France willfully setting itself up for failure

posted at 12:01 pm on July 5, 2012 by Erika Johnsen

France’s socialists recently gained a sizable majority of their parliament, as well as electing the ultimate champagne socialist to the presidency. I’m enjoying following the French beat, not because I take any perverse pleasure in watching countries suffer and stagnate beneath the myriad opportunity costs and petulant ineptitudes of socialism — but rather because the way this is all going to play out is just so utterly, laughably, painfully predictable. It’s not going to work out according to your sanguine, reality-negligent plans, I can promise you that much, France:

France’s new Socialist government announced tax rises worth 7.2 billion euros on Wednesday, including heavy one-off levies on wealthy households and big corporations, to plug a revenue shortfall this year caused by flagging economic growth. …

An extraordinary levy of 2.3 billion euros ($2.90 billion) on wealthy households and 1.1 billion euros in one-off taxes on large banks and energy firms were central parts of an amended 2012 budget presented to parliament. …

The budget followed a grim assessment of public finances on Monday by the state auditor, which warned that 6-10 billion euros of deficit cuts were needed in 2012 and a hefty 33 billion in 2013 for France to avoid a surge in public debt dragging it into the centre of the euro crisis.

One of the highest state spending levels in the world has raised France’s debt by 800 billion euros in the last 10 years to 1.8 trillion – equivalent to 90 percent of GDP, the level at which economists say debt starts to hinder economic growth.

It infuriates me that Europeans are busily denouncing the “failed” “conservative” policies of recent leadership, and the mere word “austerity” is treated like the plague — you haven’t had conservative leaders, and you certainly haven’t had austerity. You’ve had slightly-less-progressive governments making very tiny budget cuts and shuffling money around. Quit pretending like you’ve actually made any real efforts at encouraging economic growth rather than appeasing your populace with the promise of more free stuff. Punishing the wealthy isn’t a real long-term solution, it’s a populist ploy that’s going to amount to a drop in the bucket.

Honestly, France — start taxing the heck out of your country’s financial movers and shakers, and what do you think is going to happen?

More than the 75 per cent rate, it is a move to higher wealth and inheritance taxes that worries him – and what he perceives as a cultural hostility to the rich. “The anti-wealth rhetoric is just not encouraging. I’d rather be in a country where I don’t have to deal with that,” he says.

It is not just expatriates who are concerned. Henri de Castries, head of Axa, the insurer, is one of France’s most respected business leaders. “I’ve listened to Mr Hollande. He wants to see more growth and lower employment. He wants to see business prospering. We want to see that, too,” he says. “The question is how to achieve these goals? There is no example, in modern economic history, of a country that has succeeded in reducing its deficits by bringing taxes to a confiscatory level. On the contrary, it leads to a decline in activity, and an increase in the deficits.” …

The leader of Europe’s second-biggest economy – the only leading EU state headed by a socialist – has made waves across the continent with his determination to shift the focus of the battle against the eurozone’s crippling sovereign debt crisis from German-led austerity to promoting growth.

There’s a very good reason that these countries are so eager to “go global.” As Margaret Thatcher once famously said, “The problem with socialism is that eventually you run out of other people’s money.” Well, countries like Spain, Italy, and France have reached that point when they’ve run out of their own money — so now they want to “go global” so they can keep living their unsustainable, comfy lifestyles without having to reform. The eurozone affords them a larger pool from which they can take and subsequently burn through money. Eventually, however, that’ll run out, too — how long can this madness go on?


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Bring back the Monarchy!!!

DWoDiego on July 5, 2012 at 1:17 PM

Won’t work for the same reasons that expatriate Californians quickly try to vote for the same sort of policies and representatives that brought their country/state down.

Better to open immigration to the Eastern Europeans and Russians. They understand the cancer that is socialism better than anyone else.

iconoclast on July 5, 2012 at 12:50 PM

Perhaps Indians as well? They seem to be more willing to work towards success vs socialist grifting, and they know too well how big-government corruption can restrain an economy.

slickwillie2001 on July 5, 2012 at 1:17 PM

Obama should move the Democrat Convention to Paris.

The Eiffel Tower makes a nice backdrop, along with all the socialists taking France down the toilet.

fogw on July 5, 2012 at 1:21 PM

They don’t want the Euro to fail because when it turns worthless, they stand to lose the most.

We agree that the Euro’s failure is a matter of when and not if; why not go back to the DM now before the bottom completely drops out..?

affenhauer on July 5, 2012 at 1:14 PM

Coz Frau Merkel ist ein Trotzkopf :)…

jimver on July 5, 2012 at 1:24 PM

France could become a model for us of what not to do,

Liam on July 5, 2012 at 12:39 PM

Hasn’t that been true for decades?

