Subterms
Some years are defined by a single event or person — a pandemic, a recession, an insurrection — while others are buffeted by a series of disparate forces. Such was 2023. The economy and inflation remained front of mind until the war in Gaza grabbed headlines and the world’s attention — all while Donald Trump’s […] More
Stock and bond markets have been rallying in anticipation of Federal Reserve rate cuts. But don’t get swept away just yet, our columnist says.It’s too early to start celebrating. That’s the Federal Reserve’s sober message — though given half a chance, the markets won’t heed it.In a news conference on Wednesday, and in written statements after its latest policymaking meeting, the Fed did what it could to restrain Wall Street’s enthusiasm.“It’s far too early to declare victory and there are certainly risks” still facing the economy, Jerome H. Powell, the Fed chair, said. But stocks shot higher anyway, with the S&P 500 on the verge of a record.The Fed indicated that it was too early to count on a “soft landing” for the economy — a reduction in inflation without a recession — though that is increasingly the Wall Street consensus. An early decline in the federal funds rate, the benchmark short-term rate that the Fed controls directly, isn’t a sure thing, either, though Mr. Powell said the Fed has begun discussing rate cuts, and the markets are, increasingly, counting on them.The markets have been climbing since July — and have been positively buoyant since late October — on the assumption that truly good times are in the offing. That may turn out to be a correct assumption — one that could be helpful to President Biden and the rest of the Democratic Party in the 2024 elections.But if you were looking for certainty about a joyful 2024, the Fed didn’t provide it in this week’s meeting. Instead, it went out of its way to say that it is positioning itself for maximum flexibility. Prudent investors may want to do the same.Reasons for OptimismOn Wednesday, the Fed said it would leave the federal funds rate where it stands now, at about 5.3 percent. That’s roughly 5 full percentage points higher than it was in early in 2022. Inflation, the glaring economic problem at the start of the year, has dropped sharply thanks, in part, to those steep interest rate increases. The Consumer Price Index rose 3.1 percent in the year through November. That was still substantially above the Fed’s target of 2 percent, but way below the inflation peak of 9.1 percent in June 2022. And because inflation has been dropping, a virtuous cycle has developed, from the Fed’s standpoint. With the federal funds rate substantially above the inflation rate, the real interest rate has been rising since July, without the Fed needing to take direct action.But Mr. Powell says rates need to be “sufficiently restrictive” to ensure that inflation doesn’t surge again. And, he cautioned, “We will need to see further evidence to have confidence that inflation is moving toward our goal.”The wonderful thing about the Fed’s interest rate tightening so far is that it has not set off a sharp increase in unemployment. The latest figures show the unemployment rate was a mere 3.7 percent in November. On a historical basis, that’s an extraordinarily low rate, and one that has been associated with a robust economy, not a weak one. Economic growth accelerated in the three months through September (the third quarter), with gross domestic product climbing at a 4.9 percent annual rate. That doesn’t look at all like the recession that had been widely anticipated a year ago.To the contrary, with indicators of robust economic growth like these, it’s no wonder that longer-term interest rates in the bond market have been dropping in anticipation of Fed rate cuts. The federal funds futures market on Wednesday forecast federal funds cuts beginning in March. By the end of 2024, the futures market expected the federal funds rate to fall to below 4 percent.But on Wednesday, the Fed forecast a slower and more modest decline, bringing the rate to about 4.6 percent.Too Soon to RelaxSeveral other indicators are less positive than the markets have been. The pattern of Treasury rates known as the yield curve has been predicting a recession since Nov. 8, 2022. Short-term rates — specifically, for three-month Treasuries — are higher than those of longer duration — particularly, for 10-year Treasuries. In financial jargon, this is an “inverted yield curve,” and it often forecasts a recession.Another well-tested economic indicator has been flashing recession warnings, too. The Leading Economic Indicators, an index formulated by the Conference Board, an independent business think tank, is “signaling recession in the near term,” Justyna Zabinska-La Monica, a senior manager at the Conference Board, said in a statement.The consensus of economists measured in independent surveys by Bloomberg and Blue Chip Economic Indicators no longer forecasts a recession in the next 12 months — reversing the view that prevailed earlier this year. But more than 30 percent of economists in the Bloomberg survey and fully 47 percent of those in the Blue Chip Economic Indicators disagree, and take the view that a recession in the next year will, in fact, happen.While economic growth, as measured by gross domestic product, has been surging, early data show that it is slowing markedly, as the bite of high interest rates gradually does its damage to consumers, small businesses, the housing market and more.Over the last two years, fiscal stimulus from residual pandemic aid and from deficit spending has countered the restrictive efforts of monetary policy. Consumers have been