Monday, May 30, 2005

French Reject EU Constitution – So What?

The French rejection of the EU constitution is all over the news and the net (see the myriad of links, below). I have read extensively since yesterday when the news was announced and I fail to see the EUphoria emanating from the majority of the blogs. While the vote probably spells the political doom of Jacques Chirac, will his replacement be any better? Chirac is a mealy-mouthed blowhard but I think if you look around at the Western Europe leadership, you will see that all of the Western European leaders are mealy-mouthed blowhards. It’s a continental thing.

The EU is being developed for one reason and one reason only. The people of western Europe, as a whole, are lazy, selfish and envious of the United States (unfortunately, England must be included in this group). Their respective economies are stagnant and unemployment is rampant. They (the people) demand 30-60 days, more or less, of paid holiday and paid vacation annually with a mandated 35 hour workweek and mandated no overtime. They demand government paid medical, dental and hospitalization costs and free university education for everyone. They have opened their doors to almost unlimited immigration from Muslim North Africa and the Middle East and ignore the deleterious effects on their societies. Imagine the economic effect here in the US if no one was allowed to work more than 35 hours per week, period. The leadership (and I use that term loosely) does not have the political will (ala Margaret Thatcher) to challenge their respective citizenry and tell it like it is; "If these are the things you want, then this is the price that you must pay. If you want employment and a higher standard of living, then sacrifices to your lifestyles will have to be made." The European people don't understand the difference between "lifestyle" and "standard of living".

Say what you will about the United States, but the people of this country possess a quality of character that is sadly missing from that of almost every other people on the planet. The ability or capacity or trait or whatever you wish to call it of being able to react positively and aggressively when something is very very wrong. I lived in Detroit and worked in the automotive industry during the late seventies and early to mid eighties. Detroit was like a ghost town and Tokyo was humming. You can remember that, can’t you? For as long as I can remember, Michigan tags, or license plates, had been black with white lettering. The only state with a booming economy was Texas (oil - high fuel prices). So many people from Detroit packed up their families with all the possessions they had left and drove to Texas seeking work that the Texans referred to them as "black tag people". I bought a house from a bank. You could see the effect of a breadwinner losing his job and it was a sad thing to see. First, a sign would be posted outside the house, "For sale, Snowmobile" or boat or 4-wheeler. The family was selling its toys. Then, within a few weeks, another sign and a car parked in front of the house, "For Sale, 1982 Daytona". The family was selling their 4th or 3rd or 2nd car. Then, a few weeks after that, "House For Sale - by Owner". Then, within a short period of time, the house was empty and the repossessing financial institution would write on the front window with Bon Ami, "For Sale by Bank, Call 552-1234". That’s how I found my house, by driving around good neighborhoods and reading the writing on the front picture windows. I didn’t call Century 21. I didn’t have to.

What was the response from the American people? It took a while. There were the requisite sledgehammerings of Japanese cars in mall parking lots with cheering out-of-work autoworkers and TV cameras looking on, Iacocca screaming to the government about tariffs, the UAW and USW and AFL-CIO and Teamsters all crying for government relief. And there were the political panderers, but panderers lose in the end (see John Kerry). What really happened was that all of these groups and individuals were forced to accept the fact that the way they had been doing business since 1945 had to change. And we changed it. Who, now, is afraid of Japan? Who, now, fears the German economic monster? I could not possibly be any more proud to be an American than I am today, having seen and lived through and been a part of that miraculous economic recovery. Can the Europeans do the same? I don’t think so. And their leadership doesn’t think so, either. Hence, they have cobbled together a massive bureaucratic union that consumes vast amounts of capital and vaster amounts of print and airway space and that makes it appear that the leadership is addressing the problems. It’s all smoke and mirrors.

It is really simple. More simple than the pundits make it sound. If every European country is charging 25% tariffs on every other country’s goods and services, and the political elite can convince their respective populations that these tariffs are the cause of their economic ills, then it becomes easier to convince those peoples that eliminating those tariffs will fix everything, right? And, of course, a massive bureaucracy is required to manage this stupendous undertaking. Well, if I charge you 1.25 for my widgets and you charge me 1.25 for your thingys, and we agree to charge each other only 1.00 for those widgets and thingys, are we any further ahead than when we started? My expenses are reduced by .25 but my income is reduced by .25, also. 1.25 minus 1.25 equals 0 and 1.00 minus 1.00 equals the very same 0. No one gains anything. The opposite occurred with Mexico and the US via NAFTA. The howling from the unions and Perot’s "giant sucking sound" of jobs being sucked out of the US by Mexico was laughable. Here, the numbers looked like this; Mexico was charging us 1.22 on average for every 1.00 that we exported to Mexico but we were only charging 1.025 for every 1.00 that Mexico exported to us. So when all those tariffs went to zero under NAFTA, we took a loss of .025 of every 1.00 exported and the poor Mexicans took a .22 loss. The difference is .22 minus .025 or a net gain in competitiveness for US products of .195 or a net loss in competitiveness for Mexican manufacturers of minus .195, however you choose to look at it.

The silly Europeans have managed to convince themselves that they don’t have to change anything or reevaluate anything or work any harder or any longer. All they have to do is form a giant bureaucracy and everything will be hunky dory. Happy days are here again.

The French vote was a repudiation of Chirac and the EU because, and only because, the French people fear the nose to nose competition with Eastern Europe that the EU constitution would mandate. Supposedly all of the barriers and subsidies would eventually fall, and farmer Maurice would have to compete directly with farmer Stanislaw or, horrors!, farmer Kazim. That prospect is unpalatable and unacceptable to the French and to the Germans and to the English and to the Belgians and to just about all of them. Sitting down to figure out how best to compete is not something they are going to do, not now, not ever. If the Agnelli’s can’t get Italian government money, Fiat is dead and they know it. If Volkswagen, Wolfsburg has to compete with Ford, Czech Republic, VW is dead and they know this, too. And if the French wine industry has to compete with Spain and Portugal, or just about anybody, for that matter, the French wine industry is dead (this is already happening).

The rejection of the EU constitution by the French people is merely a bump in the road. The European bureaucratic elite will hem and haw and rewrite enough of it to get it passed, eventually. And Europe’s already long downhill slide into irrelevancy will accelerate. To what end, who knows?

Linked to: Scared Monkeys, chicagoboyz, Patterico, Joe Gandelman, Southern Appeal, John Kay, Prof. Bainbridge, Kevin Drum, Damian Penny, Poliblogger, OTB, Jan Haugland, Captain Ed, beggingtodiffer, Chrenkoff, Pejman

No comments: