Bacon's Rebellion

Democracy Thrives in Sunlight

“Boomergeddon” Hits France

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by

James A. Bacon
in

“Boomergeddon” is getting traction in France.

Today, the lower house of France’ s legislature passed Nicolas Sarkozy’s pension reform package that increases the minimum retirement age to 62 from 60. A vote in the upper house is due Oct.1.
For the luxury-loving French, called “EuroWeenies” by Boomergeddon author James A. Bacon, the idea of raising the retirement age is bitter medicine. According to Sarkozy, France cannot keep making its earlier-age pension payments, so some sacrifice is required.
Disgruntled workers more than one million strong have thronged streets to protest advancing the retirement age. A national strike is called for Sept. 23.
Sarkozy is hanging tough with his reform although a new election will come in 2012.
The French have been known for eating well, good wine, long vacations and early retirements. They also have been known to take time off around 5 p.m. for sexual trysts.
Peter Galuszka

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21 responses to ““Boomergeddon” Hits France”

  1. James A. Bacon Avatar
    James A. Bacon

    Good post, Peter. It seems that the French — and most other Europeans — are way ahead of the USA in scaling back the size and scope of their entitlements. During the Greek crisis, they stared into the abyss and were terribly frightened. I have to give them credit.

    In my book I predicted that the Euro-weenies would precede the U.S. into Boomergeddon. They may well prove me wrong. But I'm still counting on Japan to screw things up royally. I still think they'll beat us to default.

  2. James A. Bacon Avatar
    James A. Bacon

    Speaking of the French, what do you think of the French restrictions on burkhas?

  3. Gooze Views Avatar
    Gooze Views

    Jim,
    Burkhas? What do I think? Bunch of racists. Never happen here if the will of the people prevails and we liberals can count on you libertarians to keep things right.

    Now don't get me wrong. We owe our democracy very much to the French. We are told at birth it is the Brits who did the deal. Total Anglophile bullshit!

    Let's not forget who saved our BACON (forgive the pun) at Yorktown!

    Generally the French are accepting. Bu they've always had this thing about Muslim states, such as Algeria. I don't understand it.

    And it's not that they UNDERSTAND Muslims. Plenty of other countries deal well is Islam.

    Peter Galuszka

  4. Groveton Avatar
    Groveton

    France?!?

    You guys missed the big news. Raul Castro has apparently read Boomergeddon and is cutting the size of government in Cuba. No longer will the government own the barbershops, hair salons, etc.

    Now, if we can just get the liberals in Virginia to FOLLOW Cuba with regard to the liquor stores …

  5. Larry G Avatar
    Larry G

    It's important when talking about govt spending and deficits to distinguish between entitlements and other govt spending – as long as the govt does not attempt to fund the entitlements from general revenues instead of payroll taxes.

    Saying that SS/Medicare is "broke" is wrong.

    Even saying they will go broke in the future – is wrong.

    Right now FICA generates (depending on the economy) -more or equal to what is paid out.

    That is expected to continue to 2035 – when – if nothing is done – they still won't be "broke" but they will be paying out more than they take in – to the tune of 25% (i.e. will only pay 75% of what it was supposed to).

    This is manageable.

    This is no different than an insurance company looking to 2035 and realizing that if they don't do something about premiums and pay-outs – that they'll "be broke".

    So in BOTH cases – we know that changes will have to be made.

    In all likelihood – the most obvious change is to recognize that people do live longer and that they need to work longer OR we need to require higher co-pays for scooters and Viagara, etc.

    But this is fundamentally different than the other 1/2 of the budget that is funded by general revenues.

    "cutting entitlements" won't do a DANG thing to do with excessive Pentagon spending or trying to fund highways out of the general fund.

    I still have yet to see a meaningful accounting of exactly what govt has "grown" "bloated" in the US…..

    People are really confused about this.

    They equate entitlements to the general budget and don't recognize that the two biggies – SS/Medicare come from FICA – not income taxes.

    So the conversation that we are having is dysfunctional in my view.

    How can we really be serious about the problem if we refuse to really understand it?

  6. Hydra Avatar
    Hydra

    Burkhas?

    Imagine what would happen here if we put a ban on wearing cowboy hats.

  7. Hydra Avatar
    Hydra

    The cinq au sept was one of France's better ideas.