spending resolutely at stores and restaurants, helping to stave off an economic slowdown.Even so, a parallel measurement of economic growth — gross domestic income — has been running at a much lower rate than G.D.P. over the last year. Gross domestic income has sometimes been more reliable over the short term in measuring slowdowns. Ultimately, the two measures will be reconciled, but in which direction won’t be known for months.The MarketsThe stock and bond markets are more than eager for an end to monetary belt-tightening.Already, the U.S. stock market has fought its way upward this year and is nearly back to its peak of January 2022. And after the worst year in modern times for bonds in 2022, market returns for the year are now positive for the investment-grade bond funds — tracking the benchmark Bloomberg U.S. Aggregate Bond Index — that are part of core investment portfolios.But based on corporate profits and revenues, prices are stretched for U.S. stocks, and bond market yields reflect a consensus view that a soft landing for the economy is a near-certain thing.Those market movements may be fully justified. But they imply a near-perfect, Goldilocks economy: Inflation will keep declining, enabling the Fed to cut interest rates early enough to prevent an economic calamity.But excessive market exuberance itself could upend this outcome. Mr. Powell has spoken frequently of the tightening and loosening of financial conditions in the economy, which are partly determined by the level and direction of the stock and bond markets. Too big a rally, taking place too early, could induce the Fed to delay rate cuts.All of this will have a bearing on the elections of 2024. Prosperity tends to favor incumbents. Recessions tend to favor challengers. It’s too early to make a sure bet.Without certain knowledge, the best most investors can do is to be positioned for all eventualities. That means staying diversified, with broad holdings of stocks and bonds. Hang in, and hope for the best. More
Back in the 1970s, Arthur Okun, an economist who had been a policy adviser to Lyndon Johnson, suggested a quick-and-dirty way to assess the nation’s economic condition: the “misery index,” the sum of inflation and unemployment. It was and is a crude, easily criticized measure. The measurable economic harm from unemployment, for instance, is much higher than that from inflation. Yet the index has historically done a quite good job of predicting overall economic sentiment.So it seems worth noting that the misery index — which soared along with inflation during 2021 and the first half of 2022 — has plunged over the past year. It is now all the way back to its level when President Biden took office.This remarkable turnaround raises several questions. First, is it real? (Yes.) Second, will ordinary Americans notice? (They already have.) Third, will they give Biden credit? (That’s a lot less clear.)The plunge in the misery index reflects both what didn’t happen and what did. What didn’t happen, despite a drumbeat of dire warnings in the news media, was a recession. The U.S. economy added four million jobs over the past year, and the unemployment rate has remained near a 50-year low.What did happen was a rapid decline in inflation. But is this decline sustainable? You may have seen news reports pointing out that “core” inflation, which excludes volatile food and energy prices, has been “sticky,” suggesting that improvement on the inflation front will be only a temporary phenomenon.But just about every economist paying attention to the data knows that the traditional measure of core inflation has gone rotten, because it’s being driven largely by the delayed effects of a surge in rents that ended in mid-2022. This surge, by the way, was probably caused by the rise in remote work triggered by the Covid-19 pandemic rather than by any Biden administration policy.Alternative measures of core inflation that exclude shelter by and large show a clear pattern of disinflation; inflation is still running higher than it was before the pandemic, but it has come down a lot. If you really work at it, it’s still possible to be pessimistic about the inflation outlook, but it’s getting harder and harder. The good news about inflation, and about the economy as a whole, does look real.But are people noticing this improvement? Traditional measures of economic sentiment have become problematic in recent years: Ask people how the economy is doing, and their response is strongly affected both by partisanship and, I believe, by the narratives conveyed by the news media. That is, what people say about the economy is, all too often, what they think they’re supposed to say.But if you ask Americans more specific questions, such as whether now is a good time to find a quality job, they typically say yes. At the same time, their expectations about future inflation have declined substantially.And if you look at a novel indicator — what information people are searching for on the internet — you’ll find that searches for both “inflation” and “recession” soared in 2021-22 along with the misery index but have plunged over the past year.Finally, as always, it’s important to look at what people do as well as what they say. Strong consumer spending, record levels of air travel and many other indicators suggest that Americans are feeling pretty good about their economic circumstances.But will Biden get credit? Polls suggest that voters are still giving him very poor marks for his handling of the economy, despite the decline in the misery index.Some analysts have argued that this jaundiced view reflects a failure of wages to keep up with inflation. But this was true