Everything’s an Emergency

If memory serves, France remains in a state of emergency on account of the terror attack in Paris in last November. As terrible as terror attacks are, they are a statistically insignificant cause of death and injury in developed nations. It is also worth noting that the countries that seem most prone to suffering terror attacks are the ones that are most active in intervening militarily in foreign countries. This is probably no coincidence. Just saying.

 

hollandeFrançois Hollande puts on his emergency frown.

Photo credit: Kenzo Tribouillard / AFP

 

We also imagine that a state of emergency is a costly exercise (France’s government immediately exempted itself from meeting the Maastricht deficit target in the wake of the attack, so we can conclude this by inference). Moreover, the recurrence of such attacks shows that ubiquitous snooping on everybody’s digital communications is a wasted effort, if the goal is indeed to keep such attacks from happening (which is doubtful, but that is a topic for another day).

France is in fact one of the world’s top snoopers, but appears to have ignored information and warnings from Turkey’s secret service – information which reportedly was obtained by traditional investigative means and turned out to be correct.

Now there is another emergency, this time an economic one. Mr. Hollande (a.k.a. “the welfare state incarnate”, h/t Gaspard Koenig) has just declared that his government will pull out all stops in terms of labor market intervention, so as finally stop the inexorable rise in French unemployment. His main motive seems to be saving his own job, as Mish notes.

Apparently Hollande made a vague promise that he would step down if unemployment failed to decline this year. Given the persistence of the trend and the inability and/or unwillingness of France’s government to institute meaningful reform, it seemed a slam dunk that it would keep failing to do so.

 

france-unemployment-rate@2xFrance’s unemployment rate. If this were a stock, we’d be inclined to buy it on technical grounds – click to enlarge.

 

Back when Mr. Hollande’s approval rating fell to the reciprocal of Mr. Putin’s (namely 13%), we briefly gave him the benefit of the doubt, on account of the fact that he evidently had nothing to lose (see “Mission Impossible?”). Nothing much has happened since then – what has happened, was essentially of the too little too late variety.

 

Statistical Deception

So what master plan have the president and his advisors come up with? As one observer remarked, it is mainly an exercise in increasing government spending in favor of unions, as they control the vocational training schemes that are at the heart of the proposal. These schemes have been tried before, and have repeatedly failed.

Specifically, in addition to the 600,000 unemployed people already enrolled in vocational training, another 500,000 are to be added (funded by the government, natch). Moreover, enterprises are to receive a subsidy of EUR 2,000 for every youth or unemployed person they hire for a period exceeding six months.

What few people outside of France probably know: as soon as a person registered as unemployed is enrolled in one of these training schemes, they are reclassified from “category A” to “category D”, upon which they are no longer counted as unemployed. It is a great way of manipulating the statistics at enormous cost to taxpayers, while pleasing union bosses at the same time. Nothing of practical value will be achieved (for society at large, that is).

 

France workThe French are said to have a complicated attitude toward work – the etymological root of the French term for work – travail – is equivalent to the old French (12th century) term travail, which at the time meant “suffering or painful effort”, resp. travaillier, which meant “to torture”. This term is in turn likely based on the late Latin word trepalium, “an instrument of torture”.

Cartoon by Chappatte

 

If even a single entrepreneur is enticed by the EUR 2,000 subsidy – they’ll take it if they happen to employ someone, but they won’t employ anyone because of it – we will eat our hat. France’s byzantine labor legislation is, in a word, insane (the more than 3,000 pages long “code du travail” – see “France’s Sacred Labor Code” for some of the hair-raising details).

For many companies not even ten times this subsidy may be a sufficient inducement to hire someone – especially if they already have close to 50 employees. This peculiar threshold is quite important: Once a French company has at least 50 employees, management must create three worker councils, introduce profit sharing, and submit restructuring plans to the councils if the company decides to fire workers for economic reasons.

Anyway, the upshot of the “emergency measures” is that for a little while, the French government will be able to produce deceptive unemployment statistics and if Mr. Hollande is lucky, he won’t have to keep his promise.

 

CAC 40The CAC 40 index in Paris. In spite of the practically parabolic euro area money supply inflation since 2000, the index remains well below the highs achieved more than 15 years ago. That must have taken some doing – click to enlarge.

 

Conclusion

Socialist ideas remain extremely popular, especially in Europe. One only needs to consider the rise of leftist parties in a number of European countries in the wake of the debt crisis. It is not quite clear to us what the reason for this is – probably most people’s attention span isn’t as great as one would hope. Moreover, the false belief that the State has access to a limitless cornucopia of riches that only needs to be properly distributed remains stubbornly entrenched.

As Ludwig von Mises said:

 

“An essential point in the social philosophy of interventionism is the existence of an inexhaustible fund which can be squeezed forever. The whole doctrine of interventionism collapses when this fountain is drained off. The Santa Claus principle liquidates itself.”

