Rossputin.com Rational Thinking About Our World

see "Chirac Scraps Youth-Labor Law, Bowing to Protests" (Bloomberg, 4/10/06)
http://quote.bloomberg.com/apps/news?pid=10000006&sid=a.sXNYrENjJ8&refer=home

Caving in to know-nothing students and the all-powerful French public employee unions, French President Chirac (does that mean "worthless" in English) is withdrawing the only good idea ever proposed by current Prime Minister, Dominic de Villepin. There's a guy I really wanted to see fail, but not because of the one rational thing I've ever heard him say.

The proposed law would have allowed the creation of work contracts for young workers making it easier for employers to fire them...but thus giving employers incentive to hire them in the first place. Unemployment among young French people (old enough to work) is around 23%, and the rate for that age group in the immigrant neighborhoods which rioted a few months ago is around double that.

The French have grown up with an unsustainable socialist model which must collapse on itself as the percentage of the economy taken and run by government becomes an unsupportable burden on taxpayers.

From a very good article by Larry Kudlow:

Indeed, at the heart of the French problem is a statist-run socialist economy that is massively overtaxed and overregulated. France’s public government sector, for instance, accounts for more than 50 percent of GDP. In other words, private business in France is in the minority.

Added to this, France’s top personal tax rate is 48 percent, with a VAT tax of nearly 20 percent. So that means French laborers face a combined 68 percent tax rate on consumption and investment. No wonder France has created less than 3 million jobs over the past 20 years, compared to 31 million in the United States. Economic growth in “cowboy capitalist” America has exceeded that of France’s worker paradise by nearly 50 percent.

But the French view is reinforced by their ridiculous educational approach to the dismal science, which emphasizes how government can "improve" upon capitalism. Because of this ingrained economic idiocy, it's hard to see the French people supporting a change in government that favors economic liberalization, something which even the fairly socialist Germans opted to dip a toe into recently to see how that water feels.

Here is a fascinating article about how the French view economics:
http://www.iht.com/articles/2006/04/07/news/econ101.php
One notable quote from the article: In a 22 (sic...it's 20)-country survey published in January, France was the only nation disagreeing with the premise that the best system is "the free-market economy." In the poll, conducted by the University of Maryland, only 36 percent of French respondents agreed, compared with 65 percent in Germany, 66 percent in Britain, 71 percent in the United States and 74 percent in China.

And here is the result of such policies and thinking, from the Bloomberg article:
"Also today, the government said French industrial production unexpectedly fell in February. The 0.9 percent decline contrasted with reports last week showing manufacturing and services in the euro region expanded at the fastest pace in more than five years in March."

Socialism doesn't bring out the best in an economy? Really? Let me put on my big surprise face.