for most of the Reagan years too, and in any case real wages have been rising lately.So will voters’ views of the Biden economy eventually reflect the good news? Or did the inflation shock of 2021-22 establish a narrative of Biden as a poor economic manager that has become too deeply entrenched — both in the public consciousness and in the news media — to be dislodged even as the economy rapidly improves?Biden himself is trying hard to change that narrative, by pointing both to the improving data and to an impressive surge in manufacturing investment. But I have no idea whether he’ll succeed. One encouraging precedent for Biden: Ronald Reagan still had fairly low approval in mid-1983, then went on to win a landslide in 1984 on the strength of the economy’s recovery. Biden might yet turn the narrative on his economic policy around.And even if he can’t, it might not matter. High inflation was supposed to guarantee a huge red wave in the midterm elections. Instead, Democrats did surprisingly well, probably because abortion and other social issues played a bigger role than economics. Those social issues aren’t going away, while high inflation is. Arguably, Biden doesn’t need to convince Americans that his economic policies have been highly successful; he just needs to make the case that the economy isn’t doing too badly.And it isn’t. In fact, by most measures the economy is doing quite well.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.Follow The New York Times Opinion section on Facebook, Twitter (@NYTopinion) and Instagram. More
Republican flamethrowers and culture warriors like Donald Trump and Representatives Matt Gaetz and Marjorie Taylor Greene typically draw an outsize amount of media attention.Americans may conclude from this that there is a striking, and perhaps unfortunate, relationship between extremism and political success.But Republicans aren’t hoping for a red wave in the midterms only because norm-thrashing or scandal sells. The truth is much more banal — yet also important for parties to internalize and better for politics generally: In states across the country, Republican governors are delivering real results for people they are physically more proximate to than federal officials.Now, it’s true that the party that controls the presidency nearly always gets whipped in midterm elections, and inflation would be a huge drag on any party in power. And it’s also true that among those governors are culture warriors like Gov. Ron DeSantis of Florida and Gov. Greg Abbott of Texas.But people too often overlook the idea that actual results, especially ones related to pocketbook issues, can often be as important as rhetoric. Looked at that way, lots of Republicans — some with high public profiles, and some who fly below the radar — are excelling.Start with the simplest measure: popularity. Across the country, 13 of the 15 most popular governors are Republicans. That list does not just include red states. In fact, blue-state Republican governors like Phil Scott of Vermont, Charlie Baker of Massachusetts and Larry Hogan of Maryland are among the most popular.There are many reasons that G.O.P. governors seem to be succeeding. It’s true that governors can’t take credit for everything. Sometimes they just get lucky. But they do make policy choices, and particularly those made by governors since the start of Covid have made a difference.For example, take a look at the most recent Bureau of Labor Statistics data on unemployment. In the 10 states with the lowest rates as of June, eight were led by Republican governors. Several governors who don’t make frequent appearances in national news stand out, like Pete Ricketts of Nebraska, Chris Sununu of New Hampshire, Spencer Cox of Utah and Phil Scott of Vermont. Their states have unemployment rates under 2.5 percent, and of the 20 states with the lowest unemployment rates, just four are led by Democrats.States with Republican governors have also excelled in economic recovery since the start of the pandemic. Standouts in this measure include Mr. Abbott and Doug Ducey of Arizona.These results reflect many things — some states have grown and others have shrunk, for example — but are at least in part a result of policy choices made by their elected leaders since the start of the pandemic. For example, governors like Kristi Noem in South Dakota often rejected lockdowns and economic closures.Republican governors were also far more likely to get children back to in-person school, despite intense criticism.Covid policy doesn’t explain everything. Fiscal governance has also made a difference. The Cato Institute’s Fiscal Report Card on America’s governors for 2020 (the most recent edition available), which grades them on tax and spending records, gives high marks to many Republicans. Nearly all of the top-ranked states in this report have Republican governors, like Kim Reynolds of Iowa or Mr. Ricketts. (Some Democratic governors also ranked highly, including Steve Sisolak of Nevada and Roy Cooper of North Carolina.) Some have made their mark with employer-attracting tax cuts; others with spending controls; others with a mixture.Most states mandate a balanced budget, so taxing and spending policies are important for fiscal stability. Low taxes tend to attract and keep employers and employees. Restrained budgets help ensure that taxes can be kept low, without sacrificing bond ratings, which may matter if debt-financed spending is needed in a crisis or to try to stimulate businesses to hire more.Asa Hutchinson of Arkansas has cut taxes for individuals, reduced the number of tax brackets and cut the corporate income tax rate. Mr. Sununu has restrained