 

Generally, even the socialists themselves have stopped arguing that their ideology will increase prosperity or improve anyone’s standard of living. By now, too many profound failures attest to this fact. Nowadays they are trying to sell socialism on “moral grounds” most of the time (which is in many ways even more bizarre).

One thing is absolutely certain though: it still doesn’t work, and never will. Mr. Hollande and his government serve as regular reminders.

 

Charts by: TradingEconomics, BigCharts

 

 
 

Emigrate While You Can... Learn More

 
 

 
 

Dear Readers!

It is that time of the year again – our semi-annual funding drive begins today. Give us a little hand in offsetting the costs of running this blog, as advertising revenue alone is insufficient. You can help us reach our modest funding goal by donating either via paypal or bitcoin. Those of you who have made a ton of money based on some of the things we have said in these pages (we actually made a few good calls lately!), please feel free to up your donations accordingly (we are sorry if you have followed one of our bad calls. This is of course your own fault). Other than that, we can only repeat that donations to this site are apt to secure many benefits. These range from sound sleep, to children including you in their songs, to the potential of obtaining privileges in the afterlife (the latter cannot be guaranteed, but it seems highly likely). As always, we are greatly honored by your readership and hope that our special mixture of entertainment and education is adding a little value to your life!

   

Bitcoin address: 1DRkVzUmkGaz9xAP81us86zzxh5VMEhNke

   
 

4 Responses to “Hollande’s Socialist Wonderland”

  • Hans:

    No6, could not agree with you more. We should also remember
    there is also a very contingency of Communists to supplement their Socialist friends.

    In France, the term Socshevik is more applicable than ever.

    The debasing of the economy and military continues unabated.

  • Crysangle:

    Note that Hollande is preparing to extend the state of emergency for another three months , not the economic emergency which undoubtedly will drag on as long as it suits , but the other

    http://www.lesechos.fr/politique-societe/politique/021641631135-la-prolongation-de-trois-mois-de-letat-durgence-presentee-le-3-fevrier-1194623.php

    Venezuela also recently declared an ‘economic emergency’ , I have to wonder if it is catching , or is it that ‘crisis’ is too hands off and contemplative to denote an action plan . If the show is scaled then I guess the next level will be ‘economic catastrophe’ , just imagine how much that will cost to put right .

  • Crysangle:

    A few years back I ended up in a ‘discussion’ with the staff at a French consulate , one which hasn’t ended in fact as it turned out to be a one sided argument that was not worth replying to directly, and hence I have been pursued by them ever since for the correct answer they seek , whatever it is .

    Anyway , out of a sense of moral duty (as in I noticed a complete vulnerability that people who get messed around by the French might take advantage of ) , I advised a staff member , after having noted that they were making some minor security improvements , that it would be a good idea to replace the ground floor plain glass window behind which she sat all day (at open street level ) with a reinforced version .

    Needless to say I didn’t receive a thank you .

    The point of this little story is to underline that the French play a very different game , they will openly extend themselves a fair way but on the other hand will not return a proper service , but instead will expect you to fit into their view . That this show is completely disconnected from hard reality was very obvious to me , and in return made very obvious to them by me , not that it matters a jot , as they simply are not able to move beyond applying their own perceptions , no matter the cost to others … and themselves.

  • No6:

    The French love socialism, it is good to see them get it good and hard!

Your comment:

You must be logged in to post a comment.

Most read in the last 20 days:

