There are some races you don’t want to win.
I’m glad, for instance, that Greece instead of America is winning the race to fiscal collapse (though both the BIS and OECD predict the U.S. faces a bigger long-run challenge).
And I’m happy that California is farther down the path to chaos and meltdown than my state of Virginia (as illustrated by this amusing cartoon).
So you will understand that I am worried when a French socialist defends bad economic policy by saying that his country is copying the United States.
Here are some excerpts from a CNBC report about Obama being a role model for Hollande’s economic team.
The French politician who said Indian steel company ArcelorMittal should leave the country has told CNBC that his government is only acting like U.S. President Barack Obama. Industry Minister Arnaud Montebourg, a member of the governing Socialist party, caused controversy last week when he said that the Indian company, which employs close to 20,000 people in France, should leave after it said it would have to close down a factory. The French government announced on Thursday that it could nationalize the factory in question… The news raised the specter of the nationalizations of the early 1980s, which were instigated by Hollande’s predecessor Francois Mitterrand. Montebourg told CNBC after a meeting with trade unions in Paris: “Barack Obama’s nationalized…” Montebourg brushed off comparisons with that era. He said: “It’s a very good sign to send out (to investors). Nationalizing is a very modern step to take. Especially when you not only nationalize losses but profits as well, when you make public/private partnerships. This is our strategy. …He declined to answer a question about comments from Mayor of London Boris Johnson, who told Indian businessmen earlier this week to come to London instead of France.
I don’t actually think we’re as bad as France, and the rankings from both Economic Freedom of the World and the Index of Economic Freedom both show the United States with more economic freedom.
But a good overall score doesn’t mean that one nation is better than another in all regards. The United States still ranks above Sweden, even though the Swedes have implemented school choice and personal retirement accounts. And America still ranks above the Slovak Republic, even though that country (at least for now) has a simple and fair flat tax.
So maybe Monsieur Montebourg is right about the U.S. being a trendsetter for bad industry nationalization policy. Gee, what a high honor. I guess this is what it means to be called ugly by a frog.
[…] Or perhaps I’m just a narcissist and I appreciated a cartoon that was somewhat similar to one of my homemade jokes about Hollande and Obama. […]
Nationisation is music to ears of the owners of Indian Steel (or Grangemouth Oil Refinery etc), failing corporates etc. If forced to sell (interest rates rigged low by the central banks means selling quickly is not essential) the owners would get a fraction of the price on the open market. This means the new owner would have far lower costs and be able to modernise production, diversify and keep the workforce. Nationalisation means the original owner can get a vastly inflated price for his steel works with no loss to himself due to the govt protecting the ‘human shield’ of ‘workers’ (who now become a burden instead of part of a successful asset). The government can claim it ‘saved’ jobs when in fact the burden of the bail out caused countless unseen workers to lose jobs through out the network of the economy (The ‘Hidden’ or ‘Forgotten Man’ in Hazlitt’s Economics in One Lesson).
Part of me thinks this is one case where I wished the French Government would act like true looting socialists and just confiscate the steel plant and give it in pay related shares to the workers and management and see if they actually are any good at their jobs…
[…] only shared one French-related cartoon, but you can seem my attempts at humorous captions here, here, and […]
As an aside, there’s a good analysis of the reasons for the closures here:
http://timworstall.com/2012/11/27/arcelor-mittal-in-french-jobs-row/
Truly, these socialists would have been nationalising the flint-knapping industry at the onset of the bronze age.