Happy Nomad on July 5, 2012 at 12:41 PM

Try centuries!

Othniel on July 5, 2012 at 1:25 PM

Meanwhile, back in the USA, plans to implement ObamaCare move forward…

yubley on July 5, 2012 at 1:32 PM

I’m guessing that the French are tired of being renowned for fine wine, champagne, fine perfumes, luxury brands and haute Couture, fine food, chocolates, art, great architectural triumphs, and world class resorts…

… because its increasingly apparent that they despise those who have the cash to pay for the finer things in life… and they wish to tax those who produce the finer things in life out of their nation.

The wealthy and business owners will vote with their feet. Au revoir, France! Bon nuit!

We should be certain to welcome them here. Laizzes le bon temps rouler!

thatsafactjack on July 5, 2012 at 1:33 PM

Try centuries!

Othniel on July 5, 2012 at 1:25 PM

So True

CaliforniaRefugee on July 5, 2012 at 1:34 PM

One of the highest state spending levels in the world has raised France’s debt by 800 billion euros in the last 10 years to 1.8 trillion – equivalent to 90 percent of GDP, the level at which economists say debt starts to hinder economic growth.

The very highest public spending levels in the world has raised the US debt by $5 trillion dollars in the last 4 years to $15 trillion dollars – equivalent to 100% of the GDP, the level at which democrats say more spending is needed to grow the economy.

DanMan on July 5, 2012 at 1:34 PM

Look on the bright side – with hollande and his socialist extremist parliament, france’s economy will quickly and catastrophically collapse and take the rest of the euro-trash socialist union with it down the toilet (if Greece and Spain don’t do it first). Then all Americans will, hopefully, be shocked well beyond the effects of socialism’s failure in the programs of the OBOZO regime to see the magnitude of the ultimate, disastrous results of socialist extremism. That should be fear enough to get an overwhelming majority to turn away from ALL of the policies of the US d-cRAT socialist extremists and restore America to its capitalist / free enterprise, conservative roots.

TeaPartyNation on July 5, 2012 at 1:34 PM

Big John on July 5, 2012 at 1:08 PM

Unless the public view has changed, my knowledge comes from the viewpoint of the street. The average German got screwed when they went to the euro.

They still grumble about it.

I could see the ‘smart guys’ in the media ringing their hands over the prospect… they’re in love with the power of a ‘united’ currency.

Yes, there would be a period of short term pain over the loss of the euro, but as successive smaller nations ditch it for a sovereign currency… all bets are off.

The long-term reward for a sovereign currency goes hand-in-hand with ‘responsible governance’ (in relative terms)… something that is in short supply over in euro-land.

The only reason the EU hasn’t collapsed is because they’re riding on the shoulders of the ‘responsible’ nations.

That can change very quickly with the right events.

CPT. Charles on July 5, 2012 at 1:35 PM

Roberts punting the ball back to the voters, is using the court to play politics at best, a cowardice act imo.

Sir Napsalot on July 5, 2012 at 1:01 PM

Old: The switch in time that saved nine.

New: Roberts’ lack of spine doomed nine.

AZCoyote on July 5, 2012 at 1:38 PM

Hollande is openly, un-apologetically, and forcefully integrating social justice into French national economic policy.
And why not he campaigned on steal from the wealthy.

What could possible go wrong?

Speakup on July 5, 2012 at 1:47 PM

Try centuries!

Othniel on July 5, 2012 at 1:25 PM

So True

CaliforniaRefugee on July 5, 2012 at 1:34 PM

Beat me to it! Really, this was a very interesting read and a “mest read” for those who do not know the differences between their revolution and ours.

IrishEyes on July 5, 2012 at 1:49 PM

mest = must

fingers meet keyboard

IrishEyes on July 5, 2012 at 1:50 PM

Coz Frau Merkel ist ein Trotzkopf :)…

jimver on July 5, 2012 at 1:24 PM

Coz Frau Merkel is beaten up by Obama and has her arm broken by him. She succombs to him, in spite of her losing the presidency, at the first occasion. Then Germany will be like France, which is Obama’s aim, aside from his re-election, first and foremost.

Schadenfreude on July 5, 2012 at 1:51 PM

Not as fun when it is happening to us.

pat on July 5, 2012 at 1:51 PM

jimver on July 5, 2012 at 1:02 PM

Good one, don’t be naive. What do you think her caving last Friday was all about?

