest from 70% to 30%. Reagan intended to put an end to what he exposed as excessive redistribution and egalitarianism resulting from the New Deal and which, in his opinion, had weakened America's entrepreneurial spirit and anti-communist crusade. By liberating the energies of the entrepreneur, Reagan promised a new phase of unprecedented growth. Of course, the inequalities were going to increase, the number of millionaires would rise and they would be wealthier but all that would provide a degree of innovation which would benefit the masses meaning that everyone would gain thereby. In fact, the hold of billionaires over the American economy has grown considerably since the 1980s, with a concentration of property in the approaching the levels witnessed in Europe at the beginning of the 20th century.

The problem is that the dynamic increase in growth has not taken place: the national per capita income has witnessed its progression divided by two (2.2% per annum between 1980 and 1990, 1.1% between 1990 and 2020). Salaries have stagnated and a growing percentage of the population are beginning to doubt the benefits of globalisation. The hardening of Trump's nationalism is directly linked to this failure in Reaganism: since economic liberalism is not enough, the Mexicans and the Chinese are now accused of stealing the hard labour of white America.

In reality, the failure of Reaganism mainly demonstrates that the hyper-concentration of property and power does not correspond to the requirements of a modern and circular economy. It is not because a person has made a fortune at the age of  30 that they should continue to concentrate power as a shareholder at the age of 50, 70 or 90 years. The decrease in growth is also explained by a worrying stagnation in educational investment since the 1990s as well as by the immense inequalities in access to education and training in both the United States and in Europe.

The challenge of global warming and the international awareness of the growing inequalities do act as leverage for change but we are still far from the goal. The OECD projects for the taxation of the profits of multinationals only concerns a small fraction of the latter and the scale of the contribution proposed is much more favourable to the rich countries than to the poor ones (as is demonstrated by the work of ICRICT. The Triumph of  Injustice, a book published this week in the United States by Emmanuel Saez and Gabriel Zucman, demonstrates that there are more ambitious solutions  with the key element being financial transparency and the return to fiscal progressivity in order to finance health and education for all, and the ecological transition.  The success of these ideas amongst the American democrats (in particular Warren and Sanders) does allow for optimism.

But Europe cannot simply stand by and wait for change to come from America. If we are to go beyond merely taking a stance, and finally give substance to the Green New Deal, it is urgent that strong measures for social and fiscal justice be taken in Europe. This may also be the price to pay for the hope of bringing the British Labour Party back into the European orbit and avoiding a disastrous Conservative victory in the forthcoming elections. Thirty years after the fall of the Berlin Wall, it is time for the march towards equality, the circular economy and participatory socialism to get back on track.


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IMF: The World Economy: Synchronized Slowdown, Precarious Outlook [feedly]

IMF Cuts growth estimates  from declines in mfg and trade.

The World Economy: Synchronized Slowdown, Precarious Outlook
https://blogs.imf.org/2019/10/15/the-world-economy-synchronized-slowdown-precarious-outlook/

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Branko Milanovic: Why it is Not the Crisis of Capitalism [feedly]

Why it is Not the Crisis of Capitalism
Branko Milanovic ( https://stonecenter.gc.cuny.edu/people/milanovic-branko/ ) is a bit like the Eeyore of the economist Left.  He is conversant with the classics of socialism, and a heavy hitter in the world of real policy and real inequality as well. Compared to some on the Left, however, he is not impressed with the "anti-capitalist", "crisis of capitalism" screeds. Below is his slightly downer (for some) take on what exactly is, and is not, in crisis.  One might lighten the downer the downer effect by amending the apparently objective and external expansion of capitalist relations with the different but nonetheless compelling examples of Norway and China as arguments for "socialist-led" over "billionaire led" market relations. :)


https://www.globalpolicyjournal.com/blog/16/10/2019/why-it-not-crisis-capitalism


Branko Milanovic on why the 'crisis of capitalism' is really about its own rapid expansion. 
 
There has recently been an avalanche of articles and books about the ¨crisis of capitalism" predicting its demise or depassement. For those old enough to remember the 1990s, there is a strange similarity with the then literature arguing that the Hegelian end of history has arrived. The latter literature was proven wrong. The former, I believe, is factually wrong and misdiagnoses the problem.
 
