The Welfare State Incarnate Strikes Again

Includes: EWQ, FXE
by: Acting Man

No Idea is Too Stupid …

You have to hand it to French president Hollande. He is actively eradicating discrimination against bad ideas. He lets even the most stupid ones live, breathe and take wing. The following is from Austrian newspaper "Die Presse":

“In the fight against industrial decline and high unemployment, France's socialist government enacts a bill against the closure of factories. Entrepreneurs with more than 1,000 employees could in future be threatened with a big fine if they close a factory that has been deemed as still economically viable.

According to the law passed on Tuesday by the National Assembly, companies with more than 1,000 employees are forced to conduct an intensive search for buyers for factories that are under threat of closure. If the company cannot sufficiently prove that these efforts have been undertaken, it can be charged with 20 times of the minimum wage of €1,430 per fired worker.”

They named the law after Florange, where Hollande and his industrial renewal clown Mountebank tried to interfere with Arcelor Mittal's (NYSE:MT) decision to close an unprofitable steel factory. In the process, they were exerting a great deal of pressure on the company, but ultimately found out they were legally unable to force it into subsidizing Hollande's voters.

From now on, they can. We wrote a long time ago that Hollande was erecting a "Zwangswirtschaft" in France – an economy that it is still nominally capitalist and based on property rights, but where government bureaus decide what entrepreneurs may or may not produce, whom they may fire or hire, etc. – in other words, "property rights" would only exist on paper, but not in reality. Basically the type of economy Hitler's national socialists put in place in Germany. Frankly, at the time we thought we were exaggerating a bit for effect. We're not sure if that assessment is still appropriate.

We have a few questions: who decides what is still "economically viable", and how do they go about it? What constitutes 'proof' that one has 'actively searched for a buyer'? This sounds like a very expensive, despotic and bureaucratic nightmare of major proportions could await employers in France. In addition to the already existing despotic and bureaucratic nightmare that is – a nightmare-within-the-nightmare, so to speak. It will of course be bureaucrats arbitrarily deciding all these issues. The new vistas for graft that are opening up here probably have a number of people already salivating (if anyone sees an unidentified trail of slime in Paris, that's where it comes from).

Hollande isn't doing this only due to his truly appalling economic ignorance. As the paper also mentions, he is angling for votes from the 'worker's camp' prior to municipal and European elections.

Keeping these cynical realpolitik deliberations aside though, we think it can be stated that there probably has never been an utterly atrocious economic idea that Hollande didn't somehow like. One can only hope that he hasn't had the time to read Marx's tome "Das Kapital" yet. In spite of the book's fearsome reputation of putting to sleep even people stricken with a severe case of insomnia, some people have actually read it.

It is almost as if Hollande were actively and deliberately seeking to completely f*** up the hollow shell of an economy that is reportedly still left in France. He cannot be that ignorant, can he?

The perpetually befuddled welfare state incarnate on a recent vote angling tour.

(Photo credit: Alexandre Marchi)