France's Socialist President Proposes the Policy Equivalent of Duct Tape

France's unemployment rate is rising to ten percent and beyond, and the inflexible workforce is slow to adapt to the jobs that are available. The country's new socialist government is left to sputter about layoffs by beleaguered industries, and to threaten higher costs for companies that would dare to contemplate more of the same. Oh yes, and the government plans to put people on the state payroll with make-work jobs — essentially bribing them to not cause trouble as the economy stumbles along. The end result has all the appearances of desperate tinkerers holding together a failing machine with rolls of duct tape.

Reports Reuters:

President Francois Hollande's plan for tens of thousands of state subsidized jobs will not fix France's stagnant economy but it may be enough to keep angry unions and jobless youths off the streets as layoffs mount after the summer.

Two months into his presidency, Hollande faces a gathering storm as unemployment climbs past 10 percent and threatens to jump even higher this autumn.

Worsening prospects for many jobless youths have fed frustration in the poor suburbs that ring major French cities, which saw riots in 2005. France's militant unions, alarmed by mounting factory closures, are bristling for a fight.

"My hypothesis is that after holidays there will be social upheaval because people will no longer be able to express their frustration by voting," said Dominique Reynie, head of political think tank Fondapol.

"Everything Francois Hollande has done until now has been to prepare the French for a shock in the autumn."

The big fear here is the unions, and the young, with nearly a quarter of those 18-25 unemployed. Keeping idle hands out of the streets doesn't come cheap, though.

The cost of such plans, spread over a five-year term, is more than 11 billion euros, according to estimates by the Institut de l'Entreprise business group. Hollande's camp says the expense will be recouped by rolling back Sarkozy-era tax breaks.

But the subjects of those rolled-back tax breaks may have something to say in the matter. According to the Telegraph, "The latest estate agency figures have shown large numbers of France's most well-heeled families selling up and moving to neighbouring countries."

President Hollande may have to find another roll of duct tape.

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  • Scruffy Nerfherder||

    Witness our future. Political resistance to change. This is why Austrian economics gets no traction with government. The Austrian school embraces change while the government is only interested in keeping things the same. Vested interests do not like change.

  • Brutus||

    Well said.

  • sarcasmic||

    Austrian economics gets no traction with government because it doesn't give politicians an excuse to control things.

    That's why Keynesian economics is so popular. It gives politicians an "intellectual" excuse, if not mandate, to fuck with markets.

  • AuH2O||

    Austrian economics also often advocates "do nothing" and that is hard to sell politically, because people want to here how the government is "doing something" to fix X problem, even if "doing something" hurts more than it helps.

    It's TOBAL syndrome but with economics.

  • Scruffy Nerfherder||

    It does give an excuse, but it does not provide the motivation. The motivation comes from economically vested interests (unions, corporations, banks) that appeal to the politicians to keep things the same. The up and comers don't have the money or the connections to bend government to their will or to even just convince government to get the hell out of the way.

  • Brandybuck||

    The entire premise of Keynesian economics, is that all change leads to worsening economic conditions. It is based on a model that is perfectly balanced in a vacuum, and any intrusion by the real world will cause the economy to spin wildly off kilter. Hence the need for constant government tuning.

  • Restoras||

    It'll be interesting to see what those idiots do when the money runs out. They probably do think that if they print enough to hand out to everyone then all will be well.

  • ||

    We keep saying this, and they keep chugging along, whether one is talking about France or California or anywhere.

    When you can steal at will, it's hard for you to run out of steam.

  • Scruffy Nerfherder||

    Someone else on here said it first.

    A plugged toilet raises all turds.

  • Pound. Head. On. Desk.||

    It'll be interesting to see what those idiots do when the money runs out.

    "Capitalism is faltering. Freedom has failed. More control is necessary." Except in French.

  • ||

    From http://www.economicpolicyjourn.....omics.html

    After a back and forth on the LIBOR rate, I called him [Robert Shapiro] on his claim that the financial crisis was caused by free markets. I asked him some basic questions about the economy that he couldn't answer, which resulted in his hanging up the phone on me.

  • Lord Humungus||

    they'll just print some more! and more!

    btw, I'm (re-re-re-re-re)reading The Big Sleep (1939) right now and it's amazing that the Sternwood family - with butlers and maids - was worth *gasp* 4 million dollars. Inflation does suck.

