City Journal Summer 2014

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Summer 2014
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Theodore Dalrymple
Jobs Out of Thin Air « Back to Story

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Oh Theodore, I'll read anything you write, but economics is a tricky, and often counter-intuitive, subject. I don't know about the situation in Tunisia, but in a country like the US or UK it is perfectly feasible that an increase in public sector employment could cause an increase in the prosperity of the nation as a whole.In fact, surprisingly, in a situation of high unemployment, even if the newly created public sector jobs were completely useless, the extra spending their associated incomes would unleash would enable the private sector to produce more and perhaps employ more people - thereby (if those private sector products are useful) increasing national wealth.

This link is a very clear and simple explanation of how this works -
http://rommeldak.wordpress.com/2010/11/07/world’s-simplest-explanation-of-the-debt-and-the-deficit/
(The other posts on this site are all very clear and illuminating.)

(Obviously the public sector should not increase indefinitely. However, having recently heard of 20,000 applicants for a firm looking to recruit 20 trainees in the UK, it is clear that increased public sector employment is hardly about to crowd out the private sector. In these circumstances, in order for a newly created public sector job to directly increase the real wealth of the nation, it is only necessary that the newly created public sector employee be more productive than when he was unemployed.)

As a public intellectual, you simply must read Warren Mosler's "Seven Deadly Innocent Frauds" (It's free to download). If you had any respect for the mainstream economics profession, or our current leaders and central bankers, before reading it, I can guarantee you won't have any afterwards.

By the way, per hour worked, French per capita GDP is the same as, or slightly higher than, the USA. Maybe they know something after all.
Sir,
Well, did you know that the Belgian prime-minister, with a population of 11 million, promised 200.000 jobs. There were no critical comments in the press or in Cambers of representatives. When this project threatened to collapse, he created 100.000 jobs in the administration, and especially for people with the lowest education. And what do you think, there was nothing to do for them, and the still have nothing to do. So that is a part of the economic problem in this country. But still not a critical word for Mr. Verhofstad.

Regards
Mike: what rampant free-marketeering? The topic under discussion is government creation of jobs, which is more or less the opposite of the free market.

And of course if there are more graduates there will also be more jobless graduates. We can see this in the UK: when I left university in 1975, approximately 10% of my peers had degrees, and I knew no one who was jobless six months after they graduated; now, 44% of the demographic attend university, but unemployed graduates are two a penny (including my oldest son, who has a first-class degree in Maths plus an MSc, both from Oxford). If printing more money than the real output justifies creates inflation, producing graduates faster than graduate jobs will create graduate inflation, especially when many of these graduates have degrees demanding lower standards than the 1970s A-levels required. (I've been teaching since 1975, and have watched this inflation at first hand.)
Readers not familiar with Silver Blaze should note that the dog did not bark because it knew the criminal to be a friend.
Apparently global peak oil is in our past; might peak employment also be?
Orwellian theory has small lies aka propaganda; to be more desirable to larger ones.
So here is my imaginary lie:
Could it be that Ben Ali had planned to float a massive bond issue to finance those 350,000 new jobs only to be met with failure and hence forced to renege on a huge promise...voila force majeure
Robert Marchenoir January 20, 2011 at 9:27 PM
Of course nobody in the French press challenged the pretense by Ben Ali to create 350 000 jobs overnight.

French "journalists", "intellectuals", "economists" and opposition politicians routinely ask the state to create jobs, as if jobs were created by pressing a magic button on a secret machine in the basement of the Elysée palace.

And ruling politicians are only too happy to oblige, at least in the sense that they keep the myth alive.
According to that august institution, the World Bank, the overall unemployment rate of higher education graduates in Tunisia, was below 5 percent in 1994, and has increased significantly to 23 percent in 2009. Recent graduates face 46 percent unemployment 18 months after graduation. While GDP continues to grow at a rapid rate, Tunisia has not created those good-paying, middle class jobs for college graduates. All this rampant free-marketeering has followed the profits, which clearly do not lead to job growth.
I knew Sherlock Holmes, Mr. Dalrymple. Holmes was a friend of mine. You are no Sherlock Holmes.

The pronouncement of Ben Ali to create tens of thousands of jobs “out of thin air” is nothing out of the ordinary in the Arab world, an area known for shallow economics, mythical cultural traditions and overall general dysfunctionality.

At about the same time Ben Ali’s absurd announcement was being made, the ruler of Kuwait was similarly feeling expansive.

Under the guise of Kuwait’s 50th anniversary of independence, headlines were declaring such bountifulness as:

====“Kuwaiti ruler grants $4 bn, free food to citizens”====

“Each of the 1.12 million native citizens will get 1,000 dinars ($3,572) in cash as well as free essential food items until March 31, 2012, the KUNA news agency cited state minister for cabinet affairs Rudhan al-Rudhan as saying.”

We should remember that at least 80% of Kuwaiti citizens “work” for the government in laughably meaningless jobs.

Give ‘em a desk, a computer, a phone and game applications to while away the hours and, why, everyone’s happy.

Any major Arab corporation or establishment (“major” because ultimately it’s controlled by the government) is a beehive of useless “positions” with grand sounding titles. All kinds of directors-generals, planning directors, assistant to the director, assistants to VPs and so on, all with Phds from USC (for some reason, that’s where they all flocked to get their degrees), all basically doing…….nothing.

Where I work, the “Personnel Dept” is populated by at least 2 dozen individuals all of whose “work” could easily be done by one 40 year old female American secretary in her spare time.

The sine qua non of an Arab “establishment” (as they like to call ‘em) is not really the computer; it’s the teacup and related accoutrements.

The intense desire to “modernize” is only rivaled by the even more intense desire to avoid the painful adjustments that have to be made up and down the society in order to achieve this modernization. It ain’t gonna happen. Not in a million years.

What’s scary is that the US is beginning to sound like this too. Everybody talks about “job creation” but as Mr. Dalrymple states, job creation out of what?

The reason there are no jobs in the US (or Tunisia or Egypt etc) is because, lo and behold, there is no WORK. And I don’t see how you can create work without using a pen and paper and ordering it to come into being.
Why is there unemployment?
Isn't there work for everybody?
And is prosperity only or mostly for the rich?
I suppose Theordore Dalrymple supports
supply-side economics.
I don't.


"The main difference is that Ben Ali was a police general before leading the government; Gordon Brown was a university lecturer."

Meaning that neither of them had to successfully operate a hotdog stand, much less a larger, successful commercial enterprise of the kind that keeps people gainfully employed.

The reason they thought they could create jobs is exactly because they've never actually had to. When it's all theory, it's easy. Reality is quite different. Witness President Obama.