'How can we redistribute if there's no wealth?'
Maybe France's President François Hollande's publicly revealed, private personal indiscretions (ok, maybe in France they're not considered indiscretions but standard operating domestic procedures) also prompted him to publicly question the standard operating procedures of France's socialist economy.
With French unemployment officially at over 10.5%, unofficially probably higher, Hollande put on his clothes, slunk out of his latest female friend's apartment and stood before the national enquiring minds of not only the French press but the international media as well, plaintively asking:
"How can we run a country if entrepreneurs don't hire?" he said. "And how can we redistribute if there's no wealth?"
In the words of a six year old, "Duh!"
Hollande certainly noticed that adding a 75% surcharge on multi, multi millionaires' income, including star sports figures, doesn't yield more tax revenue but literally kicks out the star business generators to friendlier tax countries. Whoops - nothing to redistribute--not that there is anything right with the government forcibly redistributing private income.
Why should entrepreneurs hire when hiring--and firing--is an expensive, punishing obstacle course in France? As one French entrepreneur explained,
Tired of delays in getting orders filled, Pierrick Haan, CEO of Dupont Medical (not to be confused with chemical company DuPont (DD)), decided last year to return production of some wheelchairs and medical equipment to France. The 150-year-old company, based in Frouard in eastern France, created 20 jobs making custom devices at a French plant-and will stop there. Faced with France's stifling labor code, Haan probably will send any additional production of standard equipment to what he calls "Near France"-Tunisia, Bulgaria, or Romania. "The cost of labor isn't the main problem, it's the rigidities," Haan says. "If you make a mistake in your hiring plans, you can't correct it."
There are now 2.9 million people out of work in France, almost 10 percent of the workforce and the most in 12 years. "For the 100 employees we have in France, we have 10 employee representatives, for whom we have to organize weekly meetings even when there is nothing to discuss," Haan says. "Every time a social security contribution changes, which is frequently, we have to update software and send our HR people for training. We can't fire anyone without exorbitant costs."
The code sets hurdles for any company that seeks to shed jobs when it's turning a profit. It also grants judges the authority to reverse staff cuts years after they're initiated if companies don't follow the rules. The courts even deem some violations of the code a criminal offense that could send executives to jail.
Vivid reports of police finally freeing managers held hostage by angry French workers at an about to be closed Goodyear Tire plant certainly will not encourage an entrepreneur to set up a business or expand one in France.
Are you listening President Special Enterprise Zone, Constantly Changing Obamacare Obama (D)?