  8. Hydra Avatar
    Hydra

    ""The second part of Metrorail's extension from Falls Church to Dulles International Airport and Loudoun County could cost as much as $1.3 billion more than original estimates, which may mean higher rates for people who use the Dulles Toll Road.

    The new estimate was provided Wednesday to members of the Metropolitan Washington Airports Authority, which is overseeing construction. The first phase is costing $2.75 billion, the authority said. Early estimates had placed costs of the second phase in the same range. The new price range increases the cost by at least $690 million and potentially twice as much."

    Todays WAPO

  9. Hydra Avatar
    Hydra

    "The problem facing our economy isn’t regime uncertainty or the dysfunctional housing market or the financial sector or government, generally. Nope. It’s aggregate demand, the Achilles heel of capitalism: Businesses are not buying because of poor sales."

    From Cafe Hayek

  10. Larry G Avatar
    Larry G

    I found this commentary not only interesting but it puts a context to "Boomergeddon" that expands it beyond a US-only, US-centric view – and it confirms that it's much more than a US problem:

    " The international discussion among government officials about bank reform is, at an informal level, going better than you might think. Top people in the official sector are increasingly willing to confront the banking lobby and even to refute its more egregious assertions, particularly the completely erroneous notion that making banks safer by requiring them to hold more capital would hurt the broader economy and undermine growth.

    Unfortunately, the structured intergovernmental process that actually changes the rules around banks – known as Basel III – was rushed to an unsatisfactory conclusion last weekend. The United States and other countries with major financial centers will need to add substantial additional capital requirements at national levels if these new rules are to be effective.

    The heart of the substantive discussion involves whether tightening capital requirements – the buffers against losses that banks are required to hold – will have a negative impact on the economy. The banks insist that holding more capital would slow lending and therefore slow the real economy. The global banks’ Institute for International Finance issued a paper in June that insisted on this point — but there is no substance to their arguments.

    The most readable counterarguments come from a paper by Sam Hanson, Anil Kashyap and Jeremy Stein (reviewed here recently). In recent months it has become clear that – behind the scenes and off the record – a growing number of important officials agree broadly with this view. The Bank for International Settlements itself has produced two serious assessments that, if you look at them carefully (and this is not light reading), argue strongly that longer-term growth would benefit from higher capital requirements, because we would experience fewer mega-crises, and the transition to such arrangements would be much smoother than the industry contends."

    http://economix.blogs.nytimes.com/2010/09/16/new-international-banking-rules-fall-short/

    In other words – the nations of the world are starting to realize that individuals – regardless of nationality – in their quest or wealth – will do whatever is in their personal best interests – EVEN IF it will take down a country's economic system.

    This is not rocket science.

    We've known this for a long time whether it is pollution or robber barons or oil cartels… or drug monopolies.

    This whole issue brings to the fore – what the fundamental purpose of government IS – and I assert that at least one reason for government is to keep the forces in check that would reward unbridled greed no matter who it harms.

    Think of it as a world approach to predatory payday lending and it's equivalent forms.

  11. Hydra Avatar
    Hydra

    The heart of the substantive discussion involves whether tightening capital requirements – the buffers against losses that banks are required to hold – will have a negative impact on the economy.

    =================================

    OK, suppose the government required every Hay Farmer to withhold ten percent of their crop in inventory against a really bad winter.

    Of course it would affect their business. Some farmers would go out of business. On the other hand, there is generally a surplus of hay anyway, so it is doubtful the price would be affected very much.

    In the case of lending, there are probably more unqualified borrowers than there is money to give them, but for real business opportunities I doubt that requiring more reserves will cause any more hardship to the consumers than restricting the hay supply would.

    Anyway, even if you buy the argument that requiring more reserves wouls slow growth a ltiile bit, how could that be any wors than the giant hit we took on account of insufficient reserves?

  12. Larry G Avatar
    Larry G

    what is the logic behind the govt involvement in surplus commodities and FDIC and the rules on Wall Street in terms of how much money you have to have available to cover your stock calls?

    I do not think the average person understands why the govt is involved … or why they got involved…in the first place and in today's environment I suspect that the more rabid would.. in given the chance.. do away with FDIC and get the govt out of financial regulation.

