Those Not Chosen

Few public policies are ever purely matters of technique. There is also ideology, theory, economics, politics — and a whole gamut of crackpot ideas and prejudices.

Tuesday, October 13th, 2026

Bill Bonner, from Ardmore, Ireland

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Many years ago, an aspiring statesman from one of the hayseed states hoped to unseat his rival by reading aloud the menu from a French restaurant in Washington where the member of Congress was a frequent diner.

“Les cuisses de grenoodles...or something like that...I’m talking about damned frog legs. He eats frog legs. You want a man like that representing you?”

Then, as now, a man may lie, cheat, and fornicate — male or female — but let him show a little refinement, either in his speech or his victuals, and his career in politics is over.

Yesterday, we suggested that there is not as much difference between France’s major problems and those of the US. Today, the French still eat frog legs. Men still kiss each other on the cheek. And in polite society, a man makes a gesture — the ‘baise-main’ — of bowing towards a woman’s hand, as if he meant to kiss it.

But, on the important numbers, we are as alike as two hogs at the trough. The Sunday (Irish) Independent:

France is set to borrow 340 billion euros next year and is running a deficit of 5.4%.

America’s deficit is not too far off — 5.7%.

France’s debt to GDP is 116%. The gross US debt ratio is 130%; the debt ‘in the hands of the public’ is 100%.

America’s ‘diesel fuel’ of finance — the 10-year Treasury — yields 5.3%. France’s 10-year note yields 4.9%. The ‘grenoodle’ eaters are apparently the better credit.

Both countries are insolvent. They do not have the cashflow to support their obligations — including the cost of supporting old people, providing medical care, and financing and refinancing their debt. And the higher interest rates go, the more insolvent they become.

Japan is perhaps the most insolvent in the world. It has a debt/GDP ratio of 234% and is now facing the highest interest rates in a generation. BBC:

Japan raises interest rate to new 31-year high to curb rising prices

But it is far from alone. AI Overview:

Interest rates are rising globally as central banks respond to persistent inflation, with major economies like the U.S. (4.0%), U.K. (3.75%), and Eurozone (2.65%) increasing policy rates, and bond yields reaching multi‑decade highs.

Interest rates are on the rise. And a casual run through the numbers tells us that when Japan’s interest rate reaches a more normal 5%, it will be paying about 12% of GDP just on its national debt. An impossible burden.

With this scenery in place, today’s drama takes center stage. School children in France are on the warpath. They say they don’t like their shabby schools. They want the government to spend more money on them. What they also must dislike is France’s amazingly complex way of rationing school resources, called the Parcoursup.

France has socialized its university system. People whose children don’t go to college must pay for those who do. The latter’s children may loiter for years in ‘higher education’ and pay nothing for it.

In a market economy, the consumer – not the government -- pays for what he gets. The more demand, the higher goes the price. Higher prices diminish demand...and draw forth more supply. But when you abandon the market system, letting politicians fix prices to make things more ‘affordable,’ you upset the whole delicate apple cart. Demand goes up...as supplies go down. Pretty soon, you need a way to ration what little you have left. Typically, scarce supplies of food, for example, are rationed — in socialist societies — by forcing people into long lines and then limiting what they can buy.

French universities use algorithms, grades, and sometimes interviews, to determine who gets in. In a recent year, for example, the prestigious law school in Paris, Pantheon-Sorbonne, got 19,404 applications for 745 places.

To award the few places, the French came up with a system so complicated that only 6% of parents said they could readily understand it.

But few public policies are ever purely matters of technique. There is also ideology, theory, economics, politics — and a whole gamut of crackpot ideas and prejudices.

Typical of a late-stage, degenerate society, the governing elite becomes more and more powerful. They address more and more issues with policies, programs, laws, regulations — and money. Ambitious young people see how it works. They no longer dream of providing new goods and services; instead, they want to decide who gets them.

This is merely an illustration of what Peter Turchin describes as ‘elite overproduction’ — more lawyers, more administrators, more experts, more specialists, more consultants — all of them hoping to share in the wealth, power and status to which they think their education entitles them.

As long as a society is young and growing, new posts are found for them. But then...the burden of supporting its upper classes causes growth rates to go down. The GDP of France is growing at a 0.9% rate, according to the IMF. The US is higher, but still low, at 2.1%. Take out the AI capex spending, however, and you get barely 1.5%.

Sluggish growth opens few new spaces for the aspiring elite. Those chosen put on their business outfits and join the ranks...drearily spending their careers trying to keep the money flowing.

And those not chosen?

They become outlaws...idlers...sourpusses...revolutionaries...complainers. They mount the statue at the Place de la Republique, wave the black flag...and vote for ‘extremists.’

Regards,

Bill Bonner

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