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Elizabeth Nolan Brown Discusses Millennials on Fox Business

I had the opportunity to go
on Opening Bell with Maria Bartiromo this morning and
discuss millennials, hipsters, and entrepreneurs—three subjects I
covered in a piece for Reason’s October issue titled
“Rise
of the Hipster Capitalists“. It was fun and mildly infuriating.
Host Sandra Smith quoted me as saying that millennials are
“doomed”; when I protested that doomed was my characterization
of what other people say about millennials, not personal analysis,
Smith told me I “should look back at my piece.” Okay,
fine. Here’s the paragraph in question:

Popular wisdom about millennials seems to come in two varieties:
They are either an entitled, narcissistic group of
basement-dwellers, gazing at their selfies while the world burns,
or they’re a perfectly upstanding young cohort who got a raw deal
from the recession economy. Millennials make awful employees
because their boomer parents gave them too many soccer trophies; or
maybe they can’t find jobs because those same boomer parents aren’t
exiting the workforce. The one thing everyone can agree on is that
millennials are probably screwed.

I think it’s pretty clear that everything following from that
first line is meant as an example of “popular wisdom” about
millennials, not my own opinion. And in case there’s any doubt, I
spend the rest of the piece (the above is the opening
paragraph) making a case for the exact opposite. But after telling
me to re-read my own work, Smith went on to “quote” me,
context-free, saying millennials make awful employees because their
parents gave them too many trophies. Then she cut to the other
guests before I could respond.

The other guests, Newedge Director of Market Strategy Robbert
van Batenburg and Value Advisory Founder Howard
Rosencrans, mostly just wanted to yell about how millennials
are the worst. They and Smith all seemed to have outsourced their
opinions to the Generic Millennial Crit playbook—we listen to
iPods! and drink Starbucks! and are lazy, and entitled, and “less
educated” (demonstrably untrue), and… well, see for
yourself:

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LA Schools’ $1 Billion iPad Fiasco Ends After Corruption Revelations

Technology

Los Angeles Unified School District is
ending its billion-dollar iPad program, which has drawn
widespread criticism for distributing expensive devices to teachers
who didn’t know what to do with them and students who kept losing
or breaking them.

The costly program was considered a total failure, and it’s
little surprise that district officials have finally relented and
scaled back. More surprising, however, are revelations that
District Superintendent John Deasy may have engaged in some crooked
bargaining to arrange the deal in the first place.

According to
The Los Angeles Times, Deasy’s previous connections to
Apple and Pearson—the companies contracted to supply the iPads and
instructional materials for them, respectively—amount to a conflict
of interest. In hindsight, the bidding process that Apple and
Pearson won to score the contracts seems biased in those companies’
favor, The LA Times notes:

Last week, a draft report of a district technology committee,
obtained by The Times, was strongly critical of the bidding
process.

Among the findings was that the initial rules for winning the
contract appeared to be tailored to the products of the eventual
winners — Apple and Pearson — rather than to demonstrated district
needs. The report found that key changes to the bidding rules were
made after most of the competition had been eliminated under the
original specifications.

In addition, the report said that past comments or associations
with vendors, including Deasy, created an appearance of conflict
even if no ethics rules were violated.

Emails obtained by The LA Times show Jaime Aquino,
Deasy’s deputy superintendent, advising Pearson officials on how to
win the bid.

I should not that this isn’t the first Pearson has been
accused of something like this. Pearson, a British company, is
the largest publisher of education materials in the world, and its
efforts to lockdown contracts for Common Core-aligned testing
material have drawn scrutiny.

Still, the iPad fiasco hasn’t dampened the district’s enthusiasm
for forcing costly new technology on unprepared students and
teachers. Select LA schools will be trying out other devices this
fall (some of which are actually more expensive), and Deasy is
fairly pleased with that:

“We will incorporate the lessons learned from the original
procurement process,” he said.

“We look forward to refining our processes and ultimately
achieve our vision to equip every one of our students with a
personal computing device to help them succeed in the 21st
century.”

I don’t run a bunch of schools, but this sounds like the exact
opposite of learning our lesson to me.

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Letter Reveals Tony Blair Advised Kazakhstan’s President on How to Spin Massacre of Innocent, Unarmed Protesters

Screen Shot 2014-08-27 at 11.35.49 AM It doesn’t matter who pays Tony Blair, as long as Tony Blair gets paid. When he’s not busy committing war crimes or advising JP Morgan, the former UK Prime Minister (who has amassed a fortune estimated at over $115 million) can be found doing public relations work for some of the world’s most autocratic rulers, such as Kazakhstan’s Nursultan Nazarbayev.

