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:

  • Gold Price Skyrockets in India after Currency Ban – Part III
      When Money Dies In part-I of the dispatch we talked about what happened during the first two days after Indian Prime Minister, Narendra Modi banned Rs 500 and Rs 1000 banknotes, comprising of 88% of the monetary value of cash in circulation. In part-II, we talked about the scenes, chaos, desperation, and massive loss of productive capacity that this ban had led to over the next few days.   Indian prime minister Narendra Modi – another finger-wagger, as can be seen in this...
  • Gold Price Skyrockets in India after Currency Ban – Part IV
      A Market Gripped by Fear The Indian Prime Minister announced on 8th November 2016 that Rs 500 and Rs 1,000 banknotes would no longer be legal tender. Linked are Part-I, Part-II and Part-III updates on the rapidly encroaching police state. The economic and social mess that Modi has created is unprecedented. It will go down in history as an epitome of naivety and arrogance due to Modi’s self-centered desire to increase tax-collection at any cost.   Indian jewelry...
  • A Note on Gold and India – What is Driving the Gold Price?
      Hidden Motives It is well-known that India's government wants to coerce its population into “modernizing” its financial behavior and abandoning its traditions. The recent ban on large-denomination banknotes was not only meant to fight corruption.   Obviously, this very bad Indian has way too much cash. Just look at him, he looks suspicious! Photo via thenewsminute.com   In fact, as our friend Jayant Bhandari has pointed out, fresh avenues for corruption ...
  • Gold Price Skyrockets in India after Currency Ban – Part V
      A Brief Recap India's Prime Minister announced on 8th November 2016 that Rs 500 and Rs 1,000 banknotes will no longer be legal tender. Linked are Part-I, Part-II, Part-III, and Part-IV, which provide updates on the rapidly encroaching police state Expect a continuation of new social engineering notifications, each sabotaging wealth-creation, confiscating people’s wealth, and tyrannizing those who refuse to be a part of the herd, in the process destroying the very backbone of the...
  • Attaining Self-Destruct Velocity
      Bad Monday Some Monday mornings are better than others.  Others are worse than some.  For one Amazon employee, this past Monday morning was particularly bad. No doubt, the poor fellow would have been better off he’d called in sick to work.  Such a simple decision would have saved him from extreme agony.  But, unfortunately, he showed up at Amazon’s Seattle headquarters and put on a public and painful display of madness.   Good-bye cruel world! On this our planet,...
  • All Aboard! Trump’s Express Train to the Future
      Free Money! BALTIMORE – Last week, the Dow punched up above 19,000 – a new all-time record. And on Monday, the Dow, the S&P 500, the Nasdaq, and the small-cap Russell 2000 each hit new all-time highs. The last time that happened was on the last day of December 1999.   Ironically, two events that were almost universally expected to trigger large stock market declines were followed by quite rapid and strong gains. Would the market have fallen if Hillary Clinton had won...
  • India's Currency Debacle – An Interview with Jayant Bhandari
      A Major Crisis Last week Jayant Bhandari related the story of the overnight ban of certain banknotes in India under cover of “stamping out corruption” (see Gold Price Skyrockets In India after Currency Ban Part 1 and Part 2 for the details).   Banned 500 rupee banknotes   The problem is inter alia that the sudden ban of these banknotes has hit the Indian economy quite hard, given that 97% of all transactions in the country are cash-based. Not only that, it has...
  • Will the Swamp Swallow Trump?
      Permanently Skewed TRUMP HOTEL, New York – Trump’s rambling army – professionals, amateurs, camp followers, and profiteers – is marching south, down the I-95 corridor. There, on the banks of the Potomac, it will fight its next big battle.   Lieutenants in Trump's army: Bannon, Flynn & Sessions Photo credit: Drew Angerer / AFP   Here at the Diary, we do not like to get involved in politics. But this is a special time in the history of our planet – a...
  • There Are Two Types of Credit — One of Them Leads to Booms and Busts
      Stumped by the Bust In the slump of a cycle, businesses that were thriving begin to experience difficulties or go under. They do so not because of firm-specific entrepreneurial errors but rather in tandem with whole sectors of the economy. People who were wealthy yesterday have become poor today. Factories that were busy yesterday are shut down today, and workers are out of jobs.   What has caused the bust? The modern-day economic orthodoxy continues to be unable to provide...
  • Gold Bull Market Remains Intact – Long Term Fundamentals Outweigh Short Term Market Gyrations
      A Strong First Half of the Year, Followed by Another Retreat In early 2016 gold had a big bull run. The precious metal rose close to 25% this year, pushed higher in a summer rally that peaked on July 10th. Gold experienced a bumpy ride over the remainder of the summer though, as investors became increasingly concerned about a potential rate hike by the Federal Reserve. Uncertainty returned to gold market and has intensified further since then.   Initially, gold rallied sharply...
  • Too Early for “Inflation Bets”?
      The Trump Trade After 35 years of waiting... so many false signals... so often deceived... so often disappointed... bond bears gathered on rooftops as though awaiting the Second Coming. Many times, investors have said to themselves, “This is it! This is the end of the Great Bull Market in Bonds!”   The long bond's long cycle – red rectangles indicate when the post 1980 bull market was held to be “over” or “over for sure” or “100% over”, etc.  We have...
  • US True Money Supply Growth Jumps, Part 1: A Shift in Liabilities
      A Very Odd Growth Spurt in the True Money Supply The growth rates of various “Austrian” measures of the US money supply (such as TMS-2 and money AMS) have accelerated significantly in recent months.  That is quite surprising, as the Fed hasn't been engaged in QE for quite some time and year-on-year growth in commercial bank credit has actually slowed down rather than accelerating of late. The only exception to this is mortgage lending growth - at least until recently. Growth in...

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