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L'affaire demande

“L’offre crée même la demande”.

With those five words François Hollande set off his second scandal in as many weeks. A French president having an affair is one thing, but for a European Socialist leader to state that “supply creates demand” is another entirely, particularly in the econoblogosphere.

In the same speech, Hollande said he will push for tax and spending cuts. The WSJ notes that, “market watchers appreciated the efforts, but bemoaned the lack of details”; his plan does reportedly include at least €30 billion in tax breaks. This is the man who ran on a platform of equality and controversially pushed through a 75% tax on salaries above €1 million, which caused Gérard Depardieu to give up his French passport and move to Russia. Hollande is also one of the least popular French presidents ever.

The New York Times writes that Hollande made “proposals to take France in a centrist direction”. However, Dean Baker takes issue with that characterization, accusing the NYT of “acting as a mouthpiece for the agenda of the right-wing in Europe”. Baker goes on to say, “the consensus view within the economics profession is that Hollande's program will slow growth and raise unemployment”.

Francesco Saraceno points out that the French Statistics Office actually tracks whether French companies are having issues with supply, demand, or both. He writes, “The message seems to be clear: since the beginning of the crisis the trouble for French firms came from insufficient demand. Keynes: right; Say (and François Hollande, and the Commission, and Angela Merkel): wrong”. Here’s the chart:

Paul Krugman, meanwhile, wonders why the French seem so panicked when, in his words, “the numbers, while not good, just aren’t that dramatic”. Krugman has several charts showing France is in the middle of the European pack when it comes to growth and competitiveness. He adds that to the extent there is a major economic problem in France, it’s being caused by austerity, and thus probably won’t be fixed by more.

Kevin O’Rourke thinks that Hollande’s statement is evidence that the European left has been decimated. Ambrose Evans-Pritchard says Europe’s left is “so compromised by ideological defence of monetary union - a Right-wing project, or ‘bankers' ramp’ as the Old Left used to say - that it cannot muster any articulate policy”. O’Rourke’s bigger worry is that Europeans let down by both the political left and the right will turn to the extreme. So far the evidence is on O’Rourke’s side. -- Shane Ferro

On to today’s links:

Charts
No more monoliths: The average value of a tech company is decreasing - Tomasz Tunguz
Increasing income inequality, animated GIF chart edition - Center on Budget and Policy Priorities
Energy is decoupling from economic growth - Izabella Kaminska

Cephalopods
Goldman moves to Utah: "They call us 'high value,' but what they really mean is 'low cost'" - Lauren Tara LaCapra

Takedowns
Wealthy CEO Is deeply concerned about budget deficits - Josh Barro

Must Read
Our historically unprecedented, unsustainable corporate profits bubble - Chris Brightman

Epistles
"You make your own luck? Success is never accidental? Bull!!" - Howard Marks

Right On
Work is better than not-quite-work - Sam Altman

Financial Arcana
Banks are being cagey about their mortgage legal reserves. Too cagey - Peter Eavis

Alpha
FINRA keeps data on shady brokers to itself - Jonathan Weil

Equals
The depressing reason women are gaining labor market share - Shane Ferro

Remuneration
After just 15 months at Yahoo, the departing COO may get a $109 million payout - Brandon Bailey

Crime and/or Punishment
"Apple must refund at least $32.5 million to parents on the brink of disowning their children" - Lily Hay Newman

Burn Unit
"People upset with David Brooks include" - Mark Thoma
"In which we learn that that Ross Douthat has never understood Plato's Euthyphro" - Brad DeLong

Faith/Humanity Etc.
When it's bitterly cold, New Yorkers tip more for delivery - New Yorker

Follow Counterparties on Twitter. And, of course, there are many more links at Counterparties.

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Business Today: Exclusive: Cybercrime firm says uncovers six active attacks on U.S. merchants

	Click to View in Browser 01/17/2014 Exclusive: Cybercrime firm says uncovers six active attacks on U.S. merchants BOSTON (Reuters) - A cybercrime firm says it has uncovered at least six ongoing attacks at U.S. merchants whose credit card processing systems are infected with the same type of malicious software used to steal data from Target Corp. Intel to reduce global workforce by five percent in 2014 SAN FRANCISCO (Reuters) - Intel Corp plans to reduce its global workforce of 107,000 by about 5 percent this year as the chipmaker, struggling with falling personal-computer sales, shifts focus to faster-growing areas, a company spokesman said on Friday. S&P, Nasdaq end lower on Intel and GE results NEW YORK (Reuters) - The S&P 500 and Nasdaq declined on Friday, led by losses in Intel and General Electric after disappointing results. Exclusive: AB InBev seeks to buy Oriental Brewery for $4.5 billion HONG KONG/NEW YORK (Reuters) - Anheuser-Busch InBev SA is in advanced discussions to buy South Korea's Oriental Brewery from private equity owners KKR & Co LP and Affinity Equity Partners for more than $4.5 billion, according to people familiar with the matter. HSBC, Citi suspend traders as FX probe deepens LONDON (Reuters) - HSBC and Citigroup both suspended foreign exchange traders on Friday as a global probe into possible currency market manipulation intensified. Exclusive: HSBC still in regulators' crosshairs over money-laundering (Reuters) - U.S. regulators continue to find weaknesses in the way HSBC Holdings tries to prevent money laundering, according to people familiar with the matter, even after the British bank was forced to pay nearly $2 billion in penalties and invested millions in increasing its compliance. The U.S. government's bitcoin bonanza: How, where and when to sell? NEW YORK (Reuters) - U.S. prosecutors in Manhattan are sitting on a multimillion-dollar bitcoin gold mine. And it could get much bigger. Morgan Stanley profit beats estimate; raises margin target (Reuters) - Morgan Stanley posted stronger-than-expected fourth-quarter results, as its retail brokerage and asset management businesses won more assets from clients and benefited from rising stock markets. U.S. industry shows muscle in late 2013 WASHINGTON (Reuters) - U.S. industrial output rose at its fastest clip in 3-1/2 years in the fourth quarter as factory activity closed out the year on a strong note, a sign of the economy's brightening prospects. GE profit margins fall short, shares slide (Reuters) - General Electric Co posted disappointing 2013 profit margins on Friday, hurt by delayed wind turbine deliveries and poor energy management results, offsetting a 5 percent rise in quarterly earnings. Related Video Breakingviews: Yahoo's bad Google search Spain's construction firms build on recovery Economic News U.S. industry shows muscle in late 2013 U.S. consumer sentiment dips in January A daily digest of breaking business news, coverage of the US economy, major corporate news and the financial markets. Register Today   The latest Reuters articles on M&A, IPOs, private equity, hedge funds and regulatory updates delivered to your inbox each day. Register Today   » MORE NEWSLETTERS - 3 Times Square New York, NY 10036 USA © Copyright 2010 Thomson Reuters Ensure delivery of Reuters Newsmails, add mail@nl.reuters.com to your address book. Details Subscribe to other Reuters newsletters. Unsubscribe from this newsletter. Follow us on Twitter Friend us on Facebook Forward to a friend