Over at Econlib today, Anthony de Jasay skewers the French:

“[T]he ordinary Frenchman is surely among the very brightest of fellow Europeans and she no less so. He is quick-witted, sober in judgment, articulate and both capable and ready to resort to his critical faculty. Yet . . . the collective intelligence of political France works much like that of a mentally retarded child . . .

. . .This amazing failure to understand the realities of public finance—indeed, to understand reality—explains why in France the move of one pressure group to grab resources or “rights” is hardly ever countered by the resistance of other pressure groups that would have to bear the cost.”

Most social programs, so-called, are either described, or otherwise purported to be, some form of insurance. And given that most people don’t even have a basic understanding of the insurance policies that they actually need—homeowners, automobile, umbrella, &c.—they cannot be expected to understand that most of the “risks” covered by these social programs are not, in point of fact, insurable risks.

For example, localized natural disasters, like floods and hurricanes, are not really insurable risks. They occur with too great a frequency, the potential loss is generally not predictable, and they suffer severely from an adverse selection problem: the only people who need flood insurance live in flood plains. These programs can only ever be sustained by taxing people who live on high-ground, in order to subsidize the “insurance” of those who live in the disaster-prone areas. Moral hazard ensues. Because the burden of living in a high-risk area is shifted to others who don’t live in a high-risk area, more people choose to live in such areas, the costs skyrocket, and the people who don’t need the insurance are forced to pay an ever-increasing amount of money to sustain the program.

Unemployment “insurance,” a welfare staple in the United States, and also a favorite of the French, is also not an insurable risk, per Hoppe, who also argues in the extreme case, that most of what we consider to be the province of health insurance, is also not insurable:

“An uninsurable risk is one where the following condition holds: If I know with regard to a particular risk some or all of the factors that determine its outcome, then such a thing is no longer accidental; its likelihood can be individually affected, and therefore cannot possibly be insured.”

So it is no wonder, really, why the French are mired in 10%+ unemployment, year after year – with those recent graduates often experiencing a significantly greater proportion. The country is crippled by social insurance – whether it is unemployment guarantees, old age guarantees, minimum wages, maximum hours, massive farm subsidies, and so on. It is no wonder that, with little or no disposable income left over with which to enjoy the finer things in life, the French birthrate has been falling rather consistently. And like any good Ponzi scheme which requires an ever-increasing number of “agents,” a shrinking population is the harbinger of doom.

But like any Ponzi scheme, the crime does not occur, and guilt attach, at the moment the fraud is revealed – but rather at its inception.

The best indicator of wealth in society is an abundance of goods and services. On the contrary, high prices are definitively not an indicator of wealth. That settled, raising prices will not increase wealth. Furthermore, no government ever taxed itself or its people into prosperity.

The Detroit Free Press reports that Michigan is trying to do just that:

In return for the [State’s two largest elctric companies] agreeing to the tax, [Michigan] would change the law to effectively eliminate competition for the two major utilities — DTE and Consumers Energy — to encourage them to build new power plants, said people familiar with the plan who spoke on condition of anonymity. One expert said the utilities would expect to pass the tax cost along to customers.

One expert? How about anyone who’s taken an intermediate course in microeconomics?

I will scream until my lungs are sore: “Businesses do not pay taxes!” Sometimes, through an accounting identity, it looks like they are paying taxes. They sell goods and services to consumers, individuals, who pay the taxes. Businesses collect taxes on goods & services they sell. And they sell their goods and services to consumers – individuals like you or me – who pay a price that includes the tax. A tax, “paid” by businesses is an absolute fiction. Make no mistake: this is a $1 Billion tax on the citizens of the shittiest economy in the union.

But the grant of pseudo-monopolistic privilege is what really gets me hot. It is well-settled that under monopoly, all else being equal, service and quality will be poorer, and prices will be higher. So the legislature is not only asking taxpayers to take it in the rear to the tune of $1B – they’re also asking us to settle for crappy service and prices that are higher than they ought to be.

This isn’t a mere change of the rules, midway through the game. This is changing the game itself:

The concept is certain to be opposed by smaller companies that built power plants since a 2000 law opened the state’s electricity markets to competition. Other Midwest states with so-called energy-choice laws are Illinois and Ohio.

In an economy struggling as much as Michigan’s is, well, I just can’t imagine how this idea could even get past the drawing board – we’re not exactly clipping along at full employment, and most real-estate markets have seen marked declines in average sales and volume. Has the Legislature considered what will happen to the jobs of the employees at these smaller companies? Blank-out.

“Shutting down the government is not even an option,” said Sen. Michelle McManus, R-Lake Leelanau.

Maybe it ought to be.