Posts tagged with: france

Blog author: abradley
Friday, November 8, 2013
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franceSince the French Revolution, Americans have glanced over to our friends across the Atlantic Ocean as a model of what a country should not do. That tradition continues. France’s centralized planning of the economy, health care, education, the family, religion, and so on is not working. The New York Times reports:

The pervasive presence of government in French life, from workplace rules to health and education benefits, is now the subject of a great debate as the nation grapples with whether it can sustain the post-World War II model of social democracy.

Well, those who champion economic, moral, and political liberty predicted this ages ago. As expected, government control of French society has crippled France’s “capability to innovate and compete globally.”

What is more, “investors are shying away from the layers of government regulation and high taxes.” Again, not surprising.

The French government continues to raise taxes and create reasons to redistribute workers’ earnings. According to the article, in France “most child care and higher education are paid for by the government, and are universally available, as is health care.” The cost of health care is “embedded in the taxes imposed on workers and employers; workers make mandatory contributions worth about 10 percent of their paycheck to cover health insurance and a total of about 22 percent to pay for all their benefits.” This is unsustainable.
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moving_to_franceFor those of us on this side of the pond, France conjures up images of baguettes, beautiful women and lush countryside. For the French, the image conjured up might be taxes, taxes and more taxes.

More than 70 per cent of the French feel taxes are “excessive”, and 80 per cent believe the president’s economic policy is “misguided” and “inefficient”. This goes far beyond the tax exiles such as Gérard Depardieu, members of the Peugeot family or Chanel’s owners. Worse, after decades of living in one of the most redistributive systems in western Europe, 54 per cent of the French believe that taxes – of which there have been 84 new ones in the past two years, rising from 42 per cent of GDP in 2009 to 46.3 per cent this year – now widen social inequalities instead of reducing them.

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François Hollande

François Hollande

At The American Spectator, Acton Research Director Samuel Gregg looks at France’s embattled Socialist president, François Hollande, as the first anniversary of his term in office approaches. As Hollande’s approval ratings hit new lows, “Mr. Normal,” Gregg writes, is starting to look like “Mr. Irrelevant.” What’s more, he adds, “two of the biggest problems that have corroded Hollande’s credibility: his apparent inability to address France’s economic difficulties; and a growing awareness throughout France that la grande nation is slipping into the minor league when it comes to countries that wield influence in the EU.” More from Gregg:

So why such a rapid fall from grace? Some of it is of Hollande’s own making, such as his effort to impose a 75 percent tax on personal incomes over €1 million. Though the measure was eventually ruled unconstitutional, it managed to alienate a business community already suspicious of someone who once publicly proclaimed, “I dislike the rich.” The fact that Hollande is now trying to levy the same tax-rate on businesses that pay salaries over €1 million isn’t helping matters.

Nor did it help that the minister charged by Hollande with cracking down on tax-fraud, Jerome Cahuzac, was forced to resign after admitting he had maintained a Swiss bank account for over 20 years. Cahuzac is now under investigation for tax-fraud. The situation worsened when Hollande ordered his ministers to fully disclose all their personal holdings. Everyone in France has thus been reminded that most of the Socialist ministers who regularly rail against les riches are themselves quite wealthy. Caviar-Limousine-Champagne Socialism, anyone?

Read Samuel Gregg’s “The Incredible Shrinking Monsieur Hollande” at The American Spectator.

Kishore Jayabalan, Director of Instituto Acton in Rome, Italy, joined France 24 News today to discuss the pontificate of Pope Francis I as he assumes his new office of leadership.

In a lengthy interview in the Daily Caller, Acton Research Director Samuel Gregg picks up many of the themes in his terrific new book, Becoming Europe: Economic Decline, Culture, and How America Can Avoid a European Future. Here’s an excerpt:

Daily Caller: In what ways do you think the U.S. has become like Europe?

Samuel Gregg: If you think about the criteria I just identified, it’s obvious that parts of America — states like California, Illinois, and New York — have more-or-less become European. Likewise, the fact that most federal government expenditures are overwhelmingly on welfare programs replicates the situation prevailing throughout Western Europe. Then there is the unwillingness on the part of many Americans to accept that we cannot go on this way. It is one thing to have problems. But it’s quite another to refuse to acknowledge them.

Daily Caller: What’s so bad about becoming like Europe? It’s not that bad of a place. It’s not like becoming like North Korea, right?