spending, vetoed a payroll tax proposal and cut business taxes. Brian Kemp of Georgia, by contrast, actually paused some tax cuts that had been scheduled — and focused almost exclusively on spending restraint, issuing a directive for state agencies to generate budget cuts and keeping 2020 general fund growth to a tiny 1 percent.Even in blue Vermont, Mr. Scott has constrained general fund spending — despite being an odd duck out among governors in that he is not constrained by a balanced-budget amendment — to rise by an annual average of just 2.4 percent between 2017 and 2020, and he has also cut taxes. He signed a bill to ensure that the federal tax reform instituted under Mr. Trump and limiting state and local tax deductions wouldn’t result in Vermonters getting hammered. He has also cut individual income tax rates, reduced the number of tax brackets and resisted new payroll taxes in favor of voluntary paid leave plans for private-sector employers.Republicans who have a big impact on the day-to-day lives of many Americans — unlike, say, Representative Kevin McCarthy or certainly Mr. Trump, and in terms of the quality of state economies, the local job market and education — are delivering. In our federalist system, a lot of power still sits with states and not the federal government and determines much about citizens’ lives.This is a big reason that Republicans are well-positioned heading into the midterms. It should be a warning to Joe Biden and Democrats — and to some of the culture warriors. Cable-news combat over whatever the outrage of the day is may deliver politicians the spotlight. But sound economic policy and focusing on the job, not theatrics, is delivering basic day-to-day results Americans want, need and will reward.Liz Mair (@LizMair), a strategist for campaigns by Scott Walker, Roy Blunt, Rand Paul, Carly Fiorina and Rick Perry, is the founder and president of Mair Strategies.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.Follow The New York Times Opinion section on Facebook, Twitter (@NYTopinion) and Instagram. More
The president has brought innovation, jobs and growth. Still, resentments fester on the eve of the presidential election.PARIS — In full Steve Jobs mode, President Emmanuel Macron of France donned a black turtleneck in January and took to Twitter to celebrate the creation in France of 25 “unicorn” start-ups — companies with a market value of over 1 billion euros, or almost $1.1 billion.He declared that France’s start-up economy was “changing the lives of French people” and “strengthening our sovereignty.” It was also helping to create jobs: Unemployment has fallen to 7.4 percent, the lowest level in a decade.The start-up boom was a milestone for a young president elected five years ago as a restless disrupter, promising to pry open the economy and make it competitive in the 21st century.To some extent, Mr. Macron has succeeded, luring billions of euros in foreign investments and creating hundreds of thousands of new jobs, many in tech start-ups, in a country whose resistance to change is stubborn. But disruption is just that, and the president has at the same time left many French feeling unsettled and unhappy, left behind or ignored.As Mr. Macron seeks re-election starting on Sunday, it is two countries that will vote — a mainly urban France that sees the need for change to meet the era’s sweeping technological and economic challenges, and a France of the “periphery,” wary of innovation, struggling to get by, alarmed by immigration and resentful of a leader seen as embodying the arrogance of the privileged.Which France shows up at voting booths in greater numbers will determine the outcome.Campaign posters on display this month in the northeastern French town of Stiring-Wendel.Andrea Mantovani for The New York TimesIn many Western societies, the simultaneous spread of technology and inequality has posed acute problems, stirring social tensions, and France has proved no exception. If the disenchanted France prevails, Marine Le Pen, the perennial candidate of the nationalist right, will most likely prevail, too.Worried that he may have lost the left by favoring start-up entrepreneurship and market reforms, Mr. Macron has in the past week been multiplying appeals to the left, resorting to phrases like “our lives are worth more than their profits” to suggest his perceived rightward lurch was not the whole story.He told France Inter radio that “fraternity” was the most important word in the French national motto, and said during a visit to Brittany that “solidarity” and “equality of opportunity” would be the central themes of an eventual second term.Learn More About France’s Presidential ElectionThe run-up to the first round of the election has been dominated by issues such as security, immigration and national identity.On the Scene: A Times reporter attended a rally held by Marine Le Pen, the far-right French presidential candidate. Here is what he saw.Challenges to Re-election: A troubled factory in President Emmanuel Macron’s hometown shows his struggle in winning the confidence of French workers.A Late Surge: After recently rising in voter surveys, Jean-Luc Mélenchon could become the first left-wing candidate since 2012 to reach the second round of the election.A Political Bellwether: Auxerre has backed the winner in the presidential race for 40 years. This time, many residents see little to vote for.The pledges looked like signs of growing anxiety about the election’s outcome. After several months in which Mr. Macron’s re-election had appeared virtually assured, the gap between him and Ms. Le Pen has closed. The leading two candidates in Sunday’s vote