The pressure and guilt put on Germany if they don’t help, and if they help, is enormous.

Bank on even the forces from the right, incl. from Amerika, to pressure her. She has already bent. It’s what Camp David was all about.

Schadenfreude on July 5, 2012 at 1:54 PM

jimver, so has the ‘conservative’ Cameron. Only the Canadian PM is stable any more.

Schadenfreude on July 5, 2012 at 1:55 PM

As long as they don’t bring their socialist expectations with them.

Hill60 on July 5, 2012 at 12:22 PM

Good luck with that. Look at the economic refugees from California and NY. They know the places the fled from are screwed up beyond belief but do not associate their own votes for all those idiot politicians as in any way associated with the problem so they arrive and then begin to vote for the same sort of idiots they left behind and demand the same services that could not be afforded in their last home and insist on the same sort of anti business regulation that finally drove them out of their old states.

Colorado comes to mind. The state of today is not the state of 20 years ago and that is not a complement.

JIMV on July 5, 2012 at 2:00 PM

As long as they don’t bring their socialist expectations with them.

Hill60 on July 5, 2012 at 12:22 PM

That’s impossible.

Liberals and other socialists do not learn from their mistakes, from the error of their ways. All they delusionally believe is that, just because it didn’t work in their former home, (ONLY because of Republican/Conservative/religious-types, they accuse) there is no ‘evidence we can’t make it work in our new place’.

Liam on July 5, 2012 at 2:15 PM

jimver on July 5, 2012 at 1:02 PM

Good one, don’t be naive. What do you think her caving last Friday was all about?

The pressure and guilt put on Germany if they don’t help, and if they help, is enormous.

Bank on even the forces from the right, incl. from Amerika, to pressure her. She has already bent. It’s what Camp David was all about.

Schadenfreude on July 5, 2012 at 1:54 PM

You didn’t seriously think that she’d announce fhat Germany would get out of the EU :)…Germany stands to lose more if they get out now….they will survive, no doubt about it, but it would be ugly, like this, kicking the can down the road, buys everybody a faux and temporary sense of security…When the big shite hits the fan, Merkel might not even be the Chancellor….as for Obama, he can’t do sheite to help himself and his situation here, to begin with…..she caved because she had no choice, Germany is too invested into the EU crappola, besides they are afraid of the mayhem that would ensue if the EU were to fall apart, and that would be blamed entirely on Germany, if they choose to get out first (here I agree with you that the guilt pressure probably was a factor, but that was coming from the European camp mainly)….

jimver on July 5, 2012 at 2:29 PM

— how long can this madness go on?

EU: “I’m sorry France, but your card has been denied. Do you have another?”

France: “OH NO! WE SUCK AGAIN!”

rocker98 on July 5, 2012 at 2:32 PM

Erika ,
If you enjoy reading about the French try this terrific book .
” Au Revoir To All That ” Food , Wine , and the End of France
by Michael Steinberger .

Lucano on July 5, 2012 at 2:39 PM

I’m enjoying following the French beat, not because I take any perverse pleasure in watching countries suffer and stagnate beneath the myriad opportunity costs and petulant ineptitudes of socialism — but rather because the way this is all going to play out is just so utterly, laughably, painfully predictable.

Yeah…um….sure. Erika, you know as well as I do that your secret schadenfreude is aroused by these French setbacks given the arrogance of the French. But if you’re drooling now, you’re really going to get a schadenfreude rush come November when Obama gets kicked to the gutter.

timberline on July 5, 2012 at 2:51 PM

The person ultimately responsible for the destruction of France is Valery Giscard D’Estaing, who decided it would be a really excellent idea to flood France with Muslims. And guess what? Though D’Estaing is of the center-right, those Muslims all voted for the Socialist Party and Mr Hollande. It why we can’t afford to have a GOP advocate of amnesty for the illegals as our nominee.

thuja on July 5, 2012 at 2:55 PM

I’m enjoying following the French beat, not because I take any perverse pleasure in watching countries suffer and stagnate beneath the myriad opportunity costs and petulant ineptitudes of socialism — but rather because the way this is all going to play out is just so utterly, laughably, painfully predictable.

Why, it’s almost exactly like watching our fellow HA-ers who naively think Romney and the GOP will repeal Obamacare when we elect them in November.

No, really – they’ll do what they’re supposed to *this* time, for sure!

