The Bank of France weaponized debt rollover refusal to force austerity on left governments

Evidence

France was a deeply divided society in which the political right sought to raise excise and consumption taxes on everyone else, while the political left wanted to tax only the right’s income and wealth. Protecting the right, whenever it looked like the left might win an election, the Bank of France refused to roll over Treasury bills, that is, the short term debt instruments funding the government, thereby “forcing the authorities to print money.” By 1924, after several rounds of stoking inflation this way, the right came to power and as expected raised taxes on the left’s constituents. The left won the next election that same year but was unable to shift the burden back. As a result, deficits ballooned. Eventually, the left government resigned and in 1926 a rightist government under Raymond Poincaré raised enough taxes to close the shortfall. — Mark Blyth, Austerity, 547

Categorization

• XREF: Direct reinforcement for Blyth’s core thesis that austerity is class politics by other means; echoes the interwar gold-standard politics in Mattei and Eichengreen’s Golden Fetters. — connects to: European austerity is a bait-and-switch to save banks from themselves without admitting it — Mark Blyth, Austerity: The History of a Dangerous…, 208; Governments can deliberately leave debt to constrain their successors’ spending — Mark Blyth, Austerity: The History of a Dangerous…, 454; Neoliberal crisis responses deliberately undermine state fiscal authority — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 49 (+2 more)
• SEED: Article angle: the central bank as a partisan class institution — how monetary policy neutrality is a myth and ‘independence’ has historically meant defending the rentier class.

Broader Connections

• Governments can deliberately leave debt to constrain their successors’ spending #expands (0.80) — Mark Blyth, Austerity, 454
• European austerity is a bait-and-switch to save banks from themselves without admitting it #corroborates (0.78) — Mark Blyth, Austerity, 208
• Neoliberal crisis responses deliberately undermine state fiscal authority #expands (0.72) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 49