Samuel Gregg: I lived and studied in Europe for several years. So I can report that there is much to like! But even leaving aside many European nations’ apparent willingness to settle for long-term economic stagnation, I would argue that it’s becoming harder and harder to be a free person in Europe. By that, I don’t mean a re-emergence of the type of socialist regimes that controlled half of Europe for 50 years. Rather I have in mind two things. (more…)

Blog author: jcarter
Thursday, February 21, 2013
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“[He] belongs more in an insane asylum than at the head of a multinational corporation.”

beret-on-cowboyThat was the reaction by a French union official to an amusingly harsh letter by Maurice Taylor, chief executive of tire maker Titan. Taylor was initially interested in buying the French tire factory, which is facing closure following five years of unsuccessful negotiations with unions to enhance its competitiveness. However, after visiting the plant three times, he wrote a letter to France’s industry minister Arnaud Montebourg, saying: “Sir, you would like to open discussions with Titan. You think we’re that stupid?”

Taylor says the plant’s 1,173 workers “have one hour for their lunch, they talk for three hours and they work for three hours. I said this directly to their union leaders; they replied that’s the way it is in France.” The Titan CEO added:

“Titan has money and the know-how to produce tyres. What does the crazy union have? It has the French government. The French farmer wants cheap tyres. He doesn’t care if those tyres come from China or India and these governments are subsidising them. Your government doesn’t care either: ‘We’re French!’

Titan is going to buy a Chinese tyre company or an Indian one, pay less than one euro per hour wage and ship all the tyres France needs. You can keep the so-called workers.

Taylor isn’t exaggerating the problems caused by French unions. In his new book, Becoming Europe, Acton’s Director of Research Samuel Gregg writes,
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In the Washington Times, Nile Gardiner praises Becoming Europe: Economic Decline, Culture, and How America Can Avoid a European Future, the new book by Acton Research Director Samuel Gregg. Gardiner, the director of the Margaret Thatcher Center for Freedom at The Heritage Foundation and a Washington-based foreign affairs analyst for The Telegraph, says Becoming Europe “should be on the desk of every member of the House and Senate who cares about the future of America as a prosperous and free nation.” Gardiner recommends the book for its “rich detail describing the economic and social ‘Europeanization’ of America, from the rise of vast welfare systems to growing skepticism of the merits of the free-enterprise system.” Excerpt from the review:

“Becoming Europe” is a meticulously researched and well-argued thesis that lays out what is at stake for the world’s superpower, as it faces a stark choice between European-style decline or a return to the original vision of America’s Founding Fathers, as well as the classical liberal teachings of Alexis de Tocqueville, Friedrich von Hayek and Adam Smith. Mr. Gregg, who is director of research at the Acton Institute, paints a grim picture of the direction America is taking but, nevertheless, conveys a positive message to his readers. Mr. Gregg argues that while America is indeed on the path to the European model, it can still turn back and avoid the fate that Europe looks doomed to suffer. In many respects, this is an optimistic book based upon faith in America’s ability to renew itself through rediscovering the principles of economic liberty.

I agree with Mr. Gregg’s assessment. As Gallup polling consistently shows, America is still at its core a conservative nation, one that cherishes the foundations of individual liberty. The fire of freedom still burns brighter on this side of the Atlantic than it does in the Old World, where the suffocating supranationalism of the European Union marches on, with the EU heading toward ever-greater political and economic centralization. The European nightmare can be avoided here, however, only if America’s leaders, at both a national and state level, are willing to stand up for economic freedom and reject the destructive ideology of big government. Washington is already on the path to Brussels, Paris and Athens, but it still has an opportunity to reverse course and avoid the road to economic ruin.

Read Nile Gardiner’s full review of Becoming Europe in the Washington Times.

New York Post illustration

New York Post illustration

In the New York Post, Acton Research Director Samuel Gregg looks at “the spread throughout America of economic expectations and arrangements directly at odds with our republic’s founding” and asks what the slow walk to “Europeanization” means for the long term. Gregg:

Unfortunately there’s a great deal of evidence suggesting America is slouching down the path to Western Europe. In practical terms, that means social-democratic economic policies: the same policies that have turned many Western European nations into a byword for persistently high unemployment, rigid labor markets, low-to-zero economic growth, out-of-control debt and welfare states, absurdly high tax levels, growing numbers of well-paid government workers, a near-obsession with economic equality at any cost and, above all, a stubborn refusal to accept that things simply can’t go on like this.

