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:

  • factoryA Striking Chart
      The Economy and the Stock Market As long time readers know, we are always paying close attention to the manufacturing sector, which is far more important to the US economy than is generally believed. In terms of gross output it is the largest sector of the economy, and it should of course be obvious that saving, investment and production are the only ways to create wealth.   What's left of the Brooklyn Domino Sugar Refinery. Photo credit: Paul Raphaelson   Contrary...
  • trump-putin-1024Trump and Putin Narrowly Escape Assassination Attempt
      The Gloves are Coming Off First a little bit of recent history. Readers are probably aware that some questions about the occasionally malfunctioning Deep State android... no, wait, we'll start again. Questions have recently been raised about the health of presidential candidate Hillary Clinton by various “alt-right” tinfoil hat-wearing conspiracy theorists, such as this one.   The monsters are normally hiding under Hillary's bed, but lately they have come out into the open...
  • swing-voterWhy the Fed Destroyed the Market Economy
      What Have You Done for Me Lately? Swing voters are a fickle bunch.  One election they vote Democrat.  The next they vote Republican. For they have no particular ideology or political philosophy to base their judgment upon.   The primacy of the wallet.   They don’t give a rip about questions of small government or big government.  Nor do they have any druthers about the welfare or warfare state. In effect, they really don’t care.  What’s important to the...
  • trump-mapDonald’s Electoral Struggle
      Wicked and Terrible After touting her pro-labor union record, the Wicked Witch of Chappaqua rhetorically asked, “why am I not 50 points ahead?”  Her chief rival bluntly responded: “because you’re terrible.”*  No truer words have been uttered by any of the candidates about one of their opponents since the start of this extraordinary presidential campaign!   Electoral map (note that the coloration may no longer be applicable...)   That Hillary Clinton is...
  • wallet-367975_960_720Janet Yellen’s Shame
      Playing Politics In honest capitalism, you do what you can to get other people to voluntarily give you money. This usually involves providing goods or services they think are worth the price. You may get a little wild and crazy from time to time, but you are always called to order by your customers.   In the market economy, consumers reign supreme. There is no such thing as a “lost” vote in the marketplace; every penny spent affects production. Mises noted: “Consumers...
  • warren-buffett-gold-coinGet Ready for a New Crisis – in Corporate Debt
      Imposter Dollar OUZILLY, France – We’re going back to basics here at the Diary. We’re getting everyone on the same page... learning together... connecting the dots... trying to figure out what is going on.   The new three dollar bill issued by the Apprehensive States of America.   We made a breakthrough when we identified the source of so many of today’s bizarre and grotesque trends. It’s the money – the new post-1971 dollar. This new dollar is green. You...
  • 4-ip-and-non-def-capital-goods-ordersThe Economy, the Stock Market and the Fed
      John Hussman on Recent Developments We always look forward to John Hussman's weekly missive on the markets. Some people say that he is a “permabear”, but we don't think that is a fair characterization. He is rightly wary of the stock market's historically extremely high valuation and the loose monetary policy driving the surge in asset prices.   The S&P 500 Index and the NYSE advance-decline line. Most market internals weakened steadily until early February 2016, but...
  • silkroadHanjin Marooning in San Pedro Bay
      Global Trade Reversal Expansions and contractions in global trade have played out over long secular trends for thousands of years.  The Silk Road, for example, was established by the Han Dynasty of China in 130 BC, and allowed for continuous trade between East and West for nearly 1,600 years.  In addition to economic trade, the Silk Road was also a conduit for culture and knowledge among its network of civilizations.   A map of the main ancient Silk Road - click to...
  • voltaireGreat Causes, a Sea of Debt and the 2017 Recession
      Great Cause NORMANDY, FRANCE – We continue our work with the bomb squad. Myth disposal is dangerous work: People love their myths more than they love life itself. They may kill for money. But they die for their religions, their governments, their clans... and their ideas.   Famous French hippie and author Voltaire. He wears the same sardonic grin in every painting, whether he's depicted at a young or an old age, doesn't matter. His real name was François-Marie Arouet; he...
  • wilsonand-morganThe Donald Versus Killary: War or Peace?
      War: A Warning from the Past Although history does not exactly repeat itself, it does provide parallels and sometimes quite ominous ones.  Such is the case with the current U.S. Presidential election and the one which occurred one hundred years earlier.   The Donald probably has the better slogan...   The dominating question which hung over the 1916 campaign was whether the country would remain neutral in regard to the horrific slaughter which was taking place on the...
  • hittite-leftoversA Rift in the Space-Time Continuum
      Weird and Unnatural NORMANDY, France – First, a quick look at the markets. The Dow bounced on Monday, recovering 239 points of the nearly 400 it lost on Friday. Why the comeback?   FOMC member Lael Brainard: her comments on Monday were touted as the “reason” for the stock market recovering half of Friday's losses. We suspect the real reason is the triple witching on Friday... Photo via twitter.com   The financial press has a ready answer: “Stocks gain...
  • ukraine-mapCrimea: Digging For The Truth
      Renewed Escalation This summer witnessed a renewed escalation between Russia and Ukraine after Russian President Vladimir Putin accused Ukraine of sending saboteurs to attack Russian troops, targeting “critical infrastructure”. Kiev denied the allegations and claimed Russia’s “fantasy” was nothing but a false pretense to launch a “new invasion”.   August 10: Russian president Putin announces that there was an altercation involving a group of Ukrainian saboteurs at...

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