The French think they were right about everything. Iraq, for example. The French have deep ties to the Arab world. They knew Iraq would be a tar baby for the US – just like Algeria had been for them. You pick it up…you can’t put it down.
But Congress and the administration not only ignored the French (as they had when Charles DeGaulle advised against intervention in Vietnam in the early ’60s – it was a “rotten country,” he said) they accused France of cowardice, dumped good bottles of Bordeaux down the drain and renamed French fries ‘freedom fries.’
Remember the jokes? When a bomb blew up a Spanish train, France raised its color-coded Terror Alert system…from mauve for “Collaborate” to chartreuse for “Run and Hide.”
And remember what Anglo-Saxon economists said about the French economy? It was ‘sclerotic’…it was a ‘museum’…first, it was tied up by labor unions and then the socialist politicians did kinky things to it.
But every dog has his day, and now the French are enjoying a delicious moment of schadenfreude.
The frogs stayed out of Iraq…avoided a housing bubble…and side- stepped a credit crisis.
And now, the “French model” for managing an economy is the envy of the world. At least, that’s what you might think if you read The Economist. A recent issue has Sarkozy on the cover…looking confident and pleased with himself. By contrast, Britain’s Gordon Brown and Germany’s Angela Merkel look as though they needed a drink.
What’s the ‘French model?’ It’s a system where the state meddles heavily in the economy. Health care, education and public transport are all government enterprises. And political cronies, rather than entrepreneurs, run key businesses.
Heck the French don’t even have a word for “entrepreneur,” as George W. Bush pointed out.
It seems to work fairly well. The health care system functions fairly well – while taking a smaller percentage of GDP than in the US. The trains run on time (except when there is a strike). Grammar and secondary schools are probably better than in the US; the universities are probably worse. And many of France’s private businesses are world leaders – Air Liquide, Danone, LVMH, to name just a few that come to mind.
And so far, France has suffered less from the worldwide financial meltdown than any of its rivals. The last time we were in Paris, the restaurants seemed as full as ever; taxi cabs were as hard to get as ever; and Paris property had barely come down at all – at least, officially.
“I’m not so sure…” said a colleague in Paris. “I’ve been looking for an apartment for the last year. A year ago, there was almost nothing available in my price range. Now, I’m seeing lots of places. I looked at one last week. It is listed at $340,000 – about what it would have been a year ago. But the agent told me that the seller would probably take $275,000. If they’re telling me that right off-the-bat, I figure it might go for $250,000.”
for The Daily Reckoning Australia