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Shooting From The Hip And Hitting Consumers: Protectionism In France
Wolf Richter www.testosteronepit.com www.amazon.com/author/wolfrichter
That France’s economy is hurting is an understatement. Today’s manufacturing index tested depths not seen since 2009 during the trough of the financial crisis. Orders plunged and employment was morose. The service sector index dove to the lowest level since January 2009. Cited reasons: “unfavorable business climate and lack of visibility.” It confirmed yesterday’s Insee business climate index, which, at the lowest level since mid-2009, was mired in pessimism.
So the government deployed its big gun: Industry Minister Arnaud Montebourg. He’d turn around the economy by revitalizing industry; and he has been on the forefront with his vision.
In July, he announced that the government would ask the European Commission to “monitor” the free-trade agreement between the EU and South Korea. He pointed at the “very substantial increase in imports of Korean vehicles” during a time when vehicle sales in France were cascading downhill. He wanted the EU to stick additional taxes on Korean cars. In August, the French government submitted the formal request to the European Commission. At the Paris auto show in early October, Montebourg attacked the Koreans for the “social hardness” hiding “behind the windows of every Hyundai and Kia” and accused them of “social dumping” [Worse than the Infamous Lehman September: France’s Private Sector Gets Kicked off a Cliff].
But on Monday, he got slapped in the face. “He is protectionist,” said European Trade Commissioner Karel De Gucht and then pointed out the big conundrum: France has more of the world’s 500 largest corporations than any other EU member state, but they were more successful outside France than in France. How to re-industrialize France, given its 35-hour workweek and its salary costs, that’s the big question, Gucht said, but he didn’t think that Montebourg was “really interested in the long-term.”
It was part of Gucht’s smack-down of the French request to “monitor” Korean imports. And Montebourg’s idea of subsidizing European industries? “The absence of national subsidies is one of the keys of the European market,” Gucht explained, in case Montebourg had missed it in school. And then he mentioned something else the Industry Minister might have missed: The EU has a €300 billion trade surplus with the rest of the world—and France has a trade surplus with Korea.
In fact, of the nearly 400,000 new Hyundai and Kia vehicles registered in the EU during the first half of 2012, more than half were manufactured in the Czech Republic and Slovakia—both EU members—and in Turkey. Then there is GM, partner of teetering PSA Peugeot Citroën; most of its 103,000 Chevrolet’s sold in the EU were manufactured in Korea. Renault imported over 10,000 4x4 Koleos and Latitudes from its Korean subsidiary. Montebourg had opened his mouth and had inserted his foot [He should have read my hard-edged but funny book on the car business, TESTOSTERONE PIT, the novel; enjoy the first few chapters for free on Amazon].
He had better luck posing for Parisien Magazine, dressed in a €49 sailor’s jersey by Armor-Lux, holding up a €230 Moulinex blender, and displaying a Michel Herbelin watch that retails for €790 ($1,000+). Not exactly a watch that the 24% of the young people who don’t have jobs can afford. Behind him was the French flag. All of it was “Made in France.”
His priority was “le Made in France,” he said. “There’s a choice that’s more important than any other, and that is to preserve France’s industrial base.” He suggested a variety of remedies, such as installing “Made-in-France” aisles in supermarkets to better guide consumers. He called for the rebalancing of “unbalanced relationships” between industrial nations to “defend French and European industries.” The results of worldwide free trade, as “proposed by the WTO,” were a “disaster,” he said—not remembering the EU’s €300 billion trade surplus.
Consumer groups lambasted him—not everyone can afford a €790 watch. But on Saturday, the day after the article had appeared in the Parisien, sales of the jerseys at the company’s 50 stores jumped by 60% - 65%, compared to Saturday a week earlier, said Armor-Lux CEO Jean-Guy Le Floch. Visitors to its website shot from an average of 2,000 per day to 7,000. And the fancy watch? Internet traffic to the company’s site soared ten-fold the day the article appeared. Excellent promo. But naïve.
Only 40% of the products Armor-Lux sells are (at least partially) made in France. The rest is made elsewhere. And the watch? According to Atlantico, the quartz movement, dial, hands, and glass came from Switzerland. The buttons and enclosure were not French either. While the bracelet might have come from a French supplier, it would have been made in Portugal, Mauritius, and Asia. But the watch was assembled in France and qualified for the “Made in France” label. So, Montebourg’s vision is unlikely to revitalize the French economy, beyond the benefits of the promo.
