France’s continued Hollande from reality gets a rude wake-up call from America.
With an unemployment rate that’s been hovering around 10% for nearly four years, unemployment benefits that somehow manage to be the most generous in Europe and yet exclude thousands of eligible non-workers, and an attempted tax bracket of 75% on top earners, France clearly isn’t economically serious about domestic jobs. That hasn’t stopped them from being seriously upset at the lack of foreign capital coming to their rescue. Or when that same foreign capital criticizes the famous French non-work ethic.
When Goodyear Tire & Rubber Co’s Amiens Nord plant faced being closed, threatening 1,250 jobs, Paris attempted to mediate a sale to Illinois-based Titan International. Unable to get the French unions to move on any of their conditions, Titan’s owner, Maurice Taylor (last seen running for the Republican presidential nomination in 1996), fired off his answer on any potential purchase:
“The French workforce gets paid high wages but works only three hours. They get one hour for breaks and lunch, talk for three and work for three,” Taylor wrote on February 8 in the letter in English addressed to the minister, Arnaud Montebourg.
“I told this to the French union workers to their faces. They told me that’s the French way!” Taylor added in the letter, which was posted by business daily Les Echos on its website on Wednesday and which the ministry confirmed was genuine.
“How stupid do you think we are?” he asked at one point.
“Titan is going to buy a Chinese tire company or an Indian one, pay less than one Euro per hour wage and ship all the tires France needs,” he said. “You can keep the so-called workers.”
Taylor’s jab on going to China or India has to chafe Arnaud Montebourg, France’s Minister of Industrial Renewal, whose industrial policy has thus far been to scapegoat low-wage competitors. Montebourg even blocked Indian steelmaker ArcelorMittal from buying a French plant in 2012, apparently proving that beggers can be chosers.
Who needs employers?
Taylor’s brusque reply may dominate the headlines (who are we kidding with ‘may’?), but the real story is France slowly coming to terms with, well, their unemployment terms.
Despite the reputation of being exceptionally generous, which they are, France’s unemployment benefits are reaching fewer and fewer unemployed. Even as unemployment has increased, the percentage of beneficiaries has decreased – 44.8% of those eligible receive benefits, down from 48.5% in 2009. Many eligible are being turned away, a situation brought to greater public awareness when an eligible beneficiary set himself on fire in protest for being declined.
Why are even eligible beneficiaries being told ‘non’? Because as the French government auditor, the Cour des comptes (think of it as the French CBO), recently stated, the system of benefits is “unsustainable”:
The current funding system is expected to reach a deficit of 5 billion in 2013. According to the Cour, the French system is largely to blame for the deficit, as it is much more generous than similar benefits programs in neighboring countries. For example, the current allocation is between 63 and 93 percent of the previous incomes of the unemployed. In addition, the minimum compensation length for unemployment benefits in France is two years, compared to one year in Germany.
Such debts helped France’s credit rating fall to AA1, despite President Hollande’s pledge to reduce the deficit by the end of 2013. With familiar rhetoric coming from another left-leaning politician, it’s little wonder what Maurice Taylor chose to acknowledge in his letter:
Socialist President Francois Hollande may take some comfort in the view Taylor expressed of Washington: “The U.S. government is not much better than the French,” he wrote…
And imagine what would happen if they paid for their own defense, vs depending on America (via NATO). Or would provide the same level of aid to former French colonies as we provide to former English colonies and other nations.
We like to pick on lazy people here who have learned to work the system for free money (see New York City transit workers disability scam), but there are a lot of people around here working retail jobs for minimum wage or slightly over. Or even factory type work for $25K a year.
From the Times of London:
Mr Taylor said he was stunned by the attitude of the factory’s myriad union leaders – led by the local head of the communist-backed CGT union – when he met them at a hotel to discuss how he might rescue the plant.
‘The first thing out of the CGT guy’s mouth was, “You’ve got to guarantee our jobs for life”,’ said Mr Taylor.
‘They were telling us, “We’re not going to agree to anything until you do what we say”.
‘That’s when I said, “Hey you’ve got it all backwards. I’ve got enough people thinking I’m nuts even attempting to come over and run this facility and spend millions of dollars on it”.’
‘The French worker can be as productive as anyone else when he works, but he’s not working,’ Mr Taylor said.
In some ways Europe seems to be returning to the arguments of the 1920’s. International worker brotherhood vs. nationalism.
The intellectuals were attracted to fascism in those days because the actual workers didn’t feel much allegiance to other workers in foreign countries. Fascism was to fix this by having everyone — intellectuals, capitalists, workers, and bourgeois — make their first loyalty the State.
European countries have shown that it’s possible to have a degree of socialism (high taxes, some state-owned industries, a strong social safety net, a rigid job market, and a relative lack of social mobility) over a long period of time without destroying a country’s economy. While Americans tend to use “socialism” as a swear word, I can see lots of moderately socialist countries where living is fairly pleasant for most of the inhabitants.