There’s nothing warm and fuzzy about Kazakhstan. In its latest global corruption index, Transparency International ranked Kazakhstan as one of the most corrupt countries on earth in its latest report, 140 out of 177 to be precise (the higher your rank the more corrupt). The oil and gas rich former Soviet Republic has a horrible record when it comes to human rights, but that doesn’t stop Tony Blair from advising the country’s leadership in exchange for millions of dollars per year.

Protect your wealth – Buy Gold and Silver Bullion with Goldbroker.com

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Forget “Peak Oil” and “Peak Credit” … Are We On the Downslope of “Peak Intelligence”?

Scientists say that we have much smaller brains than our ancestors had 20,000 years ago … and we might have gotten stupider since agriculture became widespread.

Huffington Post reports that we've probably gotten dumber than even our Victorian ancestors:

A provocative new study suggests human intelligence is on the decline. In fact, it indicates that Westerners have lost 14 I.Q. points on average since the Victorian Era.

******

As for Dr. te Nijenhuis and colleagues, they analyzed the results of 14 intelligence studies conducted between 1884 to 2004, including one by Sir Francis Galton, an English anthropologist and a cousin of Charles Darwin. Each study gauged participants' so-called visual reaction times — how long it took them to press a button in response to seeing a stimulus. Reaction time reflects a person's mental processing speed, and so is considered an indication of general intelligence.

***

In the late 19th Century, visual reaction times averaged around 194 milliseconds, the analysis showed. In 2004 that time had grown to 275 milliseconds. Even though the machine gauging reaction time in the late 19th Century was less sophisticated than that used in recent years, Dr. te Nijenhuis told The Huffington Post that the old data is directly comparable to modern data.

***

This new research was published in the April 13 issue of Intelligence.

The Daily Mail notes that we've gotten dumber since the 1950s:

Richard Lynn, a psychologist at the University of Ulster, calculated the decline in humans’ genetic potential.

He used data on average IQs around the world in 1950 and 2000 to discover that our collective intelligence has dropped by one IQ point.

Dr Lynn predicts that if this trend continues, we could lose another 1.3 IQ points by 2050.

What's Making Us Dumber?

There are several theories for why we are getting dumber, including the following:

(1) Toxic chemicals in the environment can reduce intelligence.

Modern man is surrounded by toxic chemicals which have been shown to reduce intelligence. Examples include flame retardant, lead (found in many lipsticks), certain pesticides (and see this and this), fluoride (more).

Radiation can also reduce intelligence. For example, radiation can reduce brain size.

Brian Moench, MD notes:

Many epidemiologic studies show that extremely low doses of radiation increase the incidence of … diminished intelligence.

And a very well-established resource for doctors (the Merck Manuals) state:

The fetus is sensitive to damage from radiation because fetal cells are dividing very quickly and also differentiating from immature into mature cells. In the fetus, exposure in excess of 300 mGy during 8 to 25 weeks after conception may cause reduced intelligence and poor school performance.

(2) Humans evolved to eat a lot of Omega 3s:

Wild game animals have much higher levels of essential Omega 3 fatty acids than domesticated animals. Indeed, leading nutritionists say that humans evolved to consume a lot of Omega 3 fatty acids in the wild game and fish which they ate (more), and that a low Omega 3 diet is a very new trend within the last 100 years or so.

In other words, while omega 3s have just now been discovered by modern science, we evolved to get a lot of omega 3s … and if we just eat a modern, fast food diet without getting enough omega 3s, it can cause all sorts of health problems.

So something just discovered by science can be a central fuel which our bodies evolved to use.

Omega 3s – in turn – boost intelligence and help prevent cognitive decline.

(3) Similarly, Science Daily notes:

Exposure to specific bacteria in the environment, already believed to have antidepressant qualities, could increase learning behavior, according to research presented at the 110th General Meeting of the American Society for Microbiology in San Diego.

"Mycobacterium vaccae is a natural soil bacterium which people likely ingest or breath in when they spend time in nature," says Dorothy Matthews of The Sage Colleges in Troy, New York, who conducted the research with her colleague Susan Jenks.

***

"We found that mice that were fed live M. vaccae navigated the maze twice as fast and with less demonstrated anxiety behaviors as control mice," says Matthews.

In a second experiment the bacteria were removed from the diet of the experimental mice and they were retested. While the mice ran the maze slower than they did when they were ingesting the bacteria, on average they were still faster than the controls.

