Tag : france

The other morning, while perusing the UK’s Guardian, the following headline caught my attention: “Detroit accused of exaggerating $18bn debts in push for bankruptcy”

Digging in, I read that Detroit pensioners, whose benefits ballooned to a $3.5 billion liability could be cut down to 16 cents on the dollar. Go figure, the report said pensioners don’t like that very much. They argue that yes, $3.5 billion is a tidy sum of debt to pay off… but it’s only bad because the city’s income is so low.

“The real issue for Detroit” according to Walter Turberville from the Demos think tank, “is not its debts but declining revenues as a result of its rapidly falling population. The city’s had close to 2 million residents in 1950 and 714,000 in 2010. During the recession, unemployment and the property crash exacerbated Detroit’s revenue woes. Since 2008 the city’s revenues have fallen by over 20%. This year it will have a budget shortfall of $198 million.”

If there’s a budget shortfall, it isn’t for lack of city hall trying to increase revenue. In fact, it may have been revenue grabbing that was the culprit for budget shortfalls in the first place.

As I wrote in The Daily Reckoning pages back in July, when Detroit first declared bankruptcy:

Detroit was the fourth-largest city in the nation. As people left, the tax base shrunk. To keep revenue up, taxes were raised on things that couldn’t be moved out of the city limits, like property.

Because of high property taxes, people stopped improving buildings. Eventually, it wasn’t worth it to pay the property taxes. So people just left for greener pastures in taxpayer-friendly jurisdictions. (As I look out the window of my office here in Baltimore… I can’t help but see the same thing happening.)

It was a Pyrrhic victory. City hall continued to keep up revenues by raising taxes. People continued to leave with their money and businesses. Basic services like police and fire safety suffered heavy cuts — much like my mother-of-all financial bubbles scenario.

The city’s prosperity languished:


Here’s a comparison of the effective property tax rates in Detroit versus the average across 50 U.S. cities.


France, like Detroit also has the problem of not enough revenue. “French farmers snarled traffic into Paris as they drove tractors onto highways to protest against taxes and new regulations” wrote Bloomberg’s Gregory Viscusi earlier this week. “The action is the latest in tax revolts in France, which in recent weeks has seen horse-riding clubs, truckers and small retail outlets protesting against increased levies by President Francois Hollande’s government.”

I recall when I lived in France that the politics of debt and taxes was so ingrained in their society that there was a general strike or greve generale what seemed like every other day.

These things were so common that kids used to actually look forward to them. They didn’t even understand the issues. To them, it was an opportunity grill chorizo in the back of their trucks while blasting technopop right outside of my office on the rue Rivoli. The strikers were happy to not be working even if their strikes didn’t work. And everyone else? They were more or less annoyed that they could travel on the rue Rivoli because of it. Seems like not much has changed.

In France, the top tax rate is 75%. Back in 2011, nearly 12,000 families paid that rate… another 8,000 families paid more than 100% of their income in taxes because of a one-time levy. Maybe that explains the riots. It might also explain why in 2011, there were 10,456 Frenchmen registered as residents of Hong Kong. It used to be that the French headed westward when they wanted to escape taxes. Now, apparently Asia is increasingly becoming the preferred destination.

According to the French Consulate in Shanghai, 40% of their expatriates were working under a local contract in 2008; they were 55% in 2012. Local contracts allowed the expat to stay in the country after their work contract was up.

The larger lesson I’ve taken away from it all? Whether it’s Detroit’s population decline or French expatriation, if you expropriate them… they will go (and those left will riot). As the debt piles higher… I expect that expropriation will be the go to strategy for cash-strapped governments. Luckily for innovators, attracting capital even if the owners of it have been driven out of town.

This article originally appeared in The Daily Reckoning

A 12-year-old girl waves a banana at a black government minister and shouts: “Who’s this banana for? It’s for the monkey!”

Such slurs – and a generally muted official response to them – have caused a bout of soul-searching in France. The question at the heart of the debate: is racism rampant in a country with revolutionary roots and a motto boasting of “equality” and “liberty”?

The issue has dominated discussion since the same politician, Justice Minister Christiane Taubira, was likened to a monkey by a candidate for the right-wing National Front. The candidate was forced to withdraw, but the tensions lingered.

Last week, extreme-right weekly magazine Minute ran a photo of Taubira and the headline “Clever as a Monkey. Taubira reclaims the banana” on its cover.

Some critics allege the government has been slow to respond. When it did condemn the acts of racism against Taubira in the National Assembly on Nov. 12, only half the lawmakers left their seats for a standing ovation as she entered the chamber.

All this adds up to one thing, according to Harry Roselmack, the first black journalist to host nightly news on French television.

“A racist France is on its way back,” he wrote in an editorial in Le Monde newspaper.

“They are not slips of the tongue; they are the unvarnished expression of a world view widely shared in the National Front,” Roselmack said, referring to the far-right political group.