The facts show not the crisis, but on the contrary, the greatest strength of capitalism ever, both in terms of its geographical span and the expansion to the areas (like leisure time, or social media) where it has created entirely new markets and commodified things that historically were never objects of transaction.
 
Geographically, capitalism is now the dominant (or even the only) mode of production all over the world whether in Sweden where the private sector employs more than 70% the labor force, the United States where it employs 85% or in China where the (capitalistically-organized) private sector produces 80% of the value added.[1] This was obviously not the case before the fall of communism in Eastern Europe and Russia, nor before China embarked on what is euphemistically called "transformation" but was in reality replacement of socialism by capitalist relations of productions.
 
In addition, thanks to globalization and technological revolutions, a number od new, hitherto non-existent markets have been created: a huge market for personal data, rental markets for own cars and homes (neither of which was capital until Uber, Lyft, Airbnb etc. were created), market for housing of self-employed individuals (which did not exist before WeWork) and a number of other markets such as those for taking care of the elderly, of children, or pets, market for cooking and delivery of food, market for shopping chores etc.
 
The social importance of these new markets is that they create new capital, and by placing a price on things that had none before transform mere goods (use-value) into commodities (exchange value). This capitalist expansion is not fundamentally different from the expansion of capitalism in the 18th and 19th century Europe, the one discussed both by Adam Smith and Karl Marx. Once new markets are created, there is a shadow value placed on all these goods or activities. This does not mean that we would all immediately run to rent our homes or drive our cars as taxis, but it means that we are aware of the financial loss that we make by not doing so. For many of us, once the price is right (whether because our circumstances change or the relative price increases), we shall join the new markets and thus reinforce them.
 
These new markets are fragmented, in the sense that they seldom requite a sustained full-day of work. Thus commodification goes together with gig economy. In a gig economy we are both suppliers of services (we can deliver pizza in the afternoons), and purchasers of many services that used to be non-monetized (the already mentioned: cleaning, cooking, nursing). This in turn makes it possible for individuals to satisfy all their needs on  the market and in the longer term raises big issues such as the usefulness and survival of the family.
 
But if capitalism has spread so much in all directions, why do we speak of its crisis? Because the malaise which is limited to rich Western countries is supposed to afflict the entire world. But this is not the case. And the reason why this is not the case is because the Western malaise is the product of uneven distribution of the gains from globalization, an outcome not dissimilar to what happened in the 19th century globalization when the gains were however disproportionally reaped by the Europeans.
 
When this new bout of globalization began, it was politically "sold" in the West, especially as it came on the heels of "the end of history", on the premise that it will benefit disproportionately rich countries and their populations. The outcome was the opposite. It benefited especially Asia, populous countries like China, India, Vietnam, Indonesia. It is the gap between the expectations entertained by the Western middle classes and their low income growth, as well as their slide in the global income position, that fuels dissatisfaction with globalization. This is wrongly diagnosed as dissatisfaction with capitalism.
 
There is also another issue. The expansion of market-like approach to societies in all (or almost all) of their activities, which is indeed a feature of advanced capitalism, has also transformed politics into a business activity. In principle, politics, no more than our leisure time, was not regarded as an area of market transaction. But both have become so. This has made politics more corrupt. It is now considered like any other activity, where even if one does not engage in explicit corruption during his political tenure, one uses the connections and knowledge acquired in politics to make money afterwards. That type of commodification has created widespread cynicism and disenchantment with mainstream politics and politicians.
 
Thus the crisis is not of capitalism per se, but is the crisis brought about by the uneven effects of globalization and by capitalist expansion to the areas that were traditionally not considered apt for commercialization. In other words, capitalism has become too powerful and has in some cases come into collision with strongly held beliefs. It will either continue with its conquest of more, yet non-commercialized, spheres, or it would have to be controlled and its "field of action" reduced to what it used to be. 