The US government over the last five years squandered $7.6 trillion on Keynesian demand-side stimulus to resuscitate demographically shrinking demand as 80 million baby-boomers moved out of their peak spending years. But with only 23 million born between 1995 and 2012, “Generation Z” is too small for demand-side stimulus to revive the economy. So there are consequences, writes Chriss Street. Read.... Supply-Side Economics Is Coming Back.
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You have to hand it to the Koreans. The government essentially bans the import of cars in Korea and then subsidizes the export of cars. They've learned, like the Chinese and Japanese that managed trade is better than "free trade."
Well, to be honest, they do import a handful of foreign cars each year. They tear them apart, find anything new and useful, and pretend they invented it, just like China and India. Third world innovation.
Euro car plant supply chains have increased to absurd distances so as to benefit from lower labour costs in the east.
www.youtube.com/watch?v=4zYOJ7MV5_M
(There is now a push beyond Poland to Russia for no net gain.)
However this tactic depends on the existance of increased amounts of credit to take the place of lower wages......i.e. its a Ponzi.
If they want a domestic market of any size they will need to go back to national units of account and pay people the wages to build the stuff needed at home.
France still has some elec. energy it exports abroad......why not add value to its products at home ?
This means a return to cheap 1 Litre petrols and the use of diesels only for people who drive long distances.
They also need a modern 2CV built in France with a cheap 600cc engine as before.
PS
Labour costs should not enter any Industrial equation which requires so much capital.
Protectionism, so what? Corporate free trade globalism doesn't help most people anyway.
"In fact, of the nearly 400,000 new Hyundai and Kia vehicles registered in the EU during the first half of 2012, more than half were manufactured in the Czech Republic and Slovakia—both EU member"
Poor, poor Wolf.. hasn't got a clue. Montebourg isn't talking about the EU, he is talking about the de-industrialization of France. Go back and read your own article. How is assebling Korean parts in the Czech republic benefitting France? Anyone? And no Montebourg doesn't have a clue either.
When a liberal-leaning like Max Keiser leaves France, you KNOW shit is bad.
all over the world, stupid people are getting desperate.
http://covert.ias3.com/expose/
True enough, but some are just staying stupid.
http://www.oddee.com/item_89227.aspx
"You can't fix 'stupid'."
- Socrates
A "Trade Commissioner" sounds like a contradiction in terms - but at least this position in the EU Commission has frequently been held by people that are relatively pro-free market... for European standards. People like Karel van Miert come to mind. De Gucht seems to hold similar views. And no surprise that those people come from small open countries like Belgium or the Netherlands that highly profit from (relatively) free trade. In other words, there are no Frenchmen on this position. It is difficult to remember any comparable instance in recent history where the arguments of a European politician have been revealed as such obvious nonsense like in this case.
As bad as many European governments are - the French one is by far the worst. The City of London will soon be welcoming much more successful French entrepreneurs.
f.p. well articulated thoughts and i humble myself to your spoken truths. if only it could be understood, but that
is called intellectual honesty and the propaganda/statest control would be challenged! the war to be waged is with
the enemy within; all of these phoney constructs masked as representative governments. a well insulated structure of power/sword/pen/enforcement/smack down in your face/backdoor intimadation that the individual can not overcome unless done in unison and therin lies the problem of resistance...
Central planning idiocy. The problems of the world must look very simple if you only look at one @#&%$# thing at a time and don't bother considering any of the side effects.
Kind of ironic that F. Bastiat was French
When the world oligarchy decides that first world welfare state is now a dodo concept; aka since Reaganomics and Maggie bigbang days, and when in the context of Berlin wall collapse hailing end of Cold War this capitalist construct of supply side, Zirp funded, financialised, debt infested and steroid pumped mayhem, goes, in NWO ideology, batshit outsourced to surrogate Middle Kingdom and land of elephants, then the writing is truly on the wall :
Democracy dies as the welfare state demise and middle class lives get sold down the shute. We are deep into debt leveraged, neo-feudalista times. TPTB don't bow in allegiance to any nation-state chimes, they simply manipulate their crony friends in sterile, bankrupt, statist, institutional ivory towers which have been hollowed of all true substance by regulatory capture and hidden persuaders, proponents of the Oligarchy power mantra.
Now the world belongs to the extractive empires, globalist offshored centres of power, who deal in commodity speculation and financialised mayhem.
