French Toast

MacroAndCheese's picture


Today is the first round presidential election in France. As voters head for the polls, incumbent Nicolas Sarkozy is badly trailing his rival Francois Hollande. It is likely that Sarkozy will live to fight one more day, since he is expected to poll second behind his rival to continue on to the runoff election next month. But the consensus among the French is that Hollande will emerge as president.

The strength of Hollande's lead is rather surprising given that along with Germany, France is navigating the financial crisis rather well. Sarkozy has Merkel's explicit endorsement, and though he has had his own share of gaffes, on balance his policies are more moderate and sensible than his opponent's. So why is he losing?

According to my French colleagues, Sarkozy acts like a nouveau riche--he flaunts his wealth and status. This, in France, is just not done. At a time when the French economy is wobbling, Sarkozy's display of the good life, often in exotic locations with his glamorous wife, has not played well among the French populace. With his approval rating stuck in the low 30s for years, Sarkozy has dug himself into a hole.

But Sarkozy's hole will be nothing like the Hollande tunnel. Francois Hollande is a socialist, and his prescription for France's economy is sculpted along socialist lines. He has quite a program in store:

  • Hire 60,000 teachers in a country of 65mm
  • Balance budget by 2017
  • Tax income above EUR 1 million at 75%
  • Reduce consumer utility bills
  • Lower retirement to 60 for those who have worked 41 years or more
  • Reduce payroll tax
  • Renegotiate European treaty
  • Separate commercial and investment banking

By themselves, these planks don't seem particularly onerous, but taken together and put in the context of a European recession, the prospects for the French economy are not good. Much of his platform requires new spending, while the only new revenues to be raised seem to come from his tax on salaries above EUR 1 million, an ineffective red herring political line used around the world. Few Frenchmen fit that description, so the total take will be insignificant.

How Mr. Hollande presumes to balance the budget in four years remains to be seen, but if he follows the path of the other Francois, socialist President Mitterrand, he will reverse course soon after entering office. Mitterrand came to power in 1981 on a very progressive socialist platform, but after two years completely reversed course in what was known as "tournant de la rigueur" (turn to austerity). Such a reversal in the near future, if it comes, would surely lead to a recession and add to the burden of the struggling Eurozone.

There is some chance that voters will in the end come through for the incumbent in the runoff election. It is not politically correct these days to support Sarkozy, so voter response to opinion polls may not be an accurate reflection of what people will do in the booths. But in all probability Hollande will prevail, and come May Europe will have a new albatross around its neck.


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Mon, 04/23/2012 - 00:40 | 2365996 nah
nah's picture

so the french are going to win

Mon, 04/23/2012 - 00:20 | 2365976 Fiat Money
Fiat Money's picture

 "By themselves, these planks don't seem particularly onerous, but taken together and put in the context of a European recession, the prospects for the French economy are not good. Much of his platform requires new spending, while the only new revenues to be raised seem to come from his tax on salaries above EUR 1 million, an ineffective red herring political line used around the world. Few Frenchmen fit that description, so the total take will be insignificant."

   According to 'Mish' (Mike Shedlock, in a recent MK interview)  IF  Greece had  just DEFAULTED when they FIRST  had their "economic crisis"  it would have cost investors/the Greek people  some $40 billion dollars.  

   Today, 3-4 years of "BAILOUTS"  later, that  figure is now  $140 BILLION - over 3x as much!  And of course, NOT A DIME of those "bailouts"  has actually helped the Greek people or Greek economy,   especially pensioners and retirees. 

  (See another MK video for STEVE FORBES BRAGGING, in person at a Greek hotel,  that  he and other vulture 'capitalists' were there scarfing up VALUABLE Greek assets for pennies-on-the-dollar during one IMF enforced "austerity sale.")       Unfortunately,  Mr. Shedlock joined the inevitable (Neo-Con)  "Neo-Classical economics" CON-VENTIONAL 'wisdom'  in saying that "ALL THAT DEBT" meant that  PENSIONSERS HAD TO BE CRUSHED,  and social programs HAD TO BE CHOPPED.

   maybe just "cutting out the middle-men"  would allow folks to retire, AFTER FORTY YEARS! of work  to their little apartment flats,  reduced dietary intake (of seniors), (and, yes, higher medical costs)  without all the drama-and-thunder of  titanic debt & economic collapse ??

Sun, 04/22/2012 - 23:27 | 2365939 Elmer Fudd
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Item #7, renegotiate the european treaty, check.  Oh that small detail.  No big deal.

