One of my first blog posts, back in 2009, featured Veronique de Rugy in a video, warning that America should not adopt the statist policies that caused so much damage in her home country of France.
Sadly (but predictably), the politicians in Washington ignored Veronique’s sage advice. The burden of government has expanded since that video was released, including the adoption of costly Obamacare legislation.
But if there was a contest among nations for the worst public policy, France would still have a comfortable lead over the United States. For every bone-headed step in Washington to increase taxes, spending, and regulation, it seems there are two similar steps in Paris.
Obama wants to increase the top tax rate in America to 39.6 percent, for instance, but Hollande wants a top tax rate of 75 percent, making Obama look like a libertarian by comparison.
France also has a much more interventionist approach to labor markets. Here are some depressing features of French employment law, as reported by Business Week.
The country has 2.4 times as many companies with 49 employees as with 50. What difference does one employee make? Plenty, according to the French labor code. Once a company has at least 50 employees inside France, 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. French businesspeople often skirt these restraints by creating new companies rather than expanding existing ones. “I can’t tell you how many times when I was Minister I’d meet an entrepreneur who would tell me about his companies,” Thierry Breton, chief executive officer of consulting firm Atos and Minister of Finance from 2005 to 2007, said at a Paris conference on April 4. “I’d ask, ‘Why companies?’ He’d say, ‘Oh, I have several so that I can keep [the workforce] under 50.’
Not surprisingly, French workers are the main victims of this policy. At the risk of stating the obvious, if you make it more expensive to hire workers, there will be fewer jobs. The Business Week article adds more discouraging details.
Companies say the biggest obstacle to hiring is the 102-year-old Code du Travail, a 3,200-page rule book that dictates everything from job classifications to the ability to fire workers. Many of these rules kick in after a company’s French payroll creeps beyond 49. …Pierrick Haan, CEO of Dupont Medical (not to be confused with chemical company DuPont (DD)), decided last year to return production of some wheelchairs and medical equipment to France. The 150-year-old company, based in Frouard in eastern France, created 20 jobs making custom devices at a French plant—and will stop there. …“The cost of labor isn’t the main problem, it’s the rigidities,” Haan says. “If you make a mistake in your hiring plans, you can’t correct it.” …The code sets hurdles for any company that seeks to shed jobs when it’s turning a profit. It also grants judges the authority to reverse staff cuts years after they’re initiated if companies don’t follow the rules. The courts even deem some violations of the code a criminal offense that could send executives to jail.
Keep in mind, by the way, that this describes current French law. Hollande will probably choose to adopt additional policies that discourage job creation. All for the alleged purpose of protecting the rights of labor, of course.
No wonder so many investors and entrepreneurs are looking to move to places where hard work and success are rewarded rather than penalized.
The one thing that puzzles me is why the French people don’t rise up against the corrupt political elite. A poll from 2010 showed that French voters favored spending cuts. And another poll showed that more than one-half of French people would consider moving to America if they had the opportunity. So there’s definitely discontent.
But I suppose I shouldn’t be puzzled. American voters generally reject statism in polls but routinely are forced to choose from the lesser of two evils (or should that be the evil of two lessers?) during elections, so perhaps the lesson to be learned is that politics brings out the inner Julia in all peoples.
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France is simply a few more iterations further down the vicious cycle of HopNChange compared to America. At that stage, things start becoming outright irrational and people who are not yet as deep into the cycle (eg. Americans) wonder in bewilderment how things could possibly have gotten that way in France. Unfortunately they conclude as a corollary, that America will never become that way. But wait. As the first iteration of HopNChange moves America onto a slower growth trendline (ignore short term effects, they are notoriously unpredictable) an ever increasing desperation will cause American voters to reach for more “help” and “care” packages, i.e. more HopNChange. Genghis Khan and his three billion newly, and albeit partially, liberated hordes will take no prisoners. They have neither the patience nor the desire to accommodate a spoiled, once prosperous western world that wants to support mediocrity by inevitably penalizing exceptionalism.
The average voter will always be bamboozled by HopNChange. i.e. the hope that a majority of exceptional people will be convinced to work for others, that most of the remaining recalcitrant minority will be coerced to do so, and that mediocre people who will be handed the fruits of redistribution will become so grateful that they will renounce mediocrity and strive for exceptionalism.
The Hope lives on, the decline continues. The vicious cycle has been entered.
In denial about America’s entrance into the vicious cycle of decline? Just think to yourself:
Not only has there not been any reform of entitlement programs, but Americans voted themselves a whole brand new entitlement called ObamaCare to act as the third pillar of decline along with Medicare and Social Security and, most indicative of the vicious cycle, the person who proposed the new program is the leading candidate for the next election.
Dan, the extract below is from a newletter from the office of a member of parliament in Quennsland in Australia, to compliment your database of debased government behaviour.
“This newsletter has been subjected to the Federal Labor Government’s new censorship rules applying to newsletters produced by Members of Parliament.
While newsletters may contain any words to praise the Government, there are restrictions on the words that can be used to criticise the Government, the ALP or other political parties.
Publications, including this newsletter, are vetted by a new Government unit before they are printed to ensure they comply vvith the new rules. Words that the unit has already ruled cannot be used include:
Disgraceful, Dreadful, Inept, Mismanagement, Reckless, Incompetence, irresponsible, Unfairly, Disastrous, Flawed.
Members of Parliament are not permitted to use their postage allowance to send a copy of a Parliamentary speech containing these words, even though it is quite permissible to use these words in Parliament.
I am not allowed to use these words in this newsletter to describe what the community thinks about the State Labor Government’s Traveston Crossing dam.
Nor can they be used to describe concern about the performance of the Federal Labor Government, and its record $315 billion debt or its $58 billion budget deficit. Or about the Queensland Labor Government’s unprecedented $85.8 billion debt or its $1.6 billion deficit.”
Regards
KeithB
Perth Western Australia
Reblogged this on Public Secrets and commented:
France plays two roles in America this year: as a goal for Obama and the progressives, and as a warning to the rest of us.
viva la difference.