‘They Tell The French People Illusions and Lies.’

Wolf Richter's picture

Wolf Richter   www.testosteronepit.com   www.amazon.com/author/wolfrichter

France is in upheaval. Arguments erupt live on TV, demonstrations block the streets, strikes shut down plants, and threats of mayhem are part of the show [French Workers Threaten To Blow Up Their Factory]. The problem: an economy where businesses are suffocating under an obese public sector. Ever larger budgets have been the only source of economic growth. But now that model has run aground.

During the campaign last year, candidate François Hollande forecast that the economy in 2013 would grow 1.7%. Shortly after taking office, he shaved it down to 1.2%. Late last year, for the new budget, he chopped it to 0.8%.

And now that too has gone up in smoke. Foreign Minister Laurent Fabius guesstimated on RTL that growth would instead be 0.2% to 0.3%. And the goal of a budget deficit of 3%? It hasn’t been “abandoned,” Fabius said. But there’d be “a delay.”

The final vestiges of economic optimism are evaporating. Taxes have already been raised to absurd levels, and new tools are being implemented to crack down on tax fraud [read... Draconian Cash Controls Are Coming To France].

But the deficit still isn’t coming in line. Now the chopping block has been moved to the center. On it are child benefits. Instant hullabaloo.

Child benefits are part of a gamut of social benefits and subsidies. Parents of one child receive no child benefits. Once they have two children, they receive €127 per month. With four kids, they receive €452 per month. For each additional one, they receive another €162. A household with eight kids receives €1,100 ($1,500) per month in salary-like payments. And it’s tax free, regardless of income.

But there are drawbacks: a single mom with one child and a minimum-wage job receives nothing, while a wealthy household with two kids receives €127 per month; and it’s very, very expensive. Hence its sudden appearance on the chopping block.

Three options have been mentioned: include child benefits in taxable income; reserve the benefits for lower-income parents; or cap the benefits for high-income parents. The prior Socialist Prime Minister, Lionel Jospin, had already run his head into that wall. Tumults in the street forced him to retreat.

In this context, the evening news on France 2, France’s largest TV channel, had an amazing report, amazing because it showed a well-mannered, articulate, well-intentioned and rarely televised meeting of government functionaries and elected officials that, unintentionally, displayed in a microcosm what is wrong with the French economy.

France has a shortage of daycare centers—up to 12,000 places in Paris alone, according to the report. When three places opened up at the in-house daycare center of the Hôtel de Ville (City Hall) in Paris, 16 families applied. So 13 elected representatives and bureaucrats—some of them doctors and childhood specialists—sat around a conference table. The director of the daycare center, after meeting with the families, had put together a dossier on each case. Hours of work. Now she was presenting the dossiers. The 13 people weighed pertinent aspects and carefully arrived at a decision. It took nearly two hours—26 man hours (not counting the many hours put into it beforehand), paid for by taxpayers, to decide which three children should be able to enter the government-owned daycare center.

But where the heck was the private sector? Not a single word. Despite a shortage, and hence demand. No one even seemed to think about it. Certainly not the reporters of government-owned France 2. The private sector simply didn’t enter into the equation—though entrepreneurs creating daycare centers for 12,000 kids in Paris alone would have stimulated the economy in numerous ways.

“We have a major, massive, heavy problem that has never been dealt with until now,” lamented François Bayrou, presidential candidate of the centrist MoDem, “which is, our country has abandoned the force that it had, the force of creation, of enterprise, of production. If you don’t produce, you don’t have new products, new services, innovations, things to sell.” France has abandoned the private sector.

He estimated that growth in 2013 would be “zero, at best.” And the lofty growth forecast during the campaign? “As always during an election,” he said, “they tell the French things that are illusions and lies.”

But instead of falling for the latest fad of blaming German Chancellor Angela Merkel, British Prime Minister David Cameron, Europe, globalization, or other specters of the French economic nightmare, he said, “The problems of France are French.”

And so, the French economic model with its domineering public sector is being put through the wringer. That these discussions are taking place is a positive, though whether or not they will lead to anything constructive, or just more government intervention—and more stimulus, for “a moment of euphoria,” as Bayrou sneered—remains uncertain.

Not everything in the Eurozone is falling apart, not even in crisis-struck Italy: Ferrari booked records sales and profits in 2012. As dazzling as its cars. Not a single cloud darkened the horizon. Except in Italy where sales collapsed. And in the rest of the world, where central-bank printer ink stained the records. Read.... What Ferrari’s Glorious Results Tell Us About The World.

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Ar-Pharazôn's picture

and so? where's the news?

Edward Fiatski's picture

"You have heard it said, that this is an Age of moral crisis. You've said it yourself, half in FEAR, half in HOPE that words would have no meaning.

