Saturday, March 18, 2006

Economics 101

Thomas Sowell's latest article succinctly shows why the riots are happening in France yet again (jobs) and why the students have shut down the universities (idiocy).
Student riots in Paris remind us that education at elite academic institutions is not enough to teach either higher morals or basic economics. Not on their side of the Atlantic or on ours.

Why are students at the Sorbonne and other distinguished institutions out trashing the streets and attacking the police? Because they want privileges in the name of rights, and are too ignorant of economics to realize that those privileges cost them jobs.
For the complainers out there who constantly carp about the terrible economy in the U.S. and that there aren't any jobs, please take note of what happens when you go the socialist route! It doesn't work and causes more problems than solutions, as these riots show.
Like some other European Union countries, France has laws making it hard to fire anybody. The political left has long believed that such laws are a way of reducing unemployment.

More important, they have long remained oblivious to the fact that countries with such laws, such as France and Germany, usually have higher unemployment rates than countries without such laws, such as the United States.

Belatedly, some French officials have begun to see that job security laws make it more risky and costly for an employer to hire inexperienced workers with no track record, whom they would have a hard time getting rid of if they don't work out. The unemployment rate in France is 23 percent for workers who are 25 years old and younger.

To try to deal with this high unemployment rate among young workers, the job security laws have recently been modified to make it easier for employers to fire those workers who are on their first job.

That is what has French students outraged and rampaging through the streets of Paris. They don't want employers to be able to fire them after they graduate and go to work.
The employment rate here is less than 5 percent. Why? Well, we don't pass idiotic laws which stop bosses/managers from firing inept or lazy workers. Yes, we do have some issues and problems and it has to do with unions and the what has become the "union mentality". This doesn't happen in all unions, but it has caused problems with inept teachers being kept because of tenure or a worker is advanced not because of ability but because of seniority. This law-induced attitude is another factor in the high unemployment in France.
Students and their political supporters, including labor unions, depict them as victims. Among the slogans chanted by the rioters is "We're not young flesh for the boss." The fact that many bosses don't seem to want to hire their young flesh seems to be lost on them.

A leftist deputy has declared: "To create discrimination based on age transgresses fundamental rights!"

In other words, people have a right for other people to have to continue employing them, whether those other people want to or not. The "fundamental right" to a job over-rides the rights of other people when they are called "bosses."

The fact that many students can think only in terms of "rights," but not in terms of consequences, shows a major deficiency in their education. The right to a job is obviously not the same thing as a job. Otherwise there would not be a 23 percent unemployment rate among young French workers.

The law can create equal rights for inexperienced young workers and for older workers with a proven track record but the law cannot make them equally productive on the job or equally risky to hire. Nor is rioting likely to make employers any more likely to want young workers working for them.
I was raised with a strict work ethic. No matter what the job, you do it to the best of your ability and as quickly and efficently as possible. If you mess up, you fess up and take responsibility. Unfortunately, while working at Kohl's with college aged students, I realized that my generation of parents have not taught their children these work ethics. They want the paychecks without doing the work or by doing as little work as possible. This same age group is the one in France causing so much mayhem.
Estimates of the damage done by the rioters -- called "protesters" or "demonstrators" in the mealy-mouthed media -- range from hundreds of thousands of dollars to over a million dollars, thus far. They have also shut down dozens of universities, including the Sorbonne, denying an education to other students.
I just don't understand what happened to the notion of actually working for a paycheck and earning a position on your own merits and abilities. There is a lot of satisfaction is a job well done, not to mention knowing that you earned that paycheck. What happened to pride? When did it all change to the "gimme" mentality? This idea that you are guaranteed a job because it is your "right" is ridiculous. A paycheck is an earned right. It's called work for a reason!
The heady notion of "rights" -- and especially the notion that your rights over-ride other people's rights, when those other people belong to some suspect class called "bosses" -- is an all too familiar feature of modern welfare state notions.

French Prime Minister Dominique de Villepin, who supports the new labor law, has seen his approval rating drop to 36 percent. That is what happens when you try to talk sense to people who prefer to believe nonsense.

It is elementary economics that adding to the costs, including risks, of hiring workers tends to reduce the number of workers hired. It should not be news to anyone, whether or not they have gone to a university, that raising costs usually results in fewer transactions.

The fact that such profound ignorance of basic economics and such self-indulgent emotionalism should be prevalent at elite institutions of higher education is one of the many deep-seated failures of universities on both sides of the Atlantic.
We must, as parents, teach our children a better work ethic. Help them to understand that there are vast opportunities out there and that hard work really does pay off. When you start out in the working world, it shouldn't matter if the job is bagging groceries or flipping burgers, take pride in the job, take pride in yourself, do your best and earn your pay. It certainly would make us, as a nation more productive and would have our children striving harder to succeed on their own merits and not sit back and think they should be given something for nothing. Without a hard work ethic, we will end up like France with people rioting because they believe they are owed a job by the government.

Capitalism Magazine

Crossposted at A Rose By Any Other Name.

Friday, March 17, 2006

Hamlet of nations

There is much fuss about the fact that the Bush administration, in its newly released national security strategy, sticks to the possibility of preemptive strikes, the famous Bush-doctrine, although its first application to the case of Iraq, has proved to be a 'disaster'.

It now appears that the Bush-doctrine is not really an invention of the post-9/11 world. In fact, its foundations can be traced back to a speech by George P. Schultz, former Secretary of State in the Reagan administration, on 25 October 1984.

You have read that right: that speech was delivered 21 years ago, one month after a terrorist attack on the US embassy in Beirut killed 14 people, including 2 Americans. It seems that the world has changed a long time ago, but that it took the West (well, some Westerners) a few decades to notice and finally act accordingly.

Just read Tigerhawk's post about this speech, which, I repeat, is not a day, but a couple of decades old (the title of my post will also become clear then).

(hat tip: American Future)