    The thing also not understood is that these regulations are not unique to this country but are rather common in most industrialized countries and they come about in response to problems that would continue to be problems – without regulation.

    People forget this…

    at the same time they are on the warpath against the EPA.. they raise holy heck that their kid got sick eating a bad burger but most folks don't see the connection…

  13. Groveton Avatar
    Groveton

    The Fed was established in 1913 after 80+ years of no real central bank or central bank level regulation. The theory was that the lack of government regulation caused banking problems like the Panic of 1907. The theory was that establishing the Fed would minimize instability in the financial system. Since the date of this massive regulatory increase we have suffered the Great Depression, the current recession and plenty of other meltdowns, recessions, flash crashes and panics. I question whether the US has enjoyed any more financial system stability in the 97 years since the Fed was established than it enjoyed during the 80 year period after the Second Bank of the United States went bankrupt and the Fed was born.

    Is it unfair to call the Federal Reserve Act a failed effort at achieving stability through regulation? If not, why not?

    Regulations of US financial markets has not eliminated depressions or recessions.

    Why will more regulation suddenly work when the huge regulation of the Federal Reserve Act did not?

  14. Larry G Avatar
    Larry G

    I think one could make a good argument as Groveton has – on the merits perhaps.

    but the premise is where things go awry.

    Using Groveton's logic – because a child get harms by ingesting lead from paint or a toy or dies from a bad burger – this "proves" that regulation has "failed" in it's purpose.

    If Groveton's logic held – we'd do away with building and fire codes because they "do not work" which is clearly proven by badly-executed regulation.

    The FDIC was born out of the Great Depression.

    Should we do away with it because it has not prevented bank failures?

    BP proved that regulation can be thwarted with the "right" kind of persuasion. Does that mean we need to abandon regulation of oil wells?

    Name me one single modern economy in the world that is not regulated.

    Somalia? Yemen?

    so I think Groveton's basic premise is deeply flawed if the bar is set so that if regulation fails to perform at a 100% level – that it "fails".

    That's the same problem that many of the Tea Pots have by the way…. which they get from the business world and the media that speaks for them.

    Most of us don't give a second thought to having our money deposited in a community bank – right?

    But there was a time – where that community bank – bolted it's front doors and told you your money was gone.

    Is that what we want to go back to?

    what's the purpose of govt if not an economic environment where people trust banks and trust electronic banking?

  15. Gooze Views Avatar
    Gooze Views

    Grovten,
    Give me a break. You have to deal with central banks. That is soooo 20th century.
    Damn, if TJ had prevailed over Alexander Hamilton, we really would have been screwed.No modern banking system.

    Peter Galuszka

  16. Hydra Avatar
    Hydra

    "Enough with the doom and gloom about homeownership. Brett Arends in the WSJ presents 10 reasons why it's a good time to buy a home. Reason #1 is that you can get a great deal and Reason #2 is that mortgages are cheap. In other words, relative to income levels, housing affordability remains at historically high levels "

    From Carpe Diem

  17. Hydra Avatar
    Hydra

    "The recession is over! So where's the party?

    The Associated Press – Jeannine Aversa – ‎1 hour ago‎
    WASHINGTON – It turns out the recession ended more than a year ago. Feeling better now? The panel that determines the timing of recessions concluded Monday that this one ended – technically, anyway – in June 2009, and lasted 18 months."

    Oh yeah, that air travel that is supposedly dead: Set new records at Dulles and BWI recently.

  18. Larry G Avatar
    Larry G

    I don't think the recession is over but I think in the next year or so…with a little luck – the patient may be ready to come off of life support.

    Of course, if the Republicans take over – you can count on 4 more years of no recovery and more than likely we'l fall back and if the Republicans do what they say … we'll be in a depression.

    Of course.. if Republicans change their mind .. you can bet that they'll find ANOTHER WORD other than Keynesian to describe what they advocate – which will likely walk and talk identical to Keynesian …

    Tax Cuts that are not paid for are – classic Keynesian economics.

    How many Republicans admit this?

  19. Hydra Avatar
    Hydra

    If the independent board says it is over, then it is over, by definition. That's how we decide, and that is how it will be measured historically. Presumably, the board has some relatively objective criteria.

    I drove past a mall here in Arizona on Sunday, and I was surprised to see the parking lot pretty full.

