Steven den Beste, one of my favorite bloggers ever, has come out of "retirement" to blog yet again.
Previously known for his verbose and well-worded analyses of current events (some of which are still appliciable
today), his new blog is under the redstate.org
banner and far less detailed or lengthy as before. This is good for a couple of reasons: first, he'll hopefully not get so burned out as he did when he decided to retire and start talking about anime
, and second because it's more appealing to read shorter blog posts (at least, that's the trend I've heard). I added him to my blogroll and HIGHLY recommend you read his stuff regularly--absolute gold.
Right now, a lot of his posts deal with the French riots which are still going on because of France's impotent leaders: namely Sarkozy and Chirac
. Far from being the minor nuisance my France-loving roomate tries to paint it as, the riots are spreading
. One interesting thing (business-related) that den Beste touches on
is how this will affect the value of the euro.
The French economy is already royally screwed up. Taxes are too high, regulation is stifling, and as a result job creation and growth are nearly nonexistent. The government guarantees lavish benefits to the unemployed through its social safety net. If 1% or more of the GDP of France goes away due to a decline of tourism, it means that government tax receipts will fall, while government outlays will rise.
What was that about the "stability pact"? Something about a limit on budget deficits? Forget about it; France will have to borrow, and borrow a lot.
At which point we get into an area I know nothing about: central bank policy and currency values. What I'm wondering is what effect this could have on the €uro, and therefore indirectly on economies of all the other nations which dumped their own currencies and switched to it.
Whatever it is, it can't be good. If the French start running huge and irremediable budget deficits, what's to stop other nations from doing the same? The Euro is becoming less and less popular in Europe anyway. Could this lead to other nations dumping it and returning to national currencies?
The economic crisis in "third-way socialist" Europe is close to being super-critical. Will the French riots be the event which kicks off a total collapse in all the socialist nations of Europe?
If so, the irony meter will peg. The nations which will come out of this the best will be the former Sovbloc nations of the east; while NATO stalwarts like Germany, Belgium, Italy, and France will be the ones which will suffer the most when socialism finally collapses.
And those nasty Anglo-Saxon islands will dodge the bullet yet again.
As usual, he's right--though a little lacking in the finance aspect of things. First off, France's economic policy of lavishing the jobless with money while taxing the workers through the ears has led to this lever-type of economy where even a small amount of increase in unemployment will lead to a double-whammy against the economy. Since not only are there fewer people paying taxes now, but the government has to subsidize more people using fewer funds. Socialism hasn't worked yet, and it never will.
I would not be the least bit surprised if these riots mark the beginning of the death of the euro since France's economic policy will greatly reduce the value of the euro against the dollar (and it's not just France
these riots are in anymore, either). This means that the value of the money of other nations will also go down even though they didn't do anything. Looking at it from their perspective, I'd certainly be willing to dump France and her impotency in favor of my old currency for the sake of my own people. France is a ball and chain around the leg of a drowning Europe at this point. Though Europe may try to swim up (expantionary monetary policies), their efforts will be ultimately useless because they're not addressing the real problem of the ball and chain (though they'll still need to swim once the larger problem is fixed).
Really though, the governments of Europe created the EU cheifly to compete with the United States. Once the euro becomes worthless compared to the dollar, they will abandon the euro for their own currency and the US will still be the dominant economic superpower in the world. I imagine they would be too prideful to adopt the dollar as their "gold standard" though. It's more likely they'll choose the pound sterling or feel more at home with the Chinese Yuan.
The irony of it all will be that France, the one ("allied") nation most doggedly against the US and her policies, will be the one to bring about the deimise of the system created for the humbling of that damned upstart: America.
Also, den Beste also points out the Anglo-Saxon nations will "dodge this bullet." Why? Because they insisted on keeping the British pound as their form of currency. Though I think they'll do more than simply "dodge the bullet." I think they'll be getting a gun of their own.
While the rest of Europe slowly circles the toilet bowl, England will be nicely positioned to do the economic rebuilding of Europe through investment and loans, and make a lot of money in the process- off the stupidity of their neighbors. Once again, capitalism wins out and France is yet again proving itself to be irrelevant and worthless (if not downright negative) in the world arena.