French Protests Today Could Greatly Affect the Economic Crisis's Bottoming Process

Includes: EWQ, FRC
by: Doug Poretz

There is a massive protest called to take place throughout France on March 19. According to a Reuters story datelined March 19, some 75 percent of the population support this protest, which is expected to draw more than one million people to the streets. This protest may be yet another indication that the worldwide economic crisis is morphing into a global social/cultural/political crisis. If that is the case, any current predictions about when the economy may bottom would become irrelevant, because economic programs will be trumped by political turmoil.

I’ve suggested before that there is a pattern of protests around the world that share three characteristics: 1) they are conducted by and for the middle/working class; 2) they are not so much about one or two hot issues but more about a mood of anger against governments, bankers, the investment community and certain corporations; and 3) the remedy they seek is some government action (or inaction) they want taken that would address their needs before the needs of those they see as responsible for the situation in the first place.

In the United States, this pattern of protest has most dramatically been evidenced in the election of Barack Obama, who frequently articulates the same sentiments as the protestors. But in Europe as well as many other locations throughout the world, the protest is taking the more traditional approach of people taking to the streets.

So just what might happen in France? The Reuters article cited above, posted on the web a few hours before the strike was to really get going, describes the prospects this way:

  • “Trains, buses, airports, schools and government offices will all be hit, with workers venting their anger about surging unemployment and the high cost of living in the euro zone’s second largest economy.
  • “Opinion polls say around 75 percent of voters back the protest movement, posing Sarkozy his toughest challenge since he was swept to power in May 2007.
  • “Up to 2.5 million people took part in the union’s first day of action on Jan. 29 and labour leaders hope even more demonstrators turn out at some 200 rallies planned for Thursday.
  • “‘A very strong sense of injustice is building up,’ Jean-Claude Mailly, head of the large Force Ouvriere Union, told Reuters. ‘I think the government will find it hard to ignore us. That would be irresponsible.”

We should watch with great anticipation, even though the news media in the U.S. has basically missed this phenomenon except in notable isolated coverage. But if the French protest is indeed another part of a global trend, it’s likely that it will be only a matter of time until we start seeing a change in the headlines around the world. And if those headlines are about political and social chaos, the consumer confidence that is so vital for a bottom (to say nothing of a recovery), will go further south and, with it, it will be even longer before we reach the bottom and can start recovering.