The National Front has become a political force to be reckoned with. A recent survey found that 42 percent of voters polled had a positive opinion of the party’s leader, Marine Le Pen.

Taubira, who was born in French Guiana in South America and has been a French citizen since birth, spoke out about the attacks in an interview with the Liberation newspaper.

“Millions of people are affected when I am treated as a monkey,” she said. “Millions of kids know that someone can treat them as monkeys in the schoolyard.”

She called the remarks “violent” in another interview on evening newscast France 2. “I absorb the shock but it’s violent for my children.”

Meanwhile, the country that is notorious for its strikes and protests has seen no organized demonstrations to condemn the insults. This may have something to do with the fact that the term “multiculturalism” is often seen as a shameful reminder of the country’s darkest period during World War II when it ghettoized Jewish citizens and handed them over to the Nazis.

Squeamishness about discussing multiculturalism and compiling statistics on minorities comes as the country’s troubled relationship with marginalized groups — including those who trace their ancestry to former colonies or protectorates like Morocco and Algeria — periodically tips into violence.

In 2012, there was a 23 percent rise in racist acts in France, according to the National Consulting Commission of Human Rights.

In typical French style, the country’s artists and intellectuals are speaking out in support of Taubira and against what they perceive to be a growing wave of racism.

“We are all French monkeys,” declared a full-page ad in Le Journal du Dimanche newspaper bought by intellectual and artistic luminaries on Sunday.

Taubira was also invited by France’s world-famous philosopher Bernard-Henri Levy to a gathering of writers, filmmakers and intellectuals.

“We are here, madame, to express our anger, for sure, to confront this rise and return of infamy and racism, and to confront all these remarks that are in the process of gently justifying or explaining or excusing partially what was done to you,” he said.

Levy also suggested Taubira be the next model for the statue of France’s revolutionary heroine, Marianne. The statue, which symbolizes freedom and the patriotic mother who protects the children of the republic, has been modeled on figures like Brigitte Bardot, Catherine Deneuve and Latetia Casta.

“It’s time that Marianne reflected the face of minorities who proudly represent France,” Levy said.

‘Mini-Miss’ pageant organisers face fines and prison sentences as parliament addresses ‘hypersexualisation’ of under-16s.

Najat Vallaud-Belkacem

The French parliament has moved to ban children’s beauty contests in an attempt to halt what one former minister called the hyper-sexualisation of young girls.

France’s upper house of parliament, the senate, adopted the proposal as part of a wider law on gender equality after former sports minister Chantal Jouanno called for the ban on beauty pageants for children under 16. It must now be passed by the national assembly before becoming law.

“Let us not make our girls believe from an early age that their only value is their appearance,” Jouanno told the senate. “Let us not allow commercial interests to outweigh social interests. Lawmakers are not moralisers, but we have a duty to defend the superior interest of the child.”

The ban on what the French call Mini-Miss beauty pageants was opposed by the Socialist senator Virginie Klès, who sponsored the gender equality bill, as well as the government’s spokeswoman and women’s rights minister, Najat Vallaud-Belkacem, both of whom judged the penalties too harsh.

Under the proposed law, anyone who flouts the minimum age limit for beauty pageants will face up to two years in prison and a €30,000 (£25,000) fine.

Vallaud-Belkacem tabled an amendment that would force pageant organisers to apply for official permission to stage them, but this was ruled out after Jouanno’s amendment was approved.

Afterwards, Vallaud-Belkacem suggested she might call for an amendment to control rather than ban the child beauty pageants when the bill is discussed in the lower house in the next few weeks.

In a parliamentary report drawn up in March 2012, Jouanno expressed concern about the hyper-sexualisation of young girls, including “the sexualisation of their expressions, postures or clothes that are too precocious”. Jouanno said at the time: “The phenomenon is more and more present.”

Her report, Against Hyper-Sexualisation: A New Fight for Equality, expressed concern that young girls were being disguised as “sexual candy” in a competition over appearance, beauty and seduction, which she said was “contrary to the dignity of the human being”.

The report also recommended further measures that were not included in the bill including outlawing adult clothing in child sizes, for example padded bras and high-heeled shoes, and banning the casting of models under 16 in advertising campaigns.

Jouanno’s report was prompted by international outrage over a fashion photo-shoot in French Vogue that showed 10-year-old Thylane Loubry Blondeau and two other girls posing in heavy makeup, jewellery, high-heeled shoes and tight clothes, and pouting provocatively.

The magazine feature initially failed to rouse anger in France, but sparked widespread criticism in America where the pictures were deemed inappropriate, prompting the French government to announce its inquiry.

After the senate vote, Michel Le Parmentier, who organises the Mini-Miss pageant, said his company would look at moving the contests to other European countries if France imposed a ban.

“Maybe in Belgium, very close to the border,” Le Parmentier said.

He insisted his pageants involved “no make-up, no swimsuits, no artifice” and that the girls simply paraded in princess dresses.

The bill now passes to the national assembly where it needs approval before entering the statute books.