Sun, 04/22/2012 - 21:52 | 2365792 undertheradar
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This may be insightful to those looking on a 'fresh' perspective on the role of income distribution on economic competitiveness etc. in this interesting debate developing on 'socialism':

Sun, 04/22/2012 - 20:04 | 2365631 lakecity55
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Sarkozy is down by 2.5% and he is sneaky. Don't rule him out just yet.

Sun, 04/22/2012 - 23:59 | 2365961 TBT or not TBT
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Nope.  Both the communists and the French "far right"(who are just socialists of a nationalist/ethnic preference variety) vote will now go mostly for the socilialist Hollande who is talking tougher than Sarko against "Europe".  

The communists will vote for Hollande because they have nowhere else to go.

As to the nationalist France first crowd:   Hollande is going to beat the nationalisme drum well enough to draw the vote he needs from the large le pen block.   Sarko has delivered insufficient red meat to the nationalist/zenophobe crowd.   It'll take a miracle for him to win.

By the time he doesn't win, note that several other european governments will also be up against the wall because of the constraints of Europe and the dipshit euroweenie populace not accepting "austerity" which is to say the shrinking of their bloated public sectors.    Europe and the Euro as we know it are going down.

Mon, 04/23/2012 - 00:54 | 2366004 Freddie
Freddie's picture

Sarko sucks but Hollande is pro-islamic and another EU stooge.  

Sun, 04/22/2012 - 16:39 | 2365236 dinastar2
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Perfect window of time to short the Euro against the GBP and the US $. Euro will loose 5 to 10 % in the coming 3-4 months.Because Hollande must shows his voters he will try to defeat the EURO-ECB_German straightjacket.Then he will step back for more rigour and fiscsl austerity .I target 1,26 then 1,22 then 1,20 Euro/$

Sun, 04/22/2012 - 14:20 | 2364951 Barefooted_Tramp
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Nicolas Sarkozy has gained a reputation for activism and determination. If Barack Obama’s slogan has been “yes, we can”, Sarkozy’s is simply “yes, I can”.

His “can-do” attitude is a façade. Behind it lurks an underlying political immobilism which belongs to the whole political class, left and right.


Sun, 04/22/2012 - 15:55 | 2365117 covert
covert's picture

the french are doomed.


Sun, 04/22/2012 - 16:46 | 2365250 ihedgemyhedges
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MacroAndCheese compared "Sarkozy's hole" to "Hollande's tunnel."  I present "Sarkozy's hole".........................and who gives a rat's ass about Hollande's tunnel......

Sun, 04/22/2012 - 14:18 | 2364946 mjk0259
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US style capitalism hasn't worked well  for decades except for the top .001%. I would vote for Mao or Stalin. At least they would kill some of the ones that ruined the country.

Sun, 04/22/2012 - 16:03 | 2365132 dolly madison
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You're probably just trying to troll, but ...

The solution will not come from the top this time.  It will come from the bottom.  There is no way any leader could stop the immoral colllusion that is happening between govt., banks and corporations.  It can only be stopped by the many. 

Voting for Mao or Stalin woud do nothing.  There would still be the few to rule the many.

Sun, 04/22/2012 - 16:33 | 2365215 Pure Evil
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I guess if killing well over 100 million individuals, between the two of them, even if it included an insignificant minority labled the 0.001% is cause for celebration, then I shudder to think of the blood baths that lie ahead for the 21st century.

Sun, 04/22/2012 - 19:36 | 2365575 smb12321
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It is still rather stunning that some of the world's most flagrant violators of human rights -  Mao, Stalin, Chavez, Assad, Kim, etc - have such widespread support on ZH.   Even more perplexing is the charge that the US is just like N Korea, the USSR or Nazi Germany.  The hyperbole sounds foolish because it is. 

Yes, we are screwed up financially and perhaps morally.  But as one who has traveled widely, its worth noting that the lines outside consulates in foreign countries are not trying to get into Iran, Syria, China, Libya, Venezuela or Cuba.   No, they're desperate to flee to the mean, evil USA. 

Mon, 04/23/2012 - 03:52 | 2366089 dolly madison
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Even more perplexing is the charge that the US is just like N Korea, the USSR or Nazi Germany. 

It is not that the US is exactly like those places yet.  It is that it is on its way,  With the Patriot Act, and the NDAA it is obvious that our government is okay with violating our rights.  And then there's the little problem of the US attacking countries that sell oil for anything other than dollars.  There is badness in this government.  It's getting more flagrant with its badness over time. 