What a rear guard action of head-up-their ass statist nation-states political shills do when they cry shrilly our Enlightenment creed is endangered and dies by the day in the streets of Athens as in Spain, is neither here nor there. They are swimming in the Oligarchy shit spread by the Banksta cabal which has privatised profit and socialised debt since over a decade.
This battle now is global and as the runaway train of overhyped financial disease spreads like the plague to each and every nodal centre of the financial web, it will destroy what it has created and then the Oligarchs will cry out in one loud voice : we need another war to stop the rot we have created ourselves from burying us in this poisoned, toxic web. We are drowning in our own shit.
So Wolf get your priorities right when you spin your tale of the day. The tree of french statisim is the knee jerk of first world welfare state demise that hides the forest of a corrupted Oligarchy world construct. Lets not tell ourselves more lies.
The current model serves no nation, no people, just the Caymanista breed. There is no pot of gold at the end of this globalista rainbow; except for the Mafia matrix.
There will be intense pain and to kill the "poison pill market" there is only one true way : taking back the governments of our nation states. Its a battle for survival now in first world. People vs the Oligarchs.
Having said that about first world chimes lets look where the Oligarchy is now aiming to spend its "ill gotten" gains :
World's Fastest Economies - Business Insider
There is always a "rainbow" somewhere up in the clouds for the Matrix to encapture.
Very well stated FP !!!
Speaking of the mafia matrix .... http://allafrica.com/stories/201204270697.html
good link. Having worked in that West African environment in the oil industry I can definitely confirm the gist of that article in all its neo-colonial splendour. For forty years, the french ran that show as a statist front with the oil/agro/military lobbies as surrogates to their grand plan of Gaullist 'Francafrique'. Then when Sarko became President he went there and in his own brutal and frank way he told them : There is on longer a statist plan from France. We are not colonialists. We are here to promote modernisation of your nations which have "never really sufficiently entered History"; oh, the irony of that Machiavellian line of argument; "and now we will be partners with you in commercial ventures behind the best and brightest that France has to offer you, aka Total, Bouygues, Bolloré and Areva!" (For your info, Bouygues is one of France's biggest civil contractors, family owned, whose current boss is a childhood friend of Sarko. Ditto for Bolloré, exactly same profile, a family conglomerate, whose scion is family friend (Neuilly suburb, ex-mayor Sarko, gentry connection like Bouygues), that runs the ports, the agro business and forestry of Ivory Coast).
So Sarko not only pretended there was no statist plan behind France's historic presence under his reign, he also used that pretense to support the French Oligarchy presence of his buddies. You can't get more phony AND crony than that.
Of course, since Hollande has got elected, as true socialist son of the Enlightenment he went there and told the Afros that unlike Sarko he didn't malign their lack of history and believed in their future as the new beacon of humanity. Africa's age had come!
All hot baloney, which changes the flowered wrapping around the same Oligarchy cum neo-colonial package.
What's new under the sun, except that the new leader's discourse changes so that nothing really changes; thats politics, sport!
If you want to understand the rip-off of the oil industry undertaken by France and its puppets on GAbon and ex-French Congo just go here and see production vs local consumption of oil production. That says it all, 'cos what gets exported ends up in Swiss bank accounts for the Oligarchs of Francafrique! But that is the same story in all of MENA and Africa by the Oil majors.
40 years and what do you get, another day older and deeper in debt! ...
Energy Export Databrowser
You can't have Crony
Without an oodle of Phony
"Hot baloney" is delicious with mayo!
Another war you say?
Maybe this time the enlightened would go after the banksters and plutocracy and settle some very old scores. Storm their baronial castles with rifles and shotguns.
Now that our knowledge of true history is helped by the internet.
But who knows? it always seems like the cannon fodder still ends as cannon fodder and TPTB live on...
FP , tonight i'm sipping a Caol Ila distillers edition, i think you'd like.
what wouldn't Scotland do to distill its thrill in every hearth and home. Kilts in jig and bottoms up to you sir.
Well said, FP.
A big piece of information is missing.
Usually, 'americans' enjoy depicting 'american' economics as natural laws that would apply indiscrimitively.
It is not the case as expected from 'american' nature.
For example: debt grades.
Debt grades are a great tool when you run an extortion of the weak, farming of the poor business as they can be used to choke resource rich countries, forcing them to sell their resources to sustain the 'american' way of life. It has been done all along.
