Unrest in Paris

Paris has been rocked by protests lately. It started with transportation workers protesting a fuel tax, but has since grown to include other grievances. The lower middle class is revolting against the current system. However, there does not seem to be any clear vision among the protesters as to what is at the heart of their problems.

Commenting from the sideline, several libertarians have vented their opinion. Ron Paul has pointed to the problem of direct and indirect taxation. He sees the problem from the point of view of the French government. The Euro is not being sufficiently debased by the European Central Bank, so the French government has to introduce direct taxes to cover their expenses. This has to be targeted directly towards the productive side of the economy, and transportation workers with their need to burn fuels in order to make a living were a convenient group for this purpose. Despised by the green movement, these outcasts of society could be targeted without much political backlash. So was the theory. However, as we now see, the despised and down trodden have now had enough. They have finally started to protest.

Egon von Greyerz takes a similar view. Purchasing power has been steadily eroded through debasement of the currency to the point where the lower middle class no longer manages to make ends meet. The fuel tax was the visible spark that made everyone realize that their problems come from government. They may not as of yet realize the role of the central bank in creating their hardships. However, they are starting to realize that their problems are being foist upon them by the busy bodies micromanaging their lives. Seeing transportation workers demonstrating in the streets, other members of the lower middle class have also come to realize what has been made blatantly clear to transportation workers. Government is at the heart of their problems.

Finally, I find it interesting that the protests are happening in Paris and Brussels. These are places close to the heart of the current system. The bad money issued by the European Central Bank is finding its way into these cities first. This creates all sorts of hardships for the average worker. The unproductive but well paid functionaries of the system drive up prices, making it increasingly difficult for the productive underclass to make ends meet. This problem is far less pronounced in peripheral areas. Unrest starts at the center because that's where the bad money created by central banks make the most damage.

However, as long as the protesters are clueless to the role of central banks and the bureaucracy that it enables, the protests will come to nothing. Populist politicians will not solve the problem. They may rip the EU project to shreds. But they will not abandon central banking. Any respite coming from an EU exit will be fleeting and short lived.