Tag Archives: private sector

Europe Unemployment. Big Government, Less Jobs, by Daniel Lacalle

Bigger government means a smaller private sector and less wealth to create innovation and jobs. From Daniel Lacalle at dlacalle.com:

The unemployment rate in the Euro Area fell to 7% in December and 6.4% in the European Union, compared with the United States at 3.9%. We cannot forget that these unemployment rates do not include furloughed jobs covered by unemployment retention schemes, which account for another 5 million workers waiting to return to normal activity.

After a fiscal stimulus plan of more than 5% of GDP in 2020 and another 4% in 2021 and the European Central Bank purchasing 100% of net issuances from most sovereigns, the recovery shows a concerning weakness. Furlough jobs are rising again, working hours are still below the pre-pandemic level and real wages are falling as inflation eats the recovery.

In December 2021, the youth unemployment rate was 14.9% in both the EU and the euro area.

These unemployment levels are high, but some member states have even higher jobless ratios. Spain has a 13% official unemployment rate with still 220 thousand furlough jobs, and the youth unemployment rate stands at 30%.

What these figures show is that high government spending and enormous employment retention schemes have not helped to get the European economy recovering faster or improve job creation compared to similar economic zones.

The economic recovery has been slow and the job creation even slower. Furthermore, a large proportion of the job recovery has been from the public sector. In Spain, for example, there are still 95k less jobs in the private sector than before the pandemic and 220k more in the public sector.

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Government Is No Match for the Coronavirus, by Bob Luddy

A lot of people think that the government’s response to the coronavirus, led by the same CDC that couldn’t get its shit together on testing kits, will contain the virus. Wrong! From Bob Luddy at spectator.org:

The coronavirus is reminding everyone that you cannot rely on government and that ultimately it is the private sector that will provide the solutions. Many non-medical government officials and members of the media are predicting massive cases of COVID-19 and death, when in fact no one can predict the outcome. What we do know is that government has created a full-blown national panic, when at this point the normal flu season is far more deadly.

Decentralization is critical to a functioning society but often precluded by federal regulations.

The Washington Post reported the following about the Centers for Disease Control:

The problems started in early February, at a CDC laboratory in Atlanta.

A technical manufacturing problem, along with an initial decision to test only a narrow set of people and delays in expanding testing to other labs, gave the virus a head start to spread undetected — and helped perpetuate a false sense of security that leaves the United States dangerously behind.

Tests begin with the CDC to ensure quality, which is exactly the wrong approach. It assumes the government can outperform the best medical industry in the world. Even at this hour the CDC has failed, shipping test kits that are defective.

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Cruelly Unrequited Love, by Robert Gore

George loves Cruella, the bad girl who torments him, and spurns Constance, the good girl who loves him. Finally, Cruella goes too far; George sees her for what she is. He recognizes long-suffering Constance’s devotion and they live happily ever after. This trite story line, a romantic comedy staple, is also an apt description of the long-running, cruelly unrequited ideological love for government of much of the black establishment and its unfortunate followers, and their disdain for the ladder that has enabled so many to climb to success in America.

When Ferguson becomes a memory; after all the public figures and their media cronies have “felt their pain”—ritualistically denouncing violence and rioting, but excusing it as an understandable response to racism and oppression, then moving on to whatever grabs the headlines next—perhaps some blacks will see the charade for what it is. Individualism, entrepreneurialism, and capitalism are more demanding and less forgiving than Constance, but unlike Cruella government, they offer a real chance to climb the ladder, with rewards commensurate with effort and ability. The private economy has its imperfections, including racism, but it, not government, has been the American ticket out of poverty and powerlessness for over two centuries.

The federal government was responsible for ending slavery and the Thirteenth, Fourteenth, and Fifteenth Amendments. These were steps towards legal equality for blacks, although racism still existed de jure, most notably with “separate but equal” Jim Crow laws and barriers to voting. That legal edifice began to crumble with the Supreme Court’s 1954 decision in Brown v. Board of Education of Topeka, which overturned Plessy v. Ferguson, the 1896 Supreme Court decision that had allowed state-sponsored segregation—“separate but equal”—in public education. It took time and force of arms before integrated education became a reality. It took marches, demonstrations, and passage of the Civil Rights Act of 1964 before integration became the legal requirement for the rest of government and in private workplaces and private facilities that served the general public. The Voting Rights Act of 1965 and subsequent amendments went a long way towards ending the disenfranchisement of blacks and other minorities.

No law can end racism in people’s hearts and minds, just as no law can end stupidity. However, if you ask government for more than a fair shot—equality before the law—you’re bound to be disappointed. One of the most unlikely historical transformations is that of the party of the ”Solid South”—solid in its opposition to desegregation and civil rights legislation during the 1940s, 50s, and early 60s—to blacks’ new best friends. It began with Lyndon Johnson, who had been a Democratic stalwart in opposition to, but ultimately signed, the Civil Rights Act. As the old saying goes: “With friends like that, who needs enemies?”