Things are bound to get worse here because the US will lose reserve currency status, and I am afraid of what the government is going to be like when it gets worse.  If they are throwing out some of our rights now, what will it be like later?

You can go on thinking your rosy thoughts about the US i you'd like, but I'm very concerned about the future here myself.

Sun, 04/22/2012 - 19:44 | 2365590 MacroAndCheese
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SMB 12321

Whew, your comment is a breath of fresh air.  For some reason the people who leave comments seem to be cut from a different cloth from the host(s) of the site, who are clever and shrewd and well attuned to the ways of the Street.

Live and let live, I suppose.  It does often seem like a parallel universe.

Sun, 04/22/2012 - 19:51 | 2365614 LetThemEatRand
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"47% of American households pay no tax"

MacroAndCheese -- you are the pot.  What color is the kettle?  

Sun, 04/22/2012 - 19:55 | 2365619 MacroAndCheese
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Sorry LetThemEatRand, I have an appointment back on earth.

Sun, 04/22/2012 - 20:05 | 2365632 LetThemEatRand
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The one where 47 percent of Americans pay no taxes, or the real one? 

Sun, 04/22/2012 - 13:40 | 2364895 banksterhater
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Photo says it all, except caption: " A toast to myself, the biggest JACKASS in Europe..."

Sun, 04/22/2012 - 13:36 | 2364892 logicalman
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All the talk about left and right is bullsh*t - just a divide and conquer technique.

Under the systems of government(?) in most parts of the developed world it is really about the glove puppet on the left hand or right hand of the banking monster.

Time for change - BIG change.

Sun, 04/22/2012 - 20:08 | 2365639 lakecity55
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No. There are "leftists" and there are "conservatives." The problem lies in the Plutocrats who have subverted the political parties our Founders warned us against.

We need a "No Party" guy, or the next best thing, a Libertarian.

Mon, 04/23/2012 - 00:59 | 2366010 Lednbrass
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Agreed. Left and right, authoritarian vs. non authoritarian are legitimate political distinctions, its the political charades between idiotic parties that is ridiculous.

Sun, 04/22/2012 - 13:47 | 2364900 cossack55
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Sun, 04/22/2012 - 13:22 | 2364884 Joebloinvestor
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They get elected because they promise whatever floats, but get "real" after elected.

I wonder what his wife looks like.

Sun, 04/22/2012 - 20:10 | 2365641 lakecity55
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Hollande? His lady is a respected and popular journalist in her hometown.

Sun, 04/22/2012 - 11:24 | 2364749 balz
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I don't understand why ZH does so much left-bashing. I am a socialist, and after 30 years of neoliberalism, what do we have now ? The gap between poors and richs has never been so huge. Taxes are way too low. We need change. And Hollande is not perfect, but he is way better than Sarkozy.

Mon, 04/23/2012 - 01:02 | 2366012 Freddie
Freddie's picture

Hollande is for more Islamification of France (Saudi puppet) and is another EU puppet.  Geert Wilders is the real deal. 

Taxes are way too low?  Where?  Where the ***k are taxes too low?

Everything is taxed you moron.  What is taxed: Food, clothing, water, electricity, property ownership, cars, drivers license, cell phone service, cable or sat TV service (TV is for morons), anything you buy, garbage removal, death, any gain on anything, almost all trasnactions, airline tickets.  Everything is taxed and people are Fed up with bureacrats with guns taking people's money and labor. 

Mon, 04/23/2012 - 00:57 | 2366008 Lednbrass
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Because the Tylers and most of the readers are American; a very large portion of which are completely contemptuous of collectivist/communalist political philosophies and solutions based on top down thinking, planning, and coercion by central authority.

Sun, 04/22/2012 - 19:31 | 2365561 disabledvet
disabledvet's picture

i think the author gives his predilictions away by even admitting Holland's program is "far from ambitious." my personal view is what France is voting for is change...and i agree as an American "the Republican embrace of the bond market" under George Bush was the exact opposite of successful (ironically enough the few clowns left on Wall Street and speaking publicly STILL disagree with me! Hey'd all be dead without Central Planning you morons! The time has come to admit it!) And so it has been under both Trichet and the Communists in China i might add. Methinks the solution is a pragmatic approach as the idealogical lunacy that has prevailed all over the place for a decade now has put more people into poverty who weren't in poverty before than anything that has ever come before.

Sun, 04/22/2012 - 13:07 | 2364874 masterinchancery
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Socialism, the delusion that never dies.

