Sarkozy loses his marbles

A couple of weeks ago, French President Nicholas Sarkozy, currently President-in-Office of the European Council during the French Presidency of the EU, proposed a European bail-out fund for Europe’s financial institutions.  This was not well received.  But now the irrepressible Nicholas bounces back with a new wheeze. (“Boing!”, said Zebedee.  Those of you old enough, like me, to remember the BBC’s Magic Roundabout must have noticed the uncanny resemblance between Sarkozy and the spring-loaded, bouncing puppet).
 
He’s decided (Sarkozy, not Zebedee) that he wants Europe to have a Sovereign Wealth Fund.  If all those oil producers like Russia and Abu Dhabi, and manufacturing/exporting nations like China, can have Sovereign Wealth Funds, and can go round buying up Western companies, then Europe must do the same.
 
If only Nicholas would sometimes think before he bounces.  One of the reasons these countries have Sovereign Wealth Funds is because they have a lot of wealth.  But just now, the EU and its member-states are not particularly flush with cash.  They don’t have oil — or not enough.  They have recently enjoyed only moderate success as exporters.  And they have huge commitments in terms of welfare states, social security programmes, unemployment benefits.  Those countries with Sovereign Wealth Funds have, for the most part, avoided squandering their wealth on over-generous social programmes.
 
And though Nicholas may have missed it, western countries have large and unexpected new calls on their depleted exchequers.  Like the bail-out of the banks.  Most are borrowed to the eye-balls, and sinking deeper into debt.  Where is his new Fund supposed to come from?
 
Of course the French love a dirigiste, corporatist approach to industry, and nothing would please them more than a back-door nationalisation of the commanding heights of the economy.  Those of us who value liberty and prosperity (and have some idea about how liberty and prosperity are best promoted) will resist further nationalisation.
 
But the greatest flaw in the French President’s thinking shouts out from the very name of his idea.  Sovereign Wealth Funds.  That kind of implies a sovereign nation that funds and backs the Fund, doesn’t it?  Which one could he have had in mind?

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11 Responses to Sarkozy loses his marbles

  1. John Morton says:

    Mr Helmer

    I see you are now removing comments that do not fit your tidy little “us and them” story of the EU being the corporatist monster, and the City of London being the great guarantor of freedom and democracy worldwide.

    Well, the reality is that however you spin it, globalization and neoliberalism has failed.

    When are you going to admit that you cannot run an economy on free markets alone, and that proper regulation is an absolute necessity?

  2. John Morton says:

    As if to illustrate the point, here is your wonderful private sector self-regulation at work:

    http://abcnews.go.com/Blotter/story?id=6079598&page=1

    Do you honestly think that the more private firms we have regulating and running our economic system, the better it will work Roger?

    Come on, please be serious.

  3. editor says:

    Your blog post was removed by me the editor of the blog as we have introduced a policy of not allowing lots of text which is just requoting something or someone else. We very much encourage original comments however.

  4. John Morton says:

    Editor

    That is fair enough and reasonable, although I should say that the article I posted was extremely relevant to this discussion.

    I am posting the link here and hope you do not object:

    http://larouchepac.com/news/2008/10/21/panicked-flight-corporatism-system-breaks-down.html

    It is agreed that the issue is global fascism, it is not agreed that the source of said fascist impulse is entirely “European”.

  5. Roger Helmer says:

    Dear John, I am sorry you are so angry. And I agree with you that proper regulation is essential, or we should have anarchy. But I stand by my detailed argument that a large part of the problem has been errors of regulation (and errors of policy), not market failure. You cannot solve the problem simply with more bad regulation. We should do better with less but superior regulation. One example I didn’t quote was Gordon Brown’s triparte financial regulation system, so that three separate organisations blamed each other, and no one knew where the buck stopped. When the Bank of England was the sole regulator, we knew where we stood, and by and large the system worked well. Failure of regulation, not market failure.

  6. John Morton says:

    Roger

    That’s all well and good but you consistently refuse to answer to the fact that the entire global economy is based on ficticious values called “derivatives”, the collapse of which is now destroying civilization.

    Now, I suppose you are going to deny that the free market in derivatives is responsible for it’s own asset bubble?

  7. Roger Helmer says:

    John: The derivatives market was a large part of the mechanism, but I coninue to maintain that a large part of the cause — not the mechanism — was bad policy (Clinton’s pressure for relaxation of lending criteria for poorly qualified borrowers, Greenspan’s low interest rates) and bad regulation (“Mark to market”, Gordon Brown’s tripartite regulatory system). So it is not clear to me that “more regulation” is the answer.

  8. John Morton says:

    Roger

    I just do not understand how you can tell me with a straight face that the regulatory failures mean that we need less regulation.

    I do not mean to be rude or insulting but I just cannot understand where you are coming from.

    Right as of this moment, we are in a hyperinflationary process thanks to Gordon Brown and his fellow travelling central banker idiots.
    If we do not stop this madness, civilization is coming to an end very soon, I can promise you that.

    Now I happen to believe that despite our disagreements on economics, that you are a fundamentally decent chap who does not want to see this happen.

    I am asking you to use whatever influence you have within the Tory party to bring this government to it’s knees and force them from office in order that we can start rebuilding this country around economic principles that work.

    This bunch of fascists are a threat to each and every person on this planet with what they are doing.

  9. Pingback: Nicholas Sarkozy Proposes European Trans-National “Sovereign” Fund « Liberty and Prosperity for Today

  10. Roger Helmer says:

    John, I’m sorry you can’t understand, but it’s not rocket science. If (as I believe) bad regulation is part of the problem, then it’s difficult to see more regulation as necessarily part of the solution.

  11. John Morton says:

    Roger

    Are you reading Forbes these days?

    http://larouchepac.com/news/2008/10/27/idiot-day-steve-forbes.html

    Don’t make me call you an idiot aswell. We both know that would not be polite.

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