Let's Get Down to the Essentials

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Jacques Attali
June 3, 2009 - L'Express

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Contrary to what they'd like us to believe, the crisis is deepening: in the United States, all deficits are growing; bank defaults are worsening, and, even though Wall Street is up, its value still remains 40 percent below what it was in October 2007. On top of that, within informed circles, everyone is murmuring that we should expect further tsunamis: on private real estate loans, credit cards and commercial property.

To respond to all that, the United States, in a huge bet, is investing money it doesn't have in cutting-edge sectors. And China, in an equally audacious bet, is abandoning all hope of a recovery in its exports to America and, in a gigantic recovery effort, is investing 20 percent of its GDP in domestic infrastructure. Europe, for its part, is not doing anything. Paralyzed by its history and its precautions, it prefers to believe that the crisis will sort itself out on its own. Having bet everything on a reform in global governance that the London comedy quite naturally did not produce, it now seems to expect that the market will pull a miracle cure out of its pocket. Deprived of bold leaders in Brussels, the Union is not providing itself with a single new resource, neither to protect its banks, nor to relaunch its cutting-edge sectors. Two thousand and eight and 2009 will remain the years of the European nadir. The Euro itself will not withstand such a
shock.

It's time for France to understand that at this rate, the worst is virtually certain: a dropping real estate market, production overcapacity in key sectors, a recession in 2009, 2010 and even 2011. Unemployment will exceed 3.5 million people; the budget deficit will reach, in spite of all the cosmetic steps taken, eight or even 10 percent of GDP, unless there is a massive increase in taxes, which will become more and more difficult to implement as the presidential elections approach. Scientific and technical elites will rebel or leave, disgusted by the revelation of the fortunes made in finance. We must confront a difficult reality and repeat this every day until people understand it: if the government does not act in a truly revolutionary manner, the recession is here for at least ten years, which will lead to a decoupling of Europe and France, left behind forever by the countries that will have understood the significance of the upheavals underway.

In consequence, to act means massively reviving industry through spending clearly targeted on sectors of the future: health, energy, agriculture, infrastructure, the environment, new materials, software, nanotechnologies, neurosciences, cutting-edge services and cultural industries. And, to accomplish that, significantly increasing the salaries of researchers, professors, doctors, engineers - that is, all those whose creativity provides for the country. To the detriment, if necessary, of the income and privileges enjoyed by those who manage, finance and divert them. To act also means provisionally accepting deficits targeted to finance this spending for the future. That means promoting new models for companies, models more concerned about the long term and closer to those of NGOs and public services. That means orienting finance towards risk-taking in long-term sectors and not toward profit for its own account.

It's not a new recovery plan that we need, but a true realization of cultural and political urgencies. And in particular, we need a radical reconsideration of the division of power between those who create and those who finance: a requirement, I repeat, for our survival.