You have cried that Man's sins are destroying the world, and you have cursed the Human nature for its unwillingness to practice the "virtues" you've demanded, since virtue to you consists of sacrifice, you have demanded more sacrifices at every successive disaster. 

In the name of a return to morality you have sacrified all those evils, which you held as the cause of your plight - you have sacrified reason to faith; you have sacrified wealth to need; you have sacrified self-esteem to self-denial; you have sacrified happiness to duty - you have destroyed all that, which you held to be evil, and have achieved all that which you hold to be good, why, then, do you shrink in horror from the sight of the world around you? That world is not the product of your sins, it is a product and the image of your virtues, it is your moral ideal brought into reality in its full & final perfection. You have fought for it, you have dreamed of it, you've wished it, and I, I am the Man who has granted you your wish.

Your ideal had an implacable enemy, which your code of morality was designed to destroy - I have withdrawn that enemy, I've taken it out of your way and out of your reach. I have removed the source of all those evils you were sacrificing one by one. I have ended your battle, I've stopped your motor, I've deprived your world of... Man's Mind.

Men do not live by the Mind you say? I have withdrawn those who do. The Mind is impotent you say? I have withdrawn those, whose Mind isn't. There are values higher than the Mind you say? I have withdrawn those for whom there aren't. While you were dragging to your sacrificial altars the Men of Justice, of Independence, of Reason, of Wealth, of Self-Esteem - I beat you to it, I reached them first!

Do not beg us to return."

Who is John Galt?

AnAnonymous's picture

Have those who conserved the world actually destroyed it?

Just wondering...

Oh, wait, easily solved. For 'americans', they are human beings, sub human beings and non human beings.

Guess that those who left their environment in such a state they could provide for'americans' satisfying their consumption leaning were sub humans and non humans.

Edward Fiatski's picture

Fife dolla, sucky sucky, oko?

AnAnonymous's picture

Does it read that the private sector will jump in to satisfy any needs possible? That if there is a demand, an offer, and a satisfactory one at that, will come up? 'Americans' are still at selling this strand of propaganda?

Where is the private sector? Maybe it considers there is no money to take and therefore it is not going to be involved.

'American' economics do not solve problems. It services them, until there is nothing left to milk.

GreatUncle's picture

By paying a subsidy / benefit to anybody in work with children inflates the system with money they can spend.

It should only be you go to work, earn an income and support your family from the income you earned. That you actually get paid for having children makes it a business and potentially a way to obtain a return.

All a deception though to conceal the real problems with the economy, like enough work and / or income levels.

The income levels will contract to the lowest level in the world if you use Keynes as a model and combine it with Free Trade. They are mutually incompatible and only an exploitation mechanism one way or the other.

So an abomination that should never have been is trying to combine Keynes and Free Trade. You end up with all the "cannot afford to have" benefits being handed out all over the place pretending these two are good for each other. Everybody is so f^&ked, because ALL THE POLITICIANS when they speak actually believe Keynes and Free Trade can coexist.

Not a chance, the explotiation game argued from two opposite position by the same people. 

Now if the polticians shouted what they really mean ... "FREE KEYNES TRADE" ... What would you tell them to do? It immediatley highlights the connection of the more virtual than real growth and inflationary rates.


q99x2's picture

That is what they get paid to do. It is their job to lie.

willwork4food's picture

The French that gives money to wealthy families with over two kids is equivalent to the US immigration policy to give illegal immigrants free health care...and their anchor babies welfare.

Nice job Congress. You deserve the pay we pay you.




Oldrepublic's picture

This letter was posted yesterday on Mish's Economic Analysis website regarding a letter from the US CEO of Titan to the French Minister of Proeductive Adjustment

Dear Mr. Montebourg:

Goodyear tried for over four years to save part of the Amiens jobs that are some of the highest paid, but the French unions and French government did nothing but talk.

I have visited the factory a couple of times. The French workforce gets paid high wages but works only three hours. They get one hour for breaks and lunch, talk for three, and work for three. I told this to the French union workers to their faces. They told me that's the French way!

The Chinese are shipping tires into France - really all over Europe - and yet you do nothing. In five years, Michelin won't be able to produce tire in France. France will lose its industrial business because government is more government.

Sir, your letter states you want Titan to start a discussion. How stupid do you think we are? Titan is the one with money and talent to produce tires. What does the crazy union have? It has the French government. The French farmer wants cheap tire. He does not care if the tires are from China or India and governments are subsidizing them. Your government doesn't care either. "We're French!"

The US government is not much better than the French. Titan had to pay millions to Washington lawyers to sue the Chinese tire companies because of their subsidizing. Titan won. The government collects the duties. We don't get the duties, the government does.

Titan is going to buy a Chinese tire company or an Indian one, pay less than one Euro per hour and ship all the tires France needs. You can keep the so-called workers. Titan has no interest in the Amien North factory.

