The Busted Order Fallacy: French Socialist Finally Trump Bastiat, Not!

Way back in 1850 the great free market economist, Frederic Bastiat, famously instructed his French readers on the "broken window fallacy". He decisively proved that destroying assets so that money can be spent on their replacement does not cause economic growth nor increase societal wealth. But now it turns out that was not the end of the matter.

Apparently, French socialists have been looking for a way around Bastiat's proof for the last 164 years and have finally come up with an answer. Namely, to break the frames, not the window!

What has happened is that the government ordered 200 new trains to replace existing units. This is supposed to goose France's flagging socialist GDP because such trains do embody a lot of metal, electronics, furnishings and labor---even if this infrastructure "investment" maneuver does require scrapping the perfectly serviceable units now in operation.

But in a rebuke to Bastiat, the specifications for the new trains required that they be too wide to fit the 1,200 train stations that dot the French rail network. That is, the French government will now tear down the stations so that the new trains will fit.

French dirigisme is a wondrous thing. The GDP will now get a double dose of "investment" it doesn't need and that the French state can ill afford.

The preposterous details of the French "one size fits none" caper follows.

By Tyler Durden at Zero Hedge 

How does the New Normal saying go: "socialist-motion trainwreck"?

In a time before the New Normal "fairness doctrine" where socialized companies such as GM have 60% more recalls in 5 months than they had sales in the prior year, a story such as the following would belong at best to a surreal "Polak" joke. Unfortunately, in this centrally-planned day and age, it is all too real. Reuters reports that in order to boost GDP and to cement that even under hard-core socialism France is still a manufacturing powerhouse, the French national rail company SNCF had ordered some 2000 trains for an expanded regional network from the national rail operator RFF. There was just one problem: the trains were too wide.

And since the local station platforms can not fit the misshaped trains, France now has to spend countless millions and add to its already disturbing budget deficit  in order to repair and construct wider stations. The good news, of course, is that France gets to double count the benefit of the GDP "boost" - first for the screwed up train order, all thanks to some bureaucrat who didn't feel like double checking his numbers, and second to reconstruct all of its incompatible train stations. Surely this is the purest definition of economic "growth."

From Reuters:

A spokesman for the RFF national rail operator confirmed the error, first reported by satirical weekly Canard Enchaine in its Wednesday edition.

"We discovered the problem a bit late, we recognise that and we accept responsibility on that score," Christophe Piednoel told France Info radio.

Construction work has already begun to reconfigure station platforms to give the new trains room to pass through, but hundreds more remain to be fixed, he added.

How could such an idiotic mistake take place: does nobody double check anything under a socialist utopia? Apparently not:

The mix-up arose when the RFF transmitted faulty dimensions for its train platforms to the SNCF, which was in charge of ordering trains as part of a broad modernisation effort, the Canard Enchaine reported.

The RFF only gave the dimensions of platforms built less than 30 years ago, but most of France's 1,200 platforms were built more than 50 years ago. Repair work has already cost 80 million euros ($110 million).

Still, it wouldn't be a story about socialist success if it wasn't someone else's fault: apparently in this case the responsibility lay in the "absurd rail system" changes made by the previous government.

Transport Minister Frederic Cuvillier blamed an "absurd rail system" for the problem, referring to changes made by a previous government in 1997. "When you separate the rail operator (RFF) from the user, SNCF, it doesn't work," he told BFMTV.

Zerohedge 

 

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