If young people in Europe were a company, I would be telling you to sell the stock.
Why? Well, because politicians want to help them. And, as perfectly illustrated by this Eric Allie cartoon (as well as the cartoon he has at the bottom of this post), government at best unintentionally harms those it tries to help.
To see what I’m talking about, here’s some of what the EU Observer is reporting today.
EU leaders gathering in Brussels on Thursday (27 June) for a two-day summit will again turn to measures aimed at helping young people to get jobs, as unemployment figures soar in southern countries. The summit kicks off at 4.30pm local time with a meeting between leaders, trade unions and employers’ associations, to hear what actions they are taking to boost youth employment. …The European Commission has already drafted a paper on how the EIB could boost its lending powers. Its loans are used mostly by small and medium enterprises, which could hire more young people if they get the money to fund expansion. Under the most ambitious scenario, EIB lending could exceed €100 billion.
How stereotypical. Big business, big labor, and big government are getting together and considering a €100 billion slush fund that will line their pockets.
They want us to believe this will lead to more jobs for young people, but they overlook (and hope we’re unaware of) Bastiat’s warning about the seen and the unseen.
Expanding the EIB will simply divert resources from more productive uses.
So what’s the answer? Here’s what I recommended as part of some speeches earlier this month in Europe.
I began with what should be a common-sense observation that businesses won’t create jobs unless they think new workers will add to the bottom line.
I then outlined some of the ways big government undermines incentives to create jobs by making workers more expensive.
I also explained that Keynesian spending schemes won’t create jobs.
Last but not least, I warned that workers will be less likely to seek jobs if government handouts alter the tradeoff between work and leisure.
Regarding this final slide, I shared in my speeches this amazing chart about the anti-work incentives created by the safety net in the United States, as well as some similar startling data from the United Kingdom.
Sadly, none of my audiences included senior European officials. And even if they were in the audience, I doubt they would have learned anything.
After all, why support an agenda of free markets and small government when that would reduce their power and influence?
[…] https://danieljmitchell.wordpress.com/2013/06/27/very-bad-news-for-europes-young-people/ […]
[…] like they’re totally oblivious to the damage that big government has caused for young people in […]
[…] like they’re totally oblivious to the damage that big government has caused for young people in […]
[…] https://danieljmitchell.wordpress.com/2013/06/27/very-bad-news-for-europes-young-people/ […]
You’re so right Dan — the way almost everybody makes money working for somebody else is … helping them get richer.
That’s what people who are paid for their work are usually paid to do, to help the rich get richer.
On an aside, it was great to meet you in Bratislava. I think you’re already a very good speaker, but could improve … with more pauses and voice modulation, for example. Another blog I read talks about Own The Room:
http://casnocha.com/2013/06/learning-to-own-the-room.html
I think you’d be even more effective if you worked at it a bit. (Me too, but I’m kinda still busy … making excuses, among other things).
Solid. REALLY solid.
The idea that businesses hire people to MAKE money is a completely alien thought to a large segment of the world’s “intelligentsia.”
sinners repent…… the end is near!
This is a great article with some really good info!
Just like here: Thinking giving states/cities and companies more money to hire more workers, especially,for state/city public employees (i.e.” cops etc) and to businesses works only as long as the money taken holds out then they have no more funds. Just a temporary “fix” to cover the next election. Never works in the long run because neither area is hiring for their need to hire. So it is never really productive. An example, if you need 1 man to run a back hole but you get free $$ from the govt. you just another person to watch him. Definitely looks good for hiring and employment stats but doesn’t produce anything.
This works well for the government though. Instead of just raising the $$ spent on welfare they just give them a salary thru companies and local government. They are really still on welfare since they are pay thru the employer instead of directly to the person.
Reblogged this on Life, Liberty & the Law and commented:
Interesting points to consider. Think critically, and enjoy!