Two items from today's news. The first, from Reuters:
France's economy is likely to slip into a shallow recession in the third quarter, the Bank ofFrance said on Wednesday, dashing hopes for a robust recovery this year and adding to signs that Europe's economic prospects are worsening.
The central bank's forecast for gross domestic product (GDP) to shrink 0.1 percent in the three months to September, following last month's estimate of a similar fall in the second quarter, suggests France's 2 trillion euro ($2.5 trillion) economy will struggle to meet this year's government growth target of 0.3 percent.
The weak outlook was reinforced by figures showing France's trade gap widened to 5.99 billion euros in June, from a downwardly revised 5.47 billion euros in May, dashing economists' expectations for the deficit to narrow.
And then this, from the NYTimes:
President François Hollande is vowing to impose a 75 percent tax on the portion of anyone’s income above a million euros ($1.24 million) a year.
A chill is wafting over France’s business class as Mr. Hollande, the country’s first Socialist president since François Mitterrand in the 1980s, presses a manifesto of patriotism to “pay extra tax to get the country back on its feet again.” The 75 percent tax proposal, which Parliament plans to take up in September, is ostensibly aimed at bolstering French finances as Europe’s long-running debt crisis intensifies.
Seems like the French are about to get schooled -- the hard way -- by Hayek, Friedman & Laffer.