Hollande’s Win in France sends a Message to the Wealthy and Job Creators – You are Not Welcomed Here

Posted by PITHOCRATES - May 13th, 2012

Week in Review

The French elections are over.  Hollande is in.  Sarkozy is out.  As are the job creators.  The wealthy.  Who are looking to leave France with their talent and skills.  Because they got the message.  Hollande doesn’t like them.  And he’s coming after their wealth (see France Entrepreneurs Flee From Hollande Wealth Rejection by Anne-Sylvaine Chassany and Jacqueline Simmons posted 5/10/2012 on Bloomberg).

France, the fifth-richest country and home to some of the world’s wealthiest people, including LVMH Moet Hennessy Louis Vuitton SA Chief Executive Officer Bernard Arnault, doesn’t celebrate its affluent. Hollande, a Socialist who once said “I don’t like the rich,” and who plans to slap a 75 percent tax on income of more than 1 million euros ($1.29 million), reinforces the sentiment that in France to be rich is not glorious…

Hollande’s rhetoric against wealth and finance is prompting some in France to consider leaving, and European rivals are welcoming them. “Bienvenue a Londres,” or welcome to London, Mayor Boris Johnson quipped in January. Switzerland and Belgium have been just as warm…

“Seen from abroad, France is the last country where an entrepreneur wants to go,” Marc Simoncini, the founder of French dating site Meetic.com, said in an interview on BFM TV yesterday. “I don’t know of any British person who’s come to set up a business in France. But I know plenty of young French people who’ve gone to London to do that…”

The attitude toward business and wealth creators is driving people away, said Diane Segalen, founder of Segalen & Associes, an executive search firm specializing in top management and board members.

Talent and skills will go where they are welcome, she said…

On the other side of the Channel, Conservative London Mayor Johnson laid out the welcome carpet.

“This is the global capital of finance,” he said. “It’s on your doorstep and if your own president does not want the jobs, the opportunities and the economic growth that you generate, we do.”

Here’s another reason for those who aren’t rich to hate those who are.  Because they won’t just sit there and take it.  These selfish bastards won’t stay in France and continue to use their talent and skill to make great wealth so the state can take it away from them.  You just can’t depend on the rich, can you?  Only those who aren’t rich are caring and decent.  With other people’s money, of course.  For if they won a fortune in a lottery they’d want to pack up their wealth and leave just like everyone else that has wealth.  Because it’s an entirely different picture when it’s YOUR wealth.  Taking wealth from others, why, that’s okay.  But it just isn’t fair to take YOUR wealth.

People need jobs.  And government needs people to have jobs.  So they can pay the taxes that fund their welfare state.  And to create jobs you need people with talent and skills.  To create wealth by investing wealth.  Because that’s the only way you can create jobs.  And tax revenue.  For only someone with a job can pay an income tax.  So it all starts with jobs.  You gotta have them.  And they just don’t spontaneously appear.  If they did France wouldn’t be in the economic mess they’re in requiring a 75% tax rate on millionaires.

This is the future of the welfare state.  High taxation that encourages all those with talent and skill to leave your country.  Leaving only those consuming the benefits of the welfare state.  Without anyone left to pay for it.  Which leads to more government borrowing.  Greater deficits.  Higher debt.  And, well, you can look to Greece to see where it goes from there.



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If Sarkozy gets his way it will Speed Up the Demise of the Eurozone

Posted by PITHOCRATES - December 11th, 2011

Week in Review

You knew it couldn’t last.  The peace between archenemies France and Great Britain.  It’s just too hard to forget a century or so of history I guess (see EU Treaty: Nicolas Sarkozy’s push for power poses ‘biggest threat to EU unity’ by Bruno Waterfield posted 12/9/2011 on The Telegraph).

France has long pushed for an “intergovernmental” organisation that could reshape Europe around the kind of protectionist model that has traditionally been opposed by Britain and a coalition of free-trade nations.

“The fear is not the possibility of an intergovernmental treaty between 26 EU countries. We have to remember and beware Sarkozy and his speeches calling for a smaller union,” said Mr Verhofstadt. “Everyone knows that is the big risk now.”

In speech in Marseilles yesterday, Mr Sarkozy called for a “real European industrial policy”, a revision of the EU’s single market competition policy and the imposition of trade barriers on Asian countries, such as China, with lower social standards. “I would like to see Europe stop allowing products to enter its territory that respect none of the rules we impose on our producers, our farmers and our stockbreeders,” he said.

First France wanted the European Central Bank to start printing money to solve the Eurozone’s debt woes.  Germany not being too keen on inflation was not too keen on that idea.  They’d rather see countries enact austerity.  And live within their means.  Like the Germans are doing better than most in the Eurozone.  Of course that’s the last thing these countries want to do.  Cut back on their welfare states.  For it’s what makes them European.  Well, that and very high taxes.

Not only does France NOT want to enact any austerity measures, they want to let the good times keep rolling.  By finding other sources of revenue to pay for them.  Such as import tariffs on goods coming into the European Union.  Especially those goods from Asia that their domestic industries can’t compete against because of those high taxes to support those generous welfare states.

But this isn’t a solution.  Which is why Great Britain is against it.  As well as that coalition of free-trade nations.  Import tariffs are just taxes paid by the consumers.  They increase domestic prices.  Pulling more money out of consumers’ pockets.  Which reduces economic activity.  It also invites retaliatory tariffs.  Which increases the price of exports.  Which means people in those export markets buy less.  Because they have less money in their pockets.  Which also reduces economic activity.

Import tariffs won’t be the panacea Sarkozy thinks they’ll be.  Because economic activity is dynamic.  It isn’t static.  Yes, at first tariffs will increase tax revenue.  But they also will be a drag on the economy.  And less economic activity means less tax revenue.  Just like every nation that tried to tax away their debt problems learned.  One tax rate increase was never enough.  For every time they raised the tax rate there was a corresponding reduction in economic activity.  Which only made the original problem worse.

If Sarkozy gets his way it will speed up the demise of the Eurozone.  Which is inevitable.  For they have shown unity in currency will not work without political unity.  And there will never be political unity.  At least you’re not going to get political unity when you’re talking about the benefits of a smaller union.  Because you can’t reach a political consensus in the full union.



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