Fleeing The French Welfare State

“Good Riddance, Rich Bastard”

We have actually discussed the flight of the best and brightest (as well as the  richest) citizens from president Hollande's socialist paradise before – see  “Regime Uncertainty in France” for details. We have just come across the video below, which is also slightly dated by now, but since nothing much has changed in France, it is worth reviewing it.

Anne-Elisabeth Moutet, the London journalist (born in France, and now living in France's six-largest city, far away from the clutches of Hollande and Mountebank) is interviewed in the video as well.  As she points out, when France's richest man decided he would rather leave than keep feeding Leviathan, the French press reacted with the headline “good riddance, rich bastard”.

The anti-capitalist mentality is deeply rooted in France, which leads even to escapades such as unions kidnapping and blackmailing managers.  They have nothing to fear – for some reason it is apparently considered perfectly legal when unions do this. This is not to say that there are actually legal exceptions in the statutes regarding kidnapping and blackmail by unions or workers, but they are simply never prosecuted for it. On the contrary – they get gifts from the courts! As Business Week reported:

“Bossnapping” and similar tactics have turned out to be pretty effective negotiating tools for French labor unions. Workers who have participated in past hostage-taking incidents haven’t been prosecuted, and most have won sizable concessions from employers.

After four executives of Caterpillar (CAT) were held hostage in 2009 for 24 hours to protest layoffs in Grenoble, the company upped its total severance package from €48.5 million to €50 million, amounting to an average €80,000 ($108,000) per worker. The same year, appliance maker Ariston (A3E:GR) agreed to severance packages of up to €90,000 for workers at a factory in Brittany who protested planned layoffs by locking the manager out of the building.

In still another case—among a spate of 10 French “bossnappings” in 2009—the manager of a 3M (MMM) factory in the town of Pithiviers was taken hostage in a dispute over severance pay. The workers served him a takeout meal of mussels and French fries before deciding to let him go and pursue their grievances in court. An appeals court ruled in their favor last July, ordering 3M to pay €800,000 to 110 laid-off workers.

Former President Nicolas Sarkozy denounced the hostage-taking, but public opinion polls showed that many French sympathized with the protesters and no charges have ever been filed against them.”

However, in spite of all this “popular sympathy” for leftist causes, even if they involve violence, today a full half of France's youth say they would immediately leave the country if they could. The main reason why many feel that they can't do so is probably that they are out of work and are getting welfare checks they would have to do without if they left.

However, as the video indicates, those who have the gumption to leave are naturally all the movers and shakers who want to get ahead, plus all those who are already rich. So the country is increasingly left with slackers dependent on the State – but who or what will pay for their upkeep in the future? Hollande's quasi-Zwangswirtschaft has created a huge economic crisis in France. The economy seemingly cannot get out of its rut, in spite of all the talk about “recovery” in Europe. The unemployment rate remains above 10%, GDP growth has slowed down again recently, and GDP per capita remains below the level of 2008 to this day.

France GDP per capita, adjusted for purchasing power parity – click to enlarge.

Here is the video, which nicely summarizes the problem:

Fleeing France's welfare state

“Industrial renewal” minister Arnaud Montebourg (a.k.a. Mountebank) and the “Welfare State Incarnate”, Francois Hollande.

(Photo © Haley / Sipa)

Addendum: Sarkozy Under Investigation for Corruption

Even if the rule of law is not regarded as terribly important with respect to “bossnappings”, French politicians do occasionally stumble, especially former politicians planning a comeback (remember Dominique Strauss-Kahn?). This time former president Nicolas Sarkozy apparently tripped over a wire-tap. He has just spent 15 hours in police custody and the investigating judges seem to have concluded that there is good reason of continuing an official inquiry, with Sarkozy “mis en examen”, which is not quite as bad as being “charged with a crime”, but almost. He could potentially face a 10-year prison sentence – but even if that never happens, it is probably safe to say that there won't be a political comeback by Ersatz-Napoleon. One could say he got wire-tapped out of his political career.

“Former French president Nicolas Sarkozy was put under official investigation for corruption and misuse of influence late on Tuesday after 15 hours in police custody. Sarkozy was "mis en examen" in a Paris court on allegations that he directly or indirectly used his power in an attempt to find out information about legal proceedings against him.

The respected French financial publication Les Echos described it as a "spectacular measure" that comes as the former leader is planning his political comeback. Sarkozy's lawyer, Thierry Herzog, and a French magistrate are also now under official investigation. The two accusations carry sentences of up to 10 years in prison.

[…]

Investigators will seek to establish whether Sarkozy, who is involved in a total of six separate legal cases, tried to obtain information about an investigation being carried out over whether he received illegal campaign donations for his successful 2007 presidential bid, including from former Libyan dictator Muammar Gaddafi and France's richest woman Liliane Bettencourt, the L'Oréal heiress.

It was while investigating the donations that detectives tapped the phones of Sarkozy and his lawyer Herzog. They are alleged to have heard the pair discussing an attempt to get information about the case from a magistrate in return for offering him a high-level role in Monaco.

Sarkozy has always denied any wrongdoing. "These events only rely on phone taps … whose legal basis will be strongly contested," said Paul-Albert Iweins, lawyer for Herzog.

Riding off into the sunset …

(Cartoon by Steve Bell)

Chart by: Tradingeconomics.