Midas on July 5, 2012 at 3:01 PM

France, for decades, has been held hostage to its public-employee unions, including those who run the nationalized railroad (SNCF), commuter trains, and buses. Charles de Gaulle may have been a great general and a conservative President, but he made the major mistake of writing into the Constitution of the Fifth Republic (1958) the “right to strike” for public employees. Whenever any government tries to limit the pay or bennies for public employees, the unions go on strike, and paralyze the transportation system to bring the government to its knees. There was even one strike in December-January where Frenchmen were doing their Christmas shopping on…bicycles and roller skates.

France doesn’t need a Socialist President like Francois Hollande. France needs Scott Walker on steroids.

Steve Z on July 5, 2012 at 3:04 PM

The person ultimately responsible for the destruction of France is Valery Giscard D’Estaing, who decided it would be a really excellent idea to flood France with Muslims. And guess what? Though D’Estaing is of the center-right, those Muslims all voted for the Socialist Party and Mr Hollande. It why we can’t afford to have a GOP advocate of amnesty for the illegals as our nominee.

thuja on July 5, 2012 at 2:55 PM

There is some truth to this. During the 1970′s, when the French economy was booming, Giscard thought that France needed a cheap labor force, and allowed many Muslims to enter France from former French colonies, mostly from Algeria. As Jacques Chirac once complained, many of them “brought their four wives and 20 children” and went on welfare, and have turned entire cities into lawless ghettoes where police fear to tread.

This has led to the growth of Jean-Marie Le Pen’s anti-Arab National Front party (now run by his daughter Marine), which tends to divide conservative voters and is frequently accused of racism by Socialists, eager to “play the race card” for electoral gain.

Steve Z on July 5, 2012 at 3:14 PM

How long can the madness go on? Until the people who pushed these plans retire. After that it becomes someone else problem. Socialist economic plans don’t have to be sustainable, they only have to last long enough for the perpetrators to get out of town.

Fred 2 on July 5, 2012 at 3:14 PM

The person ultimately responsible for the destruction of France is Valery Giscard D’Estaing, who decided it would be a really excellent idea to flood France with Muslims. And guess what? Though D’Estaing is of the center-right, those Muslims all voted for the Socialist Party and Mr Hollande. It why we can’t afford to have a GOP advocate of amnesty for the illegals as our nominee.

thuja on July 5, 2012 at 2:55 PM

They are already here, already voting fraudulently, coz Holder decided so !

jimver on July 5, 2012 at 3:20 PM

There is some truth to this. During the 1970′s, when the French economy was booming, Giscard thought that France needed a cheap labor force, and allowed many Muslims to enter France from former French colonies, mostly from Algeria. As Jacques Chirac once complained, many of them “brought their four wives and 20 children” and went on welfare, and have turned entire cities into lawless ghettoes where police fear to tread.

This has led to the growth of Jean-Marie Le Pen’s anti-Arab National Front party (now run by his daughter Marine), which tends to divide conservative voters and is frequently accused of racism by Socialists, eager to “play the race card” for electoral gain.

Steve Z on July 5, 2012 at 3:14 PM

i have no sympathy for Marine le pen, she refused to endorse Sarkozy for president…she deserves every single bit of the disgrace that came her way, precisely losing the parliamentary race….Quelle conne…

jimver on July 5, 2012 at 3:27 PM

Liberal/Socialist/Marxist/Idiot playbook:
1. See problem, blame on Conservatives
2. Offer “solution” of soaking the rich with taxes
3. Promise lots of goodies that the government can give you
4. When inevitable failure occurs, repeat…

Decoski on July 5, 2012 at 3:28 PM

I’m afraid liberals will try an EU here in North America. We too will repeat their failures. Socialists always repeat their mistakes.

Decoski on July 5, 2012 at 3:32 PM

Great. so WHEN France hits the skids, all the ‘American’ Socialists can move to France, and give this country back to those who still love it.

askwhatif on July 5, 2012 at 3:39 PM

What is hilarious to me, I remember how hard the Germans pushed the Euro with the idea that they would have huge markets for their goods without confiscatory tariffs from Germanophobe governments. I wonder if any of those still alive from the Budestag regret their pro-euro vote.

MunDane68 on July 5, 2012 at 3:51 PM

Keep in mind that part of the recent deal that Germany made with other EU members was that France must meet very stringent debt reduction goals as basically laid out by Germany.
(The German press was calling France the big loser in this most recent deal.)
Hollande has to cut, cut, cut costs or raise taxes (a lot more than he said he would do in the elections).
If Hollande lasts one term he will be lucky.

albill on July 5, 2012 at 4:11 PM

The dirty little secret always was that even under Sarkozy, France was not so far from insolvency itself. Hollande seems determined to challenge the modern understanding of arithmetic itself by diving headlong into crisis, daring Europe to let France fail.