Obviously, we don't get in as much soil as our ancestors did.

(In addition, some bacteria in our gut greatly influence brain function. Most native cultures ate fermented foods containing healthy bacteria.)

(4) Exercise boosts intelligence … and our ancestors got a lot more exercise than we do!

"Even our most highly trained athletes pale in comparison to" farmers 7,000 years ago.

(5) In addition, high levels of cortisol – the chemical released when one is under continuous, unrelenting stress – and poverty can physically impair the brain and people’s ability to learn.

Hunter-gatherers had more leisure time – and a more playful attitude – than we do today.

(6) [For this and the next theory, we quote from HuffPost.] Dr. Jan te Nijenhuis points to the fact that women of high intelligence tend to have fewer children than do women of lower intelligence. This negative association between I.Q. and fertility has been demonstrated time and again in research over the last century.

(7) "The reduction in human intelligence … would have begun at the time that genetic selection became more relaxed," Dr. Gerald Crabtree, professor of pathology and developmental biology at Stanford University, told The Huffington Post in an email. "I projected this occurred as our ancestors began to live in more supportive high density societies (cities) and had access to a steady supply of food. Both of these might have resulted from the invention of agriculture, which occurred about 5,000 to 12,000 years ago."

Postscript: Relaxing activities like meditation and prayer have been shown to increase brain mass and connectivity in certain areas of the brain. And sex makes you smarter and causes brain growth.

via Zero Hedge http://ift.tt/1zFzoU1 George Washington

2nd American ISIS Fighter Killed In Syria, CNN Reports

The anti-ISIS operation, Naharawan al-Sham, who distributed images of the first American to be killed fighting for ISIS yesterday, has according to CNN announced a second American was killed in battle representing ISIS. So far, neither ISIS (which often comments on death of its “martyrs”) or Naharawan al-Sham has released any images or evidence of the second death.

As CNN reports,

Douglas McAuthur McCain is not the only American who has been killed while fighting for ISIS, a coalition of Syrian opposition groups said Wednesday.

A second American was killed in a battle with rival opposition groups as well, said the coalition, which calls itself the Nahrawan of Syria.

But while the coalition released photos of McCain’s body and his passport, it did not offer any evidence of a second American’s death.

ISIS, which sometimes comments on the death of its “martyrs,” has made no official mention of the death of any American fighters.

…

Attorney General Eric Holder estimated this summer that there are 7,000 foreign fighters in the war-ravaged Middle Eastern nation.

More than 100 Americans are among those who have tried to join various militant groups in Syria, U.S. officials say. While some are aligned with ISIS, the fighters shift allegiance and it’s difficult to pin down a specific number, officials say.

Naharawn al-Sham reported via Facebook:

Operation Room of Nahrwan Al Sham battle announced that the fighters managed to free four villages in the northern countryside of Aleppo. These villages are Al Adlieh, Al Zahrieh, Al Said Ali and Al Hasbeh

They added that 43 ISIS members were killed in the clashes and three others were captured.

Some of the killed members have American nationality.

They will be shown later

And Naharawan al-Sham preparing for the battle….

* * *

So are these the US-sponsored moderate terrorists?

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Merkel Slams US Hegemony? “America Can’t Solve All The World’s Problems Anymore”

First Russia and China, then UAE, Egypt, and Turkey… and now it appears Germany (following a phone call with Putin) is pulling the rug out from under US hegemony – just as Obama’s warmongery ramps up…

*MERKEL SAYS U.S. CAN’T SOLVE ALL THE WORLD’S PROBLEMS ANYMORE

Which is odd because just yesterday, President Obama (who never lies) stated “The United States is and will remain the one indispensable nation in the world…“ adding that “no other nation can do what we do.” Perhaps he is wrong?

“Even a superpower can’t solve all of the problems alone anymore,” German Chancellor Angela Merkel says.

Merkel did not stop there…

*PUTIN, MERKEL URGE DE-ESCALATION IN UKRAINE, KREMLIN SAYS
*PUTIN, MERKEL DISCUSSED GAS TRANSIT VIA UKRAINE, KREMLIN SAYS
*PUTIN INFORMED MERKEL OF NEW EAST UKRAINE AID PLAN: KREMLIN
*MERKEL URGES HOLLANDE TO CONTINUE REFORMS IN FRANCE
*MERKEL SAYS HOLLANDE HAS CHANCE TO REVIVE FRENCH ECONOMIC POWER

Seems like she is returning to the offensive from the defensive…

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Britain Would Be Second Poorest U.S. State – Below Alabama: Euro Zone GDP Per Capita Ranks Below West Virginia

USUK Flag Fraser Nelson over at The Spectator has
crunched the numbers and finds that if Britain were somehow to
become the 51st state (OK by me) it would the
second poorest state in terms of GDP per capita, ranking below
Alabama and just above Mississippi.