Best regards,
Maurice M. Taylor, Jr.
Chairman and CEO

ps this is a google translation from French back to English, not the original English text


nmewn's picture

"France has a shortage of daycare centers—up to 12,000 places in Paris alone, according to the report. When three places opened up at the in-house daycare center of the Hôtel de Ville (City Hall) in Paris, 16 families applied. So 13 elected representatives and bureaucrats—some of them doctors and childhood specialists—sat around a conference table. The director of the daycare center, after meeting with the families, had put together a dossier on each case. Hours of work. Now she was presenting the dossiers. The 13 people weighed pertinent aspects and carefully arrived at a decision. It took nearly two hours—26 man hours (not counting the many hours put into it beforehand), paid for by taxpayers, to decide which three children should be able to enter the government-owned daycare center."

So they got bureaucrats working on the in-house problems of bloated bureaucracy...this will end well...lol.

Absinthe Minded's picture

I guess they never heard of "first come, first served".

Yohimbo's picture

yep, and the same is now rapidly creeping into a USA near you. 

Rusty Shorts's picture

NOW as to cruelty, savagery, and the spirit of massacre. These do not add a grace to the world's partly civilized races, yet at the same time they can hardly be called defects. They grow naturally out of the social system; the system could not be perfect without them. It is hard to draw a line here, with any great degree of exactness, between the French, the Comanches, and the several other nations existing upon the same moral and social level. It must in candor be admitted that in one point the Comanches rank higher than the French, in that they do not fight among themselves, whereas a favorite pastime with the French, from time immemorial, has been the burning and slaughtering of each other. No weapon has drunk such rivers of French blood as the French sword. No hatred has been so implacable as the Frenchman's hatred of his brother. No other creature's religion has wrought such marvels of murderous atrocity as the meek and lowly religion of the Frenchman. However, the last sentence is in a sense unfair, in the present comparison, since the Comanche has had no religion, and hence no pressing motive to reform his brother by killing him.


From the Manuscript of

"A Tramp Abroad" (1879): The

French and the Comanches

 - Mark Twain

Anusocracy's picture

National Lampoon had a Family Tree of Man.

At the top were angels, below that were branches designated by various nationalities.

At the very bottom was a branch named Typical Line of Degeneration: Small Appliances and Toasters.

Hanging off that was a branch labeled Frenchmen.

Walt D.'s picture


"They Tell The French People Illusions and Lies.

Aren't I glad that I live in the United States of America, where they would never do that?

BTW. Good news - Obama is thinking of moving to France - he heard they only work 3 hours a day and get 5 weeks vacation including all of August. 


willwork4food's picture

Well that's more than Congress puts in every year. Give him a little credit.

Walt D.'s picture

"Give him a little credit."

Like another $6 trillion?

Anusocracy's picture

That's not true.

Those in Congress are working the lobbyists continually.

steve from virginia's picture




This article could be titled, "Flooding the World With Frogs".


Hundreds of euros per child? What nonsense! No wonder France is bankrupt! Sacre Blew! Too many French and too many cars. France needs to pay women hundreds of euros per month NOT to have children.


This would be a capital investment with REAL RETURNS as mouths not born do not make claims against resources ... which in turn are REAL capital.


As for cars, simply eliminate all subsidies: for fuel, roads, factories, workers and worker pensions, materials, finance/debt service, insurance, real estate, military, administration and arbitration, advertising, etc. No taxes in fact remove taxes ... just remove all subsidies at the same time ... and the entire enterprise will collapse on itself like a house of cards. Cars are dead-losses that cannot pay for themselves much less pay for the 'other' items on the 'car' balance sheet.


Uninsured (unsubsidized) expenses for French highway deaths would bankrupt the auto industry and drivers who cause the deaths ...


BTW: What I have described is underway ... in France.



Haus-Targaryen's picture

Except for the French contemplating bailing out the auto industry. So they can produce more vehicles. You know - for zhs worst troll you rarely respond to people's comments. Over the past few months I've suffered though endless paragraphs of your derp. You have absolutely no grasp on Econ And irrespective of the country or problems the world is facing you blame it on autos.

France has the lowest cars per capita of any major works economy. They even beat the Japanese yet all their problems are still due to the auto. Eyeroll.

I've responded to your endless droning time and time agin just to get ignored. I therefore conclude you cannot be serious. You are either getting paid to do this my some fringe left fundamentalist group or you are just mentally challenged

I don't expect you to respond -- you never do, so ill just say do the world a favor and gas yourself.

AnAnonymous's picture

Concentration of wealth is the issue. Cars are a simple dimension of it.

Super Broccoli's picture

And the goal of a budget deficit of 3%? It hasn’t been “abandoned,” Fabius said. But there’d be “a delay.

