Another Brick in the Wall

The ‘liberal’ agenda — the operating model for the welfare state, spending more money, with more rules, and more elite do-gooders living at public expense — seems to have reached its brick wall.

---

Source: Getty Images

Thursday, October 22nd, 2026

Bill Bonner, from Ardmore, Ireland

Young people are sharing a frustration that opportunities for their generation are becoming scarcer and their future increasingly insecure.

—El Pais

---

As promised, another way to ‘connect the dots’ on Europe’s riots.

Blame neither immigrants, free-spending liberals, nor tight-fisted conservatives. Or blame them all. The problem is deeper. It is not the collapse of Western Civilization...but the collapse of the post-WWII European welfare state. New York Times:

It’s Not Just France. Europe’s Political Center Is Crumbling

The phenomenon has been building for years, with the perceived failure of liberal democracy to make good on its promises of a better future, especially for the young and the salaried working class.

There is a growing perception among many Europeans that traditional parties of the center-left and center-right do not offer real alternatives and are led by an educated elite that has lost its connection to the poor, the workers and the young. Facing rising deficits, expenses and interest rates, governments feel constrained in what they can do to respond.

The Times is, of course, a ‘liberal’ journal. It believes the problem is fundamentally a matter of money. If not for deficits, governments would be able to ‘respond’ (spend more money) to salve the hurts suffered by the poor and the workers. El Pais makes the same point:

The debt crisis leaves the French government with no room to respond to social demands

A penniless sugar daddy is just a dirty old man. He lures the young with promises, but has no way to make good on them. Voters are disgusted, giving up not only on mainstream political parties, but on democracy itself. A Pew Research poll shows 69% of the French population is ‘dissatisfied with democracy.’ In the US the dissatisfaction is the same — 69%.

In Europe, but not yet in America, disgruntled citizens have taken to the streets. Some are hoping for a change in government policies. Others are hoping to loot a pair of sneakers. And some are just out to cause trouble.

But the real trouble is not something any of them can change. The basic model is broken. In this regard, the old-time conservatives are right. You can’t really improve a society by handing out money. And you especially can’t do it when you don’t have any real money to distribute.

“When I got out of school,” an old friend in France once told us, “...that was 1970. I could walk into almost any business in the country and get a job. The economy was booming. I had trained, but only briefly, as a machinist. But you didn’t have to worry about having certificates...and signing contracts...and all the other [BS] you go through today. I worked as a pastry chef for a while...and then as a plumber.

“And if I didn’t like my job, I could cross the street and get a different one.”

In France, as in America, people expected life to get better. Not because the government would give them more money, but because technology was racing ahead, and taking everyone with it. You could get a decent job and, as the economy grew, you would earn more. Soon, you’d be able to buy your own automobile...and maybe another one for your wife.

But Western economies have slowed down. The industrial revolution has run its course. Newer technologies — the internet and AI — have not, so far, panned out in the same way. Governments — promising more and more free stuff — have gone deeply in debt. And in their zeal to reward friends and punish enemies...they have erected such a high wall of rules, regulations and the aforementioned BS, that it is very hard for entrepreneurs to get over it.

Brett Holmes, in the New York Times, says France has become ‘unglued.’ Bad word choice. It is actually stuck, mired...gummed...in its own sweet fixes, like a fly gone to sleep in the jam pot. The Knowledge channels Holmes:

[In France] employers are discouraged from hiring by statutory social costs higher than anywhere else in Europe. The last time the World Bank published its “ease of doing business” rankings, in 2020, France came 32nd, just ahead of Turkey and Azerbaijan. A succession of prime ministers has tried to raise the retirement age from 62 to 64, to bring it more in line with the EU average and address the “crushing fiscal burden” of the country’s bloated pension system. No dice. American liberals often used to tout France as a model of what life should be like in the US: universal health care, strong worker protections, lower economic growth but “lots of joie de vivre”. Not anymore.

And now, interest rates, and inflation, are rising worldwide. France’s consumer inflation is 3.4%. In the US, it’s 3.7%. France’s cost of borrowing — the yield on its 10-year bonds — is 5.01%. US borrowing rates are already at 5.12%.

In both Europe and America, the glue has stiffened up. Governments can still borrow, but when they do, they drive up interest rates, which ends up costing them even more money.

The ‘liberal’ agenda — the operating model for the welfare state, spending more and more money, with more and more rules, and more and more elite do-gooders living at public expense — seems to have reached its brick wall.

It was always a Ponzi finance scheme, needing more and more new contributors to keep up with the promises made to the earlier ones. The first in — the baby boomer generation — did tolerably well...but the late arrivals are, pardon our French, ‘dans la merde.’

Regards,

Bill Bonner