But as shown lately, when it is hit the 'american' nations, grades lose their meaning, and countries that keep being degraded have access not to more and more expensive loans but cheaper and cheaper loans.
'Americans' protect their own and use the world institutions to their own benefits in order to optimize their stealth tendencies.
The big piece missing is the capitalization of the 'american' french corporations. It is quite a thing to bring the information but one has to bring the complementary: capitalization. If the capital is held by others than 'americans' residing in France, well, back to the discriminative use of law as 'americans' love to do when they run their extortion of the weak, farming of the poor business.
One has to keep in mind: in spite of 'american' wet dreams, you do not solve an overconsumption issue (as the one 'americans' are facing) by killing the non consumer, the lesser consumer as 'American' love to fancy on when they see overpopulation in third world countries that should be reduced and all.
You solve an overconsumption issue by pushing another big consumer under the train.
The EU seems to be the elected target.
For the 'american' world to live, one eminent member must be sacrificed.
Welcome to an 'american' world. It is cosy and the best thing that could have ever happened to humanity.
Han citizen's 'Han Citizenism' blinds him/her/it to reality - that exploitative human nature is eternal, not 'American'.
viz Empires Roman, Babylonian, Assyrian, English... or were they all 'American' too?
God you are a crashing bore.
God you are a crashing bore...
Now that is a classic in understatement. Imagine Peter Sellers saying that to valet Cato in Return of the Pink PAnther. Or James Bond in similar martial quid-pro-quo to Oddjob in Goldfinger.
One lead that Wolf promotes in this post is thought provoking to say the least :
...So there are consequences, writes Chriss Street. Read....Supply-Side Economics Is Coming Back...
The return of more Supply side mayhem as the ONLY issue to this badly baked current raisin cake...now thats what I call gilding the lilly!
I expect Cato and Oddjob were just practicing US Citizenism, whose nature is Eternal.
'American' economics is based on Smithian economics, that is a transfer from the exterior to an interior.
As more wealth is concentrated into the exterior, the cost of living within the exterior rises in absolute terms and the costs of living within the exterior fall relatively.
Such certain kind of activity can no longer be sustained in the exterior and are naturally shipped, due to Smithian economics pressure, toward the exterior.
As such a benefiting side of this transfer of wealth, 'Americans' in France should see that movement as the mere consequence of their 'american' way of doing this.
The only market that could allow to override the Smithian economics consequences is the US market, by getting the other parts of the world to subsidize work in the US if they want to sell in the biggest uniformized market in the world.
'certain kind of activity can no longer be sustained and are naturally shipped, due to Smithian economics pressure, toward the exterior'
a/k/a 'peristalsis' or 'shit beside road after gorge on noodle' in AnAnonymous engrish.
Smell so bad!
Han citizen's 'Han Citizenism' blinds him/her/it to reality - that exploitative human nature is eternal, not 'American'.
viz Empires Roman, Babylonian, Assyrian, English... or were they all 'American' too?
God you are a crashing bore.
So where's the guy who always shits all over Wolf's self-promotion? I figured he'd be first.
Are there any EU nations whose industries aren't skewed towards the luxury end of the scale, at least for export purposes (besides the former Czechoslovakia, which is apparently the EU's Mexico)? That might be part of the problem . . .
The self promotion act is performed according to 'american' nature: that is duplicitously.
Certain articles get overhyped while others are seldom if ever referenced.
For example, this 'american' author had in the past portrayed 'americans' moving to find work elsewhere the 'american' way, that is adventurers, entrepreneurs who were going to better the economy of the host country etc
Funny because 'americans' know one solution to solve their too much of people (overpopulation) they are facing again: colonization.
But you wont get that article that much referenced as it is so perfectly 'american'.
Han citizen's 'Han Citizenism' blinds him/her/it to reality - that exploitative human nature is eternal, not 'American'.
viz Empires Roman, Babylonian, Assyrian, English... or were they all 'American' too?
God you are a crashing bore.
Bring back the hurdy gurdy!
Well all things said, I can afford a E790 French watch. I will need to forgo the mortgage, electric bill and gas but what the hell?
The wife can hack it.
Excellent article Wolf, thanks. LOL re some of the "Korean" cars made there in Europe and De Gucht biotch-slapping Montebourg. France is trying as hard as possible to destroy itself... Why?
C'est une economie mondiale, putainz!
Supply side is not dead!
EBT (SNAP) cards for more Pizza and Coca-Cola!