will go through to a runoff on April 24.The election will be largely decided by perceptions of the economy. In Mr. Macron’s favor, the country has bounced back faster than expected from coronavirus lockdowns, with economic growth reaching 7 percent after a devastating pandemic-induced recession.Marine Le Pen speaking this month in Stiring-Wendel.Andrea Mantovani for The New York TimesThe most significant cultural transformation has come in the area of tech, where Mr. Macron’s determination to create a start-up culture centered around new technology has brought changes the government considers essential to the future of France.Cédric O, the secretary of state for the digital sector, wearing jeans and a white dress shirt, no tie, admits to being obsessed. Day after long day, he plots the future of “la French tech” from his spacious office at the Finance Ministry.Five years ago, that may have seemed quixotic, but something has stirred. “It’s vital to be obsessed because the risk France and Europe are facing is to be kicked out of history,” Mr. O, 39, said, borrowing a line often used by Mr. Macron. “We have to get back into the international technological race.”Toward that end, Mr. Macron opened Station F, a mammoth incubator project in Paris representing France’s start-up ambitions, and earmarked nearly €10 billion in tax credits and other inducements to lure research activity and artificial intelligence business. A new bank was created to help finance start-ups.The president wined and dined multinational chief executives, creating an annual gathering at Versailles called “Choose France.”Since 2019, France has become the leading destination for foreign investment in Europe, and more than 70 investment projects worth €12 billion have been pledged by foreign multinationals at the Versailles gatherings, said Franck Riester, France’s foreign trade minister.In the past four years, IBM, SAP of Germany and DeepMind, the London-based machine learning company owned by Google’s parent, Alphabet, have increased investment in France and created thousands of jobs.Station F, a mammoth project in Paris that represents France’s start-up ambitions.Roberto Frankenberg for The New York TimesFacebook and Google have also bolstered their French presence and their artificial intelligence teams in Paris. Salesforce, the American cloud computing company, is moving ahead with over €2 billion in pledged investments.“Macron brought a culture shift where France was suddenly open to the world of funders,” said Thomas Clozel, a doctor by training and the founder in 2016 of Owkin, a start-up that uses Artificial Intelligence to personalize and improve medical treatment. “He made everything easy for start-up entrepreneurs and so changed the view of France as an anticapitalist society.”François Hollande, Mr. Macron’s Socialist Party predecessor, had famously declared in 2012: “My enemy is the world of finance.” As a result, Mr. Clozel said, securing funds as a French start-up was so problematic that he chose to incorporate in the United States.No longer.“Today, I am thinking of reincorporating in France,” he said. “The ease of dealing with the government, the consortium of start-ups helping one another, and the new French tech pride are compelling.”Among the start-ups that have had a significant effect on French life are Doctolib, a website that allows patients to arrange for medical appointments and tests online, and Backmarket, an online market for reconditioned tech gadgets that just became France’s most valuable start-up, at $5.7 billion.They began life before Mr. Macron took office, but have grown exponentially in the past five years.“I have made 56 investments in the last two years, and 53 of them are in France,” said Jonathan Benhamou, a French entrepreneur who founded PeopleDoc, a company that simplifies access to information for human resources departments.Now funding new ventures and focusing on a new start-up called Resilience in the field of personalized cancer care, Mr. Benhamou credits Mr. Macron with “giving investors confidence in stability and creating a virtuous cycle.”Talented engineers no longer go elsewhere because there is an “ecosystem” for them in France, Mr. O said.Yellow Vest protesters blocking a road in Caen, in France’s Normandy region, in November 2018.Charly Triballeau/Agence France-Presse — Getty ImagesMr. Macron has insisted that opening the economy is consistent with maintaining protections for French workers and that the arrival of la French tech does not mean the embrace of the no-holds-barred capitalism behind the churn of American creativity.Despite the president’s overhauls, France remains one of the most expensive countries for payroll taxes, according to the Organization for Economic Cooperation and Development, with hourly labor costs of nearly €38, close to levels seen in Sweden, Norway and other northern European countries.“We know that we have to go further,” Mr. Riester, the foreign trade minister, said in a recent interview. “We still have some brakes that could be taken off the economy, and we have to cut some red tape in the future.”Who Is Running for President of France?Card 1 of 6The campaign begins. 