    My local Mall in Virginia has been pretty quiet, but as a friend points out, it's a pretty crummy mall, even though it is new.

    Location counts, even in Phoenix.

  20. Larry G Avatar
    Larry G

    didn't realize you were no longer in Va…..permanent?

    I caught this in the NYT and found it full of irony:

    " Tax Cuts on Colorado Ballot Stir Alarm

    With Republican candidates thundering against government spending and the Tea Party’s popularity soaring in parts of the country, one might think that any proposal aimed at lowering taxes would be a safe bet for the Republican Party these days.

    …..

    For politicians and civic groups, even those who support limited government, those numbers are terrifying enough to have spurred a voter outreach effort by elected officials. Indeed, many officials fear that the proposals could actually be passed by unwitting voters, particularly Republicans, who might be seduced by tax cuts.

    “In this turbulent election cycle, there might be some things that voters would be misled to vote for and not understand the consequences,” said Dan Hopkins, a spokesman for Coloradans for Responsible Reform, a coalition of business and labor groups opposed to the measures. The group says the measures would lead to the loss of about 73,000 jobs, most in the private sector.

    This month, a vast majority of the state’s Republican legislators took the unusual step of signing a letter urging their constituents to reject the measures."

    and – to be fair:

    " Supporters of the measures, including COtaxreforms.com, have shrugged off fears. They argue that the ballot measures would actually shield Coloradans from debt and ultimately stimulate job growth. Proponents also note that it would take years for all of the measures to be implemented.

    “We need tax relief, tax reform, tax justice,” Natalie Menten, campaign coordinator for the COtaxreforms.com group, wrote in an e-mail. “The establishment fears our grass-roots petitions because they benefit everyone, not just the insiders.”

    http://www.nytimes.com/2010/09/21/us/politics/21colorado.html?hp

    Now I also want to point something out.

    Colorado is not loony California when it comes to citizen referenda initiative … AND it's also NOT VIRGINIA.

    Now I'm quite sure there are two folks in this forum that would heartily applaud the citizen-initiated tax reform efforts in Colorado – while at the same time not be so enamored of a similar citizen initiative ability in Va a curious juxtaposition.

    Whereas, I'm all in favor of it and have been for quite some time.

    I'd actually like to see the Tea Party run amok in Virginia … (and other places) …so that the clueless sound-bite-susceptible middle will start to realize that the Tea Party is really little more that the shape-shifted hard core right that has infested the political realm for as long as politics have been politics.

    The self-righteous "take back our Govt" is theater of the absurd at it's very best.

    but.. you gotta admit – it does work.

    I still think that you cannot be a viable political party if you make yourself the enemy of minorities of color and culture, gays and lesbians, the academic and scientific communities, sick people without access to HC, etc

    you just limit yourself to a vociferous hard right group whose only hope of governance is not elected representation – but rule until they remove you.

    To me the real Boomergeddon is the political mega-storm that divides the country and has left such gaping wounds that it will be a long time before we are able to try to get back to the businesses of wanting to compromise on the things we cannot agree on – rather than declaring a jihad that takes no prisoners.

    This is not my view by the way.

    Just ask the dozens of elected Congress that has and is retiring and saying that right no – there is no role for true legislative process.

  21. Hydra Avatar
    Hydra

    I'm becoming a total cycnic.

    Yesterday I spoke to a man who was vocferous in his beleif that all government is bad and corrupt, that everyone in it is corrupt, and the sole goal of government is to learn what you have and take it from you. The best thing is to minimize government and let business run everything.

    I have heard that pitch a lot, lately, and these are not uneducated or underpaid people.

    One man told me he had moved 100% of his assets into gold, and another into cash. The beleifs of such people feed on each other and create spirals of increasing financial terror.

    There is no point in arguing with such people, so I merely pointed out to the one who was in all cash that this represented pure faith in government certificates, with no intrinsic value. I would prefer a little more diversification and potential for growth, I told him.

    Cynically, I'm beginning to hope that the Tea Party Takes over the Republicans, they win, in September, eject Obama two years heance and then go on a binge of even more radical Bush style economic management, with a resultant recession several multiples worse than this one.

    Evidence that compelling and repeatable might put an end to lunacy economics and palpable fear of our own government.

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