Buy TIPS and Walmart Bitchez! It's the only way to fly.
If I buy TIPS and WMT, can I fly? ;-)
Have those french folks ever thought about buyin a pair of them store bought teeth? Locally made fresh I hear, and good for the economy.
"The (head)lights are going out all over Europe: we shall not see them lit again in our lifetime ... "
(or in anyone else's lifetime, either.)
ya, good line: http://en.wikipedia.org/wiki/The_lamps_are_going_out
but I'd disagree with your prospective view. Not, in any way, that it will be nice.
- Ned
"Cited reasons: unfavorable business climate and lack of visibility."
Translation: Marxist as President, no telling what this loon is going to do next (see also North Korea & USA)
Uncertainty is an excuse that loses its validity for anything not short term(read: France's economic situation) . The longer the duration, the more likely that it is another word for sabotage.
Businesses might want to be a bit careful about thinking they're entitled to be King Louis or Marie Antoinette just for the privlege of offering work in that country. That's what they want, but French history has not been kind to such royalism.
forgive me but isn't "royalism" the old world for socialism. You know, where you replace chinless wonders that think they're above the people but can skim taxes of them with witless socialists that think they're so above the people they can take/skim/tax what they like?
business has to provide something productive and of worth to the community to justify its existence
neither royalty or socialists seem to be of any good to society, in fact all history demonstrates quite clearly they both wreck it
unlike business which provides worth royalty and lefties just suck (rather obnoxiously)
Wait a minute: does it mean what it means? That 'americans' consider the Kings to be socialists?
Woooo, 'americans' know no boundaries, and it takes an 'american' to outdo another 'american'. Other people are out of the league.
Where does this potency to elaborate cheap propaganda/fantasy come from? From the urge of consuming and win the race to depletion of resources? Biological make up? Cocoon provided by the State that allows to disregard any basic side of reality comfortably?
.
No, it never does when it is coming from AnAnonymous.
Made me do are laughing. Much contradictation with wordings other comment of making:
Inconstancy of speechings make indicate the nature propagandicalness.
Potentate elaboratings having wellspring sourcings of Chinese Citizenism Communautst Party Ministry of Truth.
Acquisition with regards to the employment in talking mouth propagandist describing your cocoon provision with durable accuracy. To the tee.
the "potency to "elaborate cheap propaganda/fantasy" comes from looking past the sugary window dressing at the scumbag behind. Wether it be tribal leader, royalty, priest or politician, all forms of the exact same do no work, erect throne above society to Lord-it, hed-fuk them with garbage/propagnda and live off their backs parasite
like those mesmorized by Party colours, flags and jingoism, they miss both Parties like 2 sets of lawyers fighting for 'you' and 'them' are pissing themselves under the table while you pay the bill.
Do you get wrapped up in the sales pitch or see the same human parasite behind Marxists, Royals, Priests, socialists, academics, the witch doctor ?
How do you "win the race to resource depletion"???
If I dig 1 tom or iron out the Earth and I have that 1 ton of iron in my hand how has the earth 'lost it' ? ...where'd it go?
The State provides only the 46 million dependents on food stamps with a "cacoon". They don't realise it's Govts destruction of other peoples wealth that put them there.
I realised decades late that Govt serves nobody and i didn't need a Govt from cradle to grave, Govt just sucks (on me, everyone). The history books show how much Govt sucks, the carnage across Europe, and to come in Japan and the US, is just history repeating itself of parasites killing the productive economy in rules, laws, distates, incompetence, corruption, stinking theiving parasites (royalty, the church, Govt, bankers ..all the same genetic dirtbag)
I live off my own earnings, it's the only way to progress. You ought to try it sometime rather than the State teet (they're going bankrupt by the way, see how "comfortable" Govt makes you when the clowns/socialists take you for a ride, off the fiscal cliff)
Let's toast Greece you and I, birthplace of 'democratic Govt', bankruoted and driven into the sewer every 14 years on average by the institution absolutely guaranteed the world over to suck and wreck any economy.. they're really enjoying their "cacoon"security the Greek people, they're over-flowing with politicians soft touch and the prosperity Govt brings aren't they chump?
Han citizen's 'Han Citizenism' blinds him/her/it to reality - that exploitative human nature is eternal, not 'American'.
viz Empires Roman, Babylonian, Assyrian, English... or were they all 'American' too?
God you are a crashing bore.