Yes a delay, when he said "next year" he ment "the next next year"

shovelhead's picture

The Bugarians will be happy to buy the French female kids at top dollar.

Then they won't need to pay to sneak them into the country.

Problem solved.

Stuck on Zero's picture

I remember when Charles DeGaulle granted all newspaper reporters tax free status.  It was an open bribe, of course, and nearly impossible to undo. 


They Tried to Steal My Gold's picture

OBAMA still maintains we can be France!


jldpc's picture

Greeks or French? who is the dumbest bunny?

Bossuet's picture

Vous pouvez ajouter américains, non ?

willwork4food's picture

Yes we can do that even better! Merci'!

Kayman's picture

Money flowed from France to Greece. France holds Greece paper. You figure it out.

ElvisDog's picture

It's a hard competition to win, but the French really are the stupidest people on Earth. Congrats.

Anusocracy's picture

I would give that award to the Americans, bar none.

They had the most to lose and they've almost lost it all. Complete slaves in their own country, coming up.

Diogenes's picture

They may not be the stupidest but certainly the biggest douchebags.

Kayman's picture

Yeah... that family subsidy sure helped jack up the Muslim population. Nothing quite so intelligent as financing future generations of people that hate you and your beliefs.

dunce's picture

Muslims have large families with or without such subsidies, but the subsidies help them a lot. If they were honest and published the figures you would find that muslims get benefits far larger than what their share of the population is and even more distortion because they pay the least in taxes.

markovchainey's picture

Damn fine food though.  After they complete their devolution into a true 3rd world country I hope to hire a French chef for a few copper pennies a day.


"Mongoloid, he was a mongoloid".

Navymugsy's picture

But he brought home the bacon so that no one knew...

falak pema's picture

normal, all of western civilization in turmoil; the french have sensitive skins unlike the yanks...

Even tho they be socialists at heart 'cos of the revolution. Its a heady heritage, the holistic vision of : freedom, equality and solidarity...lost in translation since 1793...

thats the price for aiming too high !

Yes, de Gaulle represented the best and the worst of a 1000 year tradition. But he kept mutating; awesome, all the way upto his death. 

We french owe him that formidable breath of vision. 

Diogenes's picture

DeGaulle was a brave man. But he wasn't brave enough to yell "Vive Le France Libre! Vive Le Quebec Libre!" in Quebec in 1942.


Peter Pan's picture

I do not profess to know the life and times of de Gaulle in any great detail, but what I do know is that he had the sense to trade in US dollars for GOLD. I believe he even sent a frigate to collect the last lot.


Nick Jihad's picture

Even tho they be socialists at heart 'cos of the revolution. Its a heady heritage, the holistic vision of : freedom, equality and solidarity... 

and the swirrrrrrrrrrr-chunk of the guillotine.


falak pema's picture

Churchill never controlled him. Far from it.

But de gaulle lived longer and was more complex. After having saved France from Algerian inferno, of which he was partly responsible as they called him back to save Algerie Francaise before he turned about turn, he then went on to create Francafrique.

To repeat in soft colonialism what he had lost in Indochina and Algeria; access to cheap RM but this time sold as scion of "son of enlghtenment" pipedream and sleight of hand, that created free access, via surrogate politicians to whom he had sold the enlightenment "liberté, égalité, fraternité" meme callously. For their blind alignment to french industrial interests.

We know how that paid out for those african countries : France 100 - Africa : 0...

What a level playing field that was, especially for oil rip-off of incredible magnitude, only surpassed by good ole USA of PAx Americana hubris worldwide. 

Both France and USA betrayed that "enlightenment" legacy, upto their short hairs of balls to  wall hubris. <totally.


There comes a tide in the affairs of men when taken at the flood..

Lets see who knows how to surf best ! 

lemonobrien's picture

de Gaulle ran from the germans and lived in england; his only use was to give the resistance and Churchill a mouth peace.

falak pema's picture

aw; aint that a simple vision of what he achieved in the WAR. He saved a 1000 year tradition; something that is not given to many. And he went on to make France an industrial nation and nuclear power, top industrial car producer until he was forced to leave in 1968.

Awesome legacy of black neocolonialism and white patriotism and true grit. 

I am not a white  caucasian freak  so dont get me wrong. 

lemonobrien's picture

i thought that was da marshall plan.

Vegetius's picture

I have tried to lift France out of the mud. But she will return to her errors and vomitings. I cannot prevent the French from being French.

- Charles de Gaulle

BigJim's picture

I yearn to hear The Big O say the same thing about Americans.

knukles's picture

Damn good thing we're told the truth, the whole truth and nothing but pure, unvarnished, brutally hard truths.
We can take it.
Man up for the evening news... whadda cute puppy!

philipat's picture

"The Truth? They can't handle the Truth"

Let them eat cake.