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Tuesday, October 15, 2019

Dean Baker: Trump Has Been Giving Up Ground in His Much-Vaunted "Trade War" [feedly]

Trump Has Been Giving Up Ground in His Much-Vaunted "Trade War"
http://cepr.net/publications/op-eds-columns/trump-has-been-giving-up-ground-in-his-much-vaunted-trade-war

Dean Baker
Truthout, October 14, 2019

See article on original site

With all the attention on the impeachment investigation against Donald Trump, his trade war is getting ignored by the media. Since the trade war is not going very well, that is probably a good thing for Trump.

Just to remind people, Trump made the trade deficit a major issue in his campaign. He claimed that our trading partners were ripping the U.S. off because of lousy trade deals crafted by stupid negotiators. He assured the public that he would use his negotiating skills to bring the trade deficit down. Now that he has been in office for more than two and a half years, it's worth seeing how the fight is going.

So far, it looks like Trump has been giving up ground. In 2016, the last year of the Obama administration, the trade deficit was $518.8 billion, or 2.8 percent of GDP. The trade deficit expanded in both 2017 and 2018, reaching $638.2 billion in 2018, or 3.1 percent of GDP. And it looks to come in slightly higher in 2019, with the deficit averaging $648.3 billion in the first half of 2019. This is clearly going the wrong way.

There are many factors behind the rise in the trade deficit. Growth in the U.S. has been somewhat faster than in major trading partners like the EU and Japan. The dollar has also risen in value, although most of that rise predates Trump. But we know that Trump wouldn't be interested in excuses. The bottom line is the trade deficit has gotten worse on Trump's watch.

The story does not look any better if we look at his major nemeses. Starting with China, in the last year of the Obama administration, the trade deficit in goods with China was $346.8 billion. This had increased to $419.6 billion last year. It looks like the trade deficit is coming down somewhat in 2019, with the deficit for the first eight months at $231.6 billion, compared to just over $260.0 billion over the first eight months of last year. Nonetheless, we are still likely to end up with a higher deficit with China in 2019 than we had in the last year of the Obama administration.

It is also worth remembering that it is difficult to calculate bilateral trade deficits with rigor. Suppose that iPhones, which had previously been assembled in China, are instead assembled in Thailand. If we imported the iPhone from China, the full value of the iPhone would have been recorded as an import from China, even though the assembly may have counted for less than 10 percent of the value added.

When the assembly shifts to Thailand, the reduction in our reported imports from China is equal to the full cost of the iPhones that we previously imported from China. The actual hit to China is just the small share of the value added that is attributable to assembly.

If Trump's battle with China is not going well, he seems to be doing even worse with other trade combatants. The trade deficit with Mexico was $63.3 billion in 2016. It hit $80.7 billion last year and is virtually certain to come in even higher in 2019. The trade deficit with the European Union was $146.7 billion in 2016. It had risen to $168.7 billion last year and is on a path to come in $10-$15 billion higher in 2019. The deficit with Canada rose from $11 billion in 2016 to $19.1 billion last year. It is likely to be roughly $1 billion higher in 2019.

It doesn't look like Donald Trump has had many successes in his trade war. That might be bad news for him politically, but it is probably good news for the country and the world.

While Trump made currency values a major issue in his campaign, yelling about "currency manipulation" by China and other countries, currency has largely fallen off his agenda in his trade disputes. Instead, he has put protecting the intellectual property of U.S. corporations front and center.

This is not a battle that most of us should want to see Trump win. Ordinary workers have no real interest in making people in China and elsewhere pay more for drugs, medical equipment, software, and other items to which US companies have intellectual property claims.

In fact, they would benefit from having these items sell in a free market without patent and copyright monopolies. They would also benefit from a system that facilitated the free flow of knowledge and technology, especially in the areas of clean technology and medicine. Since China has a considerably larger economy than the United States, a reasonable trade policy would be more focused on getting access to their innovations rather than protecting the intellectual property claims of US corporations.

So the report from the front is that Donald Trump is losing his trade war badly, and that is a good thing for people in the United States and the world.


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Monday, October 14, 2019

Thomas Piketty: What is a fair pension system? [feedly]

Piketty on the French pension reforms -- but with some good principles that apply to the US retirement system as well.