Would-be Europhiles might also want to consider that the oil
state of Norway would rank 8th, Switzerland 21st, Germany and
Sweden would vie for 40th place (below Michigan), and the entire
Euro area would rank 45th just below West Virginia’s per capita
GDP. Ah, such are the glories of welfare statism.

Nelson was apparently prompted to make these calculations in
response to the smug condescenion of anti-American commentators
about U.S. economic inequality in the wake of the events in
Ferguson, MO. As Nelson notes:

No one beats up America better than Americans. They openly
debate their inequality, conduct rigorous studies about it, argue
about economics vs culture as causes. Their universities study it,
with a calibre of analysis not found in Britain. Americans get so
angry about educational inequality that they make films like
Waiting for Superman. And the debate is so fierce that the rest of
the world looks on, and joins in lamenting America’s problems. A
shame: we’d do better to get a little angrier at our own.

Speaking of smug condescension, it is well worth your time to
click over The Spectator and
scroll down Nelson’s rankings.

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CBO: Deficit is Down, But Debt Remains High

The Congressional Budget Office released another
report on the
nation’s debt and deficit picture today, and the short version goes
something like this: We’ve made some short-term progress in
reducing annual deficits, but the long-term debt picture is still
quite bleak. It’s the calm before the storm more than a sign that
all is well.

There’s no question that the fiscal situation is better than it
was a few years ago. This year’s budget deficit will clock in at
just $506 billion—not a small amount, but far less than the $1
trillion overruns we saw during President Obama’s first term. This
year’s deficit will even be slightly smaller, relative to the size
of the entire economy, than is typical over the last four decades.
Projected Medicare costs—a major driver of long-term debt—have
continued to be reduced
compared to the increases the CBO expected just a few years
ago.

But some of those Medicare savings are based on cuts that, as
Medicare’s Trustees have
hinted rather strongly, may not ever materialize. And some of
them are based on projections of slowing health spending that could
easily be wrong, as much of the slowdown has been attributed to the
economy.

Meanwhile, even as annual deficits have declined, total federal
debt levels have remained high. And they are expected to rise to
unprecedented levels in the years to come. By the end of this
fiscal year, the CBO says, federal debt held by the public will
equal 74 percent of GDP, double its 2007 level, and higher than at
any point since 1950. Then it gets worse. “The persistent and
growing deficits that CBO projects would result in increasing
amounts of federal debt held by the public,” the report says.
Starting in 2018, deficits start to rise above average levels
again, pushing debt as a percentage of GDP up to 77 percent in
2024.

The higher the debt levels, the bigger the problems for the
nation, especially when debt levels are this high. As the CBO notes
(and has said repeatedly in previous reports), higher debt means
higher federal spending on interest to maintain the debt, lower
economic growth rates, less flexibility for policymakers in all
matters, and an increased risk of a fiscal crisis. Basically, debt
costs money to carry, and robs the nation of other options: the
more a nation owes, and the more it spends on debt, the fewer
choices it has to do other things, which creates a kind of
precarious state in which really big problems—like a fiscal
crisis—are more likely, and harder to deal with when they do occur.
It’s a fiscal feedback loop, and it’s threatening to drag us
down.

The Obama administration has tended to treat the recent decline
in annual deficits as a kind of problem solved. It’s not. The
problem is a little smaller, but it hasn’t gone away so much as
been postponed. That’s a good thing, but it’s not enough.

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No Bubble At All: Jessica Alba’s Diaper-Delivery Startup Is Valued At $1 Billion, Prepares For IPO

While today even the pundits are aghast at the latest Snapchat valuation round, which according to the WSJ has Kleiner Perkins inject a laughable $20 million into the private-parts photography service, boosting its valuation to a whopping $10 billion in a clear windowdressing mark-up round, up from $800 million a year ago, even as the actual equity invested into the company is a paltry $160 million or under 2% of said valuation, the true indicator of just how bubbly the second coming of the dot com era has become comes courtesy of none other than Jessica Alba’s, yes the actress, own startup: a company launched in 2012 and which makes “non-toxic” diapers (as opposed to toxic diapers?), called the Honest Co., has raised $70 million at a valuation just shy of $1 billion in preparation for an IPO.