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President Emmanuel Macron vowed an economic revival, but as he seeks re-election, a Potemkin factory in the town where he was raised shows just how hard that can be.AMIENS, France — During the last presidential campaign, the troubled Whirlpool factory in the northern city of Amiens became the setting for frantic, dueling appeals for support by Emmanuel Macron and his far-right rival, Marine Le Pen.Mr. Macron promised to save the plant — which happens to be in his hometown — and once he was elected, his government poured millions in subsidies toward the factory’s reinvention, as a showpiece of his commitment to reviving French industry.As Mr. Macron seeks re-election, he and Ms. Le Pen are preparing to square off once again as the front-runners before the first round of voting in presidential elections on Sunday. But the fate of the plant has proved much the opposite of what Mr. Macron had hoped for.Today, the plant is an example of the difficulty of rehabilitating ailing French industries and of the president’s challenge in winning the confidence of French workers, who have been gravitating for years to the far right.The mammoth plant in Amiens, where weeds have pushed through asphalt and the cafeteria’s menu is frozen on sausage fricassee, is deserted and lifeless, except for three last Whirlpool workers who spend their days huddling around the coffee machines in a few small rooms.The plant’s new operator was convicted in February of misuse of funds, after a year of taking money from the government and Whirlpool and doing precious little with it. Workers say they spent idle days as next to nothing rolled off the assembly line. Instead, they kept busy killing time, taking extended cigarette breaks or lying inside their cars fidgeting on their smartphones.Frédéric Chantrelle, left, one of the last three workers still employed at the plant in Amiens, and Christophe Beaugrand, a former employee.Dmitry Kostyukov for The New York Times“Two or three times, when someone important visited, we had to pretend to work or hide,” recalled Mariano Munoz, 49, who was in charge of janitorial services. “The welders welded all sorts of things and hammered away. One or two tinkered with a car. Me, I’d take the street cleaner and I’d sweep the entire parking lot.”Mr. Macron was elected as a change agent five years ago, with plans to disrupt the heavily unionized industrial sector that had stagnated as owners feared the rising cost of French workers who were guaranteed years of ample benefits and were notoriously difficult to fire. For years, unemployment hovered chronically at 8 percent or more as the industrial sector atrophied.Initially, Mr. Macron attempted to overhaul France’s economy by pushing through business-friendly changes, like cutting taxes, especially for the wealthy. In his first years as president, he took on some of France’s toughest unions, provoking the biggest strikes the country had seen in years as he revamped France’s voluminous labor code, making it easier to hire and fire workers.Learn More About France’s Presidential ElectionThe run-up to the first round of the election has been dominated by issues such as security, immigration and national identity.Suddenly Wide Open: An election that had seemed almost assured to return President Emmanuel Macron to power now appears to be anything but certain.On Stage: As the vote approaches, theaters and comedy venues are tackling the campaign with one message: Don’t trust politicians.Behind the Scene: In France, where political finance laws are strict, control over the media has provided an avenue for billionaires to influence the election.A Political Bellwether: Auxerre has backed the winner in the presidential race for 40 years. This time, many residents see little to vote for.Private Consultants: A report showing that firms like McKinsey earned large sums of money to do work for his government has put President Emmannuel Macron on the defensive.But even as the overall economy has bounced back strongly from the pandemic, Mr. Macron’s efforts to reindustrialize France have proved decidedly mixed, economists say, as evidenced by the nation’s trade deficit of 84.7 billion euros, about $93 billion, last year — a record — as well as the plant in Amiens, which had made tumble dryers for Whirlpool and did not survive despite nearly €10 million in subsidies.Amiens North, an area inhabited by many descendants of North Africans recruited to work in factories in the 1960s and ’70s.Dmitry Kostyukov for The New York TimesFor Mr. Macron, the plant’s long, agonizing death has complicated every trip back to his hometown, about 80 miles north of Paris. It reinforced the impression of Mr. Macron, a former investment banker, as the president of the rich, someone cut off from ordinary French people — like the nearly 300 workers who lost their jobs when the plant finally did close in 2018.Many of the laid off workers went on to join the Yellow Vest movement, whose ranks were filled with working-class French struggling under high taxes and a lack of earning power, ushering in the biggest political crisis of Mr. Macron’s presidency.Burned by the Yellow Vest protests, Mr. Macron’s government spent massively to offset the economic shock of the pandemic, and unemployment is now at its lowest in a decade. Still, it is service-sector jobs that have continued to increase, while industrial employment declines.Thomas Grjebine, an economist at CEPII, a research center in Paris, said that the fate of the Amiens plant was “symptomatic” of the difficulties of reviving the industrial sector. “In fact, the government is somewhat powerless before the closings of plants,” Mr. Grjebine said. “But many promises are made during campaigns.”During Mr. Macron’s campaign for the presidency in 2017, 11 days before the final vote, Mr. Macron met with union leaders in town, while Ms. Le Pen paid a surprise visit to the plant’s parking lot and was greeted warmly by striking employees — forcing a reluctant Mr. Macron to follow.Patrice Sinoquet, another of the last remaining workers at the plant, showed a photograph of Mr. Macron visiting the factory in 2019.Dmitry Kostyukov for The New York TimesHeckled and jostled by the hostile crowd, Mr. Macron tried to catch up with Ms. Le Pen, whose party, then called the National Front, had won the department that includes Amiens in the first round of voting that year.