Economic Austerity, French Style!

Here we go again! The federal government of the United States, having repeatedly failed to meet its own self-imposed deadlines to balance its budget, is quickly approaching yet another deadline.

The names of the deadlines are becoming more exciting, though, aren’t they? First we experienced the tamely termed debt ceiling. Then we approached the more aggressively named fiscal cliff. And now we are encountered the inscrutable yet terrifying sequestration.

Meanwhile, on the other side of the Atlantic Ocean, French citizens are collectively engaged in their own unpleasant experiences with economic austerity. The nature of their experiences, in contrast to America’s, reveals quite a bit about the cultural differences between the two societies.

The So-Called Workers

The most recent controversy involved the blunt comments of an American business executive about a French tire factory. Titan International’s CEO Morry Taylor visited France in contemplation of an acquisition of the plant, but told the French Minister of Industry Arnaud Montebourg:

“The French work force gets paid high wages but works only three hours. They get one hour for breaks and lunch, talk for three and work for three.” He continued: “Titan is going to buy a Chinese tire company or an Indian one, pay less than one Euro per hour wage and ship all the tires France needs. You can keep the so-called workers.”

Sacre Bleu! What outrageous insults! But the comments weren’t much harsher than the complaints that French citizens launched at their own President Francois Hollande after he attempted to modify the calendar of the public school system.

Hump Day Traditions

In the United States, the middle day of the working week (i.e Wednesday) is colloquially called Hump Day. That’s because we all require a fair amount of physical and mental stamina to make it “over the hump” and slide into the second half of the week.

But American society has never formalized any special traditions for Hump Day. Indeed, Wednesday has remained a standard work day, along with Monday, Tuesday, Thursday, and Friday. In France, however, Wednesday has been treated as a special day by the public school system.

How special? Well, most state schools are closed on that day. Indeed, each Wednesday is treated as a weekend day, albeit one that falls in the middle of the week.

And how have the citizens of France responded to President Hollande’s recent suggestion that children should attend schools on Wednesday mornings? One critic complained “This is the only country I know where the adults work 35 hours a week, but they expect their kids to work more.”

Sequestration

While the French have been debating issues like three hour work days and four day school weeks, the American people have begun to learn about an entirely different level of economic austerity.

What is it? Why, it’s sequestration! That’s a legal term that was originally coined to describe the seizure of property under dispute for safekeeping to prevent a party from obtaining or damaging it. But ever since the Gramm-Rudman-Hollings Deficit Reduction Act was signed into law in 1985, the term has come to mean something entirely different.

In essence, on certain arbitrary dates defined by law, the United States Treasury is required to sequester (i.e. not spend) any funds that would be borrowed under normal operating practices. This nullification of spending activities, in turn, eliminates any reason for the federal government to borrow more money and extend its deficit; it thus serves as a debt limitation tactic.

What happens to government operations that need those unborrowed and unspent funds in order to conduct their business activities? They are forced to implement devastating cutbacks, thereby depriving the American people of many necessary services.

Values and Expectations

So how do they do it? How does the French government manage to remain so far ahead of the American government in terms of its ability to help its people maintain a reasonable standard of living with relatively less work effort?

Well, the French government presides over a society that is willing to acquire less wealth for less work. While estimates of America’s Gross Domestic Product per capita range from $46,000 to $48,000, estimates of France’s GDP only range from $35,000 to $36,000.

And then there are taxes. The French people pay their federal government a Value Added Tax, a Wealth Tax, and an income tax with a top marginal rate of 75%. None of these taxes exist at such levels in the United States.

So the cultural differences between the societies are clearly defined. French citizens expect to generate and accumulate less wealth, and they bear the burden of higher taxes. In return, they value and expect a life style of limited work. American citizens, on the other hand, expect more wealth and lower taxes. In return, they value and expect a life style of significant work.

In other words, cultural values shape expectations, and expectations shape nations. The results, perhaps unsurprisingly, are self evident.