Where socialism goes wrong is when it is taken over by a strong man who devotes a lot of attention and money to eliminating all threats to his power and imposing a one-party state. European “social democratic” parties are visibly lacking in personality cults and are always having to contend with other parties for votes. The other way that socialist parties ruin countries is when they have a single valuable export commodity, the profits from which they use to dispense largesse to the mass of people that keeps re-electing them. The catch there, of course, is that the export commodity is inevitably a natural resource rather than intellectual property or even an agricultural commodity, and so eventually the supply runs out, usually exacerbated by mismanagement by politically-controlled state-owned enterprises.
President Francois Hollande has a choice: to be François Schröder or Jacques Hollande. The first name is a reference to the labor-market reforms in Germany brought about, albeit not immediately, by Gerhard Schröder when he was his nation’s chancellor; the second refers to the “immobilisme” of Jacques Chirac during his twelve years as France’s president.
Mr Hollande could yet turn out to be a Gerhard Schröder à la française, willing to bring in deep reforms, as the former center-left German chancellor did, to shake up the French welfare state and restore competitiveness. But a more likely outcome is that he will do just enough to keep the markets and the ratings agencies at bay, without ever fully confronting vested interests. Whenever he can avoid hard choices, he will. This may keep France from disaster. Whether it will reverse the slow decline of the past decade is far less certain.
“Where socialism goes wrong is when it is taken over by a strong man who devotes a lot of attention and money to eliminating all threats to his power and imposing a one-party state.”
I wonder when the useful idiots and drooling sycophants of his excellency Barack Obama will figure this out!
Emery, do you ever pull your head out of your butt? I’m sorry if that sounds harsh, but that is the only rational response to your comment.
The Eurozone is on the brink of collapse. The only responsible member of that monument to the failed New World Order, Germany, is sweating bullets because as the largest investor it has the most to lose.
Not surprisingly, Germany is also the most productive member of the EU; by a country mile.
Listen my clueless friend. There is no country on planet Earth successfully implimenting a socialist socio-economic system. None. The Scandanavian countries are either pulling back or as in the case of Norway, depleting their oil reserves to fend off the inevitable.
Do yourself a favor. Stop being a moron.
Emery and Swiftee,
What Swiftee said. The Swedes pulled back hard, and successfully so far. Most the Eurozone is hanging on until the few remaining productive countries crap out.
You might also consider that the soft socialism of the EU is also made possible by the economic and military might of the US. Absent the US’s guarantee of stability and peace in Europe the decadent and immature system set up by the childlike states of Europe would never have made it this far. Europe is like a recovering alcoholic — they’re off the bender of their horrible wars of the 19th and 20th century, but they’re not ready to take control of their future yet.
Where (when) socialism goes wrong is when they run out of other people’s money.
Also famous is the Soviet era saying of “They pretend to pay us, and we pretend to work.”
Emery, not to pile on, but 10% unemployment has been the rule in Europe for decades due to their social net. Fine with you, or no?
The only exceptions are when enlightened politicians realize what they’re doing to the economy and cut back on the socialism.
@ bosshoss429
I was thinking more along the lines of Venezuela.
The tone set by the carpetbagger in Carolina, indicates the GOP (on the national level) needs a bit longer of a “time out” such a pity….
“Where socialism goes wrong is when it is taken over by a strong man who devotes a lot of attention and money to eliminating all threats to his power and imposing a one-party state.”
Where socialism goes wrong is when it takes away money and resources you and I have earned for our families and gives it to someone else who has not earned it.
Where socialism goes wrong is when it dictates to the business owner how he or she must operate that business on behalf of a “greater good” the business owner does not endorse.
Where socialism goes wrong is when it attempts through central planning to manipulate outcomes that, for hundreds of years, have been determined by the free market without socialism’s help.
Where socialism goes wrong is when it dictates to the individual how he or she must live to support those who will not work.
Where socialism goes wrong is where it begins. Where socialism gets it right is where it ends.
Emery,
Fine, but even you can’t be blind enough that you don’t see that this is exactly the way Obama and his minions are doing things, i.e. executive orders to bypass that pesky Constitution thing!
“I was thinking more along the lines of Venezuela.”
And I stuffed the whole big, smelly truth up in your grill…you’re welcome.
Also, if by “carpetbagger” you mean gleefully joining my fellow Carolinians in generating a booming economy, basking in the warm glow of freedom, crushing the few token leftists around here like bugs, passing laws that strenghten our rights and encouraging our wonderful DC legislative delagation to gently, yet firmly suggest Obama stuff his agenda where the sun don’t shine, we’ll, I’ll wear it like a badge of honor…thank you.
Swiftee speaks for the entire national GOP? Congrats, Swiftee!
It ain’t easy being me, Bill.
swiftee says:
“It ain’t easy being me”
http://tinyurl.com/bkdzs6r
I understand Karl Rove recently formed a fund named the Conservative Victory Project. Mr. Rove states the goal of his new fund is to cut some of the “underbrush” from the more conservative wing of the GOP. Apparently the party has a primary problem. Most visibly, the contests have saddled the party with high-profile losers. But they also promote extremism among those who go on to win many races, harming the Republican national brand. Fixing that may enrage the party’s different insurgent tribes. The establishment may have a nerve in complaining about the power of forces they knowingly unleashed. But they know they have to do something about primaries: the party’s future depends on it.
One would figure that prior to founding a Victory project, Rove might do well to actually have some, you know, “victories” to trumpet. He’s not got a good record, to put it mildly, choosing winners.