“You think it doesn’t hurt me in the gut that people vote for the National Front on my soil?” Mr. Macron said to the crowd. Later, he promised a “real Marshall Plan for the reindustrialization of our economically lost territories.”Half a year after his election victory, that promise seemed in sight. A prominent local businessman, Nicolas Decayeux, was selected to take over the plant with a project to manufacture refrigerated lockers and small vehicles. He took on 162 of the 282 laid-off Whirlpool workers and received €2.6 million in subsidies from the government and €7.4 million from Whirlpool.During a celebratory visit to the plant, Mr. Macron was accompanied by Mr. Decayeux. In a follow-up letter to Mr. Decayeux, the president wrote that the businessman’s “beautiful entrepreneurial project” would “contribute to our industrial recovery.”“I really had stars in my eyes because here is a young president who wants to reform France,” recalled Mr. Decayeux, who named his company WN.It was a rare piece of good news for Amiens, a picturesque town of more than 130,000 that straddles the Somme River.Like much of northern France, it had been hit by deindustrialization for two generations as successive national governments considered a shift toward a consumer-driven economy a sign of modernization, witnessed in the Amazon warehouses that have opened in Amiens and elsewhere.An Amazon facility near Amiens. The shift toward a consumer-driven economy was seen by successive national governments as a sign of modernization.Dmitry Kostyukov for The New York Times“This drop in social standing, the sentiment of being abandoned and of not mattering, eased the way for extremism,” said Brigitte Fouré, the center-right mayor of Amiens.In an interview with a French magazine last year, Mr. Macron said that growing up in Amiens, he had witnessed the “full force of deindustrialization” in his region. Still, he acknowledged that he himself had enjoyed a sheltered upbringing, living in a “rather happy bubble, and even a bubble in a bubble.”The son of two medical doctors, Mr. Macron grew up in Amiens’s richest neighborhood, Henriville, and attended the city’s most prestigious school, a private Jesuit establishment called La Providence. “He’s from Henriville, and when you say, ‘Henriville,’ it’s Versailles,” said M’hammed El Hiba, the longtime head of Alco, a community center in Amiens North, an area inhabited by the descendants of North Africans recruited to work in factories in the 1960s and 1970s.Mr. Macron grew up in Amiens’s richest neighborhood, Henriville, and attended the city’s most prestigious school, a private Jesuit establishment called La Providence. Dmitry Kostyukov for The New York TimesAt the former Whirlpool plant, the optimism faded quickly. Former workers said that Mr. Decayeux’s plans to build lockers and small vehicles never took off.“Nothing was happening,” said Christophe Beaugrand, 44, a welder who was hired by Mr. Decayeux after being laid off by Whirlpool. “People were in the cafeteria with their phones and chargers. When the prefect visited, we had to make noise or hide.”Who Is Running for President of France?Card 1 of 6The campaign begins. More
One year into the pandemic, women have little cause to celebrate International Women’s Day tomorrow, and less energy to battle for change. Men are more likely to die from Covid-19. But women have suffered the greatest economic and social blows. They have taken the brunt of increased caregiving, have been more likely to lose their jobs and have seen a sharp rise in domestic abuse.In the UK, women did two-thirds of the extra childcare in the first lockdown, and were more likely to be furloughed. In the US, every one of the 140,000 jobs lost in December belonged to a woman: they saw 156,000 jobs disappear, while men gained 16,000. But white women actually made gains, while black and Latina women – disproportionately in jobs that offer no sick pay and little flexibility – lost out. Race, wealth, disability and migration status have all determined who is hit hardest. Previous experience suggests that the effects of health crises can be long-lasting: in Sierra Leone, over a year after Ebola broke out, 63% of men had returned to work but only 17% of women.The interruption to girls’ education is particularly alarming: Malala Fund research suggests that 20 million may never return to schooling. The United Nations Population Fund warns that there could be an extra 13 million child marriages over the next decade, and 7 million more unplanned pregnancies; both provision of and access to reproductive health services has been disrupted. In the US, Ohio and Texas exploited disease control measures to reduce access to abortions. The UN has described the surge in domestic violence which began in China and swept around the world as a “shadow pandemic”. Research has even suggested that the pandemic may lead to more restrictive ideas about gender roles, with uncertainty promoting conservatism.Coronavirus has not created inequality or misogyny. It has exacerbated them and laid them bare. Structural problems such as the pay gap, as well as gendered expectations, explain why women have taken on more of the extra caregiving. The pandemic’s radicalising effect has echoes of the #MeToo movement. Women knew the challenges they faced, but Covid has confronted them with unpalatable