It’s very hard to deny similar trends are becoming part of America’s economic landscape. States like California are already there — just ask the thousands of Californians and businesses who have fled the land of Nancy Pelosi.

Europeanization is also reflected in the refusal of so many Americans to take our nation’s debt crisis seriously. Likewise, virtually every index of economic freedom and competitiveness shows that, like most Western European nations, America’s position vis-à-vis other countries is in decline.

Is there a way out, even as the “fiscal cliff” negotiations vividly illustrate the inability of Washington’s political elites to take spending and tax problems seriously? Gregg holds out hope: (more…)

French President François Hollande has promised a 75% tax rate on those in his country who earn an annual salary above one million euros ($1.24 million). Not surprisingly, this number has struck fear into the hearts and wallets of quite a few of France’s top earners, including some who are contemplating leaving and taking their jobs with them. The New York Times has the story:

Many companies are studying contingency plans to move high-paid executives outside of France, according to consultants, lawyers, accountants and real estate agents — who are highly protective of their clients and decline to identify them by name. They say some executives and wealthy people have already packed up for destinations like Britain, Belgium, Switzerland and the United States, taking their taxable income with them.

They also know of companies — start-ups and multinationals alike — that are delaying plans to invest in France or to move employees or new hires here.

The potential tax increase threatens to handcuff “les Riches” and, ironically enough, undercut France’s prized notion of egalité, taking with it liberté and fraternité, the remainder of the country’s tripartite maxim. In Hollande’s France, these principles may not apply to the wealthy.

Of course, Hollande’s tax initiative is sure to have some beneficiaries. No, not the poor or the middle class. The real winners? Well, they live on the other side of the border. Also from the Times:

“It is a ridiculous proposal, but it’s great for us,” said Jean Dekerchove, the manager of Immobilièr Le Lion, a high-end real estate agency based in Brussels. Calls to his office have picked up in recent months, he said, as wealthy French citizens look to invest or simply move across the border amid worries about the latest tax.

“It’s a huge loss for France because people and businesses come to Belgium and bring their wealth with them,” Mr. Dekerchove said. “But we’re thrilled because they create jobs, they buy houses and spend money — and it’s our economy that profits.”

The entire story reminds me of a passage from Rev. Robert Sirico’s latest book, Defending the Free Market: The Moral Case for a Free Economy. In a chapter titled “The Idol of Equality,” Sirico addresses the unsustainable nature of simple redistribution. Instead, business development and job creation are essential–and lasting–tenets of economic growth. From the book:

When most people picture the 1 percent and their wealth, what comes to mind is designer clothing and jewelry, yachts and limousines, mansions and penthouses—all sorts of alluring and attention-grabbing luxuries. Luxuries so distracting, in fact, that we tend to lose sight of the fact that most of the wealth of the wealthiest is invested. It is put to work in the businesses they own and manage, and in stocks and other financial vehicles that provide the capital for countless other businesses. These are the businesses that provide the 99 percent with the goods, services, and employment that they regularly enjoy and often take for granted.

Whether it’s a big automotive plant or a small bakery on the corner, a microchip manufacturer or a family farm, all businesses that produce goods and employ people are owned by someone. It’s businesses that make up most of the wealth of the 1 percent. Confiscating that wealth and giving it to the other 99 percent would mean shifting much of that wealth from investment and production to consumption, since the poor and middle class consume a far higher percentage of their income than the wealthy do. This sudden shift from investment and production to consumption would demolish the infrastructure that makes jobs, goods, and services possible.

Hollande would be wise to read Defending the Free Market. Doing so might save his nation and preserve liberty, equality and brotherhood in the process.

Blog author: ckaupke
Friday, June 29, 2012
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Frédéric Bastiat (1801-1850)

This Saturday, June 30, is the 211th birthday of Frédéric Bastiat, one of the greatest political philosophers of the modern era. Considered among the founding fathers of classical liberalism, Bastiat is known for his simple and direct explanations of political and economic realities, his arguments against oppressive economic regulations and his clear and concise vision of a government of limited, enumerated powers, operating under the rule of law and unencumbered by favoritism or distributionist policies.

Bastiat drew on his Catholic faith and the writings of Adam Smith and John Locke to articulate a vision of limited, efficient government that respects each citizen’s God-given dignity, strictly adheres to the rule of law, and allows for a largely un-regulated economy in which individuals are free to pursue their interests through peaceable exchange with each other. His best-known works, and those most central to his ideas, are The Law and The Seen and the Unseen, articulating his central political and economic ideas, respectively. (more…)