Ridiculous? Well of course, but at least unlike Snapchat which still has zero revenue, there actually are idiots who will pay a premium to subscribe to hemp diapers, and the company does in fact have some revenue: “since launching in 2012 with its non-toxic diapers and other natural baby products, the California-based startup has grown quickly by blending its environmentally sensitive products with a social mission. Annual revenue is tracking to hit north of $150 million in 2014, or three times the revenue of 2013, according to Mr. Lee. Roughly 80% of Honest revenue is from customers who subscribe to a monthly service delivering diapers and other consumable products on a recurring basis.”

It appears the customers of Honest Co are so stupid, or just so lazy, they prefer to pay an exorbitant premium for a commodity product just so they have a monthly diaper delivery on their front step. In other words, a service for the 0.001%, which will continue to generate revenue as long as Fed’s uber ZIRP bubble continues and allows such other ridiculous business models as Tesla to not only survive but prosper.

Some more on how Jessica Alba is about to be a whole lot richer:

Along with the healthy lifestyle and cleaning products, which will soon include formula for babies and beauty products for moms, the startup is selling a feel-good mission. Like Toms Shoes Inc., Warby Parker Inc., Etsy Inc. and other e-commerce companies that use business to benefit social causes, Honest donates product and revenue. The company established programs like diaper and crib donations as part of its business model, earning it a B Corp certification from nonprofit group B Lab.

“Nowadays it’s about corporate responsibility. The consumer today demands this of companies and we are doing our part to help in any way we can,” Mr. Lee said.

Although the company has expanded its retail distributors during the past year from Whole Foods and Costco to include Target, Buy Buy Baby and Nordstrom, just 20% of sales occur offline.

Mr. Lee said that mix is a good balance for the company for now and the company has intentionally held back on marketing efforts because it is now at capacity fulfilling orders. The Series C funding round will be used to bankroll growth both in the U.S. and abroad.

In other words, this is just like a “supply-constrained” Tesla, only for diapers.

“We believe being a public company is the best path for us going forward and it’s good to get that validation early on,” Honest Chief Executive and Co-founder Brian Lee said, noting that public-markets investor Wellington Management Company led the Series C round. “I can’t say when that will be, but we are definitely starting to think and act like a public company.”

The existing investors are the who’s who of venture capitalist for whom the initial round equity checks is also known as pocket money:

Along with Wellington Management Company, a handful of unnamed public financial institutions also participated in the round, as did all existing venture investors, a roster that includes Institutional Venture Partners, Iconiq Capital, Lightspeed Venture Partners and General Catalyst Partners.

The Honest Co., which employs 275, previously raised $52 million. Through an Honest spokesman, Wellington declined to comment.

“Having them as shareholders will help the team understand the metrics, traction and other things public-market investors are going to look for as they enter the market. Having them inside the tent instead of outside the tent makes that dialogue much more open.”

And, of course, the exit event is quite clear: “General Catalyst Partner and Honest board member Neil Sequeira said working with Wellington to lead the round was logical because the goal is an IPO.”

Clearly, to IPO, the diaper delivery company will need an even greater upside story. Enter, what else, China.

In preparation for an IPO, Jessica Alba’s The Honest Co., a maker of eco-friendly baby products, has raised $70 million at a valuation just shy of $1 billion and is beginning partnership talks to expand to China, Dow Jones VentureWire has learned.

Jeremy Liew, a partner with early investor Lightspeed Venture Partners, said Ms. Alba, the actress-turned-entrepreneur who co-founded the company in 2011, has leveraged her star power for the benefit of the startup.

“She is an international star. We’re starting to see a lot of demand from her fans around the world,” he said. “This idea for non-toxic, chemical free products has resonated around the world in developed and developing countries.”

To summarize: an “sexy movie star”, a whole lot of VCs seeking to cash out to get-rich-quick morons who have forgotten all about the sad ending of the first dot com bubble, a company that has a “unique product”, a ridiculous, laughable, bizarre “business model”, even if ultimately it is used to simply contain shit pardon our French, and the piece de resistance, “China.”

What else is there to say. We expect the stock to soar over 100% on the day of its IPO.