  • Brett L||

    Yep. Oil Baronz!! With mansions and loose daughters and about 17 cars. Of course, Marlowe gets like $50/week plus expenses and never seems to want for beer money or run out of office scotch.

  • Lord Humungus||

    you never run out of booze money when you're single.

  • BakedPenguin||

    You're not trying hard enough.

  • ||

    IT WAS ABOUT ELEVEN O'CLOCK in the morning, mid October, with the sun not shining and a look of hard wet rain in the clearness of the foothills. I was wearing my powder-blue suit, with dark blue shirt, tie and display handkerchief, black brogues, black wool socks with dark blue clocks on them. I was neat, clean, shaved and sober, and I didn't care who knew it. I was everything the well-dressed private detective ought to be. I was calling on four million dollars.

    One of the best opening paragraphs in all literature.

  • The Heresiarch||

    I sill prefer "Arma virumque cano Troiae qui primus ab oris..."

  • ||

    You have not experienced Chandler until you have read him in the original Klingon.

  • The Heresiarch||

    All things Klingon are better, including women.

  • Spoonman.||

    I guess car insurers in France are going to have to raise their rates.

  • Drake||

    "My hypothesis is that after holidays..."

    That made me laugh. First the Frenchies are going vacation for a couple of months. Then they are going to have a revolution because their economy sucks.

  • AuH2O||

    It's called priorities, dude.

  • Spoonman.||

    But I am le tired.

  • Scruffy Nerfherder||

    Le funny

  • Tman||

    I laugh with you, that line is frigging priceless. Imagine there "out of office" setting on Outlook-

    "We are currently out of the office until September 1. We would go on strike today, but we're on paid vacation. We plan to strike when we return. If you need to strike in the meantime, please email Francois@strike.edu and he will further assist you. Viva la France!"

  • Lord Humungus||

    remember, we are told that America needs to be more like Europe!

    I'm assuming soccer will suddenly take off with renewed interest.

  • ||

    I thought it meant that America needs to brew better beer?

  • The Immaculate Trouser||

    WTF did the French expect? It's not like the incentives in play were on the level of Mayan cosmology; any fool could have predicted this outcome (and many did). French Socialist party voters who suddenly find themselves unemployed have no one to blame but themselves.

  • R C Dean||

    French Socialist party voters who suddenly find themselves unemployed have no one to blame but themselves.

    And the Jews, of course. Or the Germans. Or maybe both.

  • AuH2O||

    Awfully nice country you got there. Shame if anything was to happen to it.

  • sarcasmic||

    "Government is the great fiction through which everybody endeavors to live at the expense of everybody else."
    -Bastiat

  • Mr. FIFY||

    Why do you hate brown children, sarcasmic?

  • A Serious Man||

    Only a matter of time before the French purge all memory of Bastiat in the interest of state security.

  • ΘJΘʃ de águila||

    The West is becoming more like the former USSR every day....what will the West's version of the iron curtain look like? How dare you try to escape!

  • Drake||

    With the new IRS rules, they don't need to keep you in the country - they will keep your money either way.

  • sarcasmic||

    Slightly off topic: Garbage has a catchy new tune.

    http://www.youtube.com/watch?v=4OdTBCgqRt4

  • gaijin||

    that's trash

  • Rob||

    I see what you did there.

    Everything Garbage did after 2.0 basically sucks. Sorry sarcasmic.

  • Brandybuck||

    This is just par for the course for France. They've been engaged in this sort of insanity for centuries. This is a seriously dysfunctional nation. It wouldn't surprise me in the least if they switch to a ten month calendar and start confiscating church property.

  • ||

    When Sarkozy first got in, he tried to make some modest changes like not letting train drivers retire at 50 if I recall, the whole country went on strike and that was pretty much the end of extremely modest reform.

  • ||

    So the solution to rising unemployment caused, in part, by the high taxes on "the rich", which is causing those people to shut down factories and whatnot and move elsewhere, is to put even more people on the government dole, which will cause an even bigger fiscal hole which a socialist is likely to try to fix by raising taxes even higher on "the rich"?

    That will end well. =P

  • Loki||

    political think tank Fondapol

    Jane Fonda has a think* thank now?

    *There's three words you never thought you'd see in a sentence together: Jane Fonda and think.

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