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Wednesday, October 12, 2005

After We've Seen Paree! What?

Tech Central ran 2 articles highlighting the likely failure inherent in the economies of Germany and France. Socialism that has infected the populace in both countries shows they would rather sink together than survive in a competitive environment.

Jeremy Slater discusses how the vote of Merkel in Germany does not show us a citizenry seeking capitalist solutions to their economic malaise. The real winners in the election, he writes:

were the new Left party, made up of SPD dissenters and remnants of the former East Germany's communist party. Its main campaign platform was to vigorously defend a decaying social model that makes growth in Germany nearly impossible. That result had a spillover effect in France, where various factions welcomed the success of Germany's hard left. Indeed, failure of the CDU to win a mandate for economic reform has boosted the standing of all Europeans who did not want to push through similar policies. It makes the task for economic reformers throughout the European Union much harder.

Meanwhile in Frace, Nidra Poller describes the hysteria resulting from Hewlett Pakard's announcement that they will reduce their French workforce by 1,240 workers. French officials marched to HP headquarters to voice their anger but the computer giant is not changing its plans. Interesting, HP is cutting only 15% of its other Euro workers while cutting 26% of its French workers. Production costs and taxes a bit too high in France? French a little too slow?

Poller writes:

The HP imbroglio is a perfect illustration of the pitfalls of the French economic model. In a rigid micromanaged economy, jobs are hoarded in a locked cupboard à la père Goriot, while the dynamics of job creation are stifled and the French street erupts in anger.

Unionism, protected employees, regulations, taxes and an unproductive culture are the causes of their own demise. Yet the Europeans vote for more of the same.

Competition in the marketplace, with out-sourcing and importing where needed, makes the US economy flexible. Alan Greenspan says this flexibility is the reason the US economy can handle high energy prices, Katrina hurricanes and financial market corrections. Per Greenspan, in a speech to the National Italian American Foundation:

"The impressive performance of the U.S. economy over the past couple of decades, despite shocks that in the past would have produced marked economic contractions, offers the clearest evidence of the benefits of increased market flexibility."

Contrast this with outgoing Chancellor Gerhard Schroeder's farewell message extolling the virtues of government involvement in the market-place and people's lives

"People do not want the state in their faces, but they want it by their side."

And socialists here in the US view France and Germany as models! Hah!

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