Sun, 04/22/2012 - 13:05 | 2364871 The Alarmist
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"I don't understand why ZH does so much left-bashing. I am a socialist, and after 30 years of neoliberalism, what do we have now ? The gap between poors and richs has never been so huge. Taxes are way too low. We need change. And Hollande is not perfect, but he is way better than Sarkozy."


You forgot the /sarc> tags ... I would have added them, but wasn't sure where they would be most appropriate.

Sun, 04/22/2012 - 13:04 | 2364869 The Alarmist
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Sun, 04/22/2012 - 11:58 | 2364790 bank guy in Brussels
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Much of the perspective on ZH is too much out of the American context, and the USA has never seen government work comprehensively well in a pro-populist way ... and the last 40 years in America have been an increasingly rapid descent into oligarchic tyranny.

America has no significant 'left', it was nearly all comprised and co-opted long ago, there is just fake 'left' gangsters like Obama or the Clintons ... What radical fire there is in America, mostly comes from the neo-anarchist right, like Ron Paul.

Propagandised for decades about 'better dead than Red', and to use 'socialist' and 'communist' as insults for any kind of tyranny, Americans often cannot begin to comprehend:

... That the best-loved Canadian in history is Canadian socialist Tommy Douglas who brought Canada universal health care

... That most of the 13 'AAA'-rated countries of the world with the strongest economies, 9 of the 13 in Europe, are in whole or in part socialist (Scandinavia etc.)

... That in Europe even most wealthy people of all parties favour continuing government programmes which Americans denounce as 'socialist'

... That in old Eastern Europe, most of the older folks who remember Communism, would vote to bring the Communists back ... Ditto the elderly Chinese who have suffered for several decades without minimal healthcare rights since shortly after Mao died, and who remember the 'barefoot doctor' programme.

Americans overall have been psychologically managed to endorse the brutal system that enslaves and deprives them, government benefits for the rich and 'free market sink or swim' for the rest.

US libertarians have a fantasy about 'equal free market for rich and poor', they can't seem to digest the rich will always try to buy and own both the machinery of government and the media that fools people, unless they are chastened by the power of people in the streets.

Americans are raised in a mistaken faith in pieces of paper and legalisms, like their 'Constitution' that the US judges totally ignore. Americans never learned the key lesson of the French Revolution - people power in the streets is what counts, not pieces of paper with legalistic words on them.


Sun, 04/22/2012 - 19:59 | 2365624 disabledvet
disabledvet's picture

and Europe is different? Ron Paul is obviously not an "anarchist" Mr. Europe! You show YOUR ignorance of the USA when you say things like that. I will admit to only being in Southern Germany for a few weeks...never felt so relaxed among people. Beautiful place. When i returned the constant badgering of "socialism this" and "socialism that" over here in the USA is so ridiculous i've come to believe that the bulk of those spewing this tripe still don't understand how the only thing they accomplished going into 2008 was a mass financial "Haley Bop moment." The vibrancy of New York from the turn of the 19th into the 20th century is so far gone i don't think people would even believe it existed in the first place. The future as presented to us Americans through the media now is "one of war to death only." We're fighting an elsewhere...and those of us who do (Ron Paul being the most visible element to it all--but the markets are on to it now that the natural gas revolution is going all out) are literally being tortured, terrorized and KILLED for it. The cowardice of these meaningless and insignificant RADICAL PIGS is truly staggering. But we will win...and those who execute on their insane yet totally meaningless ideology of total loserdom will get...indeed ARE getting exactly what they wish! THE WORLD IS WAKING UP! The SLAUGHTER is coming for the most ardent advocates of it and their executioners!

Sun, 04/22/2012 - 19:48 | 2365607 smb12321
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The US always has been (and probably always will be) a center-right nation.  Our history has taught us to value tradition, experience and common sense.  We vote "for the man" not the political ideology.  If Europe has taught us anything it is that ideology is deadly when put in power.

Americans see that reliance on government inevitably brings massive debt (as in Europe) and authoritarianism where states (Greece, Italy, Portugal?) are installing unelected EU bureaucrats.  Maybe that is the way of the Left.

Sun, 04/22/2012 - 15:38 | 2365089 Stuck on Zero
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The U.S. has no left.  The U.S. has no right.  It has few libertarians.  The left and right were assimilated by the corporatocracy.

Sun, 04/22/2012 - 20:14 | 2365644 lakecity55
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If you are speaking only of the parties in DC, I agree.

