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Voila Les Misérables!
(The Omen of the Crisis in France)

William R. Hecht
November 11, 2005

Though it is popular today in many circles to bash the French, we should take this moment to thank them; their experience could save our country.

A spark of injustice set fire to an entire demographic and the flames still burn, two weeks hence. How did the refined and socialist French allow this to happen? -- In a word, disenfranchisement. Somehow these former colonials were taken in and never digested. The Arabs of France became citizens but never became French. Perhaps they were tokens of the glory of the French Foreign Legion until they remained too foreign, while their presence in the jails and the unemployment lines became, well, legion. Could it happen here - did it? Was New Orleans post Katrina an hors d'oeuvre of the cuisine yet to come?

We don't have France's unemployed but there is a growing disparity in this land between the elite and the working class. Yesterday's WSJ took time to point out that Wall Street denizens would enjoy a nice year-over-year bump in salary. Corporate earnings grew fifteen percent last year. Executive salaries have remained sacrosanct and in the wake of the Real Estate boom, the lifestyles of the "landed" gentry have certainly not been compromised. Yet wage growth has not kept abreast of inflation. And many union groups are looking down the barrel of a whole new paradigm with which to assess the value of their toil. Thanks to the "Great Wall" Mart, that perfect conduit of comparative advantage, that TransPacific cable of cheap labor, while we employ Chinese, we save money to spend on other things -- and we may need it one rainy day when we no longer have any earning power and the only thing we will bother to buy from China is cheap sustenance: rice. It is hard for a society to strike a balance between the immediacy of prosperity and the consequences for posterity. Nobody wants to stop the whole train just to let a couple of people on. We've done it before, though - when we had to. Maybe if we took these Harvard Economics types and asked them to focus for an instant on the other GDP, the Growing Disenfranchisement of the Poor, we could figure it out.

We may never need the negative example of the events in France to teach us or warn us or remind us of what can happen when an entire class of people are suddenly aflame with outrage. Or we may not need the reminder for a while, but as corporations grow in power and influence they can only exploit on an ever-increasing scale (see Frankenstein Incorporated). And when political capital is lavished on the favorite sons of commerce for an extended period, the have/have-not gap widens. Oh, these things take time. But if or when on some dark day a whole class of people should suddenly appear at our doorstep and say, "Hey, we're hungry!" at least we'll know what to say to them...

We'll tell them to eat cake.

William R. Hecht
email: w.hecht@cox.net

Bill Hecht is an investment advisor and broker with First Financial Equity Corp. in Scottsdale, AZ. He also teaches Investing at Scottsdale Community College. He graduated from the University of Wisconsin and the American Graduate School of International Management. The opinions expressed reflect the judgment solely of the author, not FFEC, SCC, their officers or employees.

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