Solving unemployment

This post started from musings over at MacDoctor.

It’s funny how Phil no ideas to fix the current unemployment problem, because we’re all told that Labour fixed this problem when they came in.

Of course, the reality is that the policies in the 90′s took a while to catch hold, and Labour just got the credit while bashing those same policies. That’s one factor, another is that the people (and I’m including the unions in that) who were telling us the recovery “wasn’t real” suddenly started telling us the recovery was strong. The media lapped up the change of story.

Any government is powerless (short of a centrally controlled economy, and we know how successful those were!) to change employment statistics since they don’t generally employ any productive workers who create wealth. The only way to get productive, private businesses to hire new workers is for those businesses to have confidence that it’s going to pay off in the long term. One of the ways to give businesses confidence and certainty for the future is to avoid big shakeups – i.e. what Labour call “do nothing”.

The other way is to make life easier for business and those who control them, Labour have several names for that, none of them particularly flattering. Names like “tax cuts for rich, paid for by poor”.

That’s the reality of life. We’d like to tax the rich to heck, and shower the poor with generous welfare from the state while changing regulations every time we find a problem, but we can’t. Over the course of the 20th century governments tried a lot of things, and found many (if not most) ideas to fix problems like this to be bad.

We can be like Obama and ignore those lessons (see graphs), or we can knuckle down and do the stuff that doesn’t sell well politically, and delivers short term pain but ultimately does deliver better outcomes in the long term.

Graphs from Gateway Pundit.

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