  • TMS-2 fast versionA Date Which Will Live in Infamy
      President Nixon’s Decision to Abandon the Gold Standard Franklin Delano Roosevelt called the Japanese “surprise” attack on the U.S. occupied territory of Hawaii and its naval base Pearl Harbor, “A Date Which Will Live in Infamy.”  Similar words should be used for President Nixon’s draconian decision 45 years ago this month that removed America from the last vestiges of the gold standard.   Nixon points out where numerous evil speculators were suspected to be...
  • Perfect-InvestmentInsanity, Oddities and Dark Clouds in Credit-Land
      Insanity Rules Bond markets are certainly displaying a lot of enthusiasm at the moment – and it doesn't matter which bonds one looks at, as the famous “hunt for yield” continues to obliterate interest returns across the board like a steamroller. Corporate and government debt have been soaring for years, but investor appetite for such debt has evidently grown even more.   The perfect investment for modern times: interest-free risk! Illuustration by Howard...
  • web-puzzled-man-scratching-head-retro-everett-collection-shutterstock_91956314News from TINA Land
      Distortions and Crazy Ideas We have come across a few articles recently that discuss some of the strategies investors are using or contemplating to use as a result of the market distortions caused by current central bank policies. Readers have no doubt noticed that numerous inter-market correlations seem to have been suspended lately, and that many things are happening that superficially seem to make little sense (e.g. falling junk bond yields while defaults are surging; the yen rising...
  • CorporateMediacontrolTrump's Tax Plan, Clinton Corruption and Mainstream Media Propaganda
      Fake Money, Fake Capital OUZILLY, France – Little change in the markets on Monday. We are in the middle of vacation season. Who wants to think too much about the stock market? Not us! Yesterday, Republican presidential candidate Donald Trump promised to reform the U.S. tax system.   This should actually even appeal to supporters of Bernie Sanders: the lowest income groups will be completely exempt from income and capital gains taxes under Trump's plan. We expect to hear...
  • mania1The Great Stock Market Swindle
      Short Circuited Feedback Loops Finding and filling gaps in the market is one avenue for entrepreneurial success.  Obviously, the first to tap into an unmet consumer demand can unlock massive profits.  But unless there’s some comparative advantage, competition will quickly commoditize the market and profit margins will decline to just above breakeven.   Example of a “commoditized” market – hard-drive storage costs per GB. This is actually the essence of economic...
  • old friendsAn Old Friend Returns
      A Rare Apparition An old friend suddenly showed up out of the blue yesterday and I’m not talking about a contributor who had washed out and, after years of ‘working for the man’, decided to return for another whack at beating the market. Instead I am delighted to report that I am looking at a bona fide confirmed VIX sell signal which we haven’t seen for ages here.   Hello, old friend. Professor X and Magneto staring each other down in the plastic...
  • Lighthouse in Storm --- Image by © John Lund/CorbisSilver is in a Different World
      The Lighthouse Problem Measured in gold, the price of the dollar hardly budged this week. It fell less than one tenth of a milligram, from 23.29 to 23.20mg. However, in silver terms, it’s a different story. The dollar became more valuable, rising from 1.58 to 1.61 grams.   Who put that bobbing lighthouse there? Image credit: John Lund / Corbis   Most people would say that gold went up $6 and silver went down 43 cents. We wonder, if they were on a sinking boat,...
  • storming the storeRetail Snails
      Second Half Recovery Dented by “Resurgent Consumer” We normally don't comment in real time on individual economic data releases. Generally we believe it makes more sense to occasionally look at a bigger picture overview, once at least some of the inevitable revisions have been made. The update we posted last week (“US Economy, Something is Not Right”) is an example.   Eager consumers storming a store Photo credit: Daniel Acker / Bloomberg   We'll make an...
  • The CongressThe Fed’s “Waterloo” Moment
      Corrupt and Unsustainable James has been a big help. Trying to get him to sleep at night, we have been telling him fantastic and unbelievable bedtime stories – full of grotesque monsters... evil maniacs... and events that couldn’t possibly be true (catch up here and here).   He turned his head until his gaze came to rest on the barred windows of the main building. Finally, he spoke; as far as I was aware these were the first words he had uttered in more than five years....
  • BuffettGold and Silver Supply and Demand Report
      The Famous Buffett Quote The prices of the metals didn’t change much this week. We thought we would take this opportunity to quote Warren Buffet. A comment he made at Harvard in 1998 earned him the scorn of the gold community.   Warren Buffett no doubt is a good investor; but he is also one of the biggest beneficiaries of the vast monetary inflation since the 1970s, a wind that has been at his back ever since. He also doesn't seem to understand gold. We don't say this...
  • SheltonThe Devil You Know - or the One You Don’t?
      Better the Devil You Know? We are providing around-the-clock nursing care to our invalid wife, who is back at home, with cracked ribs, unable to move. We are upstairs in the bedroom – the shutters closed against the heat (we have no air-conditioning) – taking a few minutes to update our Diary... but with nothing important to say.   Every day, we look at the headlines, think about what is going on in the big wide world and try to connect a dot or two. It is probably the...
  • tapis tilesFarming in France Is No Picnic
      Introductory Remarks by PT: At first we actually didn't want to post this particular Diary entry, because we felt it was too “off topic” (although we do of course occasionally discuss off topic issues), but upon further reflection it struck us that it is actually quite interesting when considered in a broader context.   EU spending: most of the budget is spent on subsidizing agriculture (which represents less than 2% of total economic output). As is the case with all...

Austrian Theory and Investment

Support Acting Man

Own physical gold and silver outside a bank

Archive

j9TJzzN

350x200

Realtime Charts

 

Gold in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Gold in EUR:

[Most Recent Quotes from www.kitco.com]

 


 

Silver in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Platinum in USD:

[Most Recent Quotes from www.kitco.com]

 


 

USD - Index:

[Most Recent USD from www.kitco.com]

 

THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

 
Buy Silver Now!
 
Buy Gold Now!
 

Oilprice.com