Historically, one of the more racist private sector institutions has been labor unions, a bulwark of the Democratic party. Unions raison d’etre is to raise their members wages above what would prevail in a competitive market. Starting with Franklin Roosevelt, Democrats have endeavored to tilt the field towards unions, most notably with closed shop laws. Attracted by higher-than-market wages, more workers want to join unions than the unions can admit. Protected monopoly unions, like protected monopoly businesses, are freer to discriminate and engage in other irrational practices that would put them at a competitive disadvantage in an open and free market. Numerous studies have confirmed that is indeed what those monopolistic entities have done, admitting and hiring a disproportionately low number of blacks and other minorities.

Labor unions have long championed laws and regulations governing pay, hours, and working conditions, not just for union members, but for the entire workforce. Undoubtedly some of that has been motivated by a sincere desire to improve the lot of all workers. However, it also shifts the relative cost calculation between union members and cheaper nonmembers. If a union member costs $20 an hour and a non-member costs $10 before a regulation, the non-member wage is 50 percent of the union wage. If the government imposes regulations costing $5 an hour, the union wage to an employer becomes $25 an hour. The non-union wage becomes $15 an hour, or 60 percent of the union wage, reducing the relative disparity, favoring union workers at the expense of non-union workers.

You can’t climb the ladder of opportunity if the bottom rungs have been knocked out, and that’s what unions and labor legislation have done to blacks. Jobs and workplace experience, not fancy government training programs, are how workers with little or no skills become higher-skilled, more valuable employees. The unemployment rate for blacks from sixteen- to nineteen-years-old is 32.7 percent. Economist Thomas Sowell notes that the rate for sixteen- and seventeen-year-old black males was just under 10 percent in 1948, lower than for white males of the same age. The reason for the difference? Minimum wage laws: in 1948 the minimum wage was so low it was irrelevant; in 2014 it prices unskilled black youth out of the labor market. Sowell writes that the minimum wage has been “a major social disaster…for the young, the poor and especially young and poor blacks.” (Thomas Sowell, “A Defining Moment,” http://townhall.com/columnists/thomassowell/2012/02/07/a_defining_moment/page/full) Those groups are supposedly of special concern to Democrats, but a substantial majority of the party is currently pressing for a large, job-destroying increase in the minimum wage.

Education is the first rung on the opportunity ladder, but here Democrats are captive to their largest base of support, public education unions. For poor blacks, unable to afford alternatives, education is a government monopoly, and its quality is typical of most monopolies. Many blacks and other minorities have embraced charter schools and voucher plans, anything that represents a step up from dead-end public schools. However, every innovation that might compete with public schools has been fought by the education unions. When it comes to better education for poor blacks or the unions, guess who Democrats throw under the bus? President Obama, our first black president, successful in part because of his gold-plated education, runs true to form, kowtowing to the unions.

Perhaps out of guilty consciences, Democrats push hard for minority preferences in university admissions, government contracting, and private economic activity. Such preferences and largess unfortunately, but inevitably, fuel the belief (held by both beneficiaries and non-beneficiaries) that the beneficiaries advancement stems from the law, not competitive merit. They create a minority subset of the privileged class that owes its good fortune to the government, to the detriment of everyone trying to make it in the private sector who pay for that privilege with their taxes and diminished opportunities. And we all know the way Washington works: some of the largess is returned to the politicians and bureaucrats dispensing it, giving them a vested interest in perpetuating the cycle.

It remains as true today as when supposedly heartless cynics argued against New Deal relief measures: giving people money they haven’t earned creates dependency on the government and destroys work incentives. Stymied at every turn trying to improve their situation, for many blacks the welfare state administers the coup de grâce of perpetual poverty. Money without effort is for the asking. Only the stubbornly auto-blinkered believe that self-respect-destructive formula doesn’t have something to do with the social pathologies—crime, drugs, illegitimacy, and prostitution, et al.—rampant in the slums and ghettos.

While government falls all over itself “helping” blacks, many of them fervently wish that it would perform its first duty and protect them from violence and crime. This is the rage we didn’t hear much about during the Ferguson riots: the rage of those who do not rampage; who want to go to their jobs and live their lives peaceably; whose routines are upended, whose businesses and homes are vandalized and burned, who have friends or family wounded or killed in the mayhem, and who are stuck cleaning up the mess and picking up the pieces.

Take all the blacks unjustly killed by white policemen (even assuming it is all such blacks, which it is not) and it would amount to a tiny fraction of the blacks unjustly killed by other blacks in the pathological hell-holes for which government policies bear a large measure of responsibility for consigning them. The success of so many blacks in all fields of private endeavor; the analyses by black intellectuals like Thomas Sowell of governmental ineptitude and destructiveness, and the failure of government, now headed by a black president, to measurably improve the lives of most blacks, has many of the previously enamored casting a more skeptical eye on the insincere blandishments of the Cruella state. Someday, completely disillusioned, they may reject its phony promises altogether.

THE PERFECT CHRISTMAS GIFT FOR LOVERS OF HISTORY, LIBERTY, FAMILY SAGAS, OR THE INDUSTRIAL REVOLUTION!!!

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