Nobel Winner Sees ‘Comedy of Errors’ in French Tax Climbdown

(Bloomberg) -- France’s political leadership has itself to blame for the riots that forced President Emmanuel Macron to reverse his plans to raise fuel taxes, according to William Nordhaus, winner of the 2018 Nobel Prize in economics.

“The whole thing was just a comedy of errors -- the introduction, the bad design, the fact that it was called a carbon tax” he said in an interview in Stockholm on Friday. “It’s a fuel tax and fuel taxes are about the most unpopular taxes in the world. So it’s too bad. It was a bad idea, bad timing, with an unpopular president.”

Nordhaus, who won for his work on climate change and the economy, will attend the Nobel Prize ceremony on Monday alongside co-winner Paul Romer. His fellow Laureate noted the risk that dramatic popular movements -- such as France’s Yellow Vest demonstrations and resistance to globalization -- can have real-world repercussions.

“We see backlashes right now I think against really all forms of expert authority and expert opinion,” Romer said in a separate interview. “What worries some people is that those public displays that are almost like theater can in some cases turn real, where legislators really do impose huge barriers.”

Anti-globalization trends such as U.S. President Donald Trump’s tariff threats and the U.K.’s looming departure from the European Union have been blamed for dragging on world growth, with the International Monetary Fund downgrading its outlook in October.

Nordhaus said the economy is likely to slow anyway after a decade of expansion since the financial crisis. Romer, who argues that policy makers should stop trying to fine-tune the business cycle and instead harness technology to foster growth, said his typical confidence is being tested.

“I’ve generally been the most optimistic economist I know, but that optimism is about what’s possible if we make the right decisions,” he said. “And I think the reason why there is some basis for pessimism right now is that it seems to be harder for nations, and societies, to make decisions.”

©2018 Bloomberg L.P.