Sun, 04/22/2012 - 14:25 | 2364966 mjk0259
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Many of them are pacified by believing that because they can own guns, they are free. What BS. Only in Europe have people regularly overthrown the government with something significantly different. No general strikes in US or any significant protests since VietNam war. American's have stood by for decades while the ruling class plunders them without doing anything with their guns except blathering about how great it is to be ruled by bankers.

Sun, 04/22/2012 - 14:13 | 2364932 Bicycle Repairman
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The US is a curious mixture of a first and third world country.  Only 10% or so of Americans have passports.  I wonder how many American's realize that the standard of living in Europe, and much of Asia is as good as America's, and has been for a very long time. There is no 'left' in the USA.  There are only totally co-opted liberals and social engineers.

In the mid 1980s I was at the top of the Renaissance tower in Detroit.  In the distance was Tiger Stadium surrounded by nothing; a complete moonscape.  I turned and looked across a river.  I saw row upon row of attractive white houses.  "Who lives there?" I asked.  "Canadians" they said.

Sun, 04/22/2012 - 14:27 | 2364970 mjk0259
mjk0259's picture

As good? I would say it's a lot better. if I didn't have to worry about medical insurance, college costs, getting drafted to Afghanistan,high crime, etc and retirement I could put up with any level of tax

Sun, 04/22/2012 - 14:40 | 2365001 Bicycle Repairman
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You got me there.  Heh, heh.

Sun, 04/22/2012 - 13:22 | 2364882 SomebodySpecial
SomebodySpecial's picture

"people power in the streets is what counts". Can't wait till I'm old enough...

Sun, 04/22/2012 - 13:11 | 2364875 GOSPLAN HERO
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Rich socialists do not pay taxes.

They own the "system."

The politicians (owned by Buffett/Soros types), by passing laws, force the middle class to pay majority of taxes.

Sun, 04/22/2012 - 14:29 | 2364974 mjk0259
mjk0259's picture

Since the middle class is much more numerous and in Europe, not as far behind the rich in income, that would be the expected result. Who benefits the most from socialized medicine, free college, etc - the same numerous middle class. If the government is spending the tax on benefits for the middle class - it's a different story than US where they spend it on Afghanistan and Citibank.


Sun, 04/22/2012 - 19:50 | 2365613 smb12321
smb12321's picture

It should be noted that all of Europe's "free" living is rapidly coming to an end with (of course) massive debt.   For the life of me, I can't see how anyone thought a continent that is rapidly depopulating can support a population of rapidly retiring folks. 

Sun, 04/22/2012 - 20:24 | 2365656 lakecity55
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Perhaps the Marshall Plan started European socialism along. With USA bucks pouring in after WW2, it would have been easy to get votes by promising against future revenue. I remember going with my old man back to some battle sites in Germany when I was in school in Spain, and how he described the rebound from the total destruction he had seen in Berlin in June '45.

Also, Americans do not realize how easy they have had it. We got by on much less in Spain; sure, the land of the Big K-Mart was great, but you could do OK with less.

Each American should spend 1 year of college in Europe, or another country, while other countries should send their students here for 1 year.


I think it's an axiom that power always brings empire; the US got involved in areas its citizens would not have been involved in, had it not been for corrupt plutocrats: but here we are talking human nature, and human nature styas the same. You have to constrain it by morality. De Touqueville was right.

Sun, 04/22/2012 - 14:03 | 2364817 GeneMarchbanks
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The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow very lively debate within that spectrum - even encourage the more critical and dissident views. That gives people the sense that there's free thinking going on, while all the time the presuppositions of the system are being reinforced by the limits put on the range of the debate --Chomsky

30+ years of anti-government propaganda has taken its toll on their national psyche if there is still such a thing in that apathetic wasteland. Civic life, more importantly civic duty has all but ceased. Instead what you have is a nonsensical discussion about size of government instead of its efficacy.

Corporations on the other hand can never do harm for they are Holy. Any conduct in the name of profit is allowed and even glorified.

Sun, 04/22/2012 - 14:46 | 2365016 Barefooted_Tramp
Barefooted_Tramp's picture

Sarkozy’s politics are based above all on fear: social problems are securitised, and as the state enjoys a monopoly of the use of force, this empowers the state to act. We have echoes of the first Bush administration, using 9/11 to shore up its authority after the legal wrangling over the 2000 election. There are also parallels with Britain, where legal innovations such as the anti-social behaviour order have transformed the everyday negotiation of appropriate conduct into a matter of state intervention.

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