What is a fair pension system?
https://www.lemonde.fr/blog/piketty/2019/09/10/what-is-a-fair-pension-system/

Even if the timing remains vague and the conditions uncertain, the government does seem to have decided to launch a vast reform of the retirement pensions system, with the key element being the unification of the rules applied at the moment in the various systems operating (civil servants, private sector employees, local authority employees, self-employed, special schemes, etc).

Let's make it clear: setting up a universal system is in itself an excellent thing, and a reform of this type is long overdue in France. The young generations, particularly those who have gone through multiple changes in status (private and public employees, self-employed, working abroad, etc.,), frequently have no idea of the retirement rights which they have accumulated. This situation is a source of unbearable uncertainties and economic anxiety, whereas our retirement system is globally well financed.

But, having announced this aim of clarification and unification of rights, the truth is that we have not said very much. There are in effect many ways of unifying the rules. Now there is no guarantee that those in power are capable of generating a viable consensus in this respect. The principle of justice invoked by the government seems simple and plausible: one Euro contributed should give rise to the same rights to retirement, no matter what the scheme, and the level of salary or of earned income. The problem is that this principle amounts to making the inequalities in income as they exist at present sacrosanct, including when they are of mammoth proportions (under-paid piece work for some, excessive salaries for others), and to perpetuating them at the age of retirement and dependency which is in no way particularly "fair".

Aware of the difficulty, the High Commissioner Jean-Paul Delevoye's Plan stipulates that a quarter of the contributions will continue to be allocated to "solidarity', that is to say, for example, to subsidies for children and interruptions of career, or to finance a minimum retirement pension for the lowest salaries. The difficulty is that the way this calculation has been made is highly controversial. In particular, this estimate purely and simply takes no account of social inequalities in life expectancy. For example, if a low wage earner spends 10 years in retirement while a highly-paid manager spends 20 years, we have forgotten to take into account the fact that a large share of the contributions of the low wage earner serves in practice to pay the retirement of the highly-paid manager (which is in no way compensated for by the allowance for strenuous and tedious work)

More generally, there are naturally multiple parameters to be fixed to define what one considers to be "solidarity". The government's proposals are respectable but they are far from being the only ones possible. It is essential that a broad public debate take place and that alternative proposals should emerge. The Delevoye Plan for example provides for a replacement rate equal to 85% for a full career (43 years of contributions) at Minimum Wage level. This rate would then very rapidly fall to 70%, to only 1,5 Smic (Minimum Wage) before stabilising at this precise level of 70% until approximately 7 Smic ( 120,000 Euros gross annual salary). This is one possible choice, but there are others. One could thus imagine that the replacement rate would go gradually from 85% of the Smic to 75%-80% around 1.5 – 2 Smic, before gradually falling to around 50%-60%, approximately 5-7 Smic.

Similarly the government's project provides for a financing of the system by a retirement contribution of which the global rate would be fixed at 28.1% on all the gross incomes below 120,000 Euros per annum, before falling suddenly to only 2.8% beyond this threshold. The official justification is that retirement rights in the new system would be capped at this wage level. The Delevoye Report goes as far as congratulating themselves because the super-managers will nevertheless be subject to this contribution (which will not be capped) of 2.8%, to mark their solidarity with the older generations. In passing, once again no account is taken of the salaries between 100,000 Euros and 200,000 Euros which usually correspond to very long life expectancies and which benefit greatly from the contributions paid by the lower waged with shorter life expectancies. In any event, this contribution of 2.8% to solidarity by those earning over 120,000 Euros is much too low, particularly given the levels of remuneration; their very legitimacy is open to challenge.

More generally it is perhaps time to abandon the old idea according to which reduction of inequalities should be left to income tax, while the retirement schemes should content themselves with reproducing them. In a world in which fabulous salaries and questions of retirement and dependency have taken on a new importance, the most legible norms of justice could be that all levels of salary (including the highest) should finance the retirement scheme at the same rates (even if the pensions themselves are capped) while leaving to income tax the task of applying higher levels to the top incomes

To be clear: the present government has a big problem with the very concept of social justice. As everyone knows, it has chosen from the outset to grant huge fiscal gifts to the richest (suppression of the wealth tax (the ISF), the flat tax on dividends and incomes). If today it does not demand a significant effort from the most privileged it will have considerable difficulty in convincing the public that its pension reform is well-founded.


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