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Get Back To Work Mr. Hollande; French Jobseekers Surge To Record High

Despite all the ‘promises’ French joblessness has risen every month since April 2011… July’s jump is the 2nd biggest sinmce April 2013 and at 3.424 million is a fresh record high. One can only hope (though good luck with that) that the new cabinet – same as the old cabinet – will turn things around. With 80% of French people believing that Hollande cannot fix the economy, we suspect things get worse before better…

French ministers are piling the pressure on Draghi to do something…

*VALLS SAYS NEW FRENCH GOVT STANDS FOR ECONOMIC CLAIRITY
*VALLS ECB NEEDS TO GO FURTHER IN FIGHTING INFLATION
*VALLS SAYS NEW FRENCH GOVT STANDS FOR ECONOMIC CLAIRITY
*VALLS SAYS LOW INFLATION THREATENS EUROPEAN PROJECT

Charts: Bloomberg

* * *

The French reshuffle (via SocGen)

The cabinet reshuffle announced by French PM Valls was small and in line with our expectations. This is clearly a centerleft cabinet comprised of like-minded politicians, without the leftwing ‘rebels’. Memb rs of the new government should be more in sync with President Hollande’s economic choices this time around. This is embodied by the appointment of Mr Macron as Minister of Economy and Industry.

We continue to believe that the government will maintain a stable majority at the National Assembly despite the rebel politicians. The first test of this will come with the confidence vote, probably on Friday. In April, PM Valls gained an overhelming majority in his first confidence vote. But this time, the ruling majority may be weakened, although the Fifth Republic, founded in 1958, can still function. The odds of the government falling are very small. Indeed, such an event would trigger a general election, which would be political suicide for most Socialist lawmakers and their allies.

A center-left cabinet of like-minded politicians

The cabinet reshuffle was small, with most ministers keeping their jobs, notably Mr Sapin as Finance Minister, Mr Fabius as Foreign Minister and Mrs Royal as Minister of Energy and Ecology. The rebels, Mr Montebourg, Minister of Economy and Industry, Mr Hamon, Minister of Education and Mrs Filipetti, Minister of Culture, did not retain their positions, as expected.

The two main appointments concern Mrs Vallaud-Belkacem as Minister of Education and Mr Macron as Minister of Economy and Industry. Mrs Vallaud-Belkacem, 37, is a bright politician born in Morocco. This is the first time a woman has been appointed as the Minister of Education, an important post. Mr Macron, 36, was the Deputy General Secretary of the Elysée from 2012 to 2014 in charge of economic policy and is known to be very close to President Hollande. He was a former banker and embodies the center-left line, a supply-side driven economic policy. He is well versed in structural reform, having participated in the Attali Commission in 2008. Put simply, he represents the antithesis of Mr Montebourg, and there is no doubt that Mr Sapin and Mr Macron are on the same page.

Overall, we believe that the cabinet reshuffle will help reduce policy uncertainty at the domestic level. The message related to Mr Hollande’s economic programme was muddied by conflicting statements made by several of his government ministers in the past, by Mr Montebourg in particular. The hope is that the new and more compact government will help restore confidence among economic agents and investors.

A weakened majority, but the Fifth Republic is still functioning and remains stable

The question is whether the departure of leftwing rebels Mr Montebourg and Mr Hamon will cost the parliamentary majority. We think not. This should be confirmed fairly quickly with the confidence vote later this week (probably on Friday). The government needs a majority of 289 sea s (out of 577) at the National Assembly to run the country. In April’s confidence vote, PM Valls received 306 votes, although 11 Socialist members abstained. This suggests that the government has sufficient room to manoeuvre despite the potential for new defections. In particular, the Socialists and the Center-Left (Parti Radical de Gauche) represent 308 seats, while most Green MEPs (about 10 out of 17) could continue to vote in favour of the ruling coalition.

The Fifth Republic, established by General de Gaulle in 1958, has proven very stable indeed. No PM has ever been thrown out by Parliament. All cabinet reshuffles have been decided by the president. The main reason for this lies in France’s Dissolution Weapon: the President can dissolve the Assembly whenever he wants. Against the current backdrop, a genera election would doubtless lead to a crushing defeat of the Socialist party and would be political suicide for most Socialist politicians. This is why we believe a no confidence vote is very unlikely. Moreover, the ruling party has a very powerful weapon if it wants to pass bills that could be challenged by rebel politicians: Article 49.3, which the Hollande administration has yet to use. Article 49.3, known as “the responsibility commitment”, allows the government to push through any bill without subjecting it to a vote. For the bill to be rejected, a no confidence vote would be required, but in that case, the government would fall, and this has not happened since the creation of the First Republic in 1958.

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