He’s adopted Obama’s Million Man Math, and the outcome is decreed.

Adjoran on July 5, 2012 at 4:15 PM

I’m afraid liberals will try an EU here in North America. We too will repeat their failures. Socialists always repeat their mistakes.

Decoski on July 5, 2012 at 3:32 PM

There were actually rumblings about creating an American Union a while ago.

No doubt there are muppets like Juan McCain and whatever criminal is now President of Mexico who still support this secretly.

But Canada? With their economy? They’d never join.

CorporatePiggy on July 5, 2012 at 4:16 PM

New York City passed a huge tax increase and a couple of thousand millionaires moved out, the City government laughed until they added up the tax monies that were lost, unbelievable. Socialism has been tried many times and they just can’t get it through their cement heads that killing the golden goose never works.

mixplix on July 5, 2012 at 5:35 PM

thuja on July 5, 2012 at 2:55 PM

Steve Z on July 5, 2012 at 3:14 PM

jimver on July 5, 2012 at 3:27 PM

Something similar happened in the UK, one party decided to import a bunch of likely voters:

The outrageous truth slips out: Labour cynically plotted to transform the entire make-up of Britain without telling us

Not that different from what democratics are doing with Mexicans. It really does work.

slickwillie2001 on July 5, 2012 at 5:46 PM

I’m guessing all the Hollywood types that moved to France will be hightailing out of there soon, if not already.

AH_C on July 5, 2012 at 7:46 PM

America’s communists must be envious of the French while the French move to London and Obama is stuck with GWs tax code and Pelosi/Reid spending levels. Obama must be so envious of Hollande’s socialists and MPs, perhaps a beam them over here moment for the Prez.
Mr Hollande’s honeymoon with the bond vigilante’s will soon be over, “knock on wood.” So much distraction there that would keep the vigilante’s from attacking here so far.

mdetlh on July 6, 2012 at 1:36 AM

As an italian i know first hand the damage of over taxation can do to the economy. PM Monti instead of making drastic cut to the state spending put new taxes and said that from the next year the VAT will increase by one point (it was increased last year by one point). I have a bookstore and i can assure you that people are spending because of the raised taxes. In the neary Swiss the swiss goverment is atracting business from Italy beacause the offer less taxation and more important less red tape. I reckon the same thing is happening in swiss part newr the france border

countrygirl on July 6, 2012 at 5:13 AM

About going Global- Greece designates paedophiles and pyromaniacs as “disabled”. They have disability payments. They have state provided unemployment benefits, (not insurance). They provide Housing, Income support, Child Maintenance, Education, Pensions, Health care, sick pay, Funeral payments, and other benefits. There are 1.5 Million children living on the street in Philippines. If you get sick and you cannot pay you die. Filipino couldn’t even imagine the benefits of Europeans. People with disabilities in Philippines have to beg for food. Unemployed is rampant and no help from government. For the IMF to ask Philippines to loan 1 billion dollars to bailout the excessive spoiled euro brats is violently obscene. The Philippine government has agreed to it. I’m going to throw up. I guess we could give the paedophiles in Greece the Filipino children. I guess the pyromaniacs will set themselves on fire when they freeze their benefits. Don’t anyone see how disgusting it is to ask a poor country to loan money to Europe’s excesses? Greece and other European countries will default and collapse and US is not far behind, then who will help Filipino street kids? Like anyone did before. Whole families live on top of a cardboard box. Man, Woman, three year old and new born. They eat from dumpsters behind McDonald. Thank God McDonald and USA are doing something about it. For those in Europe complaining of austerity measures, get some prospective.

Ed Laskie on July 6, 2012 at 8:22 AM

This has been a long time coming for France. Having lived there 25 years ago, I remember when Arabs were being allowed to come in and NOT assimilate. I lived in Bordeaux and every day we would pass by Cabrini-Green style slum buildings where only newly immigrated Muslims lived (the French wouldn’t be caught dead in such squalor). We called them “squatter flats”. The French would subsidize housing for immigrants, if they lost their jobs would give them full salaries (for not working), and not require any nationalization. Bordeaux was Burka-ville. With 20% unemployment. When countries create a welfare state, tax the rich, give lots of state-controlled goodies and are SHOCKED, I say SHOCKED, that the people aren’t grateful enough to produce more, they deserve exactly what they get. For me its not schadenfreude. It’s utter and complete sadness for what was a great and allied nation. I couldn’t have loved the people and culture of France more as I lived there. I couldn’t have hated a freakishly progressive mad statist government as much as I do now.

pacard33 on July 6, 2012 at 8:28 AM

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