France’s Fall

by Don Boudreaux on January 7, 2014

in Debt and Deficits, Nanny State, Other People's Money, Reality Is Not Optional, Seen and Unseen

France is being destroyed by high taxes, nanny-statism, rent-seeking workers protected not only from competition but even from their own incompetence, an absurdly over-extended welfare state, and – generally – by an anti-entrepreneurial, dirigiste culture.  Don’t believe me?  Read this remarkable essay by Janine di Giovanni (an English woman who’s lived in France for the past decade) in the current issue of Newsweek.  (HT Dan “Bulldog” Mitchell)

France is already what America would become if “Progressives” get their wish.  Here are some excerpts from di Giovanni’s essay (but do read the whole thing).

Since the arrival of Socialist President François Hollande in 2012, income tax and social security contributions in France have skyrocketed. The top tax rate is 75 percent, and a great many pay in excess of 70 percent.

As a result, there has been a frantic bolt for the border by the very people who create economic growth – business leaders, innovators, creative thinkers, and top executives. They are all leaving France to develop their talents elsewhere.

….

But the past two years have seen a steady, noticeable decline in France. There is a grayness that the heavy hand of socialism casts. It is increasingly difficult to start a small business when you cannot fire useless employees and hire fresh new talent. Like the Huguenots, young graduates see no future and plan their escape to London.

The official unemployment figure is more than 3 million; unofficially it’s more like 5 million. The cost of everyday living is astronomical. Paris now beats London as one of the world’s most expensive cities. A half liter of milk in Paris, for instance, costs nearly $4 – the price of a gallon in an American store.

Part of this is the fault of the suffocating nanny state.

….

When I began to look around, I saw people taking wild advantage of the system. I had friends who belonged to trade unions, which allowed them to take entire summers off and collect 55 percent unemployment pay. From the time he was an able-bodied 30-year-old, a cameraman friend worked five months a year and spent the remaining seven months collecting state subsidies from the comfort of his house in the south of France.

Another banker friend spent her three-month paid maternity leave sailing around Guadeloupe – as it is part of France, she continued to receive all the benefits.

Yet another banker friend got fired, then took off nearly three years to find a new job, because the state was paying her so long as she had no job. “Why not? I deserve it,” she said when I questioned her. “I paid my benefits into the system.” Hers is an attitude widely shared.

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