Conn pointed earlier to this fascinating piece in the Washington Post on a broad shift in European politics. Nation-states that have for decades guaranteed multiple cradle-to-grave benefits for citizens of all incomes are beginning to realize that they can only pay themselves as much as they earn.
We have already seen this in Greece and Spain, whose left-wing governments have been forced by economic and fiscal reality to enact massive cutbacks. The Spanish are even trying to get out of billions in contractually promised electricity subsidies, which they might not be able to do legally. We have seen this same phenomenon in Portugal, except that there were insufficient numbers in parliament willing to accept reality and make needed cutbacks.
Today's WaPo piece looks at France, where the state health system has curtailed reimbursements to doctors to the point that modest costs are being shifted to patients. For an American, it must be incredible to see the main character in the piece object to paying less than $200 for his wife's back surgery, but this is the mindset resulting from decades of free lunches.
France is not in crisis just yet, but its conservative government recognizes that it will not be able to ramp up borrowing to pay for entitlements. And so it is attempting to apply the lessons of the crisis countries now, before it has a crisis on its hands. President Sarkozy has raised the retirement age to 62 (!) and "tightened" rules on early retirement.
A smart man, they say, learns from his own mistakes, but a wise man learns from others' mistakes. With his recent political reaction to the Ryan plan, I think it's pretty clear that the Obama administration is in no danger of wearing out wisdom.