You might have heard of the General Electric bid for French bullet train and power equipment maker Alstom’s energy branch. This is a great story to follow if you want to see the kind of mentality that permeates the French political class. Let’s start with a little background.

Alstom was formed from a merger between Compagnie Française Thomson Houston and the Société Alsacienne de Constructions Mécaniques in 1928, significant acquisitions included the Constructions Electriques de France(1932), shipbuilder Chantiers de l’Atlantique(1976) and parts of ACEC SA(Belgium, late 1980s). Another merger with parts of the General Electric Company plc(UK) formed GEC-Alstom in 1989. The company became Alstom in 1998.

In 2003, Alstom was in a financial crisis due to massive unexpected costs(€4 billion) arising from a design flaw inherited from the acquisition of ABB Group‘s turbine business, in addition to losses in other areas of the business. The company was saved in 2004 by a €3.2 billion state backed bailout.

This is a government darling, a company which is considered strategic, a crown jewel, a fleuron national as we say. Here’s another peculiar thing about Alstom : its first shareholder, with 29.38% of the shares is Bouygues S.A.

If you’re searching for one of the most prominent French cronies, look no further than Bouygues CEO Martin Bouygues. He is very close to Nicolas Sarkozy, in fact the former President refers to him as a brother and chose him as his best man for his second marriage and as the godfather of his son Louis. Yet, Bouygues managed to adapt pretty well to the new Hollande administration. He found a precious partner in crime in minister Arnaud Montebourg, which led to ridiculous episodes of government unwarranted, botched interventions, such as trying to bully telecom company Free into canceling price cuts(I should tell you the story of Free later, it’s a pretty remarkable tale of cronyism too), or trying to back up Bouygues with public funds so he could outbid Patrick Drahi’s Altice for the acquisition of SFR.

So here we are. A fragile crown jewel company in need of fresh capital, one of the most important cronies in the country, and a socialist minister who describes his ideas as “participatory Colbertism”, which is  “the marriage between Colbert and Obama” ,and acts like a Cocker Spaniel on crack. I’m not exaggerating, he’s  a complete clown. He even openly advocates for cartels and price fixing, and intervenes any time he can, with disastrous results.

And then, General Electrics made its move, taking the French government by surprise.

Here’s the first funny thing : apparently, Martin Bouygues knew GE was in a discussion with Alstom for quite some time, but even while he was teaming up with Montebourg in the crony ventures I just told you about, he never said anything to him on this subject. Of course, he wants the deal to go through. Martin, I’m disappointed you’d rather cash a good profit than play ball with your new BFF…

As you could expect, Montebourg went ballistic. He publicly attacked Alstom CEO Patrick Kron, saying he “lacks basic national ethics” and asking if “he should install a lie detector in his office so the CAC40 CEOs can’t lie to him”. He swore to do anything possible to derail this deal. Now, you might wanna point out that General Electric has been operating in France for more than 100 years, employs 10 000 persons, generates 7 billions € in revenue and is a close partner of Safran, another crown jewel, so the President or the Prime Minister should tell Montebourg to shut up. Nope, they went along.

Our dear minister came up with a plan to prevent General Electric from buying Alstom : to have Siemens buy it. Apparently, the same Siemens we had to save Alstom from back in 2004 has turned into a gentle benefactor. Of course, the Alstom workers are quite unhappy with that turn of event. GE and Alstom somewhat complete each other, whereas their jobs would be redundant, hence in jeopardy, if they had to take the Siemens deal. The Alstom board of directors is also pretty pissed-off and chooses to take the GE deal.

You’d think it would be over by now. Fools! You’re in the Socialist Republic of France, in Socialistan. That flamboyant idiot Montebourg decided to outdo himself and go all the way. Proclaiming “the end of laissez-faire”(when exactly did we have this here?), he passed what is already called the Alstom law, extending a 2005 law that allowed the government to block acquisitions in the military sector to now include water, healthcare, energy, transportation and telecom. Everyone here probably already thinks that’s the classical mistake of focusing only on the seen and disregarding the unseen, but heh, what do we know?

But Cédric, isn’t the opposition doing something? What are the other parties saying about this affair? Well, remember what I told you in the previous article, about all this ultraliberalism paranoia? Get ready for some nice cognitive dissonance.

UMP MP Laurent Wauquiez : “The State should buy shares and prepare a real industrial policy”.

UMP President Jean-François Copé : “This measure, in line with Montebourg’s philosophy of interventionism and negation of the economic reality is obviously going to scare away foreign investors”. Fistbump, you actually said something smart for a change.

UMP MP Lionnel Luca : “The social-liberal left is the valet of capitalism. Abandoning Alstom and selling it to foreigners is the death letter of a credible alternative”

See what I mean when I say the UMP can’t get its act together?

FG President Jean-Luc Mélenchon : “We need to nationalize Alstom. What we need to defend our industries is solidary protectionism”

DLR President Nicolas Dupont-Aignan : “It’s incredible, our leaders are hesitating between two evils, General Electric and Siemens, when they should be doing whatever it takes to preserve our independence and immediately buy shares to block this industrial hold-up. We need smart protectionnism”

FN President Marine Le Pen : “The CDC should buy 30% of the shares. We need a response adapted to the economic stakes and the savage global competition attached to the ultraliberal policies decided by the European Union and implemented by the Socialist Party and the UMP “. I should mention one of her favorite buzzwords is “common-sense protectionism”

UDI President Yves Jégo : “Président Hollande should act quickly to build a European giant around Alstom.”

PLD President Aurélien Véron : “We refuse this Venezuelan turn. This violation of private property will amplify the bad signal sent by the past attacks of Arnaud Montebourg against foreign investors. He scares them away from our country and our job market, which continue to decay. Manuel Valls has to stop Montebourg’s killing game. ”

According to a poll, 70% of my compatriots approve Montebourg’s Alstom law and 55% would like to temporarily nationalize Alstom. Bolshevik country.

There you have it. In the so-called ultraliberal country, there’s an across-the-board agreement that you need heavy government intervention, and that trumping the property rights of the owners of a private company is a good and right thing to do, yet the usual suspects will keep on asking for more of the same and calling their slightly less interventionist peers ultraliberals. The UMP is split on the subject, but sadly the arguments against intervention are only utilitarian. The PLD has a good stand on this, but as I told you, its voice is completely diluted, given the UDI President is advocating for EU intervention(that’s UDI in a nutshell, they don’t call for government interventions but for EU interventions in the economy).

It’s amazing how the political class can think completely backwards. They try to stop our companies from being bought out, but never question why they’re vulnerable in the first place. It should be obvious the problem here is, our companies are weakened by the heavy and ever-changing fiscal policy and regulations, a completely blocked job market and some stupid things like pension funds being outlawed. In the same way, they try to explain away or hand-wave the fall in foreign investment when it’s clear the first thing to do to increase attractiveness is to kick out the mad dog who keeps on trampling on property rights. French politicians keep on trying to defeat the inevitable consequences of the policies they so cherish.

The only real “economic patriotism” is getting the government off our backs, so we can do what we want with our money. Including investing in our fleurons nationaux.