truths at both intimate and institutional levels.In doing so, it has created an opportunity to do better. Germany has given parents an extra 10 days paid leave to cover sickness or school and nursery closures, and single parents 20. Czech authorities have trained postal workers to identify potential signs of domestic abuse. But the deeper task is to rethink our flawed economies and find ways to reward work that is essential to us all. So far, there are precious few signs of building back better.Around 70% of health and social care workers globally are female, and they are concentrated in lower-paid, lower-status jobs. They deserve a decent wage. The 1% rise offered to NHS workers in the UK is an insult. The government also needs to bail out the childcare sector: without it, women will not return to work. It has not done equality impact assessments on key decisions – and it shows. The budget has admittedly earmarked £19m for tackling domestic violence, but Women’s Aid estimates that £393m is needed. And the UK is slashing international aid at a time when spending on services such as reproductive health is more essential than ever. Nonetheless, as a donor, it should at least press recipient governments to prioritise women in their recovery plans.Overworked and undervalued women have more awareness than ever of the need for change, and less capacity to press for it. Men too must play their part. Some have recognised more fully the demands of childcare and housework, and seen the potential benefits of greater involvement at home. Significant “use it or lose it” paternity leave might help to reset expectations both in families and the workplace. There were never easy solutions, and many look harder than ever. But the pandemic has shown that we can’t carry on like this. More
#masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesRisk Near YouVaccine RolloutNew Variants TrackerAdvertisementContinue reading the main storySupported byContinue reading the main storyHow New Jersey Averted a Pandemic Financial CalamityA $44.8 billion spending plan unveiled Tuesday by Gov. Phil Murphy calls for no new taxes and fully funds the state pension program for the first time since 1996.Gov. Philip D. Murphy of New Jersey released a $44.8 billion budget on Tuesday that shows better-than-expected revenue projections.Credit…Pool photo by Anne-Marie CarusoFeb. 23, 2021Updated 3:07 p.m. ETIt has been five months since New Jersey officials issued warnings about a coronavirus-related financial calamity. The dire outlook contributed to lawmakers’ decisions to increase taxes on income over $1 million and to become one of the first states to borrow billions to cover operating costs.But the doomsday forecast has since brightened considerably, officials said, enabling the Democratic governor, Philip D. Murphy, to unveil a $44.8 billion spending plan on Tuesday that calls for no new taxes, few cuts and tackles head-on a chronic problem — the state’s underfunded pension program — for the first time in 25 years.The governor also said there would be no increase in New Jersey Transit fares.“The news is less bad,” the state’s treasurer, Elizabeth Maher Muoio, said. “I wouldn’t say it’s good, but it’s less bad.”The governor’s election-year financial blueprint relies on better-than-expected revenue from retail sales and high-earners, who have lost fewer jobs during the pandemic than low-income workers and are reaping the benefits of a prolonged Wall Street rally.The $38 billion that New Jersey and its residents have received in federal stimulus funding, a short-term extension of a corporate tax and a $504 million windfall from the so-called millionaire’s tax also helped, Ms. Muoio said.The release of New Jersey’s proposed 2022 fiscal year budget comes as Congress continues to debate President Biden’s $1.9 trillion virus relief package. The proposed package includes considerable funds for states and municipalities as well as grant and loan programs for small businesses.Other states have seen similarly strong signs of an economic rebound even as cases of the virus have spiked nationwide over the last several months and the nation’s death toll surpassed 500,000 on Monday.Earlier this month, the nonpartisan Congressional Budget Office concluded that large sectors of the economy were adapting to the pandemic better than originally expected and that December’s economic aid package had helped.Mr. Murphy, who is running for re-election in November, said the spending plan was designed to not only enable the state to scrape through the pandemic, but to help it emerge stronger.“This is the time for us to lean into the policies that can fix our decades-old — or in some cases centuries-old — inequities,” the governor said Tuesday in a budget address, which he delivered virtually.A key pillar of the budget is a proposal to fully fund the state’s public sector pension obligations for the first time since 1996.The state has not set aside the full amount of its pension obligation for 25 years, leading $4 billion in extra debt to accrue over time, Ms. Muoio said. Under a deal brokered with the Legislature, Mr. Murphy had been on track to fully fund the state’s share by the 2023 fiscal year. But the spending plan released on Tuesday sets aside $6.4 billion for the pension system, accelerating full funding by a year.“New Jersey is done kicking problems down the road,” the governor said. “We are solving them.”Under the plan, the state’s surplus, which proved to be a vital resource during the first wave of the pandemic, would not grow, officials said, but would remain at